Jonathan Parsons
UMUC
Titleist
Segmentation
• In order to market its golf products, Titleist always considers the two
important groups: the Golf balls owners (segment 1) and the people
who play golf (segment 2). By specifically identifying those who
play golf, Titleist can design its market strategy around the feasible
media which will attract a golf player.
• The U.S ownership of Golf Balls survey was carried out for people
who own golf balls. The survey is a crucial segmentation strategy
for Titleist because golf balls are very durable. Since most golfers
play the sport their entire lives, the data can easily be extrapolated to
get more buyers of golf balls.
• There are basically three categories of people who play golf. There
are those who play when given chance, others play occasionally
while the third category is those who hardly play. Out of these three
categories, Titleist can disregard those who hardly play because it
does not want to make golf products for people who don’t play golf.
Marketing targeting strategy
• Just like many market-oriented organizations, Titleist main marketing
strategy is to create and communicate value to its clients. With a good
marketing reputation, Titleist parent organization, Fortune Brands, has come
up with an innovative framework that affords significant latitude its group of
companies. As a multinational, Fortune Brands has achieved a lot through
effective planning and balancing among its diverse group of companies. It
has also delegated marketing responsibilities to each individual companies
and this allows for specialization and can enable Titleist, for instance, to
assume responsibility for devising their own marketing strategies.
• While Fortune Brands has a secluded approach for marketing its products, it
does not imply that Titleist or any other company within the conglomerate
cannot form co-alliances to co-market products. Titleist, for instance,
partnered with Scotty Cameron to build up specialty putters. For
sophisticated golf products, Titleist’s marketing strategy has included
professional sponsorships, timely new product launches, individualized
quests such as the Titleist and a series of print and television ads. To keep in
synch with technology, the company has also gone tech by launching a
visually attractive website and its tour blog.
Value proposition
• Most professional as well as low handicap beginners play
Titleist Pro V golf balls because they find out that value
proposition favors them. A good number of golfers go for
the lower priced Titleist products such as NXT, Carry or
Roll balls that are customized to suit their specific
requirements. In general, Titleist segments the market with
value propositions with an aim of improving performance at
perceptible levels.
• Every golfer is granted an opportunity by this strategic
planning, to choose the Titleist products at a price they feel
to a value for their particular skill level. Other than
responding to customer needs, Titleist also creates these
needs through introduction of new golfer-friendly products,
and in the process, gain a competitive advantage.
Factors Influencing Consumer
Behavior of the Primary Target Market
• Consumer’s buyer behavior is influenced by four major factors:
cultural; personal; social and psychological.
• Cultural factors comprises of the golfer’s culture, sub-culture as well
as social class. These factors are usually inherent in ones values and
decision making process.
• Personal factors include aspects such as lifestyle, age, occupation,
self concept, personality and economic circumstance. This explains
why a golfer’s preference can change when his/her situation
changes.
• Social factors include groups (member groups, inspirational groups,
and reference groups), family and social class. Therefore outside
influence can influence one either to buy or not to buy a given golf
product
• Psychological factors affection a golfer’s decision to buy a certain
golf product includes perception, motivation attitudes and beliefs.
Buyer decision process of the primary
target market
• For first-time purchasers of golf products, the buyer might
seek the advice of a friend, family member or colleague
with experience in golf products. In such situation, the
buyer’s decision might depend on the guidance received
from the experienced advisor.
• Other factors that may influence the buyer’s decision
include attractive packaging, price, and existing brand
preferences. For instance, if a buyer had recently purchased
Titleist golf clubs, he/she is more likely to purchase Titleist
golf balls than Callaway golf balls.
• While the time required by first-time buyers to make a
decision exceeds that of a straight re-buy situation, it is
clearly evident from the relative simplicity of golf balls that
ball type and brand choice is more of an impulse buy.
Levels of products
• The Titleist golf ball symbolizes product
performance as well as quality excellence and is
the unmistakable number one ball in golf, as it has
been for more than six decades. The latest Titleist
golf clubs are longer, straighter and more
accommodating than clubs from elsewhere.
• They have earned broad acceptance with club
professionals, tour professionals and spirited
amateurs across the globe through steadfast
commitment to fitting, performance and quality
excellence.
Levels of product cont’d
• The Titleist 915 driver shafts are very strong and
durable and give every player an opportunity to
correct shaft characteristics without the need for
getting very expensive shafts.
• State of the art quality and performance,
technological advancement, product innovation
and performance justification at every level of the
game result in the world wide appreciation that
Titleist is golf’s symbol of excellence.
Types of products
• There is a variety of products at Titleist with the DT SoLo the ball of
choice for many renowned golfers in the world for over the past
three decades. The DT SoLo is characterized with a red ‘1’ under the
Titleist logo and its recent upgrades have made it capable of getting
between six to fifteen more feet at swings between 90 and 150
miles/hour.
• NXT Extreme is another golf ball designed to attain maximum
distance with less hustle. This model has both an outer and inner
polybutadiene core and fusablend cover that enables high
performance control.
• Other products are the Pro V1 and Pro V1x lines. They feature an
Alignment Integrated Marking side stamp that improves the
alignment. The Pro V1 offers long and steady distances when hit
with irons and drivers. It is characterized by a black ‘1’ under the
Titleist logo and it’s the most durable of all Tour-played golf balls.
Product life cycle
• The introduction of new technologies into the golf ball
industry has not changed much as the total sales in dollars
within the industry have stagnated in the recent years as the
product continues to mature.
• According to a survey conducted by Simmons Market
Research Bureau there is a decline in participation in golf
sport since 2003. Golf club membership, which is a key
driver of demand, has also gone down. In 2003, golf
memberships were 1.8% but the figure had fallen to 1.3%
by 2005. The membership rates continued to decay as a
result of busy lifestyles.
• Between 2005 and 2010, the shipment of golf products
declined at a rate of -0.5% each year.
Benefits/features analysis
• Building upon the state of the art design and booming success of the
original AP irons, Titleist designed other two high performance golf
products for enthusiastic golfers. Extensive improvements to the
new AP1 and AP2 irons include the enhancement of heel and toe to
increase stability at the expense of the face thickness.
• The ideology for the sophisticated performance irons emerged as a
result of research that revealed that enthusiastic golfers prefer
performance with great feel rather than performance at the expense
of feel.
• The company’s Research and Development team has been
conducting extensive and sound surveys aimed at suppressing the
unwanted low frequency vibration that affect feel in irons. Several
technologies and materials were then combined in the manufacture
of new AP irons resulting in the new impressive feel.
Differentiation
• Differentiation can take many forms: technology;
innovation; prestige or brand image customer service; and
features. Differentiation at Titleist serves to:
• Create higher entry barriers due to uniqueness in its
products and customer loyalty
• Avoid need for low cost position by increasing its margins
• Provide elevated margins that enable the company to
effectively handle supplier power
• Reduce consumer power because they lack appropriate
alternative
• Create customer loyalty and hence reduce threat from
competitors such as Callaway
Branding strategy
• The brand strategy defines what the company
stands for, the promise it makes and the
personality it conveys. Brand strategies at Titleist
include:
• Seeing consumer engagement that others don’t
• Establishing easily relatable identity
• Being consistent with the product quality
• Continuous innovation with unblemished timing
and execution
Competitive analysis
• Titleist experiences minimal competition because of its dominance
in the golf products market. However, Callaway could be the only
company with potential threat to Titleist. Unlike Titleist, Callaway
Golf does not operate as a fully-owned portfolio company of a
multinational.
• From a corporate point of view, this gives Callaway an upper hand
as far as golf business is concerned. While Titleist might be
restricted by Fortune Brands or governance from Acushnet,
Callaway is free to whatever it feels is good for the company.
• In 2006, Callaway made estimated $220 million from sales of golf
balls. The company markets its products under the Callaway Golf,
Ben Hogan and Top-Flite brands.
• They make both 2-piece and multi-layer golf balls. Callaway
products compete at all price levels. However, multi-layer golf balls
go for higher prices as compared with 2-layer golf balls.
Market share
• Titleist has the majority market share in all golf products, holding
close to 50% of the market
• Callaway Golf Company, Adidas Salomon AG and Nike Inc are the
major competitors with Callaway having a market share of 34% and
Adidas and Nike sharing the remaining 8%
• Competitive positions and roles
• Competitive position is a position an organization occupies in a
market or its trying to occupy relative to its competitors.
• Titleist has a positioning strategy that is influenced by:
• Customer segments: Golf ball owners and real players of the sport
• Market profile: Competitors, size and stage of growth
• Value delivering technique: How to deliver value to the market at
the highest level
• Competitive analysis: Strength, weaknesses opportunities and
threats on the ground
Strategic sweet spot
• The strategic sweet spot of a company is where the
company meets consumer’s needs in a way that
competitors can’t, in a given competitive medium.
• Titleist, for example, segments its consumers into two
main groups and will therefore have two targeted sweet
spots in their content:
• Golf balls owners
• Real players of golf
• Content besieged to each group will have a unique bent
to it, aligning with exclusive needs of each consumer
group.
Positioning
• Currently, Titleist is regarded as number one
company as far as golf products are concerned. Its
voluminous sales attest to this.
• The company already has excellent equity but the
only blockade to purchase in this market is lack of
disposable income.
• The company has established itself as a market in
both quality performance and innovation.
• This position, particularly n a sport that embraces
both tradition and technology is critical to
Titleist’s success.
Current supply chain members and
roles
• Stakeholders at Titleist mount a lot of pressure on
supply chains to integrate a superfluity of
corporate sustainability and responsibility aspects
in their business practices.
• Legal as well as commercial demands are rapidly
changing and almost no organization, firm,
company or supply chain remains unaffected.
• Owing to the last decade’s outsourcing wave,
purchasing and supply management at Titleist, in
particular, plays a major role in guaranteeing
sustainable supply chains in the market place.
Value delivery network analysis
• A value delivery network is a business analysis
framework that addresses technical and social resources
within and between businesses.
• Fortune Brands make use of value delivery networks to
address issues within all of its affiliate companies,
Titleist being one of them. Roles or people are
represented by nodes in a value delivery network.
• The nodes are connected by lines that symbolize
tangible and intangible deliverables. The deliverables
account for overall value for products and services.
Current type of distribution strategy
• As a leading company in the golf product
business, it is not easy for Titleist to acquire more
market share.
• Capturing new distribution strategies will require
Titleist to keep up their brand reputation as well
as their aggressive advertising scheme.
• The company must continue to come up in
conversation as it deals with new and nontraditional markets.
• Maintaining at the top of trends will allow Titleist
to attain more commercial success.
SWOT Analysis
Strengths
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More than 50% of market share
Product innovation
Diversified product line
Positive financial picture
Weaknesses
• Some top enthusiastic golfers switched from
Titleist to Nike
• Disintegration of Fortune Brand into golf,
hardware and wine while competitors focus
mainly on golf market
Opportunities
• Increasing international sales
• Favorable demographics
• Developing GPS-enhanced ball tracking
systems
• Appealing to high-net worth customers
Threats
• Substandard golf balls from China
• Gaining prominence of MLS, NFL and the
MLB
• Economic depression
References
• Pallate, D. (2010): Creating Sustainable Customer
Value: Business and Economics
• Pulizzi, J. (2013) Epic Content Marketing: Forbes
• Sheffi, Y. 2005. The Resilient Enterprise: Overcoming
Vulnerability for Competitive Advantage: Cambridge,
MA: MIT Press.
• The U.S Market for Golf Equipment (2006) Packaged
Facts: Division of Market Research
• Williamson, O. E. 2008. Outsourcing: Transaction cost
economics and supply chain management: Journal of
Supply Chain Management