Really interesteing post about this on the ultimate guitar forums:
"The article itself wasn't from Gibson, but was based on a look at what Amazon leaked on their site (most of what are theoretically the 2015 model lineup) and on the advertising copy that went with the individual guitars. I followed the links when they were first up, and the article is accurate *based on what was there*.
It caused quite a stir on MLP and other sites. If true, it represents an interesting business model moving forward, and it's consistent with Henry J.
The guitars that Gibson put out at the low end (the J series, the T series) were crap (IMHO). They were stripped-down junk that didn't compete on anything but logo, with quality that didn't measure up to far better chinese and Korean product in that price range.
Before the flame wars start, note that whatever popularity the guitars enjoyed was because "the common man could finally afford a real Gibson." More than one buyer stated, "I'm getting everything that Gibson has to offer except for the 'bling'." That was not music to Gibson's ears.
And what it did was NOT increase Gibson sales. It cannibalized potentially higher-end Gibson sales, substituting loss-leader sales at unsustainably low prices and zero profit. And it didn't do what Gibson intended. They have an issue with entry-level guitarists in that newbs have NO brand loyalty to Gibson. They're buying other brands. The cheap Gibsons didn't sway the newbs, who were bright enough to see that the Korean guitars were better quality. Instead, Gibson found it was selling to older customers who simply couldn't afford the prices before. Backfire.
Gibson is a premium brand, but the cheaper guitars were crapping it up. Increased volume of units moved didn't translate to increased profits. just the opposite. And Gibson was in serious danger of losing its identity.
A peripheral problem is that Guitar Center, Gibson's biggest outlet, is floundering. It's not paying its bills, and it can't support large inventories of high-dollar guitars. You probably haven't seen a PRS at your local GC in a while. For the most part, they've bailed. The guitar walls have more of the guitars flat on the walls than at an angle. It still looks like there are a lot of guitars, but those flat-on-the-wall guitars simply take up more space. There are 100-300 fewer guitars on display on average, and what IS there is mostly low end these days. You won't find much backup stock, either on the shelves or "in the back." The keyboard section will have more Used gear on display and less New stuff. I went in looking for a Korg PA3X the other day. They didn't have one and didn't have one in the system, but they did have a used (and fairly battered, with parts that didn't work) PA2X (discontinued version) sitting there. In every department, Guitar Center is filling more space with used gear. Far cheaper. Vendors who once challenged for shelf space on over 200 stores are now being parsimonious with inventory on credit, fearing its loss in a bankruptcy.
Gibson produced those low-end guitars partly to fill space on GC walls and maintain the appearance of a Gibson presence. That pretense is over. Gibson now figures to sell more guitars online and eliminate pilferage, damage, shop wear, etc.
In short, Gibson is at once tightening its belt and attempting to move back to its favorite spot at the high end. They're looking at the Harley Davidson business model and planning to rely on the retiring baby boomer money for the next ten years. They've missed that Harley is losing headway on the same business model of late and that Harley desperately needs to find new customers as well.
After years of keeping its thumb on Epiphone, it may be forced to allow Epiphone to produce the quality it's capable of. To Gibson's very deep corporate chagrin, it may be Epiphone that saves the company. Gibson has painted itself (literally) into a corner of traditionalism with nitrocellulose lacquer on US-made guitars. Epiphone has no such restrictions. Its finishing department allows its entire production facility to move far faster than Gibsons, with dry-to-dry finishing in under 24 hours. Gibson's greatest quantity of customer complaints and returns comes from nitrocellulose lacquer. They need to convert, but until they talk the Tennessee legislature into "making it their fault" so that Gibson can blame "big gummint," they can't convert to the much faster finishing methods yet. The satin finishes on the cheap guitars moved faster through the system and averted quality concerns. Flat finishes on guitars and cars are already beginning to fade as a fashion statement. But Gibson knows it can't produce large volumes of guitars with quality finishes using nitro. It really needs to change.
Epiphone can produce FAR higher quality guitars than it's been allowed to. Gibson didn't want the in-store competition for its low end and Studio guitars. By ceding the lower end pricepoints to Epiphone and allowing them to move upscale, Gibson can concentrate on producing fewer guitars at higher prices and attempt to retrieve its lost reputation for high quality. Epi still produces profit for Gibson. And you can bet that within 10 years, the Epiphone factory will be producing a Gibson-branded product "for China Only" that will be equal to (or exceed) the quality of USA-made Gibsons. The long-term plan is to develop demand for those guitars as a grey-market "sneak-in" product for the US, and then to appear to throw up its hands and produce the same guitars in the US (with modern finishes), moving nitro to a "Historic Only" niche."
http://www.ultimate-guitar.com/forum/sh ... ge=1&pp=20