Tweeter etc.

In the early 1990s, Tweeter, etc., a small regional retailer of high-end audio and video equipment, increasing competitive pressures faced price pressure from several large regional and national consumer electronics chains. In response, in 1993, they performed “Automatic Price Protection” (APP) as the cornerstone of a strategy to restore price credibility in the minds of consumers. Under APP, Tweeter monitored local newspaper ads and automatically sends a refund to a consumer to check if a purcha … Article Read more »

In the early 1990s, Tweeter, etc., a small regional retailer of high-end audio and video equipment, increasing competitive pressures faced price pressure from several large regional and national consumer electronics chains. In response, in 1993, they performed “Automatic Price Protection” (APP) as the cornerstone of a strategy to restore price credibility in the minds of consumers. Under APP, Tweeter monitored local newspaper ads and automatically sends a refund to a consumer check whether a title bought Tweeter was advertised at a better price in a competitors store. Three years later, in 1996, is Tweeter question of the effects of APP on their current competitive positioning. More importantly, with the impending entry of another major discount chain, Tweeter is forced to wonder how effective APP will be in a market increasingly dominated by large discount stores.
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from
John T. Gourville,
George Wu
Source: HBS Premier Case Collection
24 pages.
Publication Date: Oct 21, 1996. Prod #: 597 028 PDF-ENG
Tweeter etc. HBR case solution