Pricing focus grouping - my thoughts and your views needed

Hi, Doug. My response has nothing to do with product development, so if you're committed to what you're doing, you may want to move on to the next post.

I know very little about making and selling electric guitars. But I do have some knowledge of business planning and execution. And my question to you is: what do you want to be? Your original post seemed to argue against itself a couple times - and as I read through I kept coming back to the same question:

What is the single fundamental reason to offer a lower price guitar? To sell some, of course - but towards what purpose? Increased top line to finance 'other stuff?' To be nice to enthusiasts who can't afford you? Greater profits? You really need to be able to answer this simply and easily. If you can't, you'll likely find hassles that, in the end, won't be worth it to you.

Some folks would describe your OP as very typical growing pains for a small business, but it's never 'typical' when it's one's own baby. The thing is, there are tons of answers to your questions - if you have a clear vision of what you want (e.g., "I want to be like Reverend" or "I want to sell 10,000 guitars a year" or "I want to purchase a 72 foot yacht and finance an all-female, Scandinavian staff for said boat").

What's the goal?
 
I would recommend avoiding Duncan Designed pickups. I don’t dislike them—I keep the stock ones on my Corsair. But they have a horrible reputation. If you’re going to use Asian pickups just get some unbranded models that sound good and slap on a new sticker.
 
What is the single fundamental reason to offer a lower price guitar? To sell some, of course - but towards what purpose? Increased top line to finance 'other stuff?' To be nice to enthusiasts who can't afford you? Greater profits? You really need to be able to answer this simply and easily. If you can't, you'll likely find hassles that, in the end, won't be worth it to you.

What's the goal?

If we do this it's because I want to offer our "fans/followers" an option for a Kauer that the lowest price point I can to give them a way into buying a "Kauer" that we can't offer now. I am absolutely not interested in competing against Gibson or Fender or other imports. Hence why I don't want to make thousands of them. If this peters out at a 100 guitars or 50 then it was a good learning experience. I'd rather sell a 100 of them to our fans than see them buy other brands because they think we are unobtainium priced.

That's the only reason we would. It's also been a good way to take a hard look at what we do now and asses if I want to make changes.
 
For all the bunkum about not buying a guitar w/o playing it, the seller is willing to trade for another guitar sight unseen as long as it has name....

The thing about higher end guitars is that enough scrutiny went into each part of its construction that you can get one sight unseen and know it won't be a dog. That's not always the case with F or G.
 
FWIW; I'm probably one of the worst offenders when it comes to "that's nice, if it was $2k less I'd consider it". The reality is, I still wouldn't be buying a guitar for $1k because I'm just not buying guitars (I have plenty). I'm just bloviating on the Internet and looking at guitar porn. I suspect a lot of people fall into this category. Point is; don't worry about the "I'd hit it for $1k" crowd - most of 'em wouldn't.

That said, I really appreciate this thread and the openness displayed here.

Carry on.
 
Wow! This thread has a ton of info to sort through.

Here's my brief take:

Establish who you are and what you represent as a brand.

You are a high end, low volume builder. That is what you do. Taylor took decades to reach a point where they could diversify their offerings to the point they are now, and some say that isn't necessarily a good thing for their image. Either way, it's safe to say that their identity as a brand has changed considerably since venturing into more mass produced, lower end guitars.

I would personally concentrate on expanding your ability to output more units that match your current identity. Once you offer a low end alternative, you become a lower end builder with an available higher end line. It's a small distinction with huge implications.

Anyway, that's my take. Be who you are and don't sell yourself short.
 
A $1200 to $1400 guitar with a bolt on neck needs to be special for me. I can spend that much at Warmoth for the body and neck, while getting pickups and hardware elsewhere, and get exactly what I want. Your product needs to be something truly unique for me to consider it. I don't know if that happens at this price point for ME. The caveat is that I am willing, able, and likely prefer to break out the soldering iron and other tools required to assemble a guitar from parts. Even adding the cost of paying a qualified luthier to assemble and setup the guitar still forces you have something truly unique to get my business.
 
Most of what I would say has been covered by others but I have 2 thoughts on your original post that I've not noticed covered.

But Ben, my assembly guy has been hammering on how do we build a "guitar for the masses" priced between 999-1400.

To my mind a guitar for the masses is not in the $999 to $1400 range. It's a Squier Strat, and Epiphone Les Paul or a Yamaha Pacifica etc and probably somewhere in the $200 to $500 range. A guitar in the range Ben is suggesting is probably your semi pro, regular weekend warrior, or maybe a hobby player with a bit more than the average disposable income.

If you're set on producing a "budget" range, I think you need to clearly identify who that range is targeted at and what their typical budget is for a guitar. Then you need to look at what the competition is in that price range and work out what you need to do to stand out and make your offering more desirable at that price point.

On a budget model (again, budget for us is a US made guitar that's anywhere from 999-1400) we just can't do the best hardware, case, pickups ect. Pickups and a Mono case alone make up 50% of the total hardware expense on anything we make (or more). So we're not going to see Lollars or TV Jones on this model or a Mono bag.

That doesn't mean GFS either though. I'm stubborn, we're trying to see if we can do something in the lower end Duncan or Duncan Designed line that would work. Hardware would be Gotoh where we can and still hopefully CTS pots and a quality switch. No Sperzel locking tuners, electrosockets ect.

I don't think the lack of a case or gig bag at your target price point is a problem, I'd rather the money went into the guitar I'm going to play and I'll sort my own case/gigbag out.

Regarding pickups, have you tried alternative makes from the lower price points like putting some GFSs into an Arcturus for an A/B test? I've not compared things like Lollars and TV Jones with GFSs but I have used Toneriders as replacements in a couple of guitars and to me at least they stand up against "higher" brand pickups I have in some of my other guitars for a lot less money. Perception of the brand is key I guess.
 
I agree. I have bought 3 suhrs. All around or over $2000 and only 1 came with a case and that is because the dealer threw it in for free!!!

Cases aren't that important to me. Gig bag would be fine
 
Apparently, this guitar is for sale TWO BLOCKS AWAY FROM ME. I'm considering sending this guy a message on TGP. Maybe he'd be nice and just let me try it out.
If you do, please report back. I am in love with this guitar aesthetically. Maybe enough to endure the wrath of Mrs. Slim if I get it. But I'd like to hear what you think from a hands-on experience.
 
To my mind a guitar for the masses is not in the $999 to $1400 range. It's a Squier Strat, and Epiphone Les Paul or a Yamaha Pacifica etc and probably somewhere in the $200 to $500 range. A guitar in the range Ben is suggesting is probably your semi pro, regular weekend warrior, or maybe a hobby player with a bit more than the average disposable income.

True but you're not really comparing apples to oranges here. An all american made moderate volume (again, we're not talking about 100's a day, maybe 100 a year) guitar at 1299 or 1400 is very much inline with price wise with a MIA american standard strat or lower end US made Gibson. That's a bargain imo.

Again, we're not trying to go after that market. I'm simply doing this in my mind to see if it's feasible to get a guitar out to people who are fanatical about my brand (which contrary to how it seems on here, there ARE some fanatics about our brand) to give them the option of buying a "Kauer" instead of one of the millions of AM STD Strats or LP Studio's out there. I'm not knocking them but if we can do an original Kauer design at that price point and I was a already a fan of the brand and had the choice, I'd want the guitar that a million other people didn't already have. So think of it as "high volume budget boutique" and that's basically it.

Essentially if I can pick up 1% of the people who follow us to buy one, isn't that better than 0%. 1% of just our Instagram followers is enough to make this sustainable. Personally, if you don't want to spend your money with us that's fine too there are thousands (millions?) of guitars at all price points that are equally good or great and that's just fine. All I can do is try to help the people who do want one of ours out.

Also, if we do a 100 and that's all we ever do, then that's fine too. That's a 100 people more than we have no playing our guitars and maybe a large percentage of them move up to Kauer's at some point. That's a win too.

Regarding pickups, have you tried alternative makes from the lower price points like putting some GFSs into an Arcturus for an A/B test? I've not compared things like Lollars and TV Jones with GFSs but I have used Toneriders as replacements in a couple of guitars and to me at least they stand up against "higher" brand pickups I have in some of my other guitars for a lot less money. Perception of the brand is key I guess.

Given the choice, would you buy a guitar with Duncan's you know or the same priced guitar with pickups that the majority of people haven't heard of. Don't get me wrong, I've had lots of Tonerider sets and I like them but I find from my experience, if I have to convince you something is good (or why we do it a certain way) it's not going to sell. The Acadian is that way for us. Everyone who picks one up and plays it loses their mind. Everyone we tell the specs too first won't touch it.
 
True but you're not really comparing apples to oranges here. An all american made moderate volume (again, we're not talking about 100's a day, maybe 100 a year) guitar at 1299 or 1400 is very much inline with price wise with a MIA american standard strat or lower end US made Gibson. That's a bargain imo.

My point was more about whether you were looking at it from aiming to sell to the biggest buying demographic (which isn't the aim by the look of it) or compete at that price point and produce a better guitar for the money (which is the target). In which case I fully agree that is a bargain for someone with that budget level.

I'm simply doing this in my mind to see if it's feasible to get a guitar out to people who are fanatical about my brand (which contrary to how it seems on here, there ARE some fanatics about our brand) to give them the option of buying a "Kauer" instead of one of the millions of AM STD Strats or LP Studio's out there. I'm not knocking them but if we can do an original Kauer design at that price point and I was a already a fan of the brand and had the choice, I'd want the guitar that a million other people didn't already have. So think of it as "high volume budget boutique" and that's basically it.

Essentially if I can pick up 1% of the people who follow us to buy one, isn't that better than 0%. 1% of just our Instagram followers is enough to make this sustainable.

1% is definitely better than none. My personal approach to guitar equipment is that I like the idea of something different from the norm. Budget permitting, I'd be more likely to buy something with Kauer on the headstock than Fender or Gibson any day of the week.

Personally, if you don't want to spend your money with us that's fine too there are thousands (millions?) of guitars at all price points that are equally good or great and that's just fine. All I can do is try to help the people who do want one of ours out.

I'm married with 3 kids, 2 of whom are grown up but we still end subsidizing them (keeping their cars on the road, etc). As a result I generally don't have spare money, never mind any to spend on guitars anymore. :( That's why I buy parts on ebay when they come up cheap enough and try to build Partsocasters (don't tell the wife!) :wink:

If I get to the situation where I have time to gig more, and money to invest in newer guitars then I'd happily buy one of yours if it fits my gigging needs.

Given the choice, would you buy a guitar with Duncan's you know or the same priced guitar with pickups that the majority of people haven't heard of. Don't get me wrong, I've had lots of Tonerider sets and I like them but I find from my experience, if I have to convince you something is good (or why we do it a certain way) it's not going to sell. The Acadian is that way for us. Everyone who picks one up and plays it loses their mind. Everyone we tell the specs too first won't touch it.

I was using Tonerider as an example but I take the point, hence my comment that perception is key. Everyone's different but personally you wouldn't have to convince me on that account for two main reasons:

  1. You're a high end builder. You are all about top quality. You are not going to sacrifice tone in whatever guitar you put out at any price point as that defeats the purpose of your brand.
  2. Actually your website does explain in places why you do certain things. It's cleverly used as marketing spin as explaining why it's good is a reason to buy a particular model. I don't think Kauer loyalists would have a problem with believing it as essentially you would be staking your reputation on it and obviously wouldn't do that with something that didn't come up to scratch.
Good luck whatever decision you come to Doug. And if the lottery comes up, I still want that Redwood Arcturus while you've still got one in stock.
 
One other thing to keep in mind is, maybe if this does get established, ToneRiders go into a 999 version. Still need room to expand both ways :wink:
 
Doug, I've read most of this thread, but held back only because from the standpoint of your business, I know nothing! :) . I think it is cool of you to consider the possiblility.

All I can say from my standpoint, if you did come out with something around $1K, I would give it some serious consideration :)
 
For me I stand a little different and would prefer a true built Doug Kauer. I know it is alot more expensive but it is a quality product that I can be a proud owner of. I almost became an owner a few years ago but as usual, finances get in the way. My last new guitar was my 2007 Les Paul Studio plus which cost me about $1500, prior to that was 1991 G&L ASAT Classic that I bought for $1000. In between were many used guitar at reasonable prices when advertised. My only custom guitar was a 1984 Jackson Soloist that I ordered and had to wait about 4 months to get. That cost me about $1600 which in todays money would be about what Doug charges for a Starliner which is what I would have owned. I am hoping that one day I can own a Kauer. I would love to add one of Doug's gems to my horde of mistresses!
 
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