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Golf Equipment Market: Manufacturers find the rough

Golf Equipment Market: Manufacturers find the rough

Introduction

Golf is a sport played by millions across the world and is a pursuit that requires significant investment in equipment. However, in recent years, the golf equipment market has struggled badly. This case study analyzes the reasons for this performance and looks at how the market's major players are adapting and faring to soft conditions.

Features and benefits

  • Analyzes the golf equipment market's performance in recent years and its drivers.
  • Looks at the strategies employed by the industry's major manufacturers
  • Looks at what the future may hold and what equipment manufacturers must do to arrest the slide.
Highlights
  • Sales of golf equipment have fallen noticeably in recent years, with the sport's traditional markets of the US, Europe, and Japan particularly affected. Falling participation levels are driving the fall in equipment sales as people baulk at the price of golf and slow play means many do not have time to play such a time-consuming sport
  • Those engaging in premiumization seeing success thanks to higher prices offsetting falling volumes to some degree. For the most part however, the industry's powerhouses are failing to adapt to changing market forces and continue to push on with frequent product launches, leading to an oversupply of inventory than necessitates heavy discounting.
  • The future holds many challenges, with the potential for further falls in participation as the so-called 'Tiger Woods Effect' wears off. There are hobbies better suited to the age of instant gratification, and the cycle of heavy discounting must be broken. Efforts are being made by golf's governing bodies to grow the game with slow play a focus.
Your key questions answered
  • How is the global golf equipment market performing?
  • What strategies do the leading equipment manufacturers adopt and how are they are faring?
  • What future threats and opportunities face golf equipment companies?


OVERVIEW
Catalyst
Summary
GOLF EQUIPMENT MARKET: DECLINING GLOBALLY
Market in decline since 2012 following period of low growth
Traditionally strong markets most affected
Decline driven by changing playing habits
US participation stabilizing but at lower-than-peak levels
UK struggling to attract players
More core golfers needed to spur equipment sales
MANUFACTURERS EXPERIENCE MIXED FORTUNES
TaylorMade-adidas Golf causing adidas headaches
Financial performance has been very poor in recent years
Product launches too frequent
Woes continue in 2015, adidas exploring sale
Callaway Golf: Premiumization pays dividends, revenues grow
Performing well in a tough market following several years of decline
Premiumization driving revenue and profit growth
Callaway has improved brand image and 'Chev' brand now has momentum
2015 far from disastrous but shows there is still work to do
Acushnet Company: Brand strength is king
Financial information thin on the ground but revenues grew in 2014
Strong endorsement strategy
Segmented marketing: Balls for players of all abilities
Segmented marketing: Successful for FootJoy
Using club makers' names as a form of premiumization
Nike fortunes mirror those of star athlete Woods
Puma: Positioning itself as a trendy brand with mixed results
Under Armour: Now a golf apparel force to be reckoned with
FURTHER CHALLENGES REMAIN, EFFORTS MADE TO GROW PARTICIPATION
'The Tiger Woods Effect' wanes as his career is in jeopardy
Zenith of participation coincides with Tiger's peak years
Tiger puts eyes on screen and attracts sponsors
Tiger's bleak future bad for golf
Manufacturers will need to adjust to potential post-Tiger era
Growing participation tough in era of instant gratification
Cost issues being addressed
CONCLUSIONS
Falling participation level and ill-conceived strategy hurting the golf market, but adapting to soft market conditions can work
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