Mus Products Unit 1

What are the 5 Key Activities of the NAMM Show?
1. Host Trade Shows
2. Grow and Strengthen the Membership
3. Professional Development
4. Market Development
5. Global Partner
What are some ways NAMM does Professional Development?
*Seminars and Clinics
*Online Courses
*NAMM University
*Gen Next (Mus Bus students)
*NAMM YP
How does NAMM promote Market Development?
*Music in Schools
*Gov’t Lobbying
* Promoting Recreational Music Making
What is the MAC?
Music Achievement Council
*2 Focuses
-Recruitment
-Retention
SupportMusic.com
-Portal for Research

-Toolbox fro Music Programs in Trouble

What is Mr. Holland’s Opus Foundation?
-Donates Money for Buying and Repairing Instruments in Schools
-Schools Apply for Grants
-65% of Students Must be on Free Lunch
-No Cash Grants
VH1 Save the Music
-Establish Music Programs in Schools
-Budget a Full Time Instructor
-Has to be During the School Day
-Foundation Buys the Instruments Locally
GAMA
Guitar and Accessories Marketing Association
-Advocate for Guitars in the Classroom
-They Only Work with Retailers
-Guitars in Schools
-Guitar Month – April (Tax Returns 😉
PMC
Percussion Marketing Council
-Drumming for all Ages
-Retailers and Consumers
-PITS Program
-International Drum Month–May
PAS
Percussion Arts Society
-Not Under NAMM Umbrella
-PASIC
-Teachers and Drummers together
NAPBIRT
National Assoc. of Professional Band Instrument Repair Technicians
-Normal IL
-Manufacturers & Retailers
RPMDA
Retail Print Music Detailers Assoc.
-Convention of Publishers and Retailers
-Educate about Copyright
NASMD
Nat. Assoc. of School Music Dealers
-Must be a Brick and Mortar Store
-Have to have Road Reps
-Have to have Repair Facilities
-Focused on School Music
NAFME
Nat. Assoc. For Music Educators
-Works closely with the Every Student Succeeds Act. (ESSA)
Who were key people who brought the Pro Audio Combo Market to Life?
-Beatles
-Mel Bay-Made an instructional guitar book
-Les Paul – Gibson Guitars
-Leo Fender – First vacuum tube guitar AMP
What’s so amazing about the guitar?
-One Man Band
-Accompany yourself with chords
-Relatively easy to learn
-Affordable
-V Customizable
-Portable
-Pop Music
Trend or Fad?
Trend- Sticks

Fad- Here and Gone

Ukulele
-Came over night, took the world over by storm
-Big Trend
-Retailers thought t was just a trend
Customer Demographics of Guitarists
-Brand Loyalty? Nope
-Limitless Collection
-Relatively short Buying Cycle
Acoustic Guitar Types
-Classical
-Dreadnought
-Parlor
-Cut-a-way
-12 String
-Ovation
Electric Guitar types
-Strat vs. Tele
-Single Coil vs. Humbucker
Sales and Marketing Techniques When selling Pro Audio Combos
-Lessons
What are some Advantages of a Store Providing Lessons
-Income from Lessons
-Sell Books, Accessories
-Drive Store Traffic!
Benefits of Studio Rent
-Keeps Teachers Off Payroll
–Taxes, FICA
–Potential Benefits
–Insurance (Workers Comp)

Cons
-Teacher Schedual
-No Store Loyalty

What are the 2 ways to Administrate Lessons?
Studio Rent

Studio Employees

Benefits of Studio Employees
-Payroll Costs
-Store Administration
-Fees are Bundled
– Instrument sales
-Possible Sales Commission for Teachers
– You recommend Johnny buys a case, h buys a case
What are some different forms of Endorsement?
1. Free Goods
2. Gear Sold at Cost
3. Deals
4. Guest Appearances
5. Designs
Pros and Cons of Free Goods Endorsement?

Manufacturer’s Perspective

Pros
-Promotion
-Advertisement

CONS
-Artist might not want/Use it
-Means less

PROS/CONS of Gear Sold at Cost

Manufacturer’s Perspective

PROS
-Still a profit
-Better advertising, “This artist bought this!”

CONS
-Compete for Endorsees

Bundles
Grouping things together to entice the sell
eg. Guitar Strings, picks, book, tuner, strap, etc.
Dealer Agreement
Contractural Agreement between the Manufacturer and Retailer.
-Defines how the retailer can go about selling that product and advertise.
-Stronger the brand, stronger the dealer agreement
What is the importance of Territory?
If you as the manufacturer have too many retailers selling your goods in the same area, they will compete with each other and you will ultimately lose.
Master Order
Single order once a year to pretty much re-qualify as a dealer
What comes with the Master Order?
-Sale Quota
-Must buy Quantity, not just like 1 or 2 products
-Used to have a huge deal after like 50 or 100 unique items from one company, but they stopped because retailers would take advantage
Dating
Day that you as a retailer has to pay invoice for the products you’re selling
-Usually 30 Days
Extended Dating
Extends that invoice date
-Usually for a mass order
-Trying to sell over the course of the whole year,
not just that month
Freight Allowance
Percentage of shipping cost the manufacturer will take off to entice you to buy more
Sideways Sales
A sale that takes place within the same market level.
-Retailer to Retailer
–Usually Same company just moving product
–Two separate Companies, but far apart so no competition
–Often 2 retailers signed with the same dealer
It Easy or Hard to get into the Pro Audio Combo Market?
Easy

Cheap, and has a huge market

What will a Manufacturer usually ask from a retailer when taking them on as a retailer.
Personal Guarantee
-Usually involves a Credit check
-This shit usually happens because the Huge retailers often fail eventually
-Not uncommon for shit to suddenly hit the fan
–Guitar Center has it coming 😉
Pricing Structure
Highly sensitive to street pricing
-Because cost of entry is so low, you have more competitors
MAP
Minimum Advertised Price
-Smaller Brick n’ Mortar Stores want MAP to be high
-Big Box wants Low
Proprietary Brand
Smaller Brands to differentiate their products.
-Only sold at Brick and Mortar
House (Stencil) Brands
Putting the store logo on a product to control pricing
What’s the future in the guitar industry?
-Push for female guitarists
-High Turnover, very short buying cycle
What are some pricing Strategies for Combos
-MAP
-Off Shore Brands
-Cymbals are their own thing
– Expensive! Use their own dealers
-Franchises sometimes
Pricing Strategies for Orchestral and Marching
-No MAP (Min Advert. Price)
-Because everything is done through bids
-Retailer Loyalty
Pricing Strategies for World Percussion
-High Margins
-Bundles for like drum circles
Future Pricing Strategies for percussion?
2 Directions
-New Digital Drums
-Ancient Classic Drums