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Essay on Golf Ball Industry
Golf is a multi-billion dollar industry that is showing a growth in popularity due to media attention on rising young stars of the sport. Many different golf products are needed and sold to the millions of consumers who play this sport annually. Because of the large market which exist, there is strong competition between equipment makers to get their products sold. Of the equipment that is needed to play a round of golf, clubs and balls are the most essential. More notably is the fact that clubs have a longer useable life than golf balls. New golf balls may be needed every time a golfer goes to the course to play a round. This is because balls get lost or scuffed during play. The high sales turnover which exists with golf balls makes this product attractive to sports equipment producers.

The purpose of this report is to identify the major competitors of golf ball manufacturers and the size of their market share; Also, this report intends to show the current marketing programs used by these manufacturers, the profile of the golf ball market, and the current trends affecting the industry. By conducting this research, it may become apparent as to what it would take to penetrate and succeed in the golf ball industry, what type markets exist, and how much potential revenues exist. This research should provide enough information to understand the basic structure of the golf ball market. One question which this research would like to answer is: Is there room for a small business competitor?

According to an industry survey conducted by Standard and Poor s, golf product sales grossed approximately $3.9 billion in 1996 (5). Of these sales, $789 million dollars were spent on golf balls. Standard and Poor s also claim that this industry is expected to grow at least by 5% a year due to increased prices of premium products and because of increased participation rates due to emerging young stars like Tiger Woods. It has been estimated that around 25 million people in the United States play golf. As seen in Table 1, golf participation rates took a dip after the early 90 s, however, the rates now show a positive growth trend (Golf Perspectives).

TABLE 1- Golf Participation

While Table one shows that women s participation rates have declined, Standard and Poor s have reported that there is a positive trend and that more women are golfing (7). Due to the large success and media exposure of Tiger Woods, who is a young African-American, it can be assumed that more youths and minorities might also start playing golf.

While the industry is growing, so is the competition. The article by Brandweek, "Big Time Wars in Golf Balls Drive Still-Thriving Industry", claims that there are more ball manufactures than ever that are making a mark( 30). While this may be true, there are four companies which dominate and control a large portion of the market share. Figure 1 shows the sales of the leading golf manufactures in 1996(Golf Perspectives). Four of the top seven are golf ball producers, and they the rank in corresponding order for golf ball sales. This does not give an true ratio of the golf ball market share, however, it does give a general representation.

The yellow shaded areas in Figure 1 represent the golf ball producing companies, whereas, the blue shaded areas represent other types of golf equipment produces. The red shaded area represents the many other companies which hold less than 2% of the market share, which shows that about one third of the market is divided by many different companies. It also shows that Titleist, Spalding (Top Flite), Wilson, and Maxifli/Dunlop are the four major golf ball producers.

Titleist is the leading manufacturer in the golf ball market. Their claim to fame is being the "golf ball of choice by PGA and LPGA club professionals"(Titleist). As seen on Figure 2, PGA tour professionals overwhelmingly used Titleist balls in the 1998 U.S. Open which is a major tournament.(Titleist). This percentage is very consistent throughout PGA tournaments all year round.

Figure 1 - Ball Count at US Open '98

Title also innovated golf ball testing in the 1930 s and 1940 s which created demand for companies to make better balls. This strive for technological advance is very prominent in the marketing program at Titleist. They market more than eight different types of balls for different types of golfers. They use many different types of print and television media to gain exposure on their products. Between January and June of 1997, Titleist spent $8.6 million dollars on golf ball advertising(Golf Perspectives). About 42% of the amount was in magazine spending and 57% on television spending. This advertising focuses primarily on ball technology and professional endorsements, which Titleist has Tiger Woods to claim.

Spalding, which makes Top-Flite, is the second leading competitor of golf ball sales. Spalding began as a baseball manufacturer in the late 1800 s and quickly began producing balls for every sport. They used to hold the top share of the golf ball market, however lost it to Titleist in 1991. While fighting to recapture the lead, Spalding has invested millions of dollars to improve operations and technology at its golf ball factory(Consumer 518). Between January and June 1997, Spalding spent the most money on advertising for golf ball manufactures at $9.2 million dollars. During this time, 37% was spent on print and 61% was spent on television.(Golf Perspectives). Their marketing program focuses on how their technology will improve golfers games. They make many different types of balls to market to different types of golfers. The Top-Flight Strata is said to cost 3 times as much as regular golf balls, however they are sold quickly to serious golfers who praise the technology(Merritt 6). They recently designed balls to perform well for competitors drivers. They claim these balls are specifically designed to work well with Calloway s Big Bertha and Taylor Made s Ti Bubble 2 drivers which are the most popular drivers on the market(Potter 7). Spalding tends to market it s new products by point of purchase displays that inform consumers about the technology, advertisements in sports publications and on television sports events, and by offering manufacturer s rebates(Consumer 518). Spalding is looking to expand its company in the international sports market.

Wilson which is another sports equipment giant holds a top spot in the golf ball industry. Like Spalding, they produce balls for every sport. There main focus is on tennis and golf products, however they make footballs and basketballs which are endorsed by professional and collegiate sports organizations. Wilson s primary market strategy is to pursue many endorsements by professionals to enhance the brands image and increase sales(Consumer 623). Some of the pro golf endorsers are Ben Crenshaw, Tom Kite, and Sam Sneed. Wilson has also capitalized on the international market for golf ball sales, where they make significant profits in Japan, United Kingdom, and Canada(Consumer 623). Wilson also focuses on distribution where they have major retail customers such as K-mart, Target, and Sears. These major customers make up 25% of the companies sales(et. al.). During January through June 1997, Wilson spent $4.9 million on advertising, where 41% was print and 59% was television. They proportion there advertising between print and television very similar to Spalding and Titleist.

Dunlop is the final of the golf ball producers which hold a large piece of the golf ball market. Like Wilson, Dunlop is also a large competitor in the tennis industry. Dunlop produces Maxifli and Slazenger golf balls which are targeted to different types of golfers. Their marketing program is similar to the other major competitors because they focus on technology and professional endorsements, however, their advertising budget is primarily spent on television. During the Golf Perspective report, Dunlop spent $3.3 million on advertising between January and June 1997, where 89% of that was for television. The main theme in much of Dunlop s advertising is explaining what makes their product different from the rest.

While the major competitors in the golf ball industry boast about their technological advances of the golf ball, consumers may be confused about all the complication. The product manager for Spalding, Mark Grothe, claimed, "It s getting difficult for consumers to make a wise choice" about what kind of golf ball to use. According to a survey conducted by the New York Times Research Resource Center, a majority of golfers have heard of most technical terms used to describe golf balls, but only a few really knows what they mean(Golf Perspective). The study evaluated Moderate golfers( play 8 - 24 times a year) and Avid golfers (play 25+ times a year. As seen in table 2, not even a majority of Avid golfers know what the technological terms mean.

Table 1 Product Knowledge

Golf ball manufacturers are producing many different types of golf balls to target golfers styles rather than their demographic profile. However, it is significant to know what the golf ball market is composed of. According to a study complied by Simmons Market Research Company, 28.3% of people who own golf balls are between the age of 35-44 and 72.3% of golf ball owners are between the ages 18 and 49(194). A large majority of golfers are white married males who work full-time and have an average income of $40,000 or more. The Mid-west is the most populated with golfers at 35.3% of the population. The magazines which are subscribed the most from golf ball owners are Parade(42.3%), Times mirror mag. Network(30.2%), TV Guide(19.9%), and USA Today Weekend addition(22.2%). The three highest viewed cable stations by golf ball owners who view cable are CNN (47.1%), ESPN(38.3%), and The Discovery Channel(32.3%). Radio is listened to by 56% of Golf ball owners between the times of 6:00 AM and 10:00AM. This information is important for those attempting to create a marketing plan for golf balls because it show how is out there and how to reach them.

While many different markets may exist in the golf ball industry, the leaders have found an easy and effective way to separate golfers without over looking any of them. This is done by distinguishing different golf styles and producing balls which perform best for them. Even though competition is strong in this industry, many small manufacturers account for about one third of the market share. Small manufactures find there place by making custom balls, recycling used balls, or other unique styles that cater to a specific market. Companies with a large portion of the market share have professional endorsements and spend a significant amount of money on research and design. This may show that consumers want golf balls that are claimed to be the best by the best golfers for reasons that they do not necessarily understand.
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