Guitar Center Competition
Now Viewing Guitar Center's competition in: Musical Instrument Stores (primary)
Call Preparation Questions
Customers, Marketing, Pricing, Competition
Who is the company’s typical customer? - The typical customer for music instrument stores is a parent buying an instrument for a child. Other customers include amateur and professional musicians.
Who are the company’s biggest competitors? - Mass merchandisers and large music chains are the most considerable threat to musical instrument dealers.
How much has the company been able to raise prices in recent years? On which products? - Dealer prices have declined in 27 out of 39 musical instrument categories.
What types of marketing and promotions are most effective for the company? - Large music stores offer sweepstakes, celebrity appearances, and “undiscovered talent” competitions.
How important are institutional (academic) sales to the company? - Depending on the company, band sales can be a major contributor to dealer profitability. Churches are an important segment for piano and organ dealers.
How much competition does the company see from the used instrument market? - New products compete against used instrument sales in pawn shops, thrift stores, and online. Most retailers carry used products.
What role does the Internet play in the company’s marketing efforts? - Large full-line stores are exploring one-to-one marketing programs and Internet-only discounts to encourage online sales.
Competitive Landscape
Consumer income and changes in musical tastes drive demand for musical instruments. The profitability of individual companies depends on effective merchandising. Small companies can compete effectively by specializing in personalized service or high-end instruments. Average annual revenue per employee is $150,000.
Business Challenges
CRITICAL ISSUES
Stagnant Consumer Demand - US sales of musical instruments have been stagnant for the past decade. With a wide range of choices for leisure activities, fewer children play musical instruments regularly. Only 30 percent of children play a musical instrument, yet 90 percent play video games an average of seven hours a week.
Competition from Big-Box Retailers - Mass merchants such as Wal-Mart, Target, and Costco have entered the musical instrument market, selling entry-level guitars, electronic keyboards, and band instruments. Best Buy recently launched a musical instrument "store-within-a-store" concept. Over the past decade, the number of full-line and specialty music instrument stores declined 7 percent.
Industries Where Guitar Center Competes
- Retail
- Musical Equipment Retail(primary)
- Nonstore Retail
- Catalog, Mail Order & Television Sales
- Internet Retail
