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Running head: Ben McBride Center Case Study 1

Guitar Center Case Studies

Ben McBride

Central Washington University

2 McBride, Ben Com 475: PR and advertising management CWU Spring 2012

Table of Contents

Background…………………………………………………………………………………………………………3

SWOT Analysis…………………………………………………………………………………………………….3

Timeline…………………………………………………………………………………………………………..4-5

Case Study 1…………………………………………………………………………………………………….6-7

Case Study 2…………………………………………………………………………………………………….8-9

Case Study 3…………………………………………………………………………………….…………..10-11

Reflection……………………………………………………………………………………………………….…12

Bibliography……………………………………………………………………………………………………..13

3 McBride, Ben Com 475: PR and advertising management CWU Spring 2012

Background and SWOT analysis

Guitar Center is one of the largest retailers I the world. They are

responsible for the sales, distribution, marketing, and developing of instruments and

instrument accessories. There are 228 locations throughout the . Originally called

The Organ Center, Wayne Mitchell founded the store in 1959 in Hollywood. The store was

home to electronic organs. It became a major retailer for electric and guitar .

Owned by , Guitar Center has a 1.78 billion dollar revenue. Guitar Center stores are

known for customers being able to go in and play any instrument in the store before making a

major purchase on an item. They have everything from guitars, basses, electronic equipment,

lighting, and percussion. The company hosts many different types of events and competitions in

which many undiscovered musicians get to enter for a chance to win new gear and a name for

themselves in the .

Strengths Weaknesses Fun atmosphere Poor management Best prices High prices on certain items Constant deals No small town feel (corporate feel) Locations in major shopping centers Not on first name basis More than just a store, but media outlet No instruments Helps musicians get discovered No rentals

Opportunities Threats In store Local music companies More events Music being a dying profession More brands in stores Becoming monopoly Rentals Used products not working correctly Band instruments

4 McBride, Ben Com 475: PR and advertising management CWU Spring 2012

Guitar Center Timeline

Peace, Love, and Guitars 1960’s This Ain’t No , 1970’s The Guitar Center story began in 1959 when In 1972, the second Guitar Center opened its doors in Wayne Mitchell purchased a small appliance . San Francisco was a city amidst an and home organ store in Hollywood, explosive musical transition, just exiting its heyday as . By 1961, he'd changed the name of the 60's "flower power" capitol. The old Guitar Center the compa ny to The Organ Center. In 1964, building had a charm and character that attracted Joe Banaran, President of the Thomas Organ musicians from all over San Francisco. In 1973, Guitar Company, approached Wayne in search of an Center opened its doors. This location outlet to sell a new line of guitars and proved to play a pivotal role in the growth of the amplifiers, called . company, as this store was to become the home of the

company's first Central Management Office. Ray Scherr The timing was right, and Wayne saw the started with the company in 1975 behind the accessory chance to seize a new retail op portunity. He counter of Guitar Center, San Francisco. By December was in the midst of relocating his original of 1977, his talents had propelled him to the position of Hollywood Organ Center location to a new the Company's first General Manager. His business site, and he agreed that rather than closing savvy sparked the flame of success; his creative down the old store, he would stock it with Vox marketing and innovative promotions set it ablaze. In guitars and amplifiers. Wayne named the 1977, Larry Thomas began his career with Guitar store The Vox Center. By the late sixties, it had Center. He started in the San Francisco store as well become evident that the future of musical and quickly moved through the ranks. Larry's personal instrument retailing lay in guitars and amps, drive, his organizational skills and a tenacious approach not organs, and The Vox Center was re - to problem solving lead him to play a crucial role in the christened The Guitar Center. development of the company. Marty Albertson started with the company in 1979, and has held various positions of increasing responsibility.

A New Wave of Guitar Center’s, 1980’s

With the onset of the new decade, Guitar Center was opening a new store with each passing year. 1980 witnessed the opening of the second Chicago store. This North Chicago location had previously been a grocery store, and its conversion to a Guitar Center heralded the onset of a musical instrument "Superstore." With its high ceilings and open floor space, it possessed the ability to support massive merchandising. In 1982, Guitar Center, Sherman Oaks opened on Ventura Boulevard, and thus became the eighth Guitar Center. In 1983, Guitar Center lost its founder

Wayne Mitchell, who left a skilled Management Team behind to tackle the challenges that lay ahead. The company's position in the Bay Area was further solidified with the opening of the Oakland, CA location. Just one year later, in

1985, the Guitar Center chain witnessed the Grand Opening of two additional locations- Lawndale and Covina. That year also marked another significant event in the Guitar Center timeline, with the Grand Opening of a new Hollywood store on Sunset Boulevard. The huge 18,000 square foot facility was a testimony to the original flagship, and on

November 13, 1985 - amidst gala festivities - was dedicated to Guitar Center founder, Wayne Mitchell.

The opening of this Hollywood Music Complex also gave birth to RockWalk. RockWalk is a sidewalk gallery dedicated to honoring those who have made significant contributions to the music industry, by immortalizing their handprints in cement. Today, any customer who enters the Hollywood Store can share in recognizing the accomplishments of such notable artists as , , , , , BB King, , , Smoky Robinson, Roy Orbison, Eddie , and many more. 5 McBride, Ben Com 475: PR and advertising management CWU Spring 2012

Guitar Center Timeline cont.

IPO's PDA's DAT's & RAP , 1990’s You could say that in the 90's Guitar Center underwent monumental changes that impacted both the company and a nation of musicians, and earned G.C. the phrase, "The largest Musical Instrument retailer in the world."

By this time, Larry Thomas had assumed the position of Chairman and Co -Chief Executive Officer, while in 1996 Marty Albertson became President and Co -Chief Executive officer. The company's growth in this time period surpassed any other Musical Instrument retailer in the world, with the opening of nearly 70 stores during the decade. With a clear -cut vision of where they wanted to go, G.C. opened stores in smaller markets, helping cultivate the Musical Instrument Market. Grand openings were taking place at a rate of 1 to 2 stores a month. A Guitar Center grand opening is not your typical store opening. These events draw hundreds of kids and adults, local news media, and sometimes major networks like MTV , VH1 & CNN.

1997 marked the year G.C. went public. Soon after, they purchased the catalog company, Musician's Friend, and have seen solid revenue growth with the acquisition

Over 200 Stores...and Growing! 21st Century Guitar Center plunged into the new millennium with the forward-moving momentum of the previous decade and a vision of vast expansion. Guitar Center reached the 100th store mark with the Grand Opening of the Little Rock store on February 21, 2002. In 2005, G.C.'s acquisition of Music & Arts Center brought 62 new stores throughout the US, catering to a completely new instrument market. With clear -cut goals and good old fashioned customer service that ca ters to the musician's every need, Guitar Center still proves more than ever to be a strong link between musicians and the tools of the trade.

The future looks bright as Guitar Center continues to open stores across the country. Guitar Center has no inte ntion of slowing down and will be around for generations to come.

*Taken from Guitarcenter.com

6 McBride, Ben Com 475: PR and advertising management CWU Spring 2012

Case Study 1

The Guitar Center off originally started to find skilled undiscovered drummers in the United States, as well as boost Guitar Center’s audience. Today, the Guitar Center drum off is the nation’s largest drum competition. People from all over have the chance to compete against other great drummers who have not made a name for themselves. People from all different cultures can compete and come to together to show their drumming roots, and Guitar

Center is responsible for making it all happen. The competition started twenty years ago, where contestants would send in footage of them playing for a chance to get on the bill for the national competition. Now contestants have to win the store competition, win the district competition, and win the regional competition, just to have a chance to go to the national competition held in , California.

From an advertising and public relations standpoint, the objective of this competition was to give Guitar Center a name in the world of drumming. The advertising team wants to show all the sides of Guitar Center, they want to be the place where people go not just for guitars, but for as well. One strategy they are using is providing all of the equipment throughout the course of the competition. Since about fifty people enter each of the store competitions, that is fifty extra people for every store trying out and using Guitar Center’s products. If people do well in the store competition or like what they are playing on, then they are more likely to buy it. Guitar Center is only providing top notch equipment as well. All of the brands they are using are all top of the line, meaning they are going to have the best feel for the drummers and sound the greatest compared to lower end products. Another strategy with 7 McBride, Ben Com 475: PR and advertising management CWU Spring 2012 promoting Guitar Center products through this event is promoting videos and links to the event all over the and store catalogs. This is an important strategy since thousands of drummers watch the national competition on Youtube. Guitar Center records the competition using a high definition camera and special sound equipment. What this does is it makes the drums look and sound absolutely perfect on Youtube. If the drums sound perfect on video, then that entices the thousands of drummers watching, to go purchase Guitar Center’s drum products.

Guitar Center also provides great incentive to enter the competition. Contestants get to have a chance to become the nation’s best undiscovered drummer, they are offered a plethora of prizes as well.

• $25,000 Cash • Custom • Drum Kit Endorsement Deal • Complete Set of Cymbals • Cymbal Endorsement Deal • Drumhead Endorsement Deal • Stick Endorsement Deal • Roland TD-20SX Electronic Kit & PM30 • Audix DP7 Drum Pack • $500 Converse Gift Card • Feature in Modern Drummer Magazine • 2012 NAMM VIP Experience • Trip to New York to record at the Converse Rubber Track Studios

Since the completion started, Guitar Center’s drum department has grown greatly. They have expanded their product mix and lowered their prices. Also, thousands of people attend the Guitar Center drum off every year. It is featured in blogs, on websites, and even in local news papers. Not only has Guitar Center profited greatly from this, they have also generated a great amount of media coverage on their company. 8 McBride, Ben Com 475: PR and advertising management CWU Spring 2012

Case Study 2

One of the biggest moves in Guitar Center history was the expansion of a second store in

San Francisco. The store opened in 1972, during the time when the city was going through a huge musical transition from music in the 1960’s. This new building had a layout and look that was different from what people were used to in San Francisco in that time. The store’s nature brought in musicians from all over the city though. People would travel for miles to come and shop for equipment at this store. Because of this store, a third location opened up in San Diego within a couple of months. These two stores are responsible for shaping the foundation of the company.

The San Diego store especially played a key role the company’s growth since it became the first central management office. To keep this growth going, and to keep this company alive,

Guitar Center needed someone to help shape it. Ray Sherr, an accessories clerk behind the counter proved to be what the company needed to keep this business booming. He was extremely savvy and helped propel the company into the realm of success with these two stores. He used creative marketing and ground-breaking promotions to help guide the way.

Sherr had high hopes for the company and his main objective was to expand. He kept the stores decentralized while they expanded to cut costs. He used great internal public relations through his campaign by and drilling what Guitar Center can become into his employees heads. He kept everything extremely positive and his employees happy. This greatly changed the face of the company’s communication efforts and this positive attitude that he created later shaped the group that evolved into the company’s senior management. 9 McBride, Ben Com 475: PR and advertising management CWU Spring 2012

By decentralizing Guitar Center’s operations Sherr increased the companies buying power with vendors. Initially, other employees did not like the idea of the added expense of central administration until it was shown that the money saved in vendor discounts would pay for it.

Another idea Sherr had for the company changed marketing not just for Guitar Center, but for other companies as well. He organized a direct mail campaign that to this day is still an extremely important part in Guitar Center marketing. With direct mail, Guitar Center can now send out catalogs of products from their centralized location to customers.

After a couple of years of these stores being open and booming success, Guitar Center received word of a Chicago music store closing. Since their marketing and public relations techniques were working so well, the company decided to expand into Chicago, opening the first store outside of California. The efforts put forth in the first few stores made it possible for the company become what it is today. This campaign may have been the most pivotal one in company history. The senior management team still exists today and is still help shaping the company. The direct mail marketing is one of the ways that Guitar Center is setting itself apart from other music stores. They have personalized catalogs for each type of musician. They have one for drummers, one for guitar players, and one for DJ’s or people who are into making their own music on the computer. This helps a lot with their public relations since customers can feel that they are not a part of a huge pool of all types of musicians, but part of a smaller pool of musicians with the same tastes as them. The objectives were met and the audiences originally set out have increased. These stores shaped the company and helped make it what it is today.

10 McBride, Ben Com 475: PR and advertising management CWU Spring 2012

Case Study 3

One of the more modern campaigns Guitar Center had done is Guitar Sessions television and events. This campaign was launched recently in 2010 and has become very popular. Guitar

Center sessions is a channel on DirecTV. On the channel, Guitar Center focuses mainly on live performances from many famous and talented artists. The channel also hosts many different battle of the bands competitions and various other contests where bands can perform live either on the channel by themselves or open for a famous band.

Guitar Center has many different objectives and strategies associated with this campaign.

By starting this campaign they want to keep adding different forms of competitions with different styles of music to expand their audiences. Right now their audiences for sessions include artists in heavier rock and bands, alternative bands, punk bands, singer- and drummers of all genres due to the drum off competition. Another strategy used is Guitar Center Sessions is showing that the company cares about musicians all over the

United States. Not only is this good public relations, but it is good advertising as well. Musicians can now appreciate Guitar Center for more than their great products, but for their care of musicians as a whole.

With these competitions arising, bands and solo artists are now coming to Guitar Center to enter in them and posting all of their material online. When all these artists are doing this, it creates more of a buzz around Guitar Center’s website. This campaign alone has turned Guitar

Center into more than just a store, but into a media outlet as well. In one of the competitions, bands are assigned to post themselves on the session’s website, and whichever band can gain 11 McBride, Ben Com 475: PR and advertising management CWU Spring 2012 the most fans from it, gets the chance to open for a famous act. Since bands are going to be promoting this heavily, it is going to bring an extremely high amount of internet traffic to the website. That is just one competition though. On the website at any given time there are seven different competitions going on. All of the different contests are also all associated with different types of musical tastes. There is a battle of the blues, rock of ages sweepstakes , a chance to play on a warped tour stage battle of the bands, a singer-song writer competition, a chance to play on stage with , the drum off competition information, and a contest called your next record where contestants can record an with from Blink 182.

Guitar Center is keeping up with their strategy extremely well by hosting all of these competitions on this channel.

Many new types of musicians and people are able to see all the products Guitar Center has to offer as well. On top of driving in people to the stores, Guitar is also reaching out to people who do not necessarily play an instrument, but people who enjoy good music as well. Since

Guitar Center has its own channel on DirecTV, every person who is a subscriber to them has a chance to watch high quality live performances of their favorite artists and bands.

With this campaign, Guitar Center has expanded their audiences through completing their objective and following through with their strategy. With this channel they have expanded their media outlets greatly. They added a whole new page with its own URL on their main website, and a link to the Guitar Center Sessions blog. They can reach out to not only musicians, but non-musicians as well. While high lighting all the great talent and equipment that Guitar Center has to offer, this channel might help mold someone into wanting to become a musician and have it all start at Guitar Center. 12 McBride, Ben Com 475: PR and advertising management CWU Spring 2012

Personal Reflection

I personally like Guitar Center’s public relations and advertising campaigns. I used to work at a music store and was extremely loyal to them, even after I stopped working there. Shortly after I quit, I became a very loyal customer to Guitar Center. Having a personalized catalog for drummers is one of the best aspects that keeps me coming in. Instead of flipping through a whole bunch of pages of guitars, computers, and lighting, I can just have a whole catalog of drums. Also, the coupons on the back are just for drums and drum accessories, instead of one drum, one guitar, and one electronic coupon.

The in-store strategy of letting people try out anything they want instead of just a limited selection is a great business aspect. They show that they care and want you to feel comfortable with your purchase and not experience as much post purchase anxiety. As a drummer, I watch all of the videos from the Guitar Center drum off. I also look closely and what drum sets the players are playing on, what brand cymbals they are using, and even what kind of sticks. For

Guitar Center to promote all of their products on a social media site is a great aspect of their public relations. All of their advertising and public relations strategies have kept me a loyal customer to their products and a loyal customer to their atmosphere and business as a whole.

Guitar Center has molded with the changing music industry over the time of it being a company. It has always changed to the demands of the market and always had the products for certain niches. Their communication efforts have improved since I always get follow up emails on big purchases to make sure that everything is working fine with my product. Even thou know it is a public relations tactic, I still feel valued as a customer and find value in the company. 13 McBride, Ben Com 475: PR and advertising management CWU Spring 2012

Bibliography

"Company - Guitar Center." Company - Guitar Center. N.p., n.d. Web. 25 July 2012. .

"Guitar Center History." Guitar Center History. N.p., n.d. Web. 25 July 2012. .

"Guitar Center, Inc. History." History of Guitar Center, Inc. â“ FundingUniverse. James Press, n.d. Web. 25 July 2012. .

"Guitar Center's Events & SESSIONS." Events and Promotions. N.p., n.d. Web. 25 July 2012.