Steinway and Sons: Buying a Legend

Steinway and Sons: Buying a Legend

Submitted by- Vatsal Goel (FT152079)

Q. What are the sources of brand equity for Steinway?

A. Steinway & Sons - one of their major strength and value addition is their brand equity, which is built into the long established and traditional brand identity and the perceived brand quality and image of the Steinway pianos. The Steinway name communicates certain attributes and benefits to the consumer. It is the preferred brand of many world renowned musicians.

The Steinway piano over the years has been identified as one of the top-line premium and high priced piano with a market niche. Their Quality and differentiation have been the key strategic elements in the brand strategy of Steinway, which has been very successful and made them pioneer in the higher end markets. All Steinways are assembled using craft method which gives each piano a unique identity of its own, it brings in an element of art to the industrial manufacturing process.

At the 1867 Paris Exhibition - The jury awarded Steinway the prestigious Grand Gold Medal of Honor ‘for excellence in manufacturing and engineering. All these factors combined have given Steinway the reputation of quality and standard that it holds today.

Q. Should Steinway continue its high end niche strategy or market its pianos more aggressively?

A. For over 120 years, Steinway has held the image of a very niche product which is only for concerts by skilled musicians or the upper class wealthy cream of the society. This strategy has worked wonderfully for them until now. Now the markets are changing, the following factors are driving this change:

* A no. of Asian competitors, selling at lower prices.

* Emergence of computers and sophisticated electronic keyboards.

In such a scenario is would be difficult for Steinway to sustain by pursuing its niche market strategy. But introducing a lower end product under Steinway brand can also lead to brand dilution. Hence what needs...