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
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 ...view middle of the document...
Following are the four major reasons that led to the loss of Altius Golf’s market share:
* According to USGA, due to recession, 23% women and 36% children had quit the sport in the following five years. Investment in golf course real estate fell by 40% after the recession which led to increase in closure of the clubs faster than that of the new openings. This in turn led to the decrease in on course retailers which was Altius Golf’s forte.
* Due to declining interest of people in golf, USGA took initiatives to make golf a fun sport rather than a serious one which didn’t went in Altius’ favor as they focused on the more serious part of the game with their specialized Victor TX range of balls.
* A consumer research done by Altius Golf revealed that 35% of the golfers cited high prices as a reason for not buying the brand. Thus, Altius Golf was seen as a premium brand and in times of financial crisis, no consumer wanted to buy an expensive product when cheaper products were available in the market. Also a major chunk of the customers were willing to try the non-conforming ball which Altius Golf didn’t introduce in the market.
* Also, margins offered by Altius Golf to the retailers were on the lower side as compared to that of its competitors which didn’t work in Altius’ favor as the retailer preferred brands with higher margins in their stores.
* The competitors also played a major role in cutting down the market share of Altius Golf. Innovations, marketing campaigns and aggressive pricing was eating up Altius’ market share steadily. Primiera’s strategy which was mainly focused on overshadowing the need for using tournament winning balls, which was the major focus of Altius’ advertising campaign, as well as Meridian’s introduction of non-conforming balls led to the increase in their market shares at the cost of Altius’ share.
The aforementioned indicators clearly depict a picture of Altius Golf losing its ground due to its strategies which worked before the financial crisis to its competitors. These competitors are clearly being flexible in their strategies by innovating and offering inexpensive and fun filled experiences to their customers, trying to attract more and more newbies to the sport whereas Altius Golf is still continuing its focus on tournament winning balls which are expensive and preferred by professionals. However, due to recession these professionals are decreasing thus leading to the reduction of Altius’ customer base and hence, their revenue. Although it also had medium range balls available, it was still viewed as a premium brand thus deterring the users from buying the brand. Thus Altius Golf’s status quo had serious implications as buyers found it insensible to buy products which were expensive in recessionary times thus creating an alarming situation for Altius Golf.
Altius’s Objective – What trade off’s should it manage?
If Altius focuses on the manufacture of top of the line golf balls only, their...