Tweeter Price Competitiveness Essay

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Tweeter Price Competitiveness From exhibit 13 in the case it is clear that Tweeter is price competitive in almost the entire range of items and models that it sells. In an objective model by model comparison (see appendix 1 for a sample comparison) Tweeter either matches or betters competitor's prices. Further more when you compare quality and level of service and price paid Tweeter is cheaper than the competition. However, the competitors run spot sales (not advertised) and advertised sales, which at the point of sale gives the impression that the competition is more competitively priced. More importantly though the…show more content…
not Tweeter, Lechmere or Circuit City. Tweeter at the time had only 19.6% of this customer category (Appendix 4). Over 1994 and onto 1996 this class of customer has moved from Other retailers 11.30% to Lechmere 35.60%, Circuit City 27.90% and Tweeter 25.20% (Appendix 5 & 6). Even though this segment is Tweeters core customer they have been unable to attract the majority of this class of customer. In 1996 Over 63% of this customer class is shopping at Electronic Appliance Superstores. In 1996 retaining 1% of New England's market of Entry level would increase cost of good s sold at Tweeter by 13.89% and with a industry standard markup of 30% would add a margin contribution of over 2 million dollars per percent of Entry level market share (Appendix 7). In contrast 1% of Price biter, convenience customer, or quality service customer would increase goods sold at Tweeter by 4.17%, 6.94% and 2.78% respectively. Focusing on the Entry level market will apparently be the most profitable approach. To do this they will have to work hard to change the markets perception that Tweeter is more expensive than the competition, and they will have to stock lower priced items in all the range of goods they carry. Tweeter will also have to change their store design or layout to accommodate the greater number of SKU's or they may have to lease larger stores to cater to a larger volume of customers. Alternatively, Tweeter can

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