Gibson Guitars In Japan Super Final


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Gibson Guitars In Japan Super Final

  1. 2. The Team Chris Brown, Retail Specialist THUNDERBIRD Cassey Ho, Marketing Director WHARTON Nadia Medina, VP of Marketing MARSHALL SCHOOL OF BUSINESS Manny Sanchez Resident Intern WHITTIER COLLEGE Kimberly Fattorini Research Analyst UCLA
  2. 3. Now presenting… <ul><li>Japanese guitarist, producer, arranger, composer and songwriter. </li></ul><ul><li>Guitarist and lead arranger for the hard rock band B'z . </li></ul><ul><li>Virtuoso </li></ul><ul><li>One of the best guitar players in the world… </li></ul>
  3. 4. Celebrity Guest Tak Matsumoto (Phil Sun)
  4. 5. Today’s Agenda <ul><ul><li>Japan Country Overview </li></ul></ul><ul><ul><li>The Gibson Experience </li></ul></ul><ul><ul><li>Current and potential market for guitars </li></ul></ul><ul><ul><li>Competition </li></ul></ul><ul><ul><li>Pricing Strategy </li></ul></ul><ul><ul><li>Promotional Program </li></ul></ul><ul><ul><li>Distribution </li></ul></ul><ul><ul><li>Our overall outlook on </li></ul></ul><ul><ul><ul><li>The country situation </li></ul></ul></ul><ul><ul><ul><li>The company situation </li></ul></ul></ul><ul><ul><ul><li>The market situation </li></ul></ul></ul><ul><ul><li>Why this will work </li></ul></ul>CASSEY
  5. 6. Who is ? <ul><li>We are a USA based company dedicated to making the best quality musical instruments for our customers. We specialize in acoustic and electric guitar manufacturing. </li></ul>KIMBERLY
  6. 7. Gibson’s Product Values <ul><li>“ The American Dream” </li></ul><ul><li>The Gibson Culture </li></ul><ul><li>Freedom of expression </li></ul><ul><li>The Artist </li></ul><ul><li>Creativity </li></ul><ul><li>Unique Quality </li></ul><ul><li>Innovation </li></ul>MANNY
  7. 8. Japan Quick Overview <ul><li>Ethnically homogeneous </li></ul><ul><li>Religion does not play as big a part in the lives of Japanese </li></ul><ul><ul><li>Majority = Shinto and Buddhist religions </li></ul></ul><ul><ul><li>Middle class respect these as traditions rather than as a way of life </li></ul></ul><ul><li>English is rarely spoken </li></ul><ul><ul><li>Esp. in the higher levels of organizations </li></ul></ul><ul><li>Literacy is almost universal </li></ul><ul><ul><li>Less income differentials b/t provincial Japan and the capital cities (Tokyo and Osaka) </li></ul></ul><ul><li>Overcrowding </li></ul><ul><ul><li>Accounts for Japanese tourist's love of wide open spaces when they travel </li></ul></ul><ul><ul><li>Adapted by the efficient use of space </li></ul></ul><ul><ul><ul><li>Culture concerned with making things smaller </li></ul></ul></ul><ul><ul><ul><ul><li>E.g. Bonsai, Sushi </li></ul></ul></ul></ul><ul><li>Japan great in manufacturing </li></ul><ul><ul><li>Can put things together efficiently and to high quality standards (TQM). </li></ul></ul><ul><ul><li>Limited natural resources, so depends on importing raw materials and fuel </li></ul></ul><ul><li>Culture is one of the most inaccessible to the foreigner </li></ul><ul><ul><li>The Japanese respect experience, wisdom, age and status </li></ul></ul><ul><ul><li>Substantive business relationships built over many years </li></ul></ul>CASSEY
  8. 9. Socio-demographics NADIA <ul><li>Decline in the birth rate </li></ul><ul><ul><li>average age rose from 25.6 years in 1970 to 29.2 in 2006 </li></ul></ul><ul><li>Shrinking younger population </li></ul><ul><ul><li>lowest level on record since the Population Estimate began. </li></ul></ul><ul><li>Increase in aging population </li></ul><ul><li>Changes in the demographic structure have created a number of social issues </li></ul><ul><li>Immigration and birth incentives are sometimes suggested as a solution to provide younger workers to support the nation's aging population. </li></ul>
  9. 10. Socio-demographics cont’d <ul><li>Population </li></ul><ul><ul><li>0-14 years: 13.8% </li></ul></ul><ul><ul><li>15-64 years: 65.2% </li></ul></ul><ul><ul><li>65 years and over: 21% </li></ul></ul><ul><li>Ethnic Groups </li></ul><ul><ul><li>Japanese 98.5%, Koreans 0.5%, Chinese 0.4%, other 0.7% </li></ul></ul><ul><li>Primary Language </li></ul><ul><ul><li>Japanese </li></ul></ul><ul><li>Aging Population </li></ul><ul><ul><li>Youth: 13.6 % </li></ul></ul><ul><ul><li>Elderly: 20.8% </li></ul></ul><ul><ul><li>Highest Life Expectancy </li></ul></ul><ul><li>Declining Population </li></ul><ul><ul><li>-0.088% </li></ul></ul>NADIA
  10. 11. Current & Potential Market <ul><li>Increase in leisure activities - </li></ul><ul><li>Market Growing </li></ul><ul><ul><li>2 nd largest market for musical instruments in the world </li></ul></ul><ul><ul><li>Japan is Gibson's biggest market outside the United States </li></ul></ul><ul><ul><li>Gibson Guitar: biggest competitor in Japan </li></ul></ul><ul><li>Baby Boomers </li></ul><ul><ul><li>Grew up on 1970s music. Now have money to spend on guitars. </li></ul></ul><ul><ul><li>Currently ages 50-60 </li></ul></ul><ul><ul><li>Will peak in the next 20 years </li></ul></ul><ul><li>Collectors </li></ul><ul><ul><li>Some own 5, 10, 20 guitars </li></ul></ul><ul><ul><li>Middle aged guys, professional career </li></ul></ul><ul><ul><li>Just buying a dream </li></ul></ul>KIMBERLY
  11. 12. Current & Potential Cont’d <ul><li>Limited Edition in Japan only </li></ul><ul><ul><li>Rocker Tak Matsumoto </li></ul></ul><ul><li>Young Aspiring Rockers </li></ul><ul><ul><li>Often buy on credit if parents don’t buy for them. </li></ul></ul><ul><li>Pricing </li></ul><ul><ul><li>Average Gibson guitar 300,000 yen. $2,865.30 USD </li></ul></ul><ul><ul><li>Avg. Gibson in US about $1,500 </li></ul></ul><ul><ul><li>620,000 yen Tak Matsumoto guitar. 5,918.67 USD </li></ul></ul>KIMBERLY
  12. 13. Market Leaders TAK (PHIL) <ul><li>Gibson (Japan) </li></ul><ul><ul><li>Gibson life style </li></ul></ul><ul><ul><ul><li>Product spot light, latest product </li></ul></ul></ul><ul><ul><ul><li>Artists & events </li></ul></ul></ul><ul><ul><ul><li>Lessons & Gibson recommendations </li></ul></ul></ul><ul><ul><li>Fan club </li></ul></ul><ul><ul><ul><li>News, Blogs, Videos </li></ul></ul></ul><ul><ul><li>Tak Matsumoto (B’z) </li></ul></ul><ul><ul><ul><li>First Asian artist to design own Gibson signature guitar (1999) </li></ul></ul></ul><ul><li>ESP (Electric Sound Production) </li></ul><ul><ul><li>Custom Order </li></ul></ul><ul><ul><ul><li>Allowing customers to customize their guitar in detail </li></ul></ul></ul><ul><ul><ul><li>Shape, wood, number of frets (22/24), Order of Pickups and more.. </li></ul></ul></ul><ul><ul><li>Artists influence </li></ul></ul><ul><ul><ul><li>A lot of famous guitarists in Japan use ESP custom guitars </li></ul></ul></ul><ul><li>Other Leading brands </li></ul><ul><ul><li>Fender, Ibanez, Schecter, Peavy </li></ul></ul>
  13. 14. Pricing Strategy <ul><li>Four Pricing Models: </li></ul><ul><ul><li>Cost-Plus Pricing </li></ul></ul><ul><ul><li>Target-Return Pricing </li></ul></ul><ul><ul><li>Value-Based Pricing </li></ul></ul><ul><ul><li>Psychological Pricing </li></ul></ul>CHRIS <ul><li>Pricing Model most appropriate: </li></ul><ul><ul><li>Psychological Pricing </li></ul></ul>
  14. 15. Pricing Strategy cont’d <ul><li>Pricing should be high </li></ul><ul><li>Gibson Guitars are a luxury, not a necessity </li></ul><ul><li>The Gibson brand is associated with exceptional quality </li></ul><ul><ul><li>High prices will help keep it exclusive </li></ul></ul><ul><li>The Japanese market is large and prosperous </li></ul><ul><ul><li>There will always be demand and corresponding sales even if pricing is placed at a premium </li></ul></ul><ul><li>Lower-cost and higher quantity sales should be reserved for Gibson’s lower-quality Epiphone brand </li></ul>CHRIS
  15. 16. The Gibson Experience <ul><li>Provide customers with personal, intimate, face-to-face interaction </li></ul><ul><li>After sales support </li></ul><ul><ul><li>Customer Call Center </li></ul></ul><ul><ul><li>Personalized/Hands On support </li></ul></ul><ul><ul><ul><li>Apple Stores </li></ul></ul></ul><ul><li>Unique packaging </li></ul><ul><ul><li>Trovata hang-tags and stitched fabrics tell a unique story </li></ul></ul><ul><li>Relationship continues after purchase </li></ul><ul><ul><li>Emphasis on Experience </li></ul></ul><ul><ul><li>Membership </li></ul></ul><ul><ul><ul><li>Harley Davidson </li></ul></ul></ul>NADIA
  16. 17. The Retail Store <ul><li>Compare to the Apple Store </li></ul><ul><li>Supportive in-store customer service </li></ul><ul><li>Recording studio </li></ul><ul><li>Sound proof room to jam </li></ul><ul><li>“ Playground” </li></ul><ul><ul><li>Set atmosphere: Dark and Cool </li></ul></ul><ul><li>Professional Guitar Lessons </li></ul><ul><ul><li>“ Gibson certified” professional guitar instructors </li></ul></ul>NADIA
  17. 18. Playing a “story” <ul><li>Each guitar will have a special identity </li></ul><ul><ul><li>Les Paul: classic rocker/Blues player </li></ul></ul><ul><ul><li>SG: young generation/young rock bands. </li></ul></ul><ul><ul><ul><li>Sharp edges </li></ul></ul></ul><ul><ul><li>V series: collector edition/real performance guitar for shape (add pic) </li></ul></ul><ul><ul><li>Special series: made for performers </li></ul></ul><ul><ul><ul><li>Signature guitars by artists </li></ul></ul></ul>TAK (PHIL)
  18. 19. Community <ul><li>If you buy one, you are a member of the Gibson community </li></ul><ul><ul><li>Buy into Culture, lifestyle, and community </li></ul></ul><ul><ul><li>Karaoke for Gibson guitar players </li></ul></ul><ul><ul><ul><li>Invite local Gibson members </li></ul></ul></ul><ul><ul><li>Host competitions </li></ul></ul><ul><ul><ul><li>“ Next Lead Guitarist” (like AI) </li></ul></ul></ul><ul><ul><ul><li>Prizes: Custom Gibson guitar, amp, home theater system, make own signature model </li></ul></ul></ul><ul><ul><li>You get special invitations, promos, offers etc. </li></ul></ul>KIMBERLY
  19. 20. Multimedia Lifestyle Integration <ul><li>Sell Gibsons along with </li></ul><ul><ul><li>Home theatre systems </li></ul></ul><ul><ul><ul><li>Huge amps </li></ul></ul></ul><ul><ul><ul><li>Plasma screen </li></ul></ul></ul><ul><ul><ul><li>Core system </li></ul></ul></ul><ul><ul><li>Virtual instruments </li></ul></ul><ul><ul><li>Recording interface </li></ul></ul>CHRIS
  20. 21. Promotional Program <ul><li>HUGE PHENOMENAL SPLASH </li></ul><ul><ul><li>Mega events – Rock concerts </li></ul></ul><ul><ul><li>Big flashing lights </li></ul></ul><ul><ul><li>Cool/Futuristic packaging </li></ul></ul><ul><ul><li>High end media/imagery – billboards, TV </li></ul></ul><ul><ul><li>Print Media </li></ul></ul><ul><ul><ul><li>Musician Magazines </li></ul></ul></ul><ul><ul><ul><li>Japanese Comics </li></ul></ul></ul><ul><ul><ul><li>Main Transportation </li></ul></ul></ul><ul><li>PSYCHOLOGICAL </li></ul><ul><ul><li>Make it “seem big” and it will sell big! </li></ul></ul>CASSEY
  21. 22. Can you spot our ads?
  22. 23. Distribution Strategy <ul><li>U.S. Manufacturer </li></ul><ul><li> Freight Shipment </li></ul><ul><li>Wholesaler </li></ul><ul><li>Japanese </li></ul><ul><li>Customer </li></ul><ul><li>Retail Shop (Tokyo) </li></ul>MANNY
  23. 24. Estimate of the Situation <ul><li>Company situation: </li></ul><ul><ul><li>Strong brand image and loyal following </li></ul></ul><ul><ul><ul><li>Innovation </li></ul></ul></ul><ul><ul><li>High price might drive away customers </li></ul></ul><ul><li>Country situation: </li></ul><ul><ul><li>Increase in discretionary income </li></ul></ul><ul><ul><ul><li>Saving economy </li></ul></ul></ul><ul><ul><li>Threat of declining economy </li></ul></ul><ul><ul><ul><li>Recession </li></ul></ul></ul><ul><li>Market situation: </li></ul><ul><ul><li>Group of people with money to spend who are craving for American made products. </li></ul></ul><ul><ul><li>Extensively IT savvy </li></ul></ul><ul><ul><ul><li>More open to try new products and technologies </li></ul></ul></ul><ul><ul><li>Competitors trying to capture the younger audience with more affordable well-made guitars </li></ul></ul><ul><ul><ul><li>Potential to establish strong foothold with brand loyalty </li></ul></ul></ul>MANNY & TAK (PHIL)
  24. 25. Why we should proceed? <ul><li>This will work! </li></ul><ul><ul><li>Japan idolizes music, art, creativity, and the future. </li></ul></ul><ul><ul><li>They also embrace the American Dream </li></ul></ul><ul><ul><li>GIBSON GUITARS is the perfect integration </li></ul></ul>CASSEY
  25. 27. Works Cited <ul><li>Associated Press, Japanese Embrace Music Legend. </li></ul><ul><li>CIA World Factbook. Japan Country Profile. 23 Mar. </li></ul><ul><li>JGuide: Stanford Guide to Japan Information Resources. Demographics. Copyright © 1994 - 2008 The board of Trustees of the Leland Stanford Junior University. 22 Mar. </li></ul><ul><li>Wikipedia. Demographics of Japan. 24 Mar. </li></ul><ul><li>Helms, Marilyn M. “Challenge of Entrepreneurship in a Developed Economy: The Problematic Case of Japan.” BNet. 29 Apr. </li></ul><ul><li>Business Design. “Posts Under ‘Experience Enhancement’.” </li></ul><ul><li>Apple Retail Store. Genius Bar. </li></ul><ul><li>Harley Davidson Official Website. Experience. = en_US </li></ul>