Golf Logix: Measuring the

Game of Golf
Written Analysis of Case
Introduction
Golf Logix, a company with limited employees was founded in May 1999, with a simple but
revolutionary introduction of GPS system in the game of golf in order to aid the golfers. Despite of the
world of golf being rather traditional and conservative, the company has succeeded in introducing two
innovative products, both using GPS technology.
Golf Logix basically offers two systems using the same GPS technology in the form of handheld receiver
“xCaddie”. The first is the “Distance Only” system which provides the distance to the green. The second
system is somewhat an enhance form of the first system. It is called the “Complete System”. This system
can display and store results of different rounds. This system also provides assistant to the golfer in the
club selection. Both the above system can help a golfer improve his/her game.

The Increasing U.S Golf Market

In 2000, 26.7 million Americans played 586 million rounds on over 17000 public and private courses
around the country. Each year about 2 million new golfers began playing resulting in an increase of
200,000 to 400,000 golfers per year. Recently the game has attracted more women and young golfers
but still the prototypical golfer is a male over 40 years of age with a household income around $70,000.

Dilemma
For a product, in order to succeed, targeting the correct potential market is very important in short as
well as long term. Golf Logix is also facing such sort of quandary whether to target Individual consumer
or Golf courses. Initially the company had enjoyed success by leasing the xCaddie to golf courses. Now
they are considering tapping the individual consumer market but the dilemma is if they start targeting
consumer market, the Courses that are already using their product might get disturb and drop their
product, If Golf Logix decides to stick with the current market, there is a possibility that they may miss
an opportunity to earn significant revenues by targeting the individual consumers. But there are certain
potential pros and cons of targeting the consumer market as well.

Pros
It will provide a separate stream of revenue
It will also put some pressure on the courses to
buy the complete system and get their golf courses
mapped.
Increasing number of players shows a great
potential to generate revenue.
Cons
A personal ownership of xCaddie will discourage
the golf courses from buying devices and getting
their courses mapped.
It will become very difficult as well as economic
sense for Golf logix to mapped owner’s favorite
courses.

Existing Competition
The Golf Logix’s product “xCaddie” faces both high tech and low tech competition in the market. High
tech competition includes the Cart-mounted and PDA system also based on GPS technology and
targeting the same niche market. The strongest competitor is the PDA-based system because of its
competitive price, versatility and features and its ability to upload and download user-calibrated course
mappings. Given the rapid growth in PDA ownership, these GPS systems may quickly become popular
for applications like driving navigation. On the other hand, the need to own a PDA can be considered a
barrier to enter for non-PDA owners.
The other competition is the cart-mounted system with its much functionality, however, it is both
expensive and harder to use because it's fixed to the cart.
The low-tech substitutes to the xCaddie are simple but inaccurate and inconvenient. These solutions are
offered at no or low cost and are widely available on many courses. These products poses low threat as
our target market desires the accurate devices like the xCaddie.

Consumer’s Perspective on the Product

There is a significant value that Golf Logix’s product brings to both the markets. For existing market, by
leasing the xCaddie improves pace of play for their customers, resulting in increasing the number of
paying customers onto the course. The results show an improvement of 20 to 30 minutes per round,
which can result in greater utilization, especially at peak times.
Avid and core golfers will be more willing to pay for the xCaddie since they play more games per year
and are eager to improve their game. Amateur golfers would utilize the xCaddie to help them in judging
distances. These are typically occasional golfers. They constitute a small segment and spend the least on
golf and golf-related items, and so would not be part of the target market. However occasional golfers
may even turn avid or core if their frequency of play increases.

What should be Golf Logix’s Strategy?

If Golf Logix decides to enter the consumer market, it should target the avid and core golfers. This is
because avid golfers buy 50% of all golf related items with core golfers forming the largest segment. The
value proposition for them would be that the xCaddie is easy to use and will help them improve their
game by accurately judging the distance to the hole.
In order to be more effective, Golf Logix should introduce value added features. The more value Golf
Logix offers to the customer, the more premium they can charge for it. In future, the functionality of the
xCaddie could be extended to being able to upload and download mappings and courses to make it more
durable.
But on the other hand they should keep in mind that the initial cost for a personal xCaddie is $300.
Courses usually charge less than $3 to use the xCaddie. The golfer would be reluctant to pay full price of
$300 so preferring leasing the xCaddie from the golf course. This is a good reason not to go into the
retail market.
If Golf Logix succeeded in consumer market it would destroy the Golf Course market because golf
courses would no longer see the need to lease the xCaddies from Golf Logix. This means that the healthy
revenue from leasing the units would disappear and only one time revenue for selling the xCaddie would
remain.

Based on my view, there is no incentive to buy the xCaddie if the golfer can simply lease it and hence the
direct consumer market is for now is not a productive option. But with the passage of time, however,
when majority of courses are mapped Golf Logix can go direct with more. Till then Golf Logix should stick
with the existing strategy and try to introduce value added features to their products.