Tweeter: Case Review

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If the price charged by Tweeter is equal or less than the price offered by other competitors then do nothing. Similarly the APP plan will not be applicableif the purchase was made before 30 days even if the price charged by Tweeter is higher than the price offered by other competitors.

4. On learning that you have acquired an MBA from a leading business school, and that you have substantial experience in managing business, Best Buy (a leading electronic goods retailer in the markets that Tweeter operates) would like to seek your advice on how to handle the APP program. Best Buy believes that they need to take action now. Please provide an actionable recommendation that will be very effective in undermining APP program and reducing the profits of Tweeter. Your response will be evaluated based on its impact on Tweeter’s profits and ability to stop APP plan.

Best Buy is another leading electronic goods retailer which also offers similar products as offered by Tweeter. However due to the Automatic Price Protection plan offered by Tweeter the sales of Tweeter has increased. So to tackle the Automatic Price Protection Plan of Tweeter and increase the sales of the Best Buy, it should change its marketing strategy. A possible pricing strategy can be the extension of the APP plan. Tweeter offers 100 % refund on the price difference so Best Buy can offer more than 100 % refund on price difference which will make Best Buy or more attractive store for the customers. With more numbers stores Best Buy stores can also offer the customer to collect the refund of price difference from any of the Best Buy stores, going back to the particular stores was identified as one of the main problems in customers in Tweeter case. Similarly to increase the sales Best Buy can open more stores in various location and improves its after sales services as main focus of Tweeter is to offer quality product andcustomer service. If Best Buy can offer the quality customer service coupled with the comparatively lower prices than Tweeter then Best Buy will be able to reduce the sales of Tweeter hence the profit.

Another marketing strategy Best Buy can follow is to focus on advertisement and some well-known celebrities can be included in the advertisement campaign so that the customers get more attracted to Best Buy stores. Similarly Tweeter offers products which are mostly in the higher price range so Best Buy can offer discounts or combo offers on those products or can even go for the “Weekend Sales offers” to increase the sales. So if same products are available at lower price in Best Buy stores customers will buy from theBest Buy only. On the other hand the previous customer who has bought the product from Tweeter will get refund from Tweeter so the profit of Tweeter will eventually come down.Also 70 % of the Tweeter customers are the quality/ service customer who are mainly concerned with the quality of the product and after sales service or the customer service. For this customers price is not the primary concern. So Best Buy should offer quality service and also the knowledge sales person should be hired to provide customer service, which can shift the customers from Tweeter to Best Buy.

5. Tweeter realizes that there is a need to refine APP so that it does not bleed too much money. Tweeter still wants to develop a low-price image and draw price-sensitive consumers to its store. Assume that Tweeter hires you as consultant so that you could advise them on how to improve APP. What advice will you provide Tweeter in light of your response to question4.

With the entry of Best Buy in the market the sales of Tweeter has declined sharply. Similarly the lower price offered by the Best Buy for the similar product has increased the refund amount to the old customers. As a consultant of Tweeter I could suggest some changes in current pricing strategy of Tweeter so that the low price image of the Tweeter is maintained and also the number of customers also increased. Tweeter is considered to be the supplier of higher quality and products as well as quality customer care service so the prices are also higher as compared to other stores with similar products.to $. So solutionto attract the customersis to offer thehigh products at Equated Monthly Installments (EMI) so that the customers do not have to pay the whole amount while purchasing.Nominal interest rate can be charged on the EMI or if the Number of EMI is less interest free EMI can also be provided. This will help to attract more customers at Tweeter. Another strategy to improve the sales is to focus on the electronic media for advertisement so that maximum numbers of customers are covered.

The existing Automatic Price Protection plan should also be improved so that the money flow from the Tweeter can be reduced however maintaining the image of low price. One possible option is to offer other products instead of cash as the refund for the price difference. This will stop the cash flow from the company and the sales of other products also increases. The refund can also be adjusted in the second purchase by the same customers within certain period of time. This will work as an incentive for the customers to visit the store and improved in sales. Also the lower price offered by the competitorshave led to decline in sales in one hand and due to APP plan refund has to be made to the eligible customers , so anticipation of price in the market fortheproducts become an important factor. Lastly Automatic Price Protection may help to increase sales in the initial period, however this pricing strategy cannot be the long term solution in the competitive world where many new companies are entering and offering lower price. So tweeter should focus more on advertising of its products through various print and electronic media and improved its core principle of providing the quality service and customer care to its customers to sustain in the long run.