Meridian — It should surprise few that Peavey Electronics Corporation is one of the top private companies in Mississippi. After all, it is one of the largest manufacturers of musical instruments and professional sound equipment on the planet.
A large part of the rise of the company, from founder and electronics pioneer Hartley Peavey tinkering in his father’s basement in the mid-1950s to today’s world-beater, can be attributed to innovation and invention. Peavey currently holds more than 130 patents, and its more than 2,000 products have forged a solid reputation for consistently delivering as promised.
Well, Peavey is at it again, this time inventing not just a new product but practically a whole new company. It has embarked on a totally new marketing approach, tweaking all of the “four P’s” — product, price, place and promotion. And the new initiative is paying immediate dividends as the company is currently enjoying a banner year with increased product demand and sales that has prompted additional hiring and general company-wide optimism.
“There are so many positive things happening that we recently loaded up some trucks and toured our facilities to let our own employees know what we are doing. They were amazed,” said Tony Moscal, Peavey’s senior manager of marketing and product development. “I don’t have any specific numbers, but I feel we’re having the best year in terms of sales, and perhaps brand recognition, than we have had in the past decade.”
Like every other manufacturer, Peavey has felt the impact of globalization. Over the past decade, it has watched competitors send more and more work offshore, allowing them to offer less expensive products through decreased labor costs.
With a strategy of being a value leader, Peavey found itself mired in the middle of the road. Its least expensive amplifier, for instance, was being undercut price-wise by competitors. And its high-end products were becoming less competitive as well. Finding running with the pack unattractive and untenable, Peavey decided to break out.
For its low-end products, Peavey has gone with the trend and is producing its least expensive guitar amplifiers overseas. This has smoothed the playing field, dropping the price of Peavey’s entry-level amplifier from $129 to $89.
At the other end of the spectrum, the company has launched new products that are up-priced and up-scaled — and built here at home. The new JSX amplifier, designed in collaboration with guitar virtuoso Joe Satriani, is a prime example.
The strategy seems to be working. The $89 amplifier is currently Peavey’s number one producer in terms of volume. And the new JSX amplifier is the company’s best dollar-generator.
The Satriani deal is also an example of how Peavey has taken a new look at promotion. Affixing the Satriani name to a product ensures that other guitarists and musicians will take notice. And Peavey continues to sign an array of artists into the Peavey family.
But Peavey is going after different market segments, too, utilizing a number of strategies. It recently signed a deal to build products for Jack Daniel’s under an exclusive licensing agreement, recruiting a name that is part of Americana and reaching a wholly different demographic. Alliances with others such as Jagermeister, Grey Goose and Element Skateboards, as well as product appearances on the home shopping network QVC and “The Price is Right” game show furthers this effort to go after new Peavey customers.
“I went into a store the other day, and the lady working there asked me where I worked,” said Moscal, who once worked for a Peavey competitor and sold his consulting company to join the Peavey team. “When I told her, she said, “Oh, I was watching ‘The Price is Right’ the other day and saw one of your amplifiers. I guessed it was $2,000. Do you know it was only $800?’ That’s what we’re going after — a whole new market.”
Folks on the Coast will soon see a large result of this effort. Continuing an existing relationship, Hard Rock is building a casino in Biloxi, and they have recruited Peavey to build a 150-foot guitar that will grace the front of the gaming venue.
“Place” has not been left out in Peavey’s new approach. Three years ago, Peavey products could only be bought in music stores. The company saw online sales and promotion as an attractive channel, but did not want to harm its relationship with its dealers in the process. To this end, the company has launched Peavey MAGNET, a Web site pre-loaded with Peavey product information that dealers can simply customize to their own needs without needing HTML code knowledge or other technical expertise.
All of this has created momentum at Peavey. A recent tour by European dealers of Peavey’s Mississippi operations was so successful that the attendees, without Peavey’s knowledge, held an impromptu meeting in the lobby of their hotel and pledged stronger support of the company and its products. And Peavey recently held its first-ever trade show in Las Vegas.
The event drew rave reviews from participants, who were especially taken with Peavey’s new high-end HP Signature Series and Rotor models, as well as the new Sanctuary Series line designed specifically for houses of worship.
All of this has been a bonus for another group — the residents of Meridian and Lauderdale County. Due to the increased demand and sales, Peavey has hired nearly 150 new employees in the Meridian area since last April.
“This thing has just snowballed,” Moscal said. “We’re seeing growth in every category. It is very exciting.”
Contact MBJ staff writer Wally Northway at email@example.com.
BEFORE YOU GO…
… we’d like to ask for your support. More people are reading the Mississippi Business Journal than ever before, but advertising revenues for all conventional media are falling fast. Unlike many, we do not use a pay wall, because we want to continue providing Mississippi’s most comprehensive business news each and every day. But that takes time, money and hard work. We do it because it is important to us … and equally important to you, if you value the flow of trustworthy news and information which have always kept America strong and free for more than 200 years.
If those who read our content will help fund it, we can continue to bring you the very best in news and information. Please consider joining us as a valued member, or if you prefer, make a one-time contribution.Click for more info