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Washburn Guitars: Pricing Decisions and Diversity

07/09/2020 Client: sathvik2009 Deadline: 10 Days

Scenario


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. 


"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."


Instructions


With Lello's statements in mind, access the Learn: Washburn Guitars Pricing Decisions and Diversity activity in this week’s Learning Activities folder and 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 marketplace.


Create a 5-slide presentation to the leadership team of Washburn Guitars that details the following: 



  • Explain how elastic demand could influence sales. Include an example.

  • Determine how producing signature series guitars may affect demand for the product, as well as brand awareness and brand loyalty.

  • Provide an example of break-even quantity.

  • Recommend guidelines for selecting a diverse team of 5 employees to travel to Japan to meet with guitar craftspeople. Refer to the “Diversity and Inclusion Drive Success for Today’s Leaders” article from the University Library to guide your answer.


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