Management development institute

End term Exam

Consumer Behavior
MM: 30 2 Hrs
Open book

Questions:

1) Based on the information on various personas, who do you think is the best target
customer for RKS Guitars, and its value proposition of RKS Guitars? (10)
2) Conduct the market analysis through PA Map, moments of truth, and compare the
same with existing alternatives. Do you think it makes sense to design a line of
guitars to attract different segments? If so what should be different about the
guitars for each one? (10)
3) How people buy guitars; what are implications for RKS Guitars? If you were Ravi
Sawhney’s shoes, would you consider “pulling the plug” on RKS Guitars?
Prepare a marketing plan for the company (10)
Ans 1)

RKS Design used a set of four elements understand and discover a consumer need, which
has previously been unmet. The four elements are:

1. PA Map
2. Customer Profile
3. A Day in Life
4. Hero’s Journey

For the purpose of designing guitar, RKS Designs created 4 personas (sample profiles), in
order to decide which target to segment. The profiles are as follows.

Steve - Collector

 55 year old male, married, established and successful contractor

 Gives thought to purchases, critically analyses the factors and researches before
making the purchase
 In pursuit of rarities, visiting trade shows, auctions and local vineyard
 He can be categorized as a ‘Collector’
 Guitars can be priced >$6,000

Drew – Professional

 34 year old, single, young artist, with varied interests

 His priorities are performance and quality
 He likes professional grade guitar, those used by artists on stage
 Higher price is acceptable as long as it provides avenue to improve musically,
professionally or socially
 Guitar can be priced $3000 to $6000

Lisa – Hobbyist

 34 year old, young, married woman

 Looking for brands and products that tell a story and offer a personal connection
 She prefers products which appeal to playful side of her personality, however
quality is also very important to her
 Guitar can be priced below $1000 in this category
James – Aspiring Musician

 18 year old, Young adult, with low personal income

 Dedicated and passionate about music, perhaps a part of the band
 Ready to spend disproportionate, even all of his income on instruments and gears
 Likes to differentiate himself, and hence also looking for the same in his product
purchases
 Guitars can be priced $1000 to $3000

Professionals and Aspiring Musicians are the best target for RKS Guitars, since RKS has
focused a lot in design and the quality. Consequently, the product is also priced above
$1000.

Professionals and Aspiring musicians care a lot about quality, and cannot compromise
with the “sound” of the guitar. But at the same time, they are looking for differentiating
themselves from the vrowd, and would be attracted to good looking, unique, trendy guitar
styles.

RKS Guitars were exactly the product these groups would prefer. However, a deeper
analysis of the the two segment reveal the following.

Professional Aspiring Musicians

Ages 30-45, professionally Young, between 18 to 30
Segment
play music years
Guitars can be priced to Guitars cannot be priced
Profitability cover costs, and generate too high, not large volume
volumes expected
Stable; Professionals Unstable; Young Adult
Stability of Segment earning stable earning, spending disproportionate
following passion income
Association with well-
Good quality guitars, with
known guitarists, Reliable
How to Reach emphasis on playability
guitars with lower price
and tonability
points
Financially stable, earning Relatively new passion,
Segment’s Objective income from music, likely might or might not get into
to stick to the career music full time

Hence, based on the above analysis, RKS guitar should primarily focus on Professional
Guitarists. The segment of Aspiring Musicians might follow suit and become a customer,
but at the same time RKS Guitar should not specifically design guitar to target this
segment.
 Ans 2)

Based on the personas described in the previous question, the personas can be plotted on
the PA Map as follows

Steve

Basic Self Actualisation Dynamic

Drew

James

Lisa

Passive Interactivity Immersive

Looking at the customer profiles, we will now compare the current market offerings with
on the same PA Chart.
As can be seen, there does exist a demand segment in the upper left quadrant. The
currently available market offerings fail to meet the market requirements.

This forms “Opportunity Stage 1” for RKS Guitar. If RKS Guitars find the niche, and are
able to design a product that directly targets that segment, the company might really be
able to make a mark in the industry.

Designing Guitar for respective Target Segment

It is not advisable to target Steve i.e. “Collectors” Segment, or Lisa i.e. Hobbyist.

Collectors segment of guitar are very difficult to penetrate into, as the popular brands and
history associated is already established. At the same time, designing a new unique
product, and doing the required R&D expenditure does not make sense for low margin
guitars for Hobbyists and Children, who do not appreciate such differentiation.

The Guitar may be designed for Aspiring Musicians and Professionals after looking at the
respective economics. Professionals are expected to be long term, loyal customers, who
might stick to the guitar if they like it. However, Aspiring Musicians have unstable
income, and might not be in the music industry for full tie career.

Therefore, RKS Guitar should first design and target the Professional Segment, as they
are most likely to try out the product.
Ans 3)

RKS Design portrays the purchase journey in the form of following 4 steps, and call it
“The Hero’s Journey

Attraction
They should stop and walk
closer and kind of sniff the
guitar
Moment of Truth
Consumer actually
interacts with the
Purchase product, and realize the
If they start playing it, and benefit he wanted out of
they like it, they would it
Engagement want to make a purchase
Either they should walk
off, or they should pick up
the guitar.
They might want to try to
plug in to test the gitar

The implication of the Hero’s Journey described above has important implication of the
kind of product RKS would want to design.

1. The Guitar should be so unique in design, that potential customer stops to have a
second look at the design and appearance.
2. The Guitar should really sound great, which should compel the customer to make
the purchase and try it at home, to reach the moment of truth.

In order to market the above product, Ravi Sawhney has the following alternatives:

Option 1: Stay with Hohner

Hohner was expected to provide marketing and advertising in exchange for their cut.
However, RKS did not find the marketing efforts to be enough. Since, Hohner is not
making the required efforts, alternatives need to be explored.

Option 2: Finding another company

Finding someone up to par may be difficult and time consuming. There is no guarantee
that the new partner would be able to drive up visibility of the product.

Option 3: Handling their own marketing

RKS is not experienced in the area. It can end up spending more time and money than
necessary. Inexperience, in such tightly relationship driven industry might be difficult.
Option 4: Accepting Investments

RKS believes the company can reach a broader market by launching the product much
cheaper at $699. However, given the current speed of production and the overhead costs
RKS has incurred, it seems improbable they would be ale to reach such a price with given
resources and volumes.

Option 5: Selling the Design to Gibson

Gibson, fourth leading in the industry, seems interested in buying the design. The guitar
market is growing. However, this is the same reason for Sawhney to keep the company,
fix the issues and watch what can come out from this profitable industry.

Recommendation

RKS has only Option 5 left for newly deigned Guitars. It should get into an arrangement
with Gibson, or other large player to license or sell the patented design of the Guitar.

Ravi Sawhney was worried that the Guitar was not fully developed yet, and needed
further iterations. Selling the design to such a large company might only lead to shelving
of the product, since it had been observed in the industry earlier also.

RKS can get into an arrangement, where they play an active role in development and
redesigning of the guitar for further iteration, while Gibson provides the muscle power
required to push such an innovative product.

Hence, it is recommended to “not pull the plug”, and get into a licensing/selling
arrangement with Gibson, or a similar company.