Mackenzie and Marr Guitar PDF

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Mackenzie & Marr Guitars – Executive Report Mackenzie & Marr Guitars, an online guitar retailer based in Montreal, Quebec, faces challenges to finding a proper target market, an endorsement, a selling price for their new guitar model, as well as how to effectively allocate their promotional budget. This report will serve to address these challenges in greater detail. The target demographic is chosen to be young intermediate players between the age of 15 and 22. This target demographic is chosen for their proficiency in online shopping, relatively lower brand loyalty, and higher price sensitivity. These young players are likely in need of a new, higher quality guitar as their progress outgrows their entry-level model. This would make a lower-priced, high-quality guitar more appealing than a more expensive one of similar quality. The higher price sensitivity and lower experience should also be noted as these players will likely value a lower price over slight shortcomings in quality. Finally, young consumers are less loyal to certain guitar manufactures and overall more likely to explore and try new brands, especially if it is well reviewed. Therefore, the young intermediate players will be targeted. The price of $699.99 is chosen to penetrate the market opening of low priced, high quality guitar. Weighing unit contribution with the sales proportion, the launch of the new guitar will give a weighted unit contribution of $312.5, and will allow the company to break even at selling 154 guitars a year, well within the current average sales. This price will further broaden the company’s range of prices and appeal to a greater range of customers. Considering the target market of young intermediate players, this price point is reasonable as a middle ground between an entry level guitar and other comparable high-quality guitars on the market. The low price will serve to attract customers and help build brand loyalty, encouraging consumers to purchase more expensive models in the future. The US expansion should also be pursued to maximize the company’s sales and fully utilize the manufacture’s excess capacity. As the manufacturer can easily meet a monthly production of 100 guitars, while only 35 are sold in the domestic market, it makes sense to expand into a market over 10 times larger than that of Canada. Assuming similar proportions of young players as Canada, the US market consists of 2.35 million young guitar players. In one year, the 100 guitar monthly sales target accounts for capturing 0.5% of the Canada young guitar players, while only 0.05% in the US. The low price and high quality of Mackenzie & Marr guitars will give it a competitive advantage against many other online retailers, as well as the “Love it or Leave it” initiative. Therefore, making it very beneficial to move to the US market as a first mover selling High quality Chinese hand-made guitars. The Guitar World Magazine has a web traffic of approximately 280,000 between the age of 18 and 29. This is larger than the estimated market size for young guitar players. Therefore, it would be a great way to target these potential customers. Placing the ad on the marketplace may result in competition with existing guitars in the market. Therefore, regular ads seem like a more viable option. The 13 month subscription gives the lowest advertising rates per month, costing $2565 of the $4000 budget, leaving $1435 for other sources of advertising. Considering the need for high volumes of web traffic, targeting keyword searches such as “Quality” “Affordable” and “Hand-Made” with AdWords will help generate an estimated 1000 clicks for $1000. The remaining $435 can be used for “Remarketing” Google Ads to further increase exposure and generate more traffic and clicks, potentially capturing more customers.

Overall, the decision to target young intermediate players, expanding into US, the $699.99 launch price and the marketing strategies will bring the company the most success, and the details will be discussed in the following pages of the report....