2004: Business - Model glut muddles the ball game
Wednesday, October 5, 2011
Golf manufacturers and retailers, who often disagree, concur on two points about golf balls: The quality of balls industry-wide has never been better. But there are just too many of them.
In its May report on sales at golf shops, Golf Datatech LLC, a Kissimmee, Fla., company, listed nearly 100 models of balls from 15 brands. That does not include brands sold exclusively at discount stores.
Ball manufacturers almost uniformly insist they plan to narrow their product lines and present a simpler buying choice for consumers. But the number of available models actually has risen slightly over the past five years – in part reflecting Nike and Callaway’s entrance into the market.
The abundance of balls – what marketers often call “clutter” – creates problems for manufacturers, who must find a way to separate themselves from the pack. And it fuels consumer confusion.
“Golfers at all levels are seeking more simplified choices, more discernible performance differences between models and varying cost-versus-performance benefits suited to their respective games and price thresholds,” says George Sine, vice president of golf ball marketing and strategic planning at Acushnet Co., parent of the Titleist and Pinnacle brands.
The difficulty in distinguishing among all of the available balls likely explains why consumers place more weight on brand names in balls than any other product.
Mike Pai, Srixon’s vice president of marketing and advertising, says that to the uneducated consumer, “all balls are round, white and have dimples.” He realizes that’s an oversimplification, but from a marketer’s standpoint, there’s little visible technology to differentiate one ball from the next. For consumers, says Pai, premium golf balls are primarily a “brand purchase.”
A 2003 Golfweek report prepared by Golf Datatech bears that out. In that report, 55 percent of consumers surveyed said the most important consideration when buying balls was “availability of favorite brand” – more than twice the percentage in any other product category.
“The product defines the brand in golf clubs, and the brand defines the product in golf balls,” says Bill Price, director of Maxfli.
Consumers have shown a willingness to try new balls – to be “brand-promiscuous,” as Pai says. Tour exposure is the standard means of winning over new consumers, and balls like the Nike Golf Mojo and Maxfli Noodle have garnered attention with their colorful names and packaging. Callaway Golf also has had success with the distinctive shape of its packaging.
“It’s a smaller, easier-to-manage package, and from our standpoint, it gets us a little more visibility,” says Rob Arluna, Callaway’s senior marketing manager. “It helps differentiate us from competitors.”
Retailers typically believe the best way to differentiate is to offer fewer, more distinct products.
Kerry Kabase, sales director for Edwin Watts Golf Shops, recalls sitting down with a salesman from Top-Flite Golf a couple of years ago. “There were about eight different Strata golf balls,” says Kabase, “and I said, ‘Whoa, stop!’ ”
Burdened by debt prior to its June 2003 bankruptcy filing, Top-Flite expanded its ball line in part to generate more sales.
“We thought all along it was actually costing them business,” Kabase says. “Just because you have eight or nine models, that’s not necessarily going to get you more business.”
Top-Flite, now owned by Callaway Golf and no longer forced to make debt payments, plans to “rationalize” (read: trim) the product line later this year, according to Bob Penicka, the company’s president. In May, there were at least 16 Top-Flite and Strata ball models in the marketplace. Penicka said he wants to cut that number by 40 percent.
“Golfers don’t need that many choices from one company, let alone putting us out there against other companies offering the same choices,” Penicka said during a May interview.
Nike Golf also plans to cut its ball offerings to six models by late summer, says Stan Grissinger, category business director. And other companies insist they want to trim the fat in their product lines.
Among other reasons, rising media and marketing costs have forced manufacturers to be more disciplined.
“You just can’t afford to waste dollars on (models) that aren’t performing,” Grissinger says.
There is no shortage of underperforming models in the marketplace. Eighty percent of the balls sold at golf stores have less than 1 percent market share in units.
“The predominance of competitive golf balls with less than one market share point is cluttering the marketplace and forcing the trade to discount product in order to relieve their inventories,” Sine says.
There is evidence that less is indeed more. Titleist has cut its product line in half over the past five years while increasing its unit market share 7 percentage points to 36.6 percent. (That does not include its sister brand Pinnacle.)
“At one time their (models) were so wide that as a retailer it was just wearing us out,” says Jeff Williams, owner of Games People Play, a large golf specialty store in Beaumont, Texas. Titleist’s decision to cut its offerings, he says, “made it easy for the consumer to make a choice.”
Tom Farrell, owner of Pro Golf Discount in Greenville, S.C., agrees that marketers’ natural urge to segment their product lines can be counterproductive. Farrell points, for example, to Maxfli’s decision to expand its popular Noodle line this past spring to include the Al Dente and Rotini models. Price says that decision was made based on consumer research that found golfers liked the ball, but wanted slightly different performance characteristics.
But Farrell says he sees consumers, rather than buying more Noodles, instead trying comparable models such as the Nike Mojo or Titleist DT SoLo.
“There’s certainly no jumping from the Noodle to the Al Dente because they think it’s original,” Farrell says. “They’ve gone from pizza to Chinese.”
In May, the total unit market share for the four Noodle models was 4.4 percent, down from 4.7 percent just two months earlier, when only one Noodle showed up on Golf Datatech’s tracking of retail sales. Price, however, expects those numbers to rise soon based on strong Noodle shipments in late May and in-store promotions and advertising planned for this fall.
“That’s our franchise,” Price says of the Noodle.