Ibanez Market Strategy
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Ibanez Market Strategy Billy Heany, Jason Li, Hyun Park, Alena Noson Strategic Marketing Table of Contents Executive Summary ....................................................................................................................................... 3 Firm Analysis.................................................................................................................................................... 4 Key Information about the Firm ........................................................................................................... 4 Current Goals and Objectives ................................................................................................................ 5 Current Performance ................................................................................................................................. 6 SWOT ............................................................................................................................................................. 7 Current Life Cycle Stage for the Product .......................................................................................... 8 Current Branding Strategy ...................................................................................................................... 9 Industry Analysis .......................................................................................................................................... 10 Market Review ......................................................................................................................................... 10 Five Forces................................................................................................................................................. 11 Competitive Review ............................................................................................................................... 12 Customer Review .................................................................................................................................... 14 Existing and Potential Buyers ............................................................................................................ 15 Important Figures When Considering Market Size .................................................................... 16 Macroenvironmental Review .............................................................................................................. 17 3 Circle Targeting ........................................................................................................................................ 19 Targeted Customer Segment ............................................................................................................... 19 Key Competitor ........................................................................................................................................ 20 Customer Perspective ............................................................................................................................ 21 Establish Firm Perspective .................................................................................................................. 23 3Circle Map ............................................................................................................................................... 24 Core Competencies and Competitive Advantage ............................................................................ 26 Communication Strategy ........................................................................................................................... 29 Marketing Goals and Objectives ....................................................................................................... 29 Segmentation............................................................................................................................................. 30 Targeting ..................................................................................................................................................... 31 Positioning Strategy ............................................................................................................................... 32 Marketing Implementation .................................................................................................................. 32 Evaluation and Control ......................................................................................................................... 37 Executive Summary Ibanez, a Japanese guitar manufacturer, began as a bookstore in 1908 and quickly expanded into a guitar importer from Spain. 27 years later, the founder, Matsujiro Hoshino established the brand Ibanez. It eventually expanded into the U.S market in the 1960’s, and became well known for its high quality guitars with similar design to other leading guitar manufacturers. Ibanez produces many instruments including electric and acoustic guitars and their complimentary products such as amps. Ibanez is famously known as the standard rock guitar. Ibanez competes in a highly competitive market with the top four companies accounting for over 75% of the market share. The industry is also in a stage of maturity, with all sections of the market highly saturated. Ibanez is looking to fulfill unsatisfied benefits of the consumer. The benefits sought in the market that are left unfulfilled are conducive to people that are considered intermediate to advanced guitar players. Some of the primary benefits that Ibanez seeks to fulfill include a product that is an extension of the self, including the sense of social status, celebrity endorsement with a strong brand reputation, and the ability to be customized. We seek to fulfill these benefits by introducing a new product line, called Ibanez Kasutamu (originating from the Japanese word “custom”). This new line will allow complete customization of the guitar, to compete with brands Fender and Gibson that do not fulfill these benefits sought in this market segment. Ibanez’s new focus on a niche market, with their new product line, will provide a competitive advantage along with an expanded market share in the intermediate to advanced guitar playing category. Firm Analysis Key Information about the Firm In 1908, Matsujiro Hoshino opened a bookstore in Nagoya, Japan called Hoshino Shoten. As time progressed, the owner grew fascinated by Salvador Ibanez guitars and began importing them from Spain. 27 years later, Hoshino decided to start his own guitar brand called Ibanez. In the mid-60s, the company expanded into the highly competitive U.S. guitar market and introduced similar guitar designs as their rivals Fender and Gibson in hopes to attract business. Unsurprisingly, Gibson responded with a lawsuit accusing Ibanez of using their headstock design. After several years of legal battles, the case was settled out of court and Ibanez had to produce original designs as part of the agreement. The late 80s and 90s were pinnacle moments for the brand as the company landed highly sought-after musicians including Steve Vai and George Benson. The partnerships led to the launch of artist-inspired models which propelled Ibanez as one of the more recognizable guitar brands in the world. Presently, there are offices in Japan, U.S., Netherlands and China with over 429 employees. The U.S. division, led by President Shogo Hayashi, is headquartered in Bensalem, PA. 1 Primary Product Ibanez product line consists of electric guitars, basses, hollow bodies, acoustics, electronics and accessories. Their electric guitars range from $109 to $6,000 at Guitar Center, the world’s largest musical instrument retailer. Their prices are similar to Fender’s, but are not as expensive as Gibson’s. In its 2009 annual report, Ibanez listed guitars as their biggest sales generator, followed by bass guitars and electronics. http://www.ibanez.com/support/faq?id=7 http://www.hoshinogakki.co.jp/hoshino_e/company/history.html http://www.mylespaul.com/forums/other-gu Current Goals and Objectives Based on their goals and objectives, it appears that Ibanez is remaining consistent and aren’t planning on many changes in their strategy. Their goal has always been to be a leading guitar company and to make high quality products for a reasonable price. They have added to this list the goal of an expanded market share. They don’t compromise on quality and most of this is due to their Prestige branded products that are made in Japan. Ibanez is prepared to move into the future as they always have with a well-respected name and product, while growing their market share. Current and Past Strategies Past In the past, Ibanez strategies revolved around entering a U.S market segment that remained untapped and gaining market share, as a brand new company. In the 1970’s guitar companies from the U.S dominated the industry and because they were for a large part unchallenged, their guitar quality was lacking, and prices were rising. As a result, Ibanez decided to stand out in this industry by creating guitars of superior quality, while remaining inexpensive, and were very similar in style to popular U.S guitars. Because their guitars lacked in originality, they chose a strategy of working “with jazz icon, George Benson, and Ibanez began to receive its due.”2 Current As previously mentioned, “By the mid-80´s with the interest in instrumental rock guitar on the rise, Ibanez collaborated with players such as Steve Vai, Joe Satriani and Paul Gilbert and brought