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Case Study of Tweeter

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Case Study of Tweeter
Decision: APP would not continue to be an effective policy in the future. Instead, Tweeter may think about abandon the APP strategy and focus on high-end market, emphasizing ‘high quality and high service’.
Several considerations about the decision: 1. Customer
Based on the dimension of ‘price’ and ‘quality/service’, there will be 4 segments, which are ‘entry-level customer’, ‘the price bitter’, ‘the convenience customer’ and ‘the quality/service customer’.
According to Herschman’s estimation that ‘the quality/service customer’ group accounted for 70% of Tweeter’s clientele though it only represented only 10% of the total New England customer base, which also far exceed the makeup of customer base of Tweeter’s competitors( 10% for Lenchmere and 15% for Circuit City). Thus, we can say that ‘the quality/service customer’ group is the core customer of Tweeter. And this group of customers pays much more attention to product quality and customer service instead of merely price. 2. Competitor
The third largest consumer electronics retailer in the U.S, Wiz, newly entered the New England market which implemented the strategy of rock bottom prices as well as offering intensive customer service and 110% price protection. It is very aggressive in capturing the low-price driven consumer market. The ‘entry-level customer’ and ‘the price bitter’ will be most likely attracted by Wiz.
Besides, the top 2 retailers, Lechmere and Circuit City also focus on entry-level and middle-level products. ‘Entry-level’ customers and ‘price-biter’ accounts 50% and 70% customer base of these 2 retailers.
Overall, the competition among low end market is extremely fierce.
However, as the core customers for Tweeter are mainly those quality/service customers who are not sensitive to low price. So actually, Tweeter and 3 other competitors are targeting different...

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