...CASE ANALYSIS Course name: Marketing Management Altius Golf and the Fighter Brand FAS Group No: E2 Name of the Students Ashish Rakheja | 15F113 | Pankaj Deshpande | 15F134 | Sarthak Chandra | 15F144 | Shruti Shukla | 15F148 | Sreeda P | 15F153 | TERM 2 – 2015 T A PAI MANAGEMENT INSTITUTE, MANIPAL PROBLEM STATEMENT The recession of 2008 had badly affected the golf industry. The consumers of golf equipment were cutting down their spending and as a result the retail outlets closed at an alarming rate of 25%. The investment in golf course real estate and development sector also fell down over 40%. The sales shifted from on-course pro-shops to off-course retailers. USGA was aware of this and to halt this trend aimed at making golf more accessible. Altius Golf was an undisputed leader in the golf ball manufacturing market in spite of a long term decline in the number of golfers and huge drop in sales resulting from financial crisis. Due to lack in innovation and high priced products, the company has been losing market share to its rivals. The CEO, therefore, wants to launch a new product called Elevate to foster the next generation of golfers. With Elevate, the firm will introduce 4 balls that are more forgiving and easier to drive for distance and offer it at a price 40% below the company's flagship brand. It has now become necessary for Altius to relook into its strategy and come up with the “Elevate Strategy” to regain its market. However the question...
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...facing Altius in this case. There are three main challenges which Altius is facing in this case. The first one is that the whole market of the golf ball is reducing due to the financial crisis, which led to the decrease of the number of the new golfers and the decline of their spending. The second one is the chanllege from outside of Altius. Its leading position in the golf ball market is now chipped away by other manufacturers. The third one is the chanllege from inside of Altius. The Elevate program is distrusted by most of the directors. They doubted that the program will damage the company’s reputation, price structure and profit instead of saving Altius. 2. Briefly state your assessment of the strengths and weaknesses of Altius at the time of this decision (1/3 page) Strengths Even though the golf ball market share of Altius is reducing, it is still much higher than any other manufacturers’. Moreover, the range of Altius’products is very wide due to the establishment of the ”on-course” and “off-course” outlets. In addtion, Altius has a good reputation. Weaknesses Altius’s golf balls are more expensive and less accessible for new golfers than other competitors. In addition, Altius reacted later than its competitors. 3. Briefly state your assessment of the primary opportunities and threats in the marketplace for Altius at the time of this decision. (1/3 page) Opportunities The first opportunity is that the financial crisis has already gone, and the golf ball...
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...Altius Golf and the Fighter Brand 1. Why has Altius Golf lost market share? What will happen if Altius maintains the status quo? Debido al reciente periodo de recesión, los consumidores de equipos de golf han disminuido sus gastos en las pelotas de golf y esta tendencia ha afectado gravemente la industria, de igual forma ha disminuido el número de jugadores profesionales. Las pelotas Altius son caras en comparación a las de la competencia y los nuevos jugadores no están dispuestos a gastar en equipos costosos. Los requisitos reglamentarios de la USGA son muy estrictos en cuanto a tamaño, forma y material de las pelotas, lo que puede afectar el renombre de Altius por no adherirse a dichas normas. 2. What should Altius´s objectives be? What trade-offs must it manage? Deben centrarse en el equipo de golf de bajo precio, como la pelota “Elevate” y cambiar su estrategia de marketing que está enfocada a equipos profesionales de golf y ahora deberá ser a equipos menos costosos, más orientados a los nuevos jugadores que lo practican por diversión, así mejorará la rentabilidad de Altius. Esto se debe a que la industria del golf se está tratando de revivir con los esfuerzos de la USGA mediante el estímulo de nuevos jugadores que practiquen el deporte con reglas más relajadas. Por lo tanto, es un buen momento para captar nuevos jugadores a través de una amplia comercialización de pelotas de bajo costo y que sean no conforme a las normas USGA, lo que ha permitido a los...
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...environment of Altius Golf consists of: the golf industry, its competitors, regulatory bodies such as United States Golf Association (USGA) and the golf players. External environment includes some opportunities as well as threats for Altius Golf which is discussed below: Opportunities Growth in industry has just restarted after a period of recession; hence this is an opportunity for Altius Golf to acquire the market share of reviving golf industry. Moreover, recent consumer study carried out by the United States Golf Association (USGA), has revealed that high cost of golf equipment is one of the reasons for the lack of interest in golf sport, however; Altius Golf can capture the market growth by offering low-cost golf balls to its consumers through off-course outlets. Additionally, the USGA has introduced “Tee it forward” movement, to make the golf game easy, moreover; USGA has introduced “Golf 2.0” program, which allow the new golfers to play 12-hole tournament instead of 18-hole and use larger holes, therefore; this step of USGA will induce more new golf players that is an opportunity for Altius Golf to gain increased market share of new players. Threats Because of the recent recession period, consumers of golf equipments have cut-down their spending on golf balls and this trend has badly affected the golf industry. Additionally, USGA regulatory requirements are very strict in terms of size, shape and material of the golf balls, which may affect Altius Golf’s goodwill...
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...Altius Golf 1. A principal razão que levou a Altius Golf a perder quota de mercado foi a recessão económica global vivida entre 2008 e 2010. Esta recessão levou ao abandono de certos hábitos de consumo que outrora os consumidores tinham. Foram vários os mercados em que isto se sentiu uma vez que esta recessão os atacou como um todo levando consequentemente a uma perda de poder de compra por parte de muitas pessoas. Os consumidores ficaram assim mais sensíveis aos preços dos produtos no geral praticados, especialmente pelos preços que a prática de golfe tem que são muito elevados. A Altius era uma das empresas que praticava preços mais elevados na produção de bolas de golf. O número de novos praticantes de golf diminui, e os que já praticavam golf de forma mais séria tornaram.se mais sensíveis ao preço. Isto levou outros concorrentes da Altius a redirecionar o seu target e a praticar uma nova estratégia. As empresas quiseram assim conquistar uma nova geração de praticantes de golf, onde esta prática fosse mais acessível a todos, fácil e divertida. Implementaram uma nova estratégia direcionada para novos e “recreational golfers” com duas campanhas: Primiera – “Play your way challenge” e a Meridian – “non-conforming balls”. Com as novas estratégias adoptadas pelas empresas concorrentes a Altius perdeu mais quota de mercado, pois estas conseguiram satisfazer as necessidades deste novo segmento. Dada esta ameaça por parte dos seus concorrentes, a Altius teve de surgir com uma nova...
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...Altius Golf and the Fighter Brand A. Current Situation The retail channel for golf is composed of two broad categories: on-course and off-course. Altius maintained a steady position in the on-course market with nearly 100% penetration of outlets, where no other competitor had a presence in more than 80% of on-course shops. Conversely, Altius’ market share in the off- course channel is clearly eroding, falling by more than five points between 2008 and 2012. Altius’ loss of off-course market share is attributed to the availability of a greater variety of less expensive golf balls in off-course channels. After the 2008 recession, nearly 23% of women and 36% of children had quit playing golf. This resulted in a significant drop in the number of golf players. As such golfers have cut spending on golf equipment, which badly affected the golf industry. Furthermore, investment in golf course and real estate development fell over 40% after the 2008 recession. This resulted in nearly 25% drop in the number of stores immediately after the recession. Thus, equipment manufacturers are experiencing greater pricing pressure as unit volumes are falling and buying power is consolidated among a small group of powerful retail buyers. Compounding the problem, 70% of Altius Golf sales are derived from Altius’ flagship product, Victor TX, one of the most expensive golf balls on the market. Since 2008, golf players are less willing to spend more on their equipment, and more willing to explore...
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...Case Study: Altius Altius has built and maintained its leading share in the golf ball market. Between the years of 2008 to 2010 the market was hit by a global recession, which sparked the first downturn in Altius’ overall market share. Within the years following the recession, there have been slight trends of growth but industry revenues are still far below pre-recession levels. The current strategy has an extreme amount of emphasis on associating the brand with professional golfers. Evelyn Gracie, the CEO, finds that although this strategy is highly important for Altius, it is becoming less and less effective in attracting golfers and their brand loyalty. As data and survey prove, this is mostly in relation to the declining interest in the golf industry as a whole. Gracie proposes to boost sales and revenue by implementing the Elevate program, a strategy known as a fighter brand. Based on what market trends show, this program hopes to foster a generation of new and casual golfers. BEHAVIOR ANALYSIS Emerging industry data show trends of consumers reducing their discretionary spending, having a negative backlash on the golf ball market. In a consumer survey, Altius segmented consumer attitudes into three categories: agnostic, enthusiast, and loyalist. Compiled data determined a 12% to 17% jump in agnostic consumers, a 19% to 15% fall in enthusiasts, and a 69% to 68% fall in loyalists. These figures imply an increase in casual golfers who are either beginners or price-sensitive...
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...SUNRU YONG Altius Golf and the Fighter Brand Introduction Evelyn Gracie, CEO of Altius Golf, took a deep breath before introducing the company’s new golf ball strategy to the board. Several years after the global recession of 2008–2010, the private-equityowned company’s revenues had not fully recovered, and there had been grumbling among some of the directors that the old strategy was no longer working. Gracie had been hired at the end of 2012 to turn things around. Over the last six months, she and Austin Kai, the chief marketing officer, had worked on a plan to shake up the golf ball market and strengthen Altius’s leadership position. Now Gracie needed to communicate to her board a clear, compelling vision, backed by a well-articulated rationale: As everyone knows, the long-term industry trends have been worrisome. The number of new golfers has fallen, and the few who take up the sport tend to be less serious and more pricesensitive. We have seen this magnified in our own business as lower-priced competitors have stolen market share. We believe Altius’s long-term success will come from fostering a new generation of loyal golfers, and this will come when we make our brand more fun, affordable, and accessible. If we can attract new and casual golfers into our brand, we will gradually migrate them to our flagship products. This thinking is at the heart of Altius Elevate. Gracie proceeded to outline the Elevate program in broad strokes. Previously, Altius had built ...
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...SUNRU YONG Altius Golf and the Fighter Brand Introduction Evelyn Gracie, CEO of Altius Golf, took a deep breath before introducing the company’s new golf ball strategy to the board. Several years after the global recession of 2008–2010, the private-equityowned company’s revenues had not fully recovered, and there had been grumbling among some of the directors that the old strategy was no longer working. Gracie had been hired at the end of 2012 to turn things around. Over the last six months, she and Austin Kai, the chief marketing officer, had worked on a plan to shake up the golf ball market and strengthen Altius’s leadership position. Now Gracie needed to communicate to her board a clear, compelling vision, backed by a well-articulated rationale: As everyone knows, the long-term industry trends have been worrisome. The number of new golfers has fallen, and the few who take up the sport tend to be less serious and more pricesensitive. We have seen this magnified in our own business as lower-priced competitors have stolen market share. We believe Altius’s long-term success will come from fostering a new generation of loyal golfers, and this will come when we make our brand more fun, affordable, and accessible. If we can attract new and casual golfers into our brand, we will gradually migrate them to our flagship products. This thinking is at the heart of Altius Elevate. Gracie proceeded to outline the Elevate program in broad strokes. Previously, Altius had built ...
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...Altius Golf is one of the leading produces of golf balls. Since the 2008 recession the company has yet to recover their revenues. However, the overall market for golf balls has increased in sales 4.1% in 2012 but continues to fall short of pre-recession records. There are several factors that play a role in the decrease in Altius financial position. Consumer spending has decreased significantly since the 2008 recession that further implicates the struggle with continued interest in golf as a sport with decreasing interest since 2003. With the decrease in golf participants there is a significant imbalance of supply and demand for golfing equipment impacting all production companies. The new strategy Altius is using to introduce the Fighter Brand is both promising but also imposes possible problems. The approach Evelyn is presenting focuses on some of the main problems facing the golf equipment industry including providing lower cost but high quality golf balls to consumers. However the population in which the strategy focuses on is at a higher risk for market losses. Altius would be changing their targeted population from on-course to off-course golfers and as a result their competing market. Because Altius is known as a leader in golf ball production for high quality and high prices balls they would essentially be demoting themselves in the industry. The research indicates a difference in sales from on-course and off-course in both shares and dollars. Essentially...
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...Situational Analysis: Arena Park Golf The following information I have composed from the city of Cape Girardeau, specifically on economic climate, demographics, demand trends, technological trends, competitor analysis, regarding Arena Park Golf. This is for a class project that involves a situational analysis of Arena Park Golf and the surrounding area along with some history of golf. Opened in 1998, Arena Park Golf is a golf store located in Cape Girardeau, Missouri with approx. 3,000 square feet of retail space dedicated to golf clubs, golf clothing or other golf equipment essential for the avid Missouri golfer. There are also a public and private golf courses in Cape Girardeau, which shows a market for golf not only in the city but the surrounding area. The history of golf’s built environment in the U.S. has reflected the changing face of the game in terms of the number and type of golf courses built, as well as the demographic profile of those playing the game. Since 2000, the golf industry has experienced significant declines in the key barometers of its economic wellbeing as defined by: the decline in the number of golfers and rounds played and the decrease in the number of golf courses. During the 20th century, there were three “boom” periods of accelerated golf course development that peaked in 1930, 1970 and 2000. The first boom in the 1920s built private golf courses for the upper class. The second boom in the 1960s built public golf courses for the burgeoning middle...
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...Assignment Questions - Golf Q 1. What are the defining characteristics of the golf equipment industry? What is the industry like? A 1. The defining characteristics of the golf equipment industry are product performance, innovative technology and name brand recognition. Golf companies essentially sell the same products so they must differentiate their products through technological advances. Fortunately for golf companies, the sport attracts mainly upper-class individuals so the companies can focus on quality with the assurance of high-end sales. This industry is very competitive due to the regulations placed upon it and the diminishing growth in the number of players in the recent years. The technology and research that these companies have done is so advanced that the USGA feels the need to place regulations upon the professional players to that the game is fair all around. The industry can be separated into two parts: golf and sporting goods. Golf companies usually gain brand recognition by hiring professional golfers to promote their products because this can be one of the most effective forms of advertising for a company. Companies are also focusing on creating new products for recreational players. For any company who wants to enter into this market would require significant amounts of investment. Q2. What is competition like in the golf equipment industry? What competitive forces seem to have the greatest effect on industry attractiveness? What are the competitive...
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...PGA Player Introduction: Chuck contacted a sport psychologist at the end of May, approximately halfway through the year. At that time he was about 90-100 on the money list and had made about $65,000. Chuck indicated that he had an inability to concentrate on the course. He was very indecisive about club selection. He was also very intropunitive (self blaming), demanding, and negative self-talking. Intervention: The sport psychologist traveled to Chuck's home and spent 2 days with him. He utilized a paper and pencil "Golfing Profile" form to gather some intake information. This inventory proved very useful. They talked for 2-3 hours, went to the course and hit balls, played 9 holes and met again the next day with his wife, also a very good golfer. It was determined that Chuck's concentration problem was due to high internal overload; that is, he was thinking too much on the course. Chuck was able to hit shot after shot where he wanted the ball to go. Yet, he was always overly critical of the result. Nideffer's Model of Attentional Control was utilized to explain to him where his attentional difficulties occurred. SCORE was utilized as a way to go over his pre-shot routine, S (Scan),C(Contemplate), 0 (Overall feeling), R (Ritual), and E (Execute). It was decided that Chuck would cut down the amount of time in the scan and contemplate areas and to concentrate on the feel, ritual and execute stages. The plan was to eliminate or cut down the time for second...
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...a retail store that specializes in the distribution of golf supplies to the everyday recreational golfer. The Golfsmith chain operates with 75 retail stores in 21 different states providing not only golf but tennis equipment as well. Carl Paul founded Golfsmith in 1967 with the intention to create a retail service that helped golfers improve their games with custom club fitting as well as market all sorts of equipment in the golf industry. The golf industry is a large one where technology is always evolving along with the techniques and strategies to being a successful golfer. Golfsmith is one of the few chains that can cater to the various needs of golfers throughout the country. The chain defines its core purpose as “To inspire people to play better and live life more.” The golf market is more of an exclusive one compared to other sports such as basketball or football. Golf is a sport more played by wealthier consumers that reside in suburban neighborhoods. Therefore the marketing strategies of a chain such as Golfsmith can be narrowed down to specific demographics. About 85% golfers tend to be white males that fall into the age 18-65 ranges. Over half of the golf consumer market are some sort of manager, professional or executive and have some sort of college degree. The average household income for a golf consumer is over $80,0000. Also, 90% of them tend to be homeowners. These statistics show that golf is an expensive sport played by the more wealthier and...
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...1. Discuss the trends in the golf equipment industry and how it may impact a company’s strategy. Ans: According to new the United States Golf Association (USGA), Golf equipment manufacturers are forced to launch the equipment within the limitation. Therefore, the product differentiation is not quite high while recreational golfers do not enjoy playing due to lack of innovational equipment. Also, the USGA states that there are various factors that result in the declining of golfers such as: - Game difficulty: Golf equipment manufacturers are forced to follow the new USGA rules, thus, recreational golfers are suffered from the limitation of golf equipments. They cannot enjoy playing golf as much as before while new golfers face the difficulty of playing. - Time consuming for practice: According to the limited innovation of golf equipment, golfers need lots of time to practice while they also have take responsibility to their job and spend time with their families. - High golf fee: Some golfers realize that golf fee is high, as a result, they cannot practice frequently. 2. Discuss the importance of innovation, brand, performance, and price in the golf equipment industry. Ans: Good reputation and image can lead to brand loyalty. That’s why many brands use lots of advertising expenditure to promote their brands. As the leading sports brand in the world, Nike has a clear marketing advantage over its competitors. Nike spends some of their annual revenues on advertising...
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