Posted at 11.27.2018
Memo #3: Steinway & Sons
Steinway & Sons' creator wished to "build the best piano possible and sell it with the lowest price consistent with quality". In doing so, they are actually seen as the leader in the making of high quality Grand pianos. The company was able to prosper quickly, because of their technological superiority and their sound understanding of their target market, value proposition, and competitive advantage.
Target Market: Steinway & Sons' target market consisted of two different sections of consumers, private and institutional. The Grand pianos were targeted to rich, affluent individuals in america, specifically to those with money over $100, 000 and aged 45 and more mature who were thinking about music and looking for something to showcase their riches. The pianos were also targeted towards music artists, who wanted the very best quality instruments. The second segment was establishments, like musical performance halls, hotels, and colleges who also needed the best of the greatest when it arrived to musical equipment.
Value Proposition: Steinway & Sons knows the value of high quality, superior sounding Grand pianos that folks and professional music artists alike could regularly count on for providing superior service. All Steinways are built by art methods with little use of assembly-line technique with only the best possible materials used and each one has its own unique features and sound. The award being successful pianos are seen as being the best in the planet and serve as a position symbol representing a higher prestige among anyone who possesses one.
Competitors: Although Steinway & Sons face increasing competition from Japan piano manufacturers like Yamaha and Kawai, as well as U. S rival, Baldwin, they may have remained superior in the creation of Grand pianos due to the durability of their product, their ground breaking cross-stringing technique, the high quality materials used, along with the extremely skilled labor who were hired throughout the development process. Unlike their opponents who employed more automation techniques when mass producing their pianos, Steinways were built by hand, making each piano unique and building only a restricted amount of handmade pianos. This allowed them to be able to command higher prices than their competition as well as maintaining the trustworthiness of being the best in the globe.
Recommendations for Steinway & Sons:
Product: Steinway's main product was the Grand piano which is handcrafted and typically takes around 2 yrs to produce. Because of the elaborate and long process of producing the Grand pianos, the company was able to produce on average, only 3000 pianos in a given 12 months. Steinway increased their products to include Boston pianos, Limited Editions, and the Crown Jewel Collection. The Boston pianos were created by Steinway & Sons but made in Japan by Kawai. These pianos sold for approximately half a Steinway Grand piano. The Small Edition Collection was a specially-designed piano, marking the 140th anniversary. It was so successful that they made a decision to introduce a Limited Model piano every two years. The Crown Jewel Collection were traditional Steinways that were finished in amazing woods like African pommele or East Indian rosewood and were sold at a premium price of 20-30% more than the traditional Steinways.
Steinway is a solid and exclusive brand with a brandname personal information that majorly focuses on concert Grand pianos. They ought to continue production of these pianos and continue focusing on music artists and musical establishments and colleges, while also concentrating on differentiating themselves from their competitors.
If Steinway desires to keep producing Boston pianos, they must establish it as a new brand, differentiating it from the Steinway brand name. This must be clear to the client they are two different brands since it doesn't make sense from a branding standpoint for Steinway to create Boston pianos. They have to target the growing Asian market with this piano, while enhancing the syndication network in these market segments through retailers and then by beginning their own stores. The Small Edition pianos were highly successful and they should continue to produce those every 2 yrs as well as the Crown Jewel Collection.
Steinway also needs to take good thing about the used piano market that is growing fast by offering trade-ins of used pianos on the purchase of new ones. They are able to then re-sell used pianos as well as new ones to increase their profits.
Price: Steinway's Grand pianos are in the high grade end of the piano market in conditions of quality and price. Retail prices in 1996 ranged from $30, 000 to $111, 000 in the United States. Many factors contributed to the high price. Steinway pianos were constructed by handcraft methods with limited use of assembly-line techniques which brought on the Grand piano to use around two years to create. The piano contains over 12, 000 individual parts and the company possessed higher costs associated with high quality of raw materials used in the production.
Steinway has never reduced their prices, and commensurate with their high quality product, they are able to command the highest prices on the market, nearly dual that of their rival, Yamaha. In order for Steinway to be observed as a exclusive brand, they can never lower their prices or make discounts available. This would be seen as discounting the brand and would be bad for their brand image.
In order to reach other people who may not be able to spend the money for high price of the Steinways, they have to offer some kind of assistance or loans to aspiring musicians. Also, Steinway could focus on the middle course groups by providing low-interest funding options or payment plans so other customers who might not be able to spend the money for pianos, could pay it off over time.
Place: Steinway's products are sold to professional and amateur musicians, as well as orchestras and educational corporations, through its worldwide network of traders. The majority of the company's Grand pianos were sold in the United States, through Steinways' sales office buildings and a large network of self-employed dealers. Customers purchase Steinway pianos either through one of the business's shops in towns like New York or London, or through individually managed dealerships.
There is a huge, growing Asian market that Steinway has yet to focus on. Their competition, Yamaha and Kawai have already taken over this market. It's important for Steinway to enter into this market with their Boston pianos to compete with Yamaha and Kawai, and then gradually introduce their high-end Steinway Grand pianos to this market. The Asian market is rife with individuals with high disposable income, who be enthusiastic about owning a piano that is included with status and affluence from the United States. They also needs to look into growing internationally, like the center East, specifically Dubai or Saudi Arabia which also has a lot of people with high disposable income.
In addition to expanding internationally, Steinway should think about establishing an improved online and digital presence and experiment with selling their pianos online. This might open them up to more radiant demographic who use the Internet more regularly to purchase products, especially higher-end products.
Promotion: In the first years, Steinway promoted their brand by building a large factory in New York where two main Railroad automobiles passed by making thousands of individuals aware of the Steinway name. They also exposed Steinway Hall, which offered as NY City's main concert hall. Steinway marketed its pianos with famous musicians using its "Concert and Musician Program" to get top artists from about the world. In virtually any given 12 months, over 90% of most traditional music concerts presented a piano soloist performing over a Steinway Grand piano.
Steinway's marketing emails must be consistent using what the brand stands for: affluence and prestige. Steinway's advertising has outlined that one will not "buy", but "invests" in a Steinway, and a Steinway piano is usually made simply a little bit much better than necessary. Their advertising emphasizes family worth, the contributions to artwork and music of Steinway & Sons, and their technological excellence. The classic quality of Steinway is definitely emphasized and it's important for Steinway to maintain these marketing information.
Steinway's brand is so widely known and popular, that they do not should do more brand promotion since people are already so acquainted with it and what it means. Steinway should continue steadily to use musicians who are loyal to the Steinway brand in helping promote their pianos. These music artists could help to market to musical establishments or other aspiring music artists in the industry.
In addition to relying on famous music artists for promotions, Steinway should consider developing business partnerships with hotels and other entertainment venues to show only Steinway pianos at their facilities. They should also venture into product position with films and TV shows, portraying the Steinways in films and on popular tv shows. Non-musician superstar endorsements may help them utilize consumers who are not sure of the pianos, but want the prestige of owning something that other stars have.
Steinway should also consider using other types of campaign, like digital and online marketing to get the term out about their pianos. They should leverage social multimedia and YouTube campaigns to target to a youthful demographic who might not be ready to buy one of the pianos yet, but will probably in the future.
In summary, Steinway & Sons should focus on the following referrals. They should consider producing the Boston pianos under a different brand different from the Steinway name and start focusing on the Asian market. They must continue steadily to produce the Limited Release and Crown Jewel Editions given that they proved successful. Second of all, they should continue steadily to command a higher superior price over their challengers, but consider offering funding or payment plans for the middle class demographic, opening up their marketplace and the prospect of more revenue. Thirdly, Steinway should develop internationally into the Asian and Midsection Eastern markets to have good thing about an untapped growing market. Finally, the company should experiment with different promotional strategies like product placement, social advertising, and superstar endorsements.