Proposal to Gibson

The most effective solution for Gibson to increase sales, as well as profits is to more closely integrate the separate entities of the corporation. The new direction of the company should be to produce variations on one basic guitar that will satisfy price and quality concerns. There is still a need to produce both higher end as well as more economical guitars; however Gibson must find a middle ground to balance cost and quality.

Currently our production is split in two; the prestigious American models and the more reasonably priced Japanese (Epiphone, Tobias, etc.) models. Neither has left the customer totally satisfied with his/her choice in a Gibson. They are forced to choose from what appears to be either an overpriced guitar, or an inferior guitar.

With a Japanese model, the entry-level quality of the guitar will lead the customer to find a replacement as their skill advances. Since they are crafted to resemble the superior American models, the customer will assume that there is only a marginal difference in the sound and action. With the sale of an entry-level guitar, we will tend to negate the possibility of repeat customers.

The cost-prohibitive nature of the American models will again diminish repeat business. The typical customer will save for a single guitar that he/she uses exclusively for decades. With a marginal drop in price to make a guitar appear more affordable, we can make them a replaceable commodity. A life-long customer who purchases a guitar every few years will spend much more, and at the same time feel more satisfied with what he/she gets for their money.

The solution is to consolidate the two current possibilities into one. Much of the cost of production can be cut by manufacturing the electronic components in our Japanese facilities. However, this will not excessively compromise quality. The body, woodwork, paint, and assembly is worth the extra investment of being done in the United States, since they are the most glaring differences between mediocrity and superiority. This combination creates a lot of positive