Mule Guitars

We are a guitar manufacturing company. Currently, we are going to produce one guitar, ‘THE MULE’. We are marketing to sell a one of a kind steel bodied, cone resonator, 6-string acoustic guitar. We are custom making each guitar by hand in our machine shop in Michigan. The fully customized finished guitar will be delivered to the customer’s home in 10 weeks from the time the deposit is confirmed. If the customer chooses, they will have full access to promote their upcoming band performances via our social media outlets.

We have a vision of expanding into making many different styles of guitars in the future. Vision Statement We believe that we can make a significant contribution to the music industry by creating sounds that cannot be replicated, leaving a positive impression on everybody who hears our instruments. Mission Statement To help people enjoy life through music, we are on a journey to create the highest quality instruments to share with the world. We want everyone to enjoy the opportunity and to participate in creating, playing, and listening to the sounds our instruments make.

Target Markets (Segmentation) We understand that our product is a niche market and we are going to market it to specific consumers. We are looking for guitars players who already own at least one guitar and are looking to add another guitar to their collection. We are going to divide our market of guitar players into different subsets: those who are professional guitar players and those who are casual guitar players. The professional and aspiring professional, since this player is already in a band, they own at least one guitar; we are going to focus on this group the most.

We will suggest that our ‘Mule’ will offer a whole new sound to the band. We will concentrate our marketing campaign on the segment of bands that play mostly Rock and Roll, Rhythm and Blues, Folk, Country, and Jazz. The sound of the ’Mule’ will complement the tonal layers of these music styles. Our other market segment is the casual guitar player, also known as a hobbyist. Since our product is more expensive than a standard factory made, we must focus on players in the middle to upper income level, they have expendable money for a luxury item.

We will look for players who currently own at least one guitar. As for a geographic segment, we will concentrate on players throughout the United States. We will target out marketing campaigns to various festivals and concerts in the South and Southwestern United States. The steel guitar sound is very popular in the Country Music and Folk Music scene. Positioning Strategy We are positioning ourselves as a one of a kind luxury item. The customer will receive a superior quality guitar, excellent performance and style, with a sound that cannot be replicated.

Since each guitar is hand-made and built to order, you will customize your guitar as to the neck height, bridge-height, engravings, color (patina), fret amount, scale length, neck wood, inlays, etc. We are offering the most unique combination of a steel body with the cone resonator. We are offering a 10 year warranty against craftsman defects. You send it back to us and our master luthiers will fix it or replace it. Industry Analysis A study by Guitar Center estimates that the guitar sales in North America were $1. 4 Billion in 2011. 1 Guitar Center classifies their guitar customers as:2 6% Professionals 43% Aspiring Professionals 41% Hobbyists – A National Association of Music Merchants (NAMM) poll showed that 43% of adults (aged 18 – 55) can play a musical instrument. 3 The same poll from NAMM showed that 13% of adults are able to play a guitar. The gender breakdown is 17% males and 9% females. 4 This poll estimates that there are over 20 million guitar players in the U. S. Professionals –2. 6 Million Aspiring Professionals — 8. 6 Million Hobbyists — 8. 2 Million Data compiled from Musictrades. com5 shows that there is a continual increase in guitar sales.

We can see that there was a decline in sales during the 1996-1997 economic downturns, with a very strong rebound in the years following. We believe this same cycle is repeated after the 2008 recession. Total Guitar Sales Year| Units| %Change| $Retail| Change| Average Price| 2000| 1,648,595| 23. 3%| $923,552,000| 21. 2%| $560| 1999| 1,337,347| 15. 9%| $762,185,000| 9. 6%| $569| 1998| 1,153,915| 5. 8%| $694,883,000| -2. 2%| $579| 1997| 1,090,329| -. 33%| $710,769,000| . 63%| $652| 1996| 1,093,944| -1. 1%| $706,290,000| 1. 4%| $645| 1995| 1,105,914| 16%| $696,276,000| 23%| $629| 1994| 951,226| 10%| $564,480,000| 10%| $593| 993| 861,268| 26%| $511,605,000| 31%| $594| 1992| 681,762| 7%| $389,816,000| 9%| $571| This is the most recent data available to the general public. In order to access more recent data, we must be a member of the trade groups or pay a large subscription price for the proprietary information. From an informal poll, which we administered ourselves, given to a group of 20 guitar players, with the following questions: What attracts you to a specific guitar? How important is style? How important is quality of the sound? How important is scarcity of a guitar? Do you like the ability to have a guitar customized?

Highlights from our research include: 1. Looking great on stage, ergonomics for playability and acoustical sound when performing and recording are priorities. 2. Which performers use the guitar and are they are great at what they do. Is the featured artist playing the same style of music that I do. 3. Scarcity is special to the artist. Everybody owns a Fender Stratocaster but not everybody owns an exclusive hand-made instrument. External Environment Assessment Demographics: Our target market of adult guitar players aged 18 to 55 is increasing. Electric and bass guitar usage is very male dominated.

We predict an increased interest from female customers. Our acoustic guitar is customized for the proper fit for any sized hand. Economy: This is a positive for us. The economy is moving out of recession of 2008 and the stock market is booming. Our target customers have more expendable cash. Politics: We will struggle with the possibility that states will soon have to collect sales tax on internet sales. This could increase the price paid by the customer. We are not too worried because our product is in a prestige pricing category. If import regulations change our competitors will have to adapt their business models.

We will benefit because we are produced in the USA with all domestic parts. Social/Cultural: The trend is that County, Western, and Folk music is the most popular style of music. Stars like Blake Shelton, George Strait, Tim McGraw, Trace Adkins, Kenny Chesney, Lady Antebellum, Taylor Swift, and Miranda Lambert have consistently been in the Top 25 downloaded songs on ITunes. 6 Technology: The internet is where people conduct business. We will market our product through all social media available. We are aware of our competition and can adapt our marketing and sales accordingly.

Used guitars are a competitive issue. On eBay right now there are 7,000 electric guitars and 3,000 acoustic guitars listed, and a large percentage of these are over $1,000. 7 Global: The quality of guitars produced in China is getting better. We believe that the quality of our sound cannot be replicated on machine produced instruments. We will heavily promote the fact that we are made in the U. S. A.

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