Altius Golf free essay sample

Altius Golf is a company leader in golf balls, it has been the market leader of golf balls for a very long time, but because of the global recession, its CEO and its chief marketing officer are trying to develop a new strategy by introducing a ball that is priced more than 40% below the company’s flagship Victor TX line and it would be sold primarily through the â€Å"off-course† channel, keeping it out of the most premium â€Å"on-course† retail outlets. Only two directors viewed the move favorably, agreeing that it was the right strategy to meet the broader growth challenges in the golf industry. The other five weren. t happy at all with the implementation of Elevate, the strategy, voicing concerns that the Elevate strategy would damage the brand, undermine the pricing architecture, and impair margins permanently. One of the main facts to implement a new strategy is to watch out the industry trends. We will write a custom essay sample on Altius Golf or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page The most worrying trend for the golf industry, was declining interest in the sport in the U. S. This was reflected in both total golfers, and in degree of engagement, as measured by frequency of play. Also the investment in golf course real estate and development fell over 40% . As total golfers and their spending fell, retail outlets also closed at an alarming rate, with nearly 25% of stores closing in the years immediately following the recession. So the downturn accelerated longer-term trends in golf retailing. Consumer studies showed that high costs, lack of time, and the difficulty of the sport were the leading reasons for not playing golf and the USGA was aware of this negative trends so its efforts were focused on making golf more accesible; based on this two golf balls manufacturers, Primiera and Meridian, demonstrated the potential to make the sport more accessible, especially to new and recreational golfers, that shows that the world in changing so if Altius Golf want to keep up being the markt leader it has to make some moves, one of them is facing its new competitors. Primiera began holding custom ball-fitting sessions around the country and Meridian went one step further in making golf easier and more fun: marketing non-conforming balls with characteristics outside the USGA’s parameters. On the other hand, Evelyn Gracie, CEO of Altius Golf, and and Austin Kai, the chief marketing officer, had to deal with the customer preferences, so to meet those preferences Altius’s made a consumer research. This recent consumer research had been revealing. The brand remained prestigious and nearly all golfers, including those who used other balls, viewed both the brand and the product line positively. the brand perception of competitors, including Bantam, Carlsbad, and Premiera, had improved; Altius’s lead in brand strength had declined modestly, and these facts were followed by other negative signs, the survey suggested that more consumers than before were now open to trying competing golf balls. Based on the survey, Austin thought that Elevate was the best way to secure the company’s longer- term leadership position and Evelyn Gracie believed that ignoring the successful incursions of Altius’ competition was a losing proposition and protecting the company’s market leadership required a new strategy. PROBLEM IDENTIFICATION Main problems that Altius has to deal with: 1. Global recession. The economy is still dealing with the global recession since 2008, so developing a new strategy/product takes also its risks based on the economy problems that we are still facing. Prior to 2008, one out of every two golf balls sold in the U. S. was an Altius ball, and the company had accounted for nearly 60% of industry revenues. Nowadays Altius Golf is still te market leader but the best way to face a enonomic recession is through innovation, introducing a new product would be the answer to deal with this recession. 2. New competitors. Altius Golf has been the market leader for a long time but new competitors like Meridian and Primiera are taking over. To face this new competitors Altius must make a move implementing a new strategy, building a competitive advantage over its competitors. Although its still the market leader on golf balls, the world is constantly changing so it must make a move. 3. Customers. The company segmented current Altius consumers into three categories by a customer research: loyalists, enthusiasts, and brand agnostics. The survey suggested that more consumers than before were now open to trying competing golf balls; specifically, there were significantly more â€Å"agnostics† than before. Based on the survey: AGNOSTICS: medium high to very high trying a new Brand. (17%) Casual and/or infrequent golfer More likely to be a beginner Price-sensitive and likely to purchase on promotion ENTHUSIASTS: medium to high trying a new Brand. (15%) Moderate frequency golfer Includes both beginners and experienced players, but likely to be â€Å"serious† (e. g. taking lessons, practicing at driving range) Interested in â€Å"best† equipment technology, but moderate price sensitivity 4. Price. Altiu? s prices are much higher compared to its competitors, and based on the recent survey that it has made only one group of customers are not price sensitive. To face this problems Altius Golf should lower its prices or introduce a new product with a lower price to meet the expectations of those customers. CASE ANALYSIS Golf is a multi-billion dollar industry that is showing a growth in popularity due to media attention on rising young stars of the sport. Many different golf products are needed and sold to the millions of consumers who play this sport annually. Because of the large market which exist, there is strong competition between equipment makers to get their products sold. Of the equipment that is needed to play a round of golf, clubs and balls are the most essential. More notably is the fact that clubs have a longer useable life than golf balls. New golf balls may be needed every time a golfer goes to the course to play a round. This is because balls get lost or scuffed during play. The high sales turnover which exists with golf balls makes this product attractive to sports equipment producers. Altius Golf may be the clear leader in the baseball market despite the fact that there has been a decline in the amount of golfers and a drop in sales following a financial meltdown. Altius Golf still maintained its good position in the market by introducing generations of higher level, top quality golf balls that allow their clients to copy professional golf players. The business suffered a loss because of competition who had been cutting the prices down and the Chief Executive Officer really wants to introduce a fresh program called Elevate to foster another generation of golfers. With the introduction of Elevate, Altius Golf will introduce a ball that’s smoother and better to drive for long distances and provide it at a cost 40% below the business’s flagship product. Elevate will undoubtedly be available through â€Å"off the course† channels such as for example golf specialty stores and big box retailers rather than â€Å"on the course† professional shops where in fact Altius Golf sells its products and services. The board of directors is divided on whether to go with this decision or against it. Only two of them support this decision, the others think that the Elevate strategy would damage the brand, undermine the pricing architecture, and impair margins permanently. Altius Golf can outperform rivals only if it can established a difference that it can preserve, with the Elevate strategy Altius would meet those expectations, like delivering greater value to its customers with its main product Victor TX, the flagship premium line would still be offered in two versions, one that maximized distance and one that emphasized â€Å"feel† around the greens with a suggested retail price of $48 per dozen; or creating comparable value at a lower price with Victor, the mid-range line, that would come in two versions, maximizing either distance or control, and had a suggested retail price of $39 per dozen or introducing a new product, Elevate, the new value line would come in four versions: for fast, medium, and slow swing speeds, as well as a non-conforming offering. These would have a suggested price of $27 per dozen. So should Altius make a move and introduce Elevate? In my opinion I would definitely say yes, the world is constantly changing and if you don? t change with it you would get stuck, even though if you are the market leader, innovation means building a competitive advantage over Altius competitors, that would mean transforming its main weaks into strengths, its threats into opportunities. With Elevate, Altius would deliver its main products to its loyal customers, which will keep buying the Victor TX as they are not price sensitive; to the moderate golfers and beginners, which would buy Victor and Elevate, both are moderate or infrequent golfers, so they wont be willing to spend a lot of money in golf balls, and instead they could buy Victor and Elevate. Altius golf, using its recognized brand name would definitely increase sales, because the loyal customers will keep on buying them and the other two groups of customers would buy its golf balls because its prices are much lower and Altius is the best manufacturer of golf balls, so that would attract them even though they are willing to try new brands, Altius Golf is the market leader.