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Introduction
Altius Golf's revenue was on the decline and had not recovered from the global recession that hit the
company in the year 2008-2010. Evelyn Gracie, CEO of Altius Golf introduced a new strategy to tackle
the current situation company found itself. For generations Altius had focused on the super-premium
offerings. But with new strategy Evelyn proposed a new line of product named Elevate that will be priced
40% below the company's flagship VictorTX line and will be targeted towards recreational golfers. In fact
one of the product in the Elevate line was proposed to be non-conforming with United States Golf
Association(USGA) standards.
About Altius
Altius Golf has been the market leader in Golf Balls through its product named Victor TX. Inspite of the
price of Victor TX being $50 per unit, it captured 40% of the total sales. Apart from the selling golf balls,
the company also manufactures other golf equipment but then the 60 percent and 85 percent of the
revenue and the profit of the company comes from selling the balls respectively. Further, 60 percent of
the industry revenue was earned by Altius Golf only. The size of the golf industry in the US was $483
million from a total units sold of 17.6 million.
Brand
Altius
Primiera
Bantam
Carlsbad
-7.68%
+20.42%
-9.81%
-10.75%
70
40
60
Percentage share
Percentage share
35
30
25
20
15
10
50
40
30
20
10
5
0
0
2008
2010
2012
2008
2010
Year
2012
Year
Altius
Primiera
Altius
Primiera
Bantam
Carlsbad
Bantam
Carlsbad
PERCENTAGE SHARE
Altius
Overall
44.3
55.8
29.9025
25.389
ON COURSE
OFF COURSE
YEAR
We can find it from the graphs above that even though the market share of on-course channel was
reducing, the market share of off-course channel was increasing. Off-course channel focused on selling
the products which were in the mid-range. The rivals focus was also on this line by promoting nonconforming product. The reason for this was that the non-conforming golf ball didn't unintentionally
veered sharply right or left which caused less frustration and embarrassment for recreational golfers.
Thus, recreational golfers started preferring this ball because of which competitor like Meredian had
gained 2 points of market share in the off-course product. As shown in the graph a large chunk of off
course market was untouched by Altius.
Also, due to the decline in the serious golfers, the number of closures of the golf course reduced which
led to the decrease in the sales of on-course channel. Altius also provided the least margin to the retailer
viz. 15% when compared with the competitors. The prices and the margins have been depicted in the
graphs below which show how the nearest competitor was posing a threat through competitive pricing,
diverse product line and sharing extra margin.
Pricing Analysis
$27.00
Not present
PREMIUM
MID RANGE
VALUE
$18.00
Primiera
$35.00
$39.00
$44.00
$48.00
Altius
ECONOMY
Margins
20%
15%
57.50%
Other Competitiors
70%
Altius
Also, we can see from the Exhibit 4, the percentage of 'Agnostics' has increased and the reasons cited by
them are high price and the desire to try non-conforming ball. Thus, all the reasons mentioned above
suggest that there is a need for Elevate which according to Evelyn is fun, affordable and will help
recreational golfers coming back to the game.
Recommendation:
Based on the above data analysis, we suggest that the company should go ahead with Elevate
marketing strategy focusing on low cost and user friendly designed golf balls for gaining higher
share in growing market keeping in view the changing consumer profiles and preferences. One
option can be by decreasing the retail sale price and increasing the number of units sold. A
venture into new product line also needs a different kind of promotion strategy altogether as it
cannot be endorsed by the premium players in US but the general public from which the people
can relate the product more easily. The awareness about low price products among customers is
needed without any image degradation of its premium product which should be ensured to be at
the same market position as it is now.
Submitted By
Team AC2