Business and Management
Submitted By ystras
Altius Golf and the Fighter Brand A. Current Situation
The retail channel for golf is composed of two broad categories: on-course and off-course. Altius maintained a steady position in the on-course market with nearly 100% penetration of outlets, where no other competitor had a presence in more than 80% of on-course shops. Conversely, Altius’ market share in the off- course channel is clearly eroding, falling by more than five points between 2008 and 2012. Altius’ loss of off-course market share is attributed to the availability of a greater variety of less expensive golf balls in off-course channels.
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. As such golfers have cut spending on golf equipment, which badly affected the golf industry. Furthermore, 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 immediately after the recession. Thus, equipment manufacturers are experiencing greater pricing pressure as unit volumes are falling and buying power is consolidated among a small group of powerful retail buyers.
Compounding the problem, 70% of Altius Golf sales are derived from Altius’ flagship product, Victor TX, one of the most expensive golf balls on the market. Since 2008, golf players are less willing to spend more on their equipment, and more willing to explore less expensive alternatives. Furthermore, competitors have responded to this shift, negatively impacting Altius’ market share. Two major rivals introduced product innovations, marketing campaigns and more competitive pricing that chipped away at Altius’s market share. Primiera introduced ball-fitting technology with a launch monitor that allowed golfers to compare their speed and trajectory…...