Altius Golf
Key Issues
The key issue in this case is whether or not Altius should go ahead with Elevate as one of their products; they must decide if they should stay focused on their lifetime customers (whose numbers have also decreased in the last decade) or if they should open their brand to a more recreational, non-committal market within golf.
Situational Analysis
Gracie and Kai dove into the market trends sport-wide, and they found a shift toward making golf “fun and accessible” rather than “prestigious and traditional”. The recession of 2008 made a large impact on the sport, as it requires constant payment of greens fees and a consistent replacement of equipment, namely golf balls. Because of this decrease in discretionary budgets, as well as perceptions of golf taking too much time and being too difficult to just pick up, golf has only recently begun to see their numbers come back up, although still at a fraction of what they were in 2003. Going along with the trend of opening Altius to a new market is the capitalization on the revival of non-conforming golf balls. There has been a move towards reducing stigma of the use of these products, and competitors have already begun to take advantage of this shift.
On-course vs. off-course (Market share and price sensitivity)
On-course retailers are retailers present on the grounds of a golf course, and traditionally cater to a more professional-minded golf player and tend to carry higher-end products. This is the prime environment we would find Altius’ Victor TX (current version), with Altius holding a 68% profit share due to their brand prestige with nearly all golfers and a higher than average price structure. Off-course retailers, who have become predominantly “big-box” players offer more space and an avenue to access more casual players who wouldn’t necessarily exclusively shop at their course retailer. These types of markets are much more price sensitive, and are focused on customer individuality and preferences, and rely less on the prestige of the products they offer.
Fun and accessible, and the long term goal
Hand in hand with price sensitivity, the time commitment and the cost of maintaining regular golf rounds were large deterrents of lapsed golfers and those who had never golfed as Gracie and Kai found in their market research. Elevate was a product that would be able to encourage these customers, a much broader and numerous population, to give golf a try (again). They saw opportunity in these non-traditional customers, and knew that pricing and individualization of the product were the most obvious ways to break down the barriers people seemed to have about picking up golf. In the shift from regular golfers to more recreational, Gracie saw an opportunity to capture a new population of golfers, ones that they could invite in and then later “graduate” to more traditional Altius products and hopefully lock them in as a lifetime golfer and Altius customer.
Non-conforming balls (shifts in equipment demand)
Elevate was also taking on a shift in product development that had been a sport-wide taboo for years. Non-conforming balls, those that did not measure up to the USGA and R&A parameters, had been marketed as the “rogue” player’s ball. Allowing them to play the game how they wanted, without the worry about technical skills that only professionals seemed to have mastered, these non-conforming balls let players focus on the basics of golf: getting the ball down the green and into the hole. The interest for Altius, however, came with Meridian’s remarketing of these products. They were introduced to recreational golfers as a low-risk ball, perfect for those who wanted to enjoy the game without the embarrassment of slicing the ball into the woods. The lack of attention to meeting specifications and, more directly, making a substitute for a more expensive and refined golf ball, Meridian cut costs and reduced the risk associated with being a novice player. Meridian has
