Price & Marketing Math - Essay Example

Washburn Guitars Is the history of a wide range of musicians. From blues players who shaped rock ;n roll to multi;platinum recording artists to emerging guitar virtuosos. It is a history that can be heard and experienced every time you turn on the radio or listen to a live performance. It is a history built by skilled craftsmen and musicians who share one common love-a passion for the guitar. Washburn 125 year history is steeped in the tradition of fine instrument making. The products reflect the hard-working spirit of the Washburn employees who craft and design each guitar.

We Will Write A Custom Essay Sample On
ANY TOPIC SPECIFICALLY
FOR YOU

For Only $13.90/page


order now

Washburn continues to be a consistent leader in combining design, innovation, and technology to deliver the rich, bold sounds for a vast musical landscape. Washburn guitars are preferred for many first time buyers and professional musicians as well. Prices, designs, and quality of various guitars manufactured by Washburn are formulated to attract market segments that Include the first time guitar buyer as well as professional musicians, The company Is also well known for Its custom made guitars purchased by major recording artists.

Washburn may produce “signature del guitars” signed by Darryl Jones or Joe Perry, but it still has to set prices that enable it to stay in business. The current executive vice president of Washburn International is responsible for setting the prices for the company’s line of guitars. Currently, a new line of guitars is being considered for production with a suggested competitive retail price of $850. Suggested retail prices of $900 and $1000 are also being considered for the new guitar line. Washburn distributes it guitars at major musical retail outlets like Sam Ash.

Market research has indicated that Washburn an expect to sell as many as 25,000 of the new line of guitars internationally. In addition, the vice president Is trying to decide whether It would be more cost effective and profitable to manufacture the new guitar line In the Chicago plant or In the Nashville faculty. The Nashville faculty enjoys some lower fixed costs because of lower rental costs, taxes, etc. To help in the decision making, the company Retail Markup % Total Fixed Costs $360,000 Labor Costs Per Hour $15 Number of hours required for new unit 8 hrs.

Additional Materials cost per unit $150 Nashville Facility: 250,000 $10 Price & Marketing Math Case: Answer Sheet Belling Hall 401 Questions: 1. What factors are most likely to affect demand for the lines of Washburn guitars (a) bought by first-time guitar buyers and (b) by a sophisticated musician who wants a signature model? 2. For Washburn, what are some factors that may cause the demand curve for the new guitar line to shift (movement of the demand curve)? 3. In Washburn Chicago plant, what is the break-even point in units and Sales (BEEP) for the new line of guitars if the suggested retail price is (a) $850, (b) $900, (C) $1000 4.