Altius Golf

and
the Fighter Brand
CASE ANALYSIS

Group O1
Akshay Jain 14F304
Deepta Guha 14F315
Jangveer Singh 14F320
Priya Nair 14F334
Ravikeerthi Somayaji 14F336

Altius Golf is a private firm in US which manufactures high quality Golf balls. It is the
market leader in the premium golf ball segment which professional golfers use. After the
recession in 2008, Altius and the golf industry in general experienced a negative growth.
Even several years after recession Altius could not regain its original revenue and started
losing its market share.
In 2012, the golf ball market in the US was $483 million in retail sales from 17.6 million
units. The sales in 2011 was $464 million in retail sales. So overall there was growth in the
industry. However, these figures were still far below the pre-recession levels. After the
economic slowdown consumers had reduced discretionary purchases. This led to a dip in the
overall golf playing population as golf is an expensive sport (equipment, apparel, bags, shoes
are quite expensive).
LOSS OF MARKET SHARE
There are plethora of reasons why Altius lost its market share. The primary reason is the US
recession. After the economic slowdown many professional golfers quit golf. According to
USGA 23% women and 36% of children had quit golf over the last five years.
Altius was the market leader in golf balls due to the popularity of its flagship Victor TX line.
The company marketed it aggressively as the premium ball for professionals. Most of the
professionals in the PGA, LPGA and European tours played with Victor TX only. Since
Altius caters to premium segment its pricing is little higher than its competitors. Mid-range
quality of Altius costs $39 per dozen balls, whereas its competitor charges $35 per dozen
balls. Majority of its revenues came from professional golfers.
After the recession, golf industry slowed down and Altius revenues declined owing to
decreased frequency of the tournaments and lack of enthusiasm by casual players. Many
golfers quit because of the high cost involved in this sport.
In order to attract children and non-professional golfers, Primiera and Meridian (two closest
competitors of Altius) introduced cheap golf balls of lower price which does not confirm to
USGA parameters. Beginners preferred these golf balls over Altius which further declined
their revenue. Non professional golfers will not spend huge amount of money for golf balls.
Retail gross margin was 15% from Altius whereas its competitors offered 20%. This gave
their competitors more shelf space of the off-course stores. Altius however continued to rule
the shelves of the on-course stores as it was the favourite of professional golfers. But because
of the economic conditions that segment was diminishing.
So if they dont reduce their price, casual golfers will not prefer Altius. If Altius maintains its
status quo it will lose its market share, which in turn will result in revenue loss.
OBJECTIVES OF ALTIUS:
The last few years had been challenging for the golf industry with the total sales falling by
18% from 2007 to 2010; investments in golf course real estate and development fell by40%;

and retail outlets too closed at an alarming pace of 25%. The main reasons for declining
interest in the sport, according to a survey, were high costs, lack of time and difficulty of the
sport. The USGA tried to revive the declining golf industry through initiatives like Tee It
Forward and Golf 2.0 which made the game easier and more fun and thus encouraged
recreational and new golfers to play the sport with relaxed rules. This opportunity was well
utilised by the Primiera, which initiated the Play Your Way Challenge which allowed the
customers to choose the ball that best suits them with the help of a ball-fitting expert. Owing
to these initiatives the golf industry had shown modest recovery since 2012, though far below
the pre-recession levels.
The enthusiasm shown by USGA also led to the popularisation of non-confirmed golf balls.
Meridian, another competitor of Altius and the market leader in non-confirming golf balls
introduced a variety of non-confirming balls which made the sport much easier for the
recreational golfer.
The objective of Altius should be to increase the revenues and profitability of the company
and restore the market share to strengthen Altius leadership position. This could be achieved
by a change in the marketing strategy from targeting professional golf players to low cost
golf balls which are aimed to attract recreational and new golf players as this is an emerging
segment. Focus should be to make the brand more fun, affordable and accessible through
introduction of low priced golf balls like the Elevate ball. This low cost, non-conforming golf
ball would encourage participation of new golf players and thus capture the new generation
of golf players.
TRADE OFFS FOR ALTIUS
Altius had previously maintained its leading share in the golf ball market by introducing
advanced, super-premium golf balls like the Victor TX line which was mainly targeted to the
professional golf players. The new low cost, non-conforming Elevate golf ball would be
priced at $27 per dozen, which is more than 40% below the companys flagship Victor TX
line and would mainly be targeted to recreational and new golf players. It would tarnish the
brand image of Altius. Moreover, the retailer gross margin would be 20% for the Elevate golf
ball, compared to the 15% that Altius offered earlier. Unlike Victor TX line, Elevate would
be promoted mainly in off-course retailers as the on-course would be less willing to accept
the low cost, non-conforming ball.
THE ELEVATE STRATEGY
Altius is known for its golf balls that have been designed especially for professional players.
Their marketing strategy was to inspire consumers play golf like professionals. Almost all the
professional and famous golf players used Altius golf balls. Altius had become the market
leader with a market share (retail dollar sales) of 55.2%. It had almost 100% penetration in
on-course golf stores.
Post-recession there has been a declining interest in golf. Participation in golf declined from
31 mn golfers in 2003 to 26 mn golfers in 2013. Meanwhile competitors came up with low

prices non-conforming custom made golf balls that attracted recreational and casual players.
Competitor brands like Primiera and Meridian introduced campaigns that encouraged golfers
to play according to their skills and not mimic the professional golf players. Their marketing
strategy was a clear counter to Altius positioning. This campaign gained tremendous positive
response and their market share increased at the expense of that of Altius.
Golf is more of a recreational sport than a professional sport and consumers would not prefer
spending a lot for a recreational sport. In view of all this, it is recommended that Altius
implement Elevate strategy. Elevate strategy will involve 3 tiers:
1) Victor TX priced at 48$ per dozen
2) Victor priced at 39$ per dozen
3) Elevate priced at 27$ per dozen
The company segmented the current Altius consumers into 3 categories:

Loyalists
Enthusiasts
Brand agnostics

The segmentation clearly shows that before Elevate strategy, the company primarily targeted
on Golf balls for professional players whereas after Elevate strategy being introduced, its
main focus was on non-golfers, less skilled players and price sensitive lapsed golfers.
Pros of Elevate strategy
1) Attracts lapsed golfers and non-golfers due to lower prices
2) Custom made golf balls makes the sport easier and hence lures more consumers into
playing golf
3) Increased profit margin for retailers -20%
4) Even if the prices are competitive, consumers will prefer Altius to other brands due to
its brand name
5) Increase product placement in off course retailers.
Cons of Elevate Strategy
1) Can tarnish brand image.
As pros outweigh cons it will be better to launch Elevate strategy. In the long run more
number of customers will develop an interest for golf and foster Altius profitability.