2003: Business - Wilson makes moves to gain Velocity

As it dusts itself off from a difficult – but profitable – 2002, Wilson Golf faces serious questions about what it is going to do next.

Wilson’s Fat Shaft products continue to sell well, and the Deep Red metalwoods and irons have been a success. But the True ball, introduced a year ago, has yet to gain traction; Wilson Sporting Goods president Jim Baugh believes the message that the ball putts truer did not resonate with golfers more interested in bombing drives. Moreover, there has been a brutal bloodletting in the value ball segment the past couple of years.

Baugh continues to run the $240 million golf division while searching for a replacement for Luke Reese, the former general manager who left the firm last fall. But Baugh and Amer Group, Wilson’s parent company, soon must settle on a long-term strategy for battling much larger industry competitors.

In the interim, Wilson is shifting its attention to a series of line extensions that include more products for better players. This includes the Deep Red II Tour driver and irons, which eschew the Fat Shaft in favor of more conventional shafts.

“We are not getting away from our grass-roots focus on local club professionals and game improvement,” Baugh said. “Rather, we are adding to it. Why? Because there is a market for these clubs, and because they can enhance the brand image and give us products with greater margins.”

That move prompted Wilson to bolster its tour presence, which primarily featured Irishman Padraig Harrington. It signed Jesper Parnevik to a three-year contract and also brought Grant Waite and Michael Clark on board – commitments that will cost the company close to $2 million in 2003.

“Our goal is to gradually rebuild our presence there over time,” Baugh said. “No, we are not going to outspend the big guys. But we will be there.”

It also led Wilson to develop a new marketing campaign under the slogan “Velocity Matters.”

“Velocity is speed and distance in balls and distance in drivers,” said Baugh, who hopes the new campaign will spark interest in the second-generation True balls. “We’re taking the definition of velocity and applying it to our products. The new irons and woods, for example, produce more velocity off the club face, and the slogan ‘Velocity Matters’ will be seen in our advertising, on our point-of- purchase displays, on our Web site . . . It will be everywhere.”

Industry watchers say the new moves should help reenergize the golf division.

“They’ve accomplished a lot with their Deep Red irons and woods, which are very easy to hit, and to sell,” said Tim Whalen, co-founder of the Fiddler’s Green Golf Center in Eugene, Ore. “And I think the pro tour presence, and the more traditional shafts, will help not only sales but also improve Wilson’s image, which had gotten tarnished somewhat among the better players. But they probably need to advertise and market more and come up with some lower price points to move product. And if they grow back to the high end, that’s great.”

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