Case | HBS Case Collection | October 1996 (Revised April 1997)

Tweeter etc.

by John T. Gourville and George Wu

Abstract

In the early 1990s, Tweeter etc., a small regional retailer of higher-end audio and video equipment, faced increasing competitive pricing pressures from several large regional and national consumer electronics chains. In response, in 1993, they introduced "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 mailed a refund check to a consumer if an item purchased at Tweeter was advertised for a lower price by a competitor. Three years later, in 1996, Tweeter is questioning the impact of APP on their current competitive positioning. More importantly, with the pending entry of another major discount chain, Tweeter is forced to question how effective APP will be in a market increasingly dominated by large discount retailers.

Keywords: Advertising; Customer Focus and Relationships; Price; Market Entry and Exit; Supply Chain Management; Competition; Electronics Industry; Retail Industry;

Citation:

Gourville, John T., and George Wu. "Tweeter etc." Harvard Business School Case 597-028, October 1996. (Revised April 1997.)