After reading Endless Novelty this week and Wheels for the World last week I have been thinking about the current state of American industry and production. Certainly the world is a different place than the time period covered by Endless Novelty. Specialty production, however, seems to be thriving in at least certain industries.
One such industry that I actually know something about due to the fact that I am a musician is guitar amplification, and this field is actually quite interesting when analyzing it in terms of the industrial aspects we have covered in this class. Let me explain some of the odd things about guitar amplifiers that make them an interesting case study about industry and marketing.
First, guitar amplifiers are one of the few machines still being produced with vacuum tubes. Yes, that’s right, tubes. The things that they used in primitive computers that took up entire rooms. Many musicians feel that none of the modern technologies have improved upon, or even rivaled, the sound of tube amplifiers. This is a hotly debated topic, but none the less, there is a thriving industry of tube amp producing companies. I am often convinced that, while there may be some sonic advantages for certain applications, the tube love affair is also marketing hype. Guitarists will spend twice the money on a tube amp for a machine that has all kinds of reliability issues because it supposedly sounds better. Again, this is sometimes the case but not always!
Second, guitar amplifiers are a product still benefitting from the ideal of “American Manufacturing.” While the American auto industry tanks the far smaller industry of American made guitar amplifiers is doing quite well. While some American based companies have certain product lines produced overseas these budget lines are always looked down upon by “serious” musicians. Does that mean that all of these budget lines are of low quality? I doubt it, but the “Made in USA” tag demands respect and a HIGH price on guitar amplifiers.
The only large American instrument amplifier company that has not outsourced any product lines to overseas production is a company called Mesa Boogie. (This company became popular in the early 70s when Carlos Santana started using one of their prototypes) Mesa Boogie is considered almost unanimously among guitarists to be the best amplifiers available before boutique products. Mesa Boogie amps are much more expensive than most other large company amplifiers. They are, however, known to be absolutely reliable and of course, they sound good.
So why do so many musicians pay 2-3 times as much money for Mesa Boogie amps then they would for something with comparable features that are produced overseas? Is the quality of workmanship truly that much better to warrant such drastic price differences? I would say there is at least a slight quality difference. If nothing else there seems to be at least a consistency of quality present in American made amps, at least with very high end companies like Mesa Boogie. However, I think there is more to it than simply more consistent quality control.
A large factor in choosing an American made amplifier among musicians is name brand recognition and this is certainly a major factor in all of industries. If you play a Mesa Boogie fellow musicians know that you spent a lot of money and therefore, in theory, are serious about what you do. This is, in my opinion, the single biggest factor in the guitar amplifier industry. I have personally used overseas products that I have felt are just as good as American made products, but there is no name brand recognition in an amplifier produced in China. Even the good Chinese players I have seen play Mesa Boogies or something made by the United Kingdom based company Marshall Amplifiers. If you play a Mesa Boogie other musicians take you more seriously. With that said, I have heard many poor guitarists playing Mesa Boogies and many great ones playing cheap overseas things. But, while I love driving a Toyota, for now I prefer playing a Mesa Boogie!
While on a musical topic, here is a link to an article analyzing the differences between a Mexican made Fender Stratocaster and an American made Fender Stratocaster. The Stratocaster is a very popular guitar invented in the 1950s and has become an icon of modern music. So, for your reading pleasure:

All that is all well & good about the Mesa Boogie, but does it go to 11?
I think that the connection between price and value assigned to items by individuals and groups is really interesting. I have been lured into getting the most expensive items for the things I really feel passionately about, and then later I feel duped even if I really enjoy it. I feel like for most things I don't understand how they came to that price, and maybe if I knew what went into making it then I would feel more comfortable paying a certain amount. But everything seems like it is made so quickly and easily now I can't justify it.
I suppose Mesa Boogies was able to keep a market by connecting its older technologies to a higher qualitity.
Posted by: Lindsey Bestebreurtje | 10/14/2009 at 01:03 PM
When I was working on my bachlor's in economics this came up briefly, as it was not totally in line with a couple of key Econ assumptions. In most economic models it is the case that unit demand for a product decreases as price increases. If a good is more expensive people will demand less of it. However, in the case of certain "luxury" goods this relationship is the opposite. As price increases so does demand. It is difficult to imagine this behavior with a student budget, but it is clearly the case with more than just luxury items. Think bottled water from a tap, or your example of the amps above. There are many other variables consumers factor in besides just unit price. But that goes against one of the key Econ priniples of ceterus paribus, all else equal. And what is another key Econ priciple questioned by this pattern? Everyone acts rationally.
Posted by: Kyle Riddle | 10/14/2009 at 09:14 PM
Good point Kyle. In one of my marketing classes we were asked "Why do people pay so much for Mercedes automobiles?" After a certain point, there is no qualitative difference between them and other cars (i.e., an engine is an engine is an engine). I don't know the answer to this, but apparently there is some psychic reward for owning an expensive automobile. This was years ago, so I don't know that Mercedes are still so overvalued.
Posted by: Dianne Schmidley | 10/15/2009 at 08:21 AM
This over-priced issue seems to permiate most types of products. As Kyle points out, certain types of luxury items seem to do better since they are so over-priced. I think this is also due to the fact that these products create an "exclusive" sort of group. Just by owning such a thing a person feels that they belong to somthing above average, at least within that domain, be it cars or guitar amps. And yes Lindsey, Mesa Boogies go to 11! But so do many cheaper amps.
Posted by: Salvatore DeGennaro | 10/15/2009 at 10:09 AM