Altius Golf Case Study
A. Current Situation
What role has Altius Golf’s choice of channels of distributions played in its loss of market share? What other factors have contributed to its loss of market share? What will happen if Altius maintains the status quo?
Altius Golf’s choices in its channels of distribution have played a major role in its loss of market share. There are two distribution channels when it comes to the golf market, on-course and off-course, which account for 40% and 60% of unit sales respectively which result in 45% and 55% in dollar sales respectively. Altius’ number one selling product the Victor TX retailing at nearly $50 per pack accounts for 70% of its total golf ball sales. Altius sells the Victor TX in both on-course and off-course retailers, however the majority of the sales for the product come from on-course retailers. Here inlays the problem, after 2008 the number of course openings has always been less than the number of course closing. These on-course retailers are closing fast 25% closed in the years immediately following the recession. Altius is losing the main sales channel of on-course retailers. One may think that the off-course retailers would simply pick up this slack, however this is not the case. The reason that the on-course retailers and golf courses are closing faster than they are opening is because of the rescission. People have less money to spend and therefore cut spending on certain things golf being one of them. Off-course retailers attract the recreational golfer who is not willing to spend massive amounts of money on the sport; at $50 a pack Victor TX balls are out of most recreational golfer’s price range.
Other factors that have had a negative impact on Altius’ sales is the fact that there are less golfers in the U.S.. In 2003 the number of golfers in the U.S. was around 31 million in the past 10 years that number has dropped to 26 million. Simply put when less people are play a sport you sell equipment for the less equipment you
What role has Altius Golf’s choice of channels of distributions played in its loss of market share? What other factors have contributed to its loss of market share? What will happen if Altius maintains the status quo?
Altius Golf’s choices in its channels of distribution have played a major role in its loss of market share. There are two distribution channels when it comes to the golf market, on-course and off-course, which account for 40% and 60% of unit sales respectively which result in 45% and 55% in dollar sales respectively. Altius’ number one selling product the Victor TX retailing at nearly $50 per pack accounts for 70% of its total golf ball sales. Altius sells the Victor TX in both on-course and off-course retailers, however the majority of the sales for the product come from on-course retailers. Here inlays the problem, after 2008 the number of course openings has always been less than the number of course closing. These on-course retailers are closing fast 25% closed in the years immediately following the recession. Altius is losing the main sales channel of on-course retailers. One may think that the off-course retailers would simply pick up this slack, however this is not the case. The reason that the on-course retailers and golf courses are closing faster than they are opening is because of the rescission. People have less money to spend and therefore cut spending on certain things golf being one of them. Off-course retailers attract the recreational golfer who is not willing to spend massive amounts of money on the sport; at $50 a pack Victor TX balls are out of most recreational golfer’s price range.
Other factors that have had a negative impact on Altius’ sales is the fact that there are less golfers in the U.S.. In 2003 the number of golfers in the U.S. was around 31 million in the past 10 years that number has dropped to 26 million. Simply put when less people are play a sport you sell equipment for the less equipment you