Market Analysis for the E-Guitar Market

Market Analysis and Low-Price-Segments The global market for music instruments covers about $16,8 billion. As there are no steady-going sources on worldwide sales data for guitars, the U. S. market shall be examined exemplarily. Table 1 shows the development of units sold, retails, and the average sets over the last ten years. It cigaret be observed that there is a growth of nearly 275% in units sold, and about 160% in retail, whereat the average price decreased by 57%. tally to this there is a strong determination for low price products. Year Units Sold Retail Average Price 2010 2,991,260 $1,151,290,000 $372 009 3,302,670 $1,158,592,050 $350 2008 3,201,220 $1,022,861,000 $309 2007 2,341,551 $903,261,000 $386 2006 1,942,625 $921,057,000 $529 2005 1,742,498 $922,280,000 $529 2004 1,648,595 $923,522,000 $560 2003 1,337,347 $762,185,000 $569 2002 1,153,915 $694,883,000 $579 2001 1,090,329 $710,769,000 $652 In table 2 this tendency appears very obviously. In the low price segment, that is prices below $ cholecalciferol, are about two third of the whole market volume. Comparing acoustic and electric guitars it can be observed that there is a stronger request for high prize electrics than acoustics. UnitsSold UnitsSold Type Acoustics Electrics Under $100 390,028 256,354 $101 to $200 410,030 561,537 $201 to $350 110,008 195,317 $351 to $500 40,003 97,659 $501 to $1,000 40,003 61,037 $1,001 to $1,500 10,001 24,415 Over $1,5o1 20,001 36,621 Total 1,490,260 1,501,000 Also it turns out that high quality guitars as Gibsons or Paul Reed Smiths, which are presented in this paper, are prestige goods with an inverse price-demand relationship. That is higher prices are associated with higher quality.Gibsons former attempt to join the low price segment in order to make do with rivals such as Yamaha and Ibanez, which are both producers of cheap guitars, did not turn out to be successful as it did not match with their century-old tradition of creating investment-quality in struments that portray the highest standards of imaginative institution and masterful craftsmanship (Kotler et al. 2010, p. 327). The strategy of focusing on the high quality segment, at a time when most guitar manufacturers entered the low price segment, has proven very successful. Gibsons chief executive noted We had an inverse price-demand relationship.The more we charged, the more product we sold. Kotler et al. 2010 (Principles of Marketing, Thirteenth Edition, Philip Kotler, Gary Armstrong, Pearson Education Inc. , Upper Saddle River, naked as a jaybird Jersey, 2010) In case of prestige goods, the demand curve sometimes slopes upward. Consumers think that higher prices mean more quality. For example, Gibson Guitar Corporation once toyed with the idea of lowering its prices to fight more effectively with rivals such as Yamaha and Ibanez that make cheaper guitars. To its surprise, Gibson found that its instruments didnt sell as well at lower prices. We had an inverse price-d emand relationship, noted Gibsons chief executive. The more we charged, the more product we sold. At a time when other guitar manufacturers have chosen to build their instruments more quickly, cheaply, and in greater numbers, Gibson pipe down promises guitars that are made one-at-a-time, by hand. No shortcuts. No substitutes. It turns out that low prices simply arent consistent with Gibsons century-old tradition of creating investment-quality instruments that represent the highest standards of imaginative design and masterful craftsmanship. Bild Body