Tweeter Price CompetitivenessFrom exhibit 13 in the case it is clear that the tweeter is competitively priced across almost the entire range of items and models it sells. In an objective model-by-model comparison (see Appendix 1 for a sample comparison) the tweeter matches or betters competitor prices. Furthermore, if you compare the quality, level of service and price paid, the Tweeter is cheaper than the competition. However, competitors make spot (non-advertised) sales and advertised sales, which at the point of sale gives the impression that the competition is more price competitive. More importantly, however, the competition, namely Lechmere, Circuit City and Wiz, all offer lower range and lower priced items in each category, namely 27" color TVs, multiple CD players, camcorders and full size speakers, which they allow the competition to offer customers cheaper products than Tweeter, within each category This creates a benchmark for customers to compare themselves to and makes it seem (subjectively) more expensive to buy Tweeter. So, in reality, Tweeter has competitively priced, however suffers from an image problem where it is generally perceived as being more expensive than the competition, which likely dissuades some customers from purchasing from Tweeter and leaves others feeling that they could have gotten their purchase at a better price. lower elsewhere if they had tried it. Tweeter's main customers According to the segmentation in the case Tweeter is a specialized shop and its most important customers are quality/service customers (Appendix 3). This group represents 70% of Tweeter's clientele. This segment cares about the high quality......the advertised selling price of the paper. So this reaction from superstores will not drive customers away from Tweeter and will allow Tweeter to retain current customers. In my opinion, Tweeter has not positioned its APP strategy to gain a large market share of the core class of customers. If they do a better job of educating their core customer, they will gain a greater market share, possibly from other retailers (current market share 11.30%). At a 30% margin, this can add up to $5,369,760 (11.30 x 475,200) to your annual profits. In educating their customers about the APP, Tweeter must communicate how the program works for the customer and actively provide information on how much customers have saved from the program, this will help retain current customers and as more and more people come aware of the program, will help increase Tweeter's share of their core market.