Washburn Guitar has been a maker of fine musical instruments since the company's founding in Chicago in 1883. The company promises that "each guitar [it produces] represents the finest quality at the best possible price:' Washburn has four price points: (1) entry level at $349 and below; (2) intermediate level at $1,000 and below; (3) professional level at $1,000 to $3,000; and (4) collectors level at $3,000 and above. Amid the evolving perception that lower prices indicate lower quality, Washburn has taken steps to ensure the quality of its products at all price points. Interestingly, guitars made in the United States typically are of better quality and workmanship than are guitars made offshore. Consequently, U.S.-made guitars command higher prices. Indeed, most musical artists demand U.S.-made guitars. Washburn uses a manufacturer's suggested retail price (MSRP) as the pricing guideline for retailers selling its guitars. If discount and online retailers offer Washburn guitars for sale at below a minimum advertised price (MAP) that is set by Washburn, these di'stributors are warned to cease the practice. If the practice of violating the set MAP continues, the retailers lose their distribution rights for Washburn products.

Video Discussion Questions
1. How does the concept of segmentation pricing relate to Washburn Guitar's four different price points?
2. How does Washburn's four different price points reflect customer wants and needs?
3. Are Washburn's four price points an accurate indicator of differential quality? Why or why not?