Altius Golf and the Fighter Brand Case Study Solution can be analyzed from the lens of Brand Repositioning, Channel Establishment, and New Product Introduction
Altius Golf and the Fighter Brand Case Study Solution: Case Introduction
Despite long-term declines in golf participation and sales following the 2008 financial crisis, Altius Golf maintains its position as the industry leader. The company has maintained its dominant market share by constantly innovating and releasing new generations of ultra-premium and cutting-edge golf balls that allow its customers to play like pros.
The company’s CEO wants to counteract the effects of price competition by introducing a program called Elevate, which is designed to help young golfers improve their skills. The new ball, called Elevate, will be 40% less expensive than the company’s flagship brand while still being easier to drive for distance and forgiving. Unlike the company’s other products, which are sold exclusively in “on-course” pro shops, Elevate will be available in “off-course” channels like golf specialty stores and big box retailers. The board of directors is deeply divided over whether or not to support the decision. Students are required to conduct a quantitative analysis of the CEO’s proposal before making a final recommendation in order to better understand the risks and gains involved.
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Altius Golf and the Fighter Brand Case Study Solution: Reason for Declining Sales
2008’s Economic Downturn
The beginning of decline in Altius’ market share coincided with the beginning of the decline in the golf equipment industry as a whole, which began with the beginning of the economic crisis that began in 2008. The crisis didn’t start until 2008, but it began that year. The decline in the market for golf balls mirrored the trend of consumers cutting back on their discretionary spending, which can be seen in the previous sentence.
Decline in Popularity
The overall decline in interest Golf’s popularity has been on a downward trend ever since it hit an all-time high in 2003, which is another significant factor. This decline in interest has been attributed to a number of factors. In recent years, a significant number of female golfers and junior golfers have given up the sport. In addition to this, the percentage of serious golfers, who represent Altius’ most profitable customer segment, has also decreased.
Higher Incentives from Competition
Since the percentage of sales made by off-course retailers has increased, these retailers now have a greater incentive to sell products made by competing companies because the higher margin of 20%, which is significantly higher than the 15% offered by Altius, makes it more profitable for them to do so. Additionally, the percentage of sales made by off-course retailers has increased.
High Price associated with the Sport
In addition, consumer research has shown that the high costs associated with playing golf are a major deterrent for a great number of people who otherwise might start playing the sport if it were not for the high costs.
Competition
Two of Altius’s competitors, Primiera and Meridian, had both implemented a strategy in which they aimed their products at the beginning and recreational golfers. This was Altius’s strategy as well. Both companies employed this tactic in their operations. They ran promotional campaigns aimed at the recreational market, with the goal of assisting players in selecting balls that were tailored to their specific requirements and producing non-conforming balls that were resistant to cuts and hooks.
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There is a crossover between the percentage increase in total equipment sales and the percentage increase in the sale of golf balls in the above graph, which was for 2010. More and more golfers are opting for cheaper balls, reflecting growing consumer sentiment.
Altius stands to lose market share if it sticks to its current strategy and practices, as price-conscious customers look elsewhere and the next generation of recreational golfers opts for more affordable and less regulation-heavy options rather than Altius’s traditional and high prices. The current product line limits participation in golf, an aspect the USGA is working hard to improve. More difficult to defend your territory against competition as USGA campaigns and consumer preferences shift toward golf balls that are more accessible and improve ease of play.
Altius Golf and the Fighter Brand Case Study Solution: Short-Term Strategy
In the short term, the primary objective for Altius should be to successfully implement the Elevate strategy in order to protect its market share and continue to hold the leadership position in its industry. This can be accomplished by repositioning your product line in such a way that it more effectively targets different customer demographics, such as serious golfers and casual golfers. At the same time, the company must make certain that the launch of a more cost-effective product line does not result in a watering down of the premium image that is currently associated with the brand. Because off-field channels are increasingly becoming the primary channel for the sale of golf equipment, Altius needs to find a solution to the declining share of dollar sales that these channels account for.
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Altius Golf and the Fighter Brand Case Study Solution: Source: Case Exhibit: Long-Term Strategy
Long term, Altius needs to make sure that they not only promote recreational golf but that they can also migrate some of these casual golfers who have started to use your value product to your most premium and professional offerings, such as the Victor TX golf line. This is something that Altius needs to make sure that they can do. balls. This migration would not only lead to an increase in the company’s margins, but it would also lead to an increase in customer loyalty, as it would transform the extremely slippery segment of casual golfers into the extremely traction-oriented segment of serious golfers.
Altius Golf and the Fighter Brand Case Study Solution: Risk Analysis
The following is a list of some of the tradeoffs that the company will be trying to navigate
Altius must make a commitment to its profit margins if the company plans to protect its market share against rivals who sell innovative and cost-effective products to customers. It would be necessary to raise retailers’ margins to match those of their competitors in order to encourage large retailers to sell the Altius product line. However, this would result in the retailers’ margins being lowered, defeating the purpose of the incentive. When compared to the current business strategy, which consists of selling only premium and mid-range products, selling a cheaper product would result in a reduction in the profits made per unit.
Premium Image Vs Value Image
If the company makes the decision to sell the Elevate line of golf balls, it will be venturing into the territory of valor. As a result of players using Altius golf balls on professional courses such as those used in the PGA and LPGA, as well as the company’s Victor TX line of balls, which focused on maximizing distance while maintaining a consistent feel, players have come to associate the name Altius with quality. It would be to the company’s advantage to remove this premium brand image from the value offering; however, the company will need to take measures to ensure that the premium image is not diluted in any way. as well as the possibility that the company will be able to keep its existing professional customers.
Professional Branding Vs Casual Branding
The current strategy for promotion, as well as the current positioning of the Victor TX and Victor line of golf balls, both draw attention to the fact that Altius golf balls are used by professional golfers. A novice golfer may find this intimidating, which may cause them to have an inaccurate impression of how challenging the game is. It is more likely that this will catch your attention if a new line of value-oriented golf balls that emphasizes the product’s ease of use is introduced. However, because professional and casual offerings are simultaneously marketed, Altius needs to make sure that the appropriate consumer segment is targeted without altering the way that the other consumer segment views the brand of the company.
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Altius Golf and the Fighter Brand Case Study Solution: Source: Economical Performance
| Altius | Primiera | Bantam | Carlsbad | |
| VictorTX | Flight | BCE | Seraph | |
| Product Name | 48 | 44 | 45 | 45 |
| Price Per Unit | 15% | 20% | 20% | 20% |
| Retailer Gross Margin% | 41.74 | 36.67 | 37.50% | 37.40 |
| Cost Price for Retailer | 70% | 55% | 55% | 55% |
| Mfg Gross Margin | 24.55 | 23.66 | 24.19 | 24.19 |
Mid Range
| Altius | Primiera | Bantam | Carlsbad | |
| Product Name | Victor | Aerial | Merion | Celeste |
| Price Per Unit | 39 | 35 | 36 | 36 |
| Retailer Gross Margin% | 15% | 20% | 20% | 20% |
| Cost Price for Retailer | 33.91 | 29.17 | 30.00 | 30.00 |
| Mfg Gross Margin | 70% | 55% | 55% | 55% |
| Cost for Manufacturer | 19.95 | 18.82 | 19.35 | 19.35 |
The case data shows that Altius and its competitors have comparable manufacturing costs. This indicates that, from a purely operational perspective, there is no longer any room for improvement.
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Altius Golf and the Fighter Brand Case Study Solution: Source: Probable reasons for High Cost
Since Altius is aiming to project the image of a high-end brand, the company has raised prices in order to maintain this perception. The recent success of the Altius brand has allowed the company to increase its profit margin and bargain power with retailers.
As we can see from the above, Altius can increase its attractiveness to retailers by lowering the gross margin of the premium category of balls it sells. This will help the company achieve its goal of premiumization by encouraging retailers to sell more premium balls.
Altius Golf and the Fighter Brand Case Study Solution: Source: Elevate Introduction
Value Range
| Altiius | Primiera | Bantam | Carlsbad | |
| Elevate | Arc | Riviera | Pegasus | |
| Product Name | 27 | 27 | 27 | 25 |
| Price Per Unit | 20% | 20% | 20% | 20% |
| Cost Price for Retailer | 22.50 | 22.50 | 22.50 | 20.83 |
| Manufacturer Gross Margin | 70% | 55% | 55% | 55% |
| Cost of Manufacturer | 13.24 | 14.52 | 14.52 | 13.44 |
As can be seen from the information presented above, it is quite clear that Altius will not be able to keep the same level of gross margins with the Elevate product line as it does with the Premium product line. Due to the fact that customers in this market are much more aware of the prices, Altius would need to lower its gross margins in order to be competitive in this space from the perspective of pricing.
Altius Golf and the Fighter Brand Case Study Solution: Introduction of “Exhibit”
In light of the responses to the three questions presented earlier, we believe that Altius should implement the Elevate strategy, with the primary motivation being the rising number of golfers who play the game for either recreation or competition. those prices that, in the future, can be converted into high-margin premium offers to be sold.
Our recommendation is to undercut the prices of the rivals in the value market by a significant amount and provide retailers with a convincing gross margin of twenty percent. The only way to accomplish this is for Altius to lower its gross margin on this line of business.
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Altius Golf and the Fighter Brand Case Study Solution: Source: Potential Risks
Dilution of the Brand
Altius runs the risk of diluting the premium brand image that it has worked hard to cultivate and hurting the feelings of its existing base of devoted customers. This can be dealt with by maintaining and further enhancing Altius’s reputation as a premium brand. increasing the amount of promotion that is put into the Victor TX line. In addition, Altius could form partnerships with prominent golfers in order to strengthen its reputation as the brand of choice among professional golfers. In addition, in order to keep the allure of its premium line alive and well, Altius needs to continue to innovate.
Cross Cannibalization
Due to the fact that they are targeted at completely different ends of the market, the Elevate product line and the high-end Victor TX product line would not pose a significant threat to one another in terms of cross-cannibalization. However, it could be a problem for the product line that falls in the middle of the price spectrum, which is the Victor line. This is because the most loyal and agnostic Altius customers (which account for 31% of the total market) would choose to purchase the value range rather than the option that falls in the middle of the price spectrum. Because of this, it is not necessarily a bad thing for Altius, as with a lower entry price, Altius can work to create more loyal consumers and sell them to the Premium offer in the future. This is not necessarily a bad thing for Altius.
If the aforementioned strategy of lowering prices is implemented by Altius, the company has the potential to not only become the leader of the market in the quality category but also the leader of the market in the value category. The company already has a great brand image.
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Samrat is a Delhi-based MBA from the Indian Institute of Management. He is a Strategy, AI, and Marketing Enthusiast and passionately writes about core and emerging topics in Management studies. Reach out to his LinkedIn for a discussion or follow his Quora Page