Who are

Steinway & Sons

For 140 years, Steinway & Sons has been recognized as a leader in the market for high-qualitygrand pianos. Established in New York City in 1853 by Henry Engelhard Steinway, a Germanimmigrant, the firm quickly prospered because of its technical excellence.

STEINWAY ARTISTS

Why is Steinway legend? What made it so a great master?

All Steinways are still assembled by craft methods, with limited use of assembly-line techniques.

1.

2. Skilled labour was employed throughout the production process.

3. Steinway used the highest grade ofWood.

4. selling them through its own sumptuous outlets and through a network of dealers, and gaining exposure by encouraging premier performing artists to use the pianos.

ON APRIL 18, 1995

STEINWAY AND SONS WAS SOLD FOR $100 MILLION.

PURCHASED BY DANA MESSINA AND KYLE KIRKLAND.

IN 1994, STEINWAY & SONS HAD SALES OF $100 MILLION.

Grand pianos Vertical pianos Boston pianos0

500

1000

1500

2000

2500

3000 2698

600

2300

Units Sold

Sales of Steinway pianos in different Countries

Sales in 1994

United StatesGermanyJapanEnglandSwitzerlandOthers

PRICES OF STEINWAY PIANOS IN 1995

GRAND PIANOS : $26,400 TO OVER $70,000

VERTICAL PIANOS : $11,900 TO OVER $17,000

BOSTON PIANOS : $6,395 TO OVER $30,000

UNDERSTANDING THE PIANO INDUSTRY

Pianos come in 2 types

Verticals Grands

CHALLENGES

How should melissa

and kirkland go about

the Boston

range of pianos?

Should Steinway continue its high

end niche strategy or market its

pianos more

aggressively?

How to further

enhance or

increase revenue

s?

What roles

Messina and Kirk should play?

WHO ARE STEINWAY’S BIGGEST COMPETITORS ?

1. Other Piano Manufacturers

2. The company’s own used Pianos

Largest producer of piano in the world.

Produced limited number of concert grand piano with traditional craft method.

Duplicated or used better technology than Steinway

By 1996,sole remaining large scale producer of piano in USA

Produced wide range of pianos ranging from inexpensive one to hand crafted concert grand

Manufactured pianos on highly automated assembly line

Focused on small volume-top quality grand pianos

Recognized as being among the highest quality in the industry

STRENGHTS• Established brand

reputation of quality and durability

• The Steinway Concert and Artist program has around 850 artists whom choose the Steinway and Sons piano

• Traditional handicraft production techniques

WEAKNESS• Saturated market• Major Competitor is

their own used pianos• The durability and

quality of their products limits the concept of repeat buyers

OPPORTUNITIES• Use name to push other

music products • Lower prices and cut in

on competitors• Have new famous

composers represent Steinway

• Establish a larger customer base in Asia to increase market share

THREATS• Technology, rise of the

electric piano• There are levels of

inexperience of the current younger owners/CEOs

• Expansion of Asian manufacturers

1. Maintain high quality niche market 2. Should introduce new lower-priced piano to Asian

market as a flanker to compete against low-price competitors

3. Should make good use of ‘THE CROWN JEWEL COLLECTION’ as it represented 30% of unit sales in 1995

4. They should divide their roles into marketing and finance section

Role of Messina & Kirkland

As both Messina and Kirkland lack experience in the piano industry, they should hire a professional team from the piano industry and they itself have gain lot of experience from financial sector from salmon so they handle financial activities.  

Focus on Asian market 

Market more aggressively Economic conditions is improving and more focus on growing Asian market will cause higher profits .The piano industry is going downturn and the impact of the used piano market is strong.

To reinforce marketing activities into Asian market, Steinway should introduce new lower-priced piano to Asian market as a flanker to compete against low-price competitors. 

Focus on Asian market 

DISCLAIMER

Created byAkash Deep, IIT Kanpur, during a marketing internshipunder the guidance of Prof. Sameer Mathur, IIM Lucknow(See www.IIMInternship.com)