Acushnet Company

The Acushnet Company1
In late 2000, Sherman Weathers, Brand Manager of the Acushnet Company’s Titleist brand,2 reviewed an important and interesting proposal from retail giant, K-Mart. Acushnet sold golf balls, golf clubs, and related items (e.g., caps, visors, gloves) under the Titleist brand. There were two other Acushnet brands, FootJoy and Pinnacle. Both of these brands were also associated with golf merchandise. The FootJoy brand specialized in golf shoes, gloves, and outerwear. The Pinnacle brand was associated solely with golf balls. Titleist was an extremely successful brand, particularly in the golf ball market. Titleist balls generated more revenue than any other brand in the world, capturing an impressive 30.2 percent of the U.S. market in terms of revenue in 1999. In terms of unit sales, Titleist held the second largest market share behind the
Top-Flite brand of Acushnet’s leading rival, Spalding.
The proposal was a request for Acushnet to distribute its Titleist brand golf balls via K-Mart stores. If accepted, it would mean a significant change in the firm’s distribution tactics.
Acushnet did not distribute any Titleist brand merchandise through mass merchandisers like KMart. Rather, the firm used golf pro shops (stores located at golf courses and selling only golfrelated merchandise), golf specialty stores (stores that, like pro shops, sold only golf-related merchandise but not located at golf courses), and sporting goods stores (stores that sold a variety of sporting goods; essentially “department stores” devoted exclusively to sporting goods) to distribute its offerings to customers.
If Acushnet accepted the proposal, it could potentially greatly expand the numbers of customers it might reach. This was because mass merchandisers like K-Mart served enormous numbers of potential customers. A bonus was that many of these potential customers were likely to be new to the game, which would give Acushnet the opportunity to establish Titleist as the brand of choice for them from their beginnings with the game. Doing so would, ostensibly, make it easier than would otherwise be the case for Titleist offerings to become their lifelong favorites. Another noteworthy potential implication of accepting the proposal arose from the fact that many of these potential new customers were more price sensitive than the typical customer of golf merchandise was. Golf was a game played primarily by people of relatively substantial means; people who were generally not very averse to paying high prices for the things that they wanted. But the emergence of young golf superstar, Tiger Woods, had induced interest in a large number of people who were newcomers to the game. These newcomers were, on average, younger, less wealthy, and more ethnically diverse than was the typical golf merchandise customer. As a result, they would likely be strongly attracted to the relatively low retail prices at which a mass merchandiser like K-Mart would almost certainly choose to price Titleist balls.
Retaining only its existing channels of distribution would make it more difficult for the brand to sell to these new customers.
Evidence that distributing golf balls through mass merchandisers would benefit the firm had already begun to show. Spalding began distributing its Top Flite brand balls through such retailers less than one year earlier. And in that brief period, sales of Top Flite balls soared,
1

Darryl T. Banks, assistant professor of marketing at the North Carolina Central University School of Business, prepared this case as the basis for class discussion rather than to illustrate either effective or ineffective managerial decision-making. Copyright © 2011 by Darryl T. Banks.
2

Though based on actual events, some names, titles, and other details have been changed. This case is intended solely for academic purposes.

1

increasing that brand’s lead over Titleist in unit sales and nearly catching Titleist in revenue.
These developments troubled

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