Altius golf

1. Alternative 1 To launch Elevate Series

2. Figures in USD $ Particular Victor TX Victor Elevate Retail Price 48 39 27 Retailer Margin 15%
(7.20) 15% (5.85) 20% (5.4) After retailer Margin 40.80 33.15 21.60 Manufacturer Margin 70%
70% 60% Margin 22.56 23.21 13.85 Total cost 12.24 9.95 7.75 Elevate Particular (26 Million
*40=10400000) Amount (USD) Cost ( Manufacturing + Advertisement (.16/ball))
10.4M(Dozen)*7.75+1.7M Cost and Profit 82.3 M and 144.04M BEA 0.57 years Alternative 1
To launch Elevate Series

3. Alternative 2 To Start Price war

4. Particular Altius Primiera Bantam Market Share Retail Dollar 55% 15% 11.4% Retail Sale ($483
M) 265.6 72.45 53.13 Retail % 15 20 20% (SP-Retail) $225M $61.6M $42.50 Manufacturer
Margin 70% 57.5% 57.55% Gross Profit $158.6M $33.3M $18.27M

5. Victor TX Particular $48 $45.5 $43 $40.50 Retail margin 15% 15% 15% 15% Price 40.80 38.68
36.55 34.43 Cost 12.24 12.24 12.24 12.24 Margin 28.56 26.44 24.31 22.19 % 70% 68% 67% 64%
Particular $39 $38 $37 $36 Retail margin 15% 15% 15% 15% Price 33.15 32.3 31.45 30.6 Cost
9.95 9.95 9.95 9.95 Margin 23.2 22.35 21.5 20.65 % 70% 69% 68% 67.5% Victor

6. Alternative 3 To increase retailers margin

7. Type/Retail margin 15% 18% 21% 25% Price $48 $48 $48 $48 After retailer margin $40.8
$39.36 $37.92 $36 Manufacturer margin 70% 68.9% 67.7% 66% Manufacturer margin $28.56
$27.12 $25.68 $23.76 Cost $12.24 $12.24 $12.24 $12.24 Victor TX Type/Retail margin 15% 18%
21% 25% Price $39 $39 $39 $39 After retailer margin $33.15 $31.98 $30.81 $29.25
Manufacturer margin 70% 68.9% 67.7% 66% Manufacturer margin $23.2 $22.03 $20.86 $19.3
Cost $9.95 $9.95 $9.95 $9.95 Victor

External Environment
The external environment of Altius Golf consists of: the golf industry, its competitors, regulatory bodies
such as United States Golf Association (USGA) and the golf players. External environment includes some
opportunities as well as threats for Altius Golf which is discussed below:

Opportunities
Growth in industry has just restarted after a period of recession; hence this is an opportunity for Altius
Golf to acquire the market share of reviving golf industry.
Moreover, recent consumer study carried out by the United States Golf Association (USGA), has
revealed that high cost of golf equipment is one of the reasons for the lack of interest in golf sport,
however; Altius Golf can capture the market growth by offering low-cost golf balls to its consumers
through off-course outlets.
Additionally, the USGA has introduced Tee it forward movement, to make the golf game easy,
moreover; USGA has introduced Golf 2.0 program, which allow the new golfers to play 12-hole
tournament instead of 18-hole and use larger holes, therefore; this step of USGA will induce more new
golf players that is an opportunity for Altius Golf to gain increased market share of new players.
Threats
Because of the recent recession period, consumers of golf equipments have cut-down their spending on
golf balls and this trend has badly affected the golf industry.
Additionally, USGA regulatory requirements are very strict in terms of size, shape and material of the
golf balls, which may affect Altius Golfs goodwill for not adhering with the USGA regulations.
Moreover, since golf equipment sales is linked to the number of golf rounds being played in the U.S.,
which ultimately depends on the investment being made in golf fields but investment in development of
golf field is falling, consequently, the number of golf rounds are decreasing which is affecting Altius
Golfs sales. However, it has been noted that investment in development of golf field has decreased by
around 40% after the recession period.
The public interest in playing golf is falling in the U.S, consequently; sales of golf equipments are falling
and this is clearly a threat to Altius Golf for its future sales in the U.S. One of the major competitors of
Altius Golf, Primiera, has introduced a campaign for marketing of golf equipment which is specially
designed for new learners of golf to help them play the sport and learn it easily. This strategy has been
successful as it has captured the market share of Altius Golf and some other sellers in the golf market.
Primerras strategy is a potential threat for Altius as it can gain a major market share from Altius Golf
and may become a market leader in near future.
Internal Environment
Internal environment of Altius Golf includes the process, culture, differentiating point and strategies of
the Altius Golf, which affect its performance.
Strengths

Altius Golf has competitive advantage over its competitors through its sales of Victor TX and Altius Golf
has become the market leader in providing golf balls under Victor TX line; additionally, this advantage
has given Altius Golf the benefit of economies of scale.
Moreover, Altius Golf has an already established chain of off-course and on-course outlets for selling
its different range of products, which has given its customer easy access to its golf equipments.
As per calculations made in spread sheet, market share of Altius Golf is higher than other competitors in
the golf industry, which gives it a competitive advantage over other companies to control prices by
affecting the demand and supply forces.
Weaknesses
Altius Golfs competitors are moving with the industry trends and are trying to offer balls and other golf
equipments which are easy to use and helps new golf users to hit the shot as they require, while Altius
Golf is still offering equipments which are for professionals, although golf professionals value the
equipments of Altius but the industry trend shows that recent recession period has decreased the
number of professional golf players and new golf players are being encouraged to play golf.
Additionally, Altius Golfs balls are expensive as compared to competitors golf balls and new golf players
are not willing to spend more on expensive golf equipments.
Key Marketing Issue
Altius Golf marketing focus is on Victor TX line golf equipments, which are designed for professional golf
players because in the past professional golf players have won their matches using Victor TX
equipments. Altius Golf has heavily spent on marketing their success of Victor TX line, however; the golf
industry trends have changed and the new trend is towards low cost as well as non-confirming golf
equipments. Elevate is a new line of golf equipments being considered by the Altius Golf.
Gross margin from the Elevate will be around 64% which is 6% lower than the Victor TX and in terms of
retail price; Elevate will be priced at $27 per unit which is 44% lower than the premiere price of Victor
TX. This low price equipment should be highlighted in marketing to gain higher share of growing golf
industry.
Statement of Objectives
Focusing on the low price golf equipments, such as Elevate golf ball and changing the marketing strategy
from targeting professional golf equipments to low cost golf equipments and more fun oriented golf
equipment for new golf players will enhance the profitability of Altius. This is because golf industry is
reviving by the efforts of USGA, through encouragement of new golf players to play golf with relaxed
rules. Therefore, it is a good time to target new players through extensive marketing of low cost and
non-confirming golf balls, which has enabled new golf players to hit the ball perfectly. The new golf ball
Elevate will be sold below the 40% of its premium Victor TX brand, which will enable Altius Golf to
capture new generation of golf players.

Generation and Evaluation of Alternatives

Alternate options that are available to the Altius Golf include lowering the price of its existing Victor TX
line of products and spending on marketing with focus on low price of its golf equipments. Moreover,
opting into this alternate will require Altius Golf to increase the number of sales units, which can be
done through extensive marketing. Altius Golf has to increase the number of units sold by 8% if it needs
to decrease the retail sales price by $2.5 per unit.
Another alternate available to Altius Golf is that it can decrease gross profit margins of its retailers by 5%
in order to decrease the retail price by $2.67, however; its seems unlikely that retailers will be willing to
accept the lower gross profit margin. Therefore, this alternate option is not practicable for Altius Golf to
increase its profits by forcing the retailers to achieve more sales and compensate for lower gross profit
margins.
Recommendation
Based on the analysis of golf industry and marketing strategy of Altius Golf, it is recommended that the
company should continue the Elevate marketing strategy. In addition, it has to focus on low cost and
user friendly designed golf balls in marketing to gain the higher share of growing market. The analysis of
alternative reveals that Altius Golf can achieve high market share of the growing golf industry by
decreasing its retail price and then focusing on increasing the number of units sold in order to maintain
its profitability. However, an increase in the number of low price golf balls sold will depend on marketing
and awareness of the low price as well as quality of equipments among new golf players.