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SAJAL JAIN|15299 1.
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Tweeter Report
Solution_canonical Decision Problem
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TWEETER Etc.
Describe the environmental changes that forced Tweeter to change its pricing pricing strategy in the 80's - 90's.
Following were the major factor
2.
New competitive entrants, entrants, especially especially at the lower lower end of the retail market
Limited future growth for the product product categories due to saturated markets
Stagnation of the US economy.
Consumers increased focus on price in their purchasing process, even though Tweeter sold middle middle and products
Week end sales campaign that cut prices on select items and reduced sales during week days
Discuss the issues involved in using Pricing as an avenue to changing the overall overall Marketing Strategy.
Prevalence of Price Competition prevalent in later later stage of a product life life cycle or in highly commoditized commoditized
Mismatch between between the consumer’s perceived perceived value of the product and and its its actual price
Tweeter caters to a very niche segment (10% of the market) who considers quality quality above price. Lowering would impact consumers perceived value
Behavior of the competitors o o
3.
The competitor matches every price change. The competitor has his own objectives to maximize profit.
It is important to anticipate the competitor’s move in regard to our price changes.
Discuss the issues involved in implementing a Promotion Pricing Pricing Plan vs EDLP vs. Lowest Price Price Guarantee
Promotion Pricing Plan
PROS
o
Large volumes can be cleared rapidly
EDLP o
o
CONS
o
Price war with financially strong competitors likely
o
Avoid “price war” with financially strong opponents Value pricing
Customer retentio o lessens purchase r o competitive pricin highlighted Everyday low price should be Expensive o lower or equal to the discount o Change in technolo price offered by competitor, reduce the price, Free Foron 30this Days Sign up to vote title reduced margin Read economically not a feasible option Useful Not useful Cancel anytime. Yes No
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