MKT 421T Wk 4 – Apply: Summative Assessment: Washburn Guitars: Pricing Decisions and Diversity

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MKT 421T Wk 4 - Apply: Summative Assessment: Washburn Guitars: Pricing Decisions and Diversity
MKT 421T Wk 4 – Apply: Summative Assessment: Washburn Guitars: Pricing Decisions and Diversity
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MKT 421T Wk 4 – Apply: Summative Assessment: Washburn Guitars: Pricing Decisions and Diversity

Washburn Guitars

 

The modern Washburn Guitars Company started in 1977 when a small Chicago firm bought the century-old Washburn brand name and a small inventory of guitars, parts, and promotional supplies. At that time, annual company sales of about 2,500 guitars generated revenues of $300,000. Washburn’s first catalog, appearing in 1978, told a frightening truth.

 

“Our designs are translated by Japan’s most experienced craftsmen, assuring the consistent quality and craftsmanship for which they are known. At that time, the American guitar-making craft was at an all-time low. Guitars made by Japanese firms, such as Ibanez and Yamaha, were in use by an increasing number of professionals.”

 

“We offer a guitar at every price point for every skill level,” explains Kevin Lello, vice president of marketing at Washburn Guitars. Washburn is one of the most prestigious guitar manufacturers in the world, offering instruments that range from one-of-a-kind, custom-made acoustic and electric guitars and basses to less-expensive, mass-produced guitars.

 

Lello has responsibility for marketing Washburn’s products and ensuring that the price of each product matches the company’s objectives related to sales, profit, and market share. “We do pay attention to break-even points,” adds Lello. “We need to know exactly how much a guitar costs us, and how much the overhead is for each guitar.”

 

With that statement in mind, watch the video describing how Washburn prices its guitars and how it uses the pricing variable as a strategic tool for positioning its various guitars in the market place.