MKT-case Study

Download as pdf or txt
Download as pdf or txt
You are on page 1of 7
At a glance
Powered by AI
The document discusses Altius Golf's plans to launch an affordable golf ball brand called Elevate to target beginner and casual players.

Victor has the highest market share and revenue, followed by Primera. Meridian, Bantam and Carlsbad have lower market shares and revenues.

A two-piece ball with a rubber core and Surlyn cover that provides straighter shots, distance and is affordable.

ALTIUS GOLF AND THE FIGHTER BRAND

CASE ANALYSIS SUBMISSION


FAS K1 – SECTION 2
Joe Thampi(19F221)
Mrutyunjaya H C(19F226)
Ritam Chakraborty(19F242)
Shilvy Karwa(19F253)
1. Prepare a competitor analysis table for Victor? Conclusions.

PARTICULARS ALTIUS PRIMERA MERIDIAN BANTAM CARLSBAD
Revenue 1450.656 394.2 84.096 454.644 244.404
Market Share 55.20% 15.00% 3.20% 17.30% 9.30%
Objective Leader Challenger Niche Follower Follower
BCE
Flight Seraph
Merion
Range of Victor TX, Aerial Celeste
-------------- Riviera
Products Victor Arc Pegasus
Canterbur
Wing PegasusX
y
Non-
conformin
Important Professional g
------------- -------------- --------------
Features Grade balls Asymmetri
c Dimple
pattern
Matches
Victor TX:
customer
Feel around
skill
greens,
ARC and
Maximize Reduce
Important Wing: --------------
Distance, slices and ---------------
Benefits Assists -
Victor: hooks
mishits,
Maximize control,
slower
Maximize
swing
distance,
speeds
Loyalty Status High Medium Low Low Low
Premium Premium Premium Premium
Segment
Premium and and and and
Description
Economy Economy Economy Economy
High quality and Providing a Save
Value credibility to golf ball that beginners
Proposition enhance matches the from
Professional or skill of the embarrass
Experienced play. ment and --------------- --------------
golfers ‘Your play, frustration
your ball’ of bad
swings
Distribution Off-course Off-course Off-course
On-course Off-Course
channel On-course On-course On-course
Promotion --------------
--------------- ---------------
Outlay $35 Million $15 Million -
Penetrated
Unmatched major off Caters to Caters to
prestige and Competitive course all all
Strengths credibility prices retailers segments segments
Cannot be
sold on-
Relatively
Bad penetration course as it
lesser --------------
Weaknesses in off course is sells ---------------
spending in -
markets non-
advertising
conformin
g balls
Asymmetri
Popular choice of Provides c dimple
Special professionals ball fitting patterns to
--------------
Strategies which makes the expert and reduce ---------------
-
Used player feel like launch slices and
one monitor hooks, for
beginners
*Assuming the remaining 3.2% is Meridian’s market share.

2. What will you recommend as Benefits and features of the new product under Elevate?

FEATURES:

• TWO-PIECE: Such balls have both cover and a core. Typically this is best for beginners and
casual players because it helpd to generate distance.
• RUBBER CORE: This is one of the few products that they use in a two-piece ball that helps
reduce ball’s swing making it ideal for Elevate’s target market.
• SURLYN COVER: One of the two material used in the development of a two-piece ball is a
surlyn cover. It increases the overall benefit of likely fewer spins and straighter shots
• Non-conforming balls
The above two-piece ball should retain a lower cost of construction while fulfilling the
advantages that Elevate has to offer its beginners and casual golf players customers.

BENEFITS:

• Straighter shots with less spin


• Covers maximum distance
• Fast, medium and slow swing speeds
• Affordable and cheaper price for casual players while adding prestige and privilege of using a
premium brand.

3. Will you keep Victor name or some other name for the new product line, keeping in mind the
existing brand’s popularity, brand strength and perceptions? Reasons.


Victor is positioned in the market as an expensive and professional brand. Adding a new economy
segment product will undermine the brand image and value of Victor. However, Altius have to grab a
pie of mid-range and economy golf ball market. Hence Elevate should be introduced as a separate
category without affecting the position and brand value of Victor. The suggested names for the new
product line are:

• Elevate by ALTIUS
• Elevate from the house of Victor

These names will help to capture the mid-range and economy market share by the existing brand
value of Altius and at the same time without affecting the premium value of Victor.

4. Which all segments will you find most attractive? Reasons.

The attractive segments are Loyalists and Agnostics.

• Loyalists stayed more or less the same, dropping from a share of 69% of the total customers of
Altius in 2006 to 68% in 2011. This group has consumers who are less likely and less price-
sensitive to turn to other brands. Given the economic situation in which people cut spending
and golf is viewed as a discretionary purchase, it is important to maintain this section.
• Agnostics are those who are casual players or beginners. This market is extremely price-
sensitive and with a change in price is very likely to switch to other brands. But the segment
rose from 12% of Altius ' customer base to 17% between 2006 and 2011. It represents a strong
potential for a new market. Elevate is also a product capable of attracting this specific
segment.

5. What will be 3-4 factors on which the new product line can be built?

• Price: Lower price providing accessibility to casual and non-golfers gradually turning
these participants into loyal customers
• Size, Distance and weight: makes the game casual for recreational golfers and easier for
new participants. Elevate ball is easier to drive for distance
• Provides easy entry point into intimidating game and is fun to play
• Premium quality despite lower price since it belongs to premium brand Altius.
• Customer segment: Positioned to target the price sensitive Agnostic and Enthusiastic
segment

6. What will be the 2 Value propositions? Draw a perceptual map showing competition.

Product Price(1-5) Beginner Friendly(1-5) Market Share
Victor TX 1 1 35.60%
Victor 2 1 12%
Elevate 4 5 10.0%
Arc 3 3 8.0%
Flight 2 1 2.0%
Aerial 3 2 2.0%
Wing 5 5 2.0%
Riviera 3 4 3.30%
BCE 1 3 1.7%
Merion 2 3 8.0%
Canterbury 1 3 3.7%
Pegasus 3 4 4.3%
Seraph 1 2 1.16%
Celeste 2 2 1.14%
Pegasus X 5 4 2.68%
Merdian 5 5 2.47%
MORE BEGINNER FRIENDLY
6
PERCEPTUAL MAP
Victor TX
5 5 5 5
Victor

Elevate
4 4 4
Arc
HIGH PRICE

Flight
LOW PRICE

3 3 3 3 Aerial
0 1 2 3 4 5 6
Wing

2 2 2 2 Riviera
V
BCE

1 1 1 Merion

Canterbu
ry
0
LESS BEGINNER FRIENDLY


7. What will be your distribution channel plan? On-course channel or off-course channel or
both? Margins?

Elevate should be sold in off-course retail stores as this line also has non- conforming balls.
Usually the retailers on-course do not sell non-conforming balls as they are not to the USGA
standards. Also, until now Altius with its Victor range was able to achieve almost a 100%
penetration into the on-course market but have almost no presence in the off-course market.
Elevate will help in overcoming this issue.
Usually Altius offers only a margin of 15% on its Victor even when its competitors are offering
about 20%. However, Altius in case of Elevate should offer at least about 20% margin because
• It is new in the market and will be catering a price sensitive market
• This will help Elevate to be placed on shelves along with Victor TX and Victor which will
help improve the sales of Elevate due to the brand value Victor line has to offer.
Altius is planning to offer Elevate at a retail price of $27. Hence with a margin of 20% ($5.40),
Altius will be able to retain $21.60 from sale of each ball.


8. What will be the cost and price structure of the new product?

COST-PRICE STRUCTURE OF ELEVATE:

Price $26
Cost $7.75
Retail Gross Margin % 20%
Retail Gross Margin $5.20
Manufacturer Margin $13.05
Manufacturer Margin % 50.19%
Manufacturer retains $20.80

9. What will be your theme of Promotion? Budget?

Promotion Theme: “Golf - now made easy to play”


Budget for promotion: 25 Million Dollar
Advertisement 20%
Events and
40%
Experience
Sales Promotion 20%
Social Media 20%





10. Will you alone or be part of popularizing the new way of playing golf? If yes, what will be your
budget for that?
I would be part of popularizing the new way of playing golf. Earlier the game was difficult to play by a
common person. Many used to get embarrassed when they were not able to hit the ball. But now, as
the rules have been relaxed, many would be interested to play the game and have fun. Altius is
planning to take this change in rules to their advantage by introducing new economic balls under
elevate strategy. In order to popularize, they need to promote this product. They can organize events
to create awareness about the new rules and how it is easy to play the game now and can have fun.
Budget can be around 5-10 million Dollar. They have to conduct the event in multiple locations so as
to have a maximum reach.

11. What will be your expected sales of the new product in 2013?
The main value proposition in the elevate strategy is the low-cost golf ball. With this, the company is
trying to attract new customers and casual players. The same strategy is being followed by many
other companies also. Hence the industry revenue would grow by around 3.5% in 2013.
The on-course retail sales were greatly driven by the loyalists and hence elevate strategy would not
affect the on-course sales. Rather, it will help Altius to gain a larger market share as the off-course
retailers had shown a strong interest in low-cost golf balls.
Calculations:
Industry Revenue in 2012 = $ 483M, Expected Industry Growth in 2013 = 3.5%,
Expected Increase in market share of Altius due to elevate strategy = 0.40 %

2012
Revenue 483
Altius 55.20%
Revenue of Altius in
Dollar 266.616

Expected Market Revenue and Altius Share in 2013

2013
Revenue 500
Altius 55.60%
Revenue of Altius in
Dollar 278

You might also like