Washburn Guitars Factors

Q1 What factors are most likely to affect the demand for the lines of Washburn guitars (a) bought by a first-time guitar buyer and (b) bought by a sophisticated musician who wants a signature model?

a) The factors are most likely to affect the demand bought by a first-time guitar buyer are;

• Price - Price is the major factor for the first time guitar buyers. The industry is competitive and there are substitutes for this product. A price reduction will raise the demand for these guitars. Buyers can shop at another guitar store and find a deal for a similar guitar. This type of product has high price elasticity or price sensitivity.

• Brand name - A recognized brand name is also one of the major factors for the first time guitar buyer. Brand name usually presents good product quality and customer service, it has the good reputation that can be trusted.

• Trend - Demand will be affected by trends. For example when the Hunger Games was released demand for Archery increased. The same thing could happen if a movie about guitar playing was a hit.

• Taste - Customer tastes, if buyer like acoustic or electric guitars or if the buyer is beginner or middle or professional level players or what style or color of guitar they like, left hand or right hand player, what level of quality they are looking for?

• Income level - Consumer income, what price range of guitar consumer can afford decided by their income. Changes in disposable income as a guitar purchase is likely a discretionary purchase for this type of buyer

b) The factors are most likely to affect the demand bought by a sophisticated musician who wants a signature model are;

• Brand - Prestige brand is the major factors for sophisticated musician to consider since the brand has famous musician associated with the guitar, the identification with star spokesperson

• Quality - Premium quality includes craftsmanship, design, the look and feel, material, sound quality are the important factors affecting the demand

• Price - Price inelasticity since the product is a one-of-a-kind. It cannot be bought anywhere else.

Q2 For Washburn, what are examples of (a) shifting the demand curve to the right to get a higher price for a guitar line (movement of the demand curve) and (b) pricing decisions involving moving along a demand curve?

a. There are few reason will shift the demand curve to the right to get a higher price a guitar line. For example 1) an increase in disposable income would shift the demand curve; 2) if competitors increased prices, Washburn demand would shift to the right; 3) if the price of amplifiers dropped, the demand curve for guitars would shift to the right; and 4) if there was a change in consumer taste towards the style of guitar that Washburn sold, demand would shift to