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MM CASE ANALYSIS

ALTIUS GOLF & THE


FIGHTER BRAND

The golf industry has been critically affected by the recent recession in the country and
consumers of the golf equipment have cut down on spending on golf balls and this trend has
badly affected the golf industry. The industry trend shows that the recent recession has
decreased the number of professional golf players mentioning the main reason as high cost
and lack of interest and time. Altius provides premium golf balls that are priced high
compared to its competitors golf balls and new golf players were not willing to spend more
on expensive golf equipment.
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. Adding to this, 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. The retail channel for golf is composed of two
broad categories: On-course and Off-course. After recession, there was a drop in the sales
through on-course stores and an increment in the sales through Off-course stores. 70% of the
sales of Altis Golf came from Victor Tx which was their flagship product and this was a
premier product and now many consumers are more price sensitive. So, many of them do not
prefer this product.
The innovative marketing strategy by Primiera and Meridian is another reason for the decline
in Altis Golfs market share. These companies mainly focused on non-conforming golf balls
which were priced in sweet spot. Also these companies products were perfectly
complemented to USGAs own golf 2.0 and Tee it Forward campaigns. There is also an
increase in agnostic players. Being beginners, they did not purchase the golf balls which were
priced at $50 per dozen. If Altis Golf maintains status quo it will be a risky business for them.
As consumer behavior is changing, and consumer is becoming more price sensitive, they
prefer mid and low priced golf balls. From exhibit 4, we can see that there is a 5% increase in
agnostic players. From 2008 to 2012, there is only 3% drop in units sold but if we calculate in
dollar sell drop it is dropped from $314.6 mn to $266.6 mn. This resulted in approximately a
drop of $48 mn which was a huge drop. Also other companies started focusing on nonconforming golf balls and interest of consumers began increasing in this segment so
maintaining status quo is considered not to be a good option for Altis Golf.
Altius primary objective should focus on increasing its market share on both unit sales and
dollar sales. In order to accomplish this they have to consider manufacturing value line golf
balls thereby capturing the agnostic segment as a recent consumer research survey had

suggested that there was an increase in the number of agnostics than before as more
consumers were now reluctant to play golf stating reasons such as high costs, lack of time
and the difficulty level of the sport. This was true for both lapsed golfers as well as those
who had never played before.
In order to achieve the above stated objective of increasing its market share. Altius golf is
contemplating on introducing new options which include deviations from the United States
Golf Associations specifications as the USGA specified golf balls were mainly used by
professionals and hence casual golfers found the game a difficult one to play. Nonconforming golf balls were likely to be rejected by the on course retail shops as they would
be unwilling to give up there limited shelf space to a value offering. Moreover off course
retailers displayed great interest in seeing a lower priced product from Altius and were open
to the legitimacy that the brand would confer to a non-confirming golf balls. Hence they were
losing out on one of their retail channels.
Altius should implement the Elevate Strategy because market segmentation is important in
this case where they should realize that the market share is decreasing and the people are not
willing to buy the costly golf equipments. The focus now should be convincing more people
to transfer towards golf and that cant happen if they target only the high end customers. The
high end customers are already into it but more number of infrequent golfers can be targeted
if they introduce Elevate. Mass marketing means that they can focus on mass production and
distribution if a lot of people are ready to buy it. It is shown in the case that 35% of the
audience do not buy Altius because the prices are too high of Victor TX. And the Elevates
Strategy of pricing $27 per ball will actually attract more audience to buy it. An example of it
is HCL when they first made computers but then later realized that selling computers doesnt
have that much market and so they got into service sector. Also the 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, so if they reduce the prices,
they can target more people and capture the market more convincingly in low end market
also. Exhibit 4 shows the connection of golfer profile and the likelihood to try that, which
shows that a new golfer will love to try a new brand. Thus Elevate can actually help build up
the market share in the low end market and the Victor TX already has conquered the high
end. The only concern in case of going ahead with this option is the devaluing of Altius
brand image due to the misconception that could arise in the minds of consumers that
products are of reduced quality. Still it is in the benefit of Altius as a whole.