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Altius Golf and the Fighter Brand

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Altius Golf and the Fighter Brand

1. Why has Altius Golf lost market share? What will happen if Altius maintains the status quo?

Debido al reciente periodo de recesión, los consumidores de equipos de golf han disminuido sus gastos en las pelotas de golf y esta tendencia ha afectado gravemente la industria, de igual forma ha disminuido el número de jugadores profesionales. Las pelotas Altius son caras en comparación a las de la competencia y los nuevos jugadores no están dispuestos a gastar en equipos costosos. Los requisitos reglamentarios de la USGA son muy estrictos en cuanto a tamaño, forma y material de las pelotas, lo que puede afectar el renombre de Altius por no adherirse a dichas normas.

2. What should Altius´s objectives be? What trade-offs must it manage?

Deben centrarse en el equipo de golf de bajo precio, como la pelota “Elevate” y cambiar su estrategia de marketing que está enfocada a equipos profesionales de golf y ahora deberá ser a equipos menos costosos, más orientados a los nuevos jugadores que lo practican por diversión, así mejorará la rentabilidad de Altius. Esto se debe a que la industria del golf se está tratando de revivir con los esfuerzos de la USGA mediante el estímulo de nuevos jugadores que practiquen el deporte con reglas más relajadas.
Por lo tanto, es un buen momento para captar nuevos jugadores a través de una amplia comercialización de pelotas de bajo costo y que sean no conforme a las normas USGA, lo que ha permitido a los nuevos jugadores golpear la pelota perfectamente.
La nueva pelota de golf "Elevate" se venderá por debajo del 40% de la Victor TX, su marca Premium, lo que permitirá a Altius Golf capturar una nueva generación de jugadores de golf.

3. Analyze the economics of Altius´s overall golf ball business compared to its competitors and for the three proposed Altius product lines. What are the implications of this for the advisability of introducing Elevate? a. What is Altius´s and its competitors´ 2012 revenue and gross profit?

Considerando las ventas de 483 millones de dólares, podemos dividir los ingresos del año 2012 de la siguiente manera:

Empresa | Ingresos (millones de doláres) | Altius | 266.61 | Primiera | 72.45 | Bantman | 55.02 | Carlsbad | 38.15 | Carnoustie | 19.83 | Davis | 14.97 | Sarazen | 4.83 | Other | 11.11 |

Los márgenes de contribución quedaron de la siguiente manera:

| Altius | Primiera | Bantman | Carlsbad | Carnoustie | Davis | Sarazen | Other | | U.S. Retail dolar sales | 55.2% | 15% | 11.4% | 7.9% | 4.1% | 3.1% | 1% | 2.3% | | Retail sales (483 M) | 266.6 | 72.5 | 55.02 | 38.15 | 19.83 | 14.97 | 4.83 | 11.11 | | Retail percentage | 15% | 20% | 20% | 20% | 20% | 20% | 20% | 20% | | Retail margin | 226.61 | 58 | 44.05 | 30.52 | 15.86 | 11.98 | 3.84 | 8.89 | | Manufacturer Margin | 70% | 57.5% | 57.5% | 57.5% | 57.5% | 57.5% | 57.5% | 57.5% | | Gross profit | 158.6 | 33.35 | 20.92 | 17.55 | 9.13 | 6.89 | 2.22 | 5.11 | |

b. What is the value of a point of market share for Altius?
En el 2012, para el canal “On Course” Altius cuenta con el 67.5% del mercado, con una reducción del 1.5% en los últimos 3 años.
Para el canal “off course” cuenta con el 45.5%, en este apartado es donde se ve más marcada la disminución con un 5.2% en los últimos 3 años.

c. What are the implications for Elevate, considering its unit contribution and gross margins compared to Victor TX and Victor?
Elevate propone una incursión al Mercado con un precio de 27 dólares y un margen de contribución al distribuidor detallista del 20%, por el encima del usual 15% que maneja.
Considerando el buen posicionamiento que tiene la marca en niveles “on cousre” a pesar de la perdida de mercado en los últimos años, podría utilizar esto para apalancarse y entrar a recuperar mercado “off course”. Así mismo vemos que en encuestas el precio es determinante en la decisión de compra final de los consumidores, también mencionaron estar dispuestos a probar bolas no conforme a las normas USGA, las cuales incluye la marca Elevate.

4. Should Altius implement the Elevate strategy?

a. If so, what are the risks to the brand and how can they be managed? What sales result would you expect for each item in the line if Elevate is introduced?
La línea Victor TX está enfocada al segmento de mercado profesional y Altius Golf ha invertido fuertemente en fortalecer esta marca con el éxito que los jugadores de alto nivel han demostrado; sin embargo las investigaciones de mercado arrojan información que indica que las tendencias han cambiado hacia un enfoque más económico. Por esto se visualiza el decremento en la participación de mercado de Altius Golf frente a crecimientos por parte de sus competidores.
La línea Elevate atiende a este cambio en las tendencias. Al enfocar esfuerzos en equipo/línea de menor costo y precio para el cliente final e invirtiendo/redirigiendo parte importante de los recursos de mercadotecnia hacia este proyecto, se atiende de mejor manera el mercado potencial o en crecimiento según la USGA y las investigaciones de mercado, un mercado interesado en practicar golf de una manera más simple y divertida, disminuyendo malas rachas y frustraciones que deriven en desánimo y finalmente dejar el deporte. Lo anterior se apoya en una orientación más relajada y divertida del deporte, para atraer jugadores principiantes e intermedios, sin descuidar la calidad y seriedad del producto, que pueda ser también utilizado por profesionales.
La idea es posicionar Elevate con su bajo costo, menor precio y elevar el volumen de ventas al atender el segmento de mercado en crecimiento, derivando en incremento de su rentabilidad.
Es importante aclarar que esta estrategia debe estar ligada a un esquema muy robusto de mercadotecnia para lograr conciencia en el cliente distribuidor y en el cliente final, sobre el conveniente nivel de precio y su relación con la buena calidad. Lo anterior debido que sería prudente considerar escenario de riesgo el no lograr el volumen de ventas mínimo requerido para compensar el diferencial de margen $ vs. las líneas Victor TX y Victor, asumiendo que la participación de mercado en estas dos líneas continúe disminuyendo. Pero esta disminución no debiera continuar por mucho, ya que el posicionamiento a nivel profesional es robusto. Lo importante es participar en el segmento de mercado con crecimiento potencial e incentivar al distribuidor hacia esta meta.
A continuación se presenta el análisis cuantitativo que soporta estas conclusiones/recomendaciones:

| Victor TX | Victor | Elevate | Precio al Público | $48 | $39 | $27 | Margen Distribuidor | 15% | 15% | 20% | Precio al Distribuidor | $40.8 | $33.15 | $21.6 | Margen Altius Golf % | 70% | 70% | 64% | Margen Altius Golf $ | $28.56 | $23.21 | $13.85 | Costo Variable | $12.24 | $9.95 | $7.75 |

Notas: * Precios unitarios (paquete - docena) * Costo variable unitario Elevate: $7.75 * Precio sugerido por paquete – docena Elevate: $27 * Margen para el Distribuidor con Elevate: 20%

Escenario de expectativa de ventas tomando en consideración el mercado potencial según USGA y segmentos que se atienden con las tres líneas:

Al introducir Elevate, Altuis Golf incorporará al mercado una línea que sus competidores ya manejan y que mediante ésta han logrado crecimiento en su participación de mercado de 2008 a 2012. Esta medida no sólo deberá frenar la pérdida de participación de mercado para Altius Golf, sino que provocará crecimiento y derivará en mayor rentabilidad.

b. I not, what are the alternatives, assuming the Board expects growth in the profit contribution from the golf ball line? How would these restore Altius´s market and financial position, and what are their advantages and disadvantages?
Las opciones alternativas de no implementar la estrategia Elevate, serían: 1. Disminución del precio al público de las líneas Victor TX y Victor, alineada con un aumento en inversión de recursos de mercadotecnia, que logre compensar rentabilidad y ampliación de participación de mercado mediante un incremento en el volumen de ventas.

2. Disminución del margen para el distribuidor y con ello lograr una disminución del precio al público. Pero esta medida no es la más viable, ya que es muy difícil que el distribuidor acepte una disminución de su margen unitario y los obligue a incurrir en inversión de recursos adicionales para incrementar las ventas que les compense dicha disminución.

Por otro lado, estas medidas no son recomendables ya que implicarían un impacto a la imagen profesional y de prestigio que se ha logrado con las marcas. Además de que los porcentajes de incremento mínimo requerido en volumen de ventas son altos, y esto tendría implicar mayor inversión/costo de mercadotecnia y/o sacrificio de distribuidores.

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