How Do Dixons And Tandy Add Value To The Products They Sell?

How Do Dixons and Tandy Add Value To The Products They Sell?


How do Dixons and Tandy add value to the products that they sell, and, in doing

so, what benefits are passed on to the consumer? Do high street consumer

electronics stores offer better value for money than their mail-order

counterparts?


The raw price figures show that, obviously, the high street stores cost more

than the mail-order stores, but are the benefits that the high street stores

bring worth the extra price?


I took the prices of five types of products, a large stereo, a portable system,

a small television, a video recorder, and a computer. The large stereo was an

AIWA NSX-V710, the portable system was a Sanyo MCD 278, the small televisions

that I chose were not available in both stores, and so I had to choose similar

models. The models I chose were the Matsui 14" Remote from Tandy and the Nokia

14" Remote from Dixons. The models were both available from the mail-order

supplier, at the same price. The video recorder that I chose to use was an AKAI

VSG745, and was in fact available from both stores. The computer was the most

difficult part of the system to match, as the Dixons systems came with some

added bonuses such as extra multimedia software and Internet capability. I

therefore reduced the price of the Dixons machine to account for these

differences, by deducting the price that it would cost to upgrade on the Tandy

machine. So, to give the Tandy computer Internet capability would cost £150, so

that was deducted, and the multimedia software would have cost £50, so that was

deducted. The computer specification I aimed to have as a common platform was an

Intel Pentium 120MHz machine, with 8MB RAM, a 14" monitor, at least a 1 GB Hard

Disk and MPC level 2 capability (i.e. be able to use CD-ROM Multimedia titles).

The mail order supplier I chose to match these specifications with was Computer

Trading, as they offered a system which was a close match to the Tandy and

Dixons ones, while having a low price. The common factor with all the products

is that they are all more expensive than their mail-order price counterparts.

This means that the high street stores 'add value'. Adding value is taking one

or more parts or products, combining, changing or adding to them, in such a way

that the perceived value of the product is increased by more than the cost of

the change. For example you might expect to pay £150 more than the cost of the

parts when buying a hi-fi, but the cost of putting the hi-fi together is much

less than £150. The price, however, must not be too high, as the customer has to

perceive the value of the product to be that at which it is priced for a sale to

take place. Within any company there will be some several 'departments', each

adding value in their own particular way.


How much value do Dixons and Tandy add?


The only way in which this question can be answered is by looking at the figures

themselves, and how much items cost from Dixons and Tandy as opposed to the mail

order companies. The figures that I obtained by looking through the stores and

magazines were as follows:


Here we can see that every product is more expThis is ONLY a preview of the article. If you would like to view the entire document, you must subscribe to Electronic References. Please register below now!


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