Question 5 – Thanh
Tweeter’s competitors will not feel threatened by the new strategy if there is little overlap between products sold at Tweeter and those sold at other competing stores. Tweeter’s main product line fell under middle to high-end categories whereas other retailers carried a wider range of products. As pointed by a few skeptics, “there is little chance that many items will qualify for the refunds”. Moreover, even if Tweeter’s competitors are worried about APP, they can adopt a similar program to APP or undertake a targeted price war. Since big retailers such as Circuit City and Lechmere were already pricing their products competitively, launching a similar program to APP would not create a huge impact on their bottom lines as few products would qualify for the program. They could also undercut Tweeter by offering significant sales on …show more content…
New consumers have to be able to observe the benefits of APP before they make a purchase at Tweeter. However, based on Exhibit 14, 40.6% of surveyed consumers did not know about APP and only 22.1% of them were aware that Tweeter offered the program. Even if consumers were aware of the program, many were skeptical as it was perceived that “Tweeter’s moderate to high-end products don’t overlap with many other retailers”. APP seemed to be effective for a fraction of consumers who received the cheque and made the recommendations to their friends and families. Thus, APP works well if Tweeter’s strategy is to retain customers rather than to attract new customers. Secondly, in order for APP to be attractive, the program has to target price sensitive customers like entry-level customers, who were interested in cheapest products and indifferent to product quality and consumer services, or the price biter, who was concerned about price, product quality and customer service. APP would work better if Tweeter is targeting those two groups of
Tweeter’s competitors will not feel threatened by the new strategy if there is little overlap between products sold at Tweeter and those sold at other competing stores. Tweeter’s main product line fell under middle to high-end categories whereas other retailers carried a wider range of products. As pointed by a few skeptics, “there is little chance that many items will qualify for the refunds”. Moreover, even if Tweeter’s competitors are worried about APP, they can adopt a similar program to APP or undertake a targeted price war. Since big retailers such as Circuit City and Lechmere were already pricing their products competitively, launching a similar program to APP would not create a huge impact on their bottom lines as few products would qualify for the program. They could also undercut Tweeter by offering significant sales on …show more content…
New consumers have to be able to observe the benefits of APP before they make a purchase at Tweeter. However, based on Exhibit 14, 40.6% of surveyed consumers did not know about APP and only 22.1% of them were aware that Tweeter offered the program. Even if consumers were aware of the program, many were skeptical as it was perceived that “Tweeter’s moderate to high-end products don’t overlap with many other retailers”. APP seemed to be effective for a fraction of consumers who received the cheque and made the recommendations to their friends and families. Thus, APP works well if Tweeter’s strategy is to retain customers rather than to attract new customers. Secondly, in order for APP to be attractive, the program has to target price sensitive customers like entry-level customers, who were interested in cheapest products and indifferent to product quality and consumer services, or the price biter, who was concerned about price, product quality and customer service. APP would work better if Tweeter is targeting those two groups of