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March 11 2Teck-Hua HoPricing Policy

OutlineOutline

Objectively and subjectively, is Tweeter price competitive?

What is the impact of APP on effective price paid for a product?ow is it desi!ned to alter current buyin! behavior?

as APP proven effective for Tweeter? What factors need to be inplace for APP to be effective?

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Objective PriceObjective Price

Competitiveness: Mean PricesCompetitiveness: Mean Prices

Lechmere Circuit City The Wiz Tweeter

27" Color TV #$$" #$%& #$'" $648

Multiple CD Player #22( #2)% #22( $!8

Camcor#er #&1" #&)% #&"& $84

%tereo %pea&er #2'1 #2)) #"$$ $642

Mean Product Price within Selected Product ategories

*ean product prices are hi!her by 1$+2& for 2&- T.s and/amcorders, by '$ for /0 players and by 12$ for tereospeaers

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ObservationsObservations

These hi!her mean prices do not imply lower pricecompetitiveness for Tweeter because it offers hi!h3uality products4

5ut the 1$ to 12$ price premium does have animpact on Tweeter6s price ima!e4

78 people would loo at our ads and they would loo at 9echmere6sads4 9echmere would advertise a #1"( ./: and we would advertise a#1(( ./:4 They6d have a #"(( camcorder and we6d have a #$((camcorder4 8 we seemed to be more e;pensive to the ine;periencedconsumer4-

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Mean Product Price forMean Product Price for

Overlapping ProductsOverlapping ProductsColor TVs (Tweeter carries 14 Models: 11 overlap and 3 are unique to Tweeter)

CD Players (Tweeter carries ! Models: " overlap and 13 are unique to Tweeter)

Competitor

Lechmere Circuit City The Wiz

Competitor' Mea( Price #1(" #2$$ #21$

Tweeter' Mea( Price #1

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Mean Product Price forMean Product Price for

Overlapping ProductsOverlapping ProductsCa#corders (Tweeter carries 13 Models: 1 overlap and 1 is unique to Tweeter)

$tereo $pea%ers (Tweeter carries 3 Models: 1 overlap and are unique to Tweeter)

Competitor

Lechmere Circuit City The Wiz

Competitor' Mea( Price =>A =>A #1(