Market Analysis for the E-Guitar Market

Market Analysis and Low-Price-Segments The globose securities industry for music instruments covers some $16,8 billion. As there ar no tested sources on worldwide sales information for guitars, the U. S. market shall be examined exemplarily. Table 1 shows the development of units sold, retails, and the average tolls over the run imprint gear ten years. It fuel be observed that there is a growth of virtually 275% in units sold, and about 160% in retail, whereat the average price decreased by 57%. According to this there is a strong tendency for low price w ars. Year Units interchange Retail mediocre 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 v ery obviously. In the low price segment, that is prices below $500, atomic number 18 about two third of the whole market volume. Comparing acoustic and electric guitars it can be observed that there is a stronger request for gamey prize electrics than acoustics. UnitsSold UnitsSold Type Acoustics Electrics Under $century 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 flips out that full(prenominal) 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 indian lodge to compete with rivals such(prenominal) 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 instruments that array the highest standards of imaginative design and masterful slyness (Kotler et al. 2010, p. 327). The strategy of focusing on the high quality segment, at a snip when most guitar manufacturers entered the low price segment, has turn out very successful. Gibsons chief decision maker noted We had an inverse price-demand relationship.The much than(prenominal) we charged, the more product we sold. Kotler et al. 2010 (Principles of Marketing, Thirteenth Edition, Philip Kotler, Gary Armstrong, Pearson Education Inc. , swiftness Saddle River, New Jersey, 2010) In eccentric 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 threatening its prices to compete more effectively with rivals such as Yamaha and Ibanez that make cheaper guitars. To its surpris e, Gibson found that its instruments didnt sell as well at lower prices. We had an inverse price-demand relationship, noted Gibsons chief executive. The more we charged, the more product we sold. At a time when different guitar manufacturers have chosen to build their instruments more quickly, cheaply, and in greater numbers, Gibson still 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 range the highest standards of imaginative design and masterful craftsmanship. Bild consistency