Gibson Guitar Competition
Now Viewing Gibson Guitar's competition in: Musical Instrument Manufacture (primary)
Call Preparation Questions
Customers, Marketing, Pricing, Competition
What role does sponsoring professional musicians play in the company’s marketing? - Companies like Yamaha, Steinway, and Gibson sponsor artists and music festivals to showcase their brand and product lines.
How is the company improving its relationships with retailers? - Many instrument manufacturers have turned their attention to managing relationships with department stores and music chain stores, often neglecting the needs of independent dealers.
How important are institutional sales to the company? - Depending on the company, band sales can be a major contributor to corporate profitability. Churches are an important segment for piano and organ sales.
How has competition from used instruments affected the company’s sales? - New products compete against used instrument sales. Manufacturers that own retail stores often carry their own used products.
How much has the company been able to raise prices in recent years? - Overall manufacturer prices have risen about 2 percent per year.
What new demographic niches is the company targeting? - Industry trade associations and manufacturers are targeting baby boomers and senior citizens as potential instrument buyers.
How dependent is the company on holiday sales? - Revenues for musical instrument sales can be slightly seasonal, depending on the company’s product mix.
Competitive Landscape
Demand is largely driven by consumer income and education demographics. The profitability of individual companies depends on cost efficiencies. Many large companies benefit by offering a wide range of products. Small companies can compete effectively by specializing in high-end or niche instruments. The industry is labor-intensive: average annual revenue per employee is about $125,000.
Business Challenges
CRITICAL ISSUES
Competition from Imports - Imports account for about 50 percent of the US market for musical instruments, partly because of lower foreign manufacturing costs. China is the largest source of imports, followed by Japan. China and other Asian manufacturers make mainly low-end and midrange instruments that account for the bulk of the US market.
Stagnant Retail Demand - Retail sales of musical instruments in the US have been stagnant the past decade. Because of the difficulty of learning, interest in playing music has declined. The number of children in the music-learning age category has been flat. In the past five years, jobs at musical instrument stores dropped 10 percent.
Industries Where Gibson Guitar Competes
- Consumer Products Manufacturers
- Musical Equipment
- Musical Instruments(primary)
- Sound & Lighting Equipment
- Musical Equipment
- Industrial Manufacturing
- Foodservice & Food Retail Equipment Manufacturing
