10/20/03 1

Taking the Market

Robert M. SmithFocalpoint Marketing Inc.

10/20/03 2

The Questions

Is there an effective new approach that can be executed by our fragmented and diverse industry?

Is it short term economics or a longer-term trend?

Does it require concerted, industry-wide effort?

Is there a serious golf participation problem?

?

10/20/03 3

What We Did

Reviewed two dozen research studies and reports.

Interviewed 15 industry leaders.

Reviewed industry programs addressing these questions.

Distilled to a single report.

10/20/03 4

Facts in a Minute

• Rounds played: 3%

• Revenue: < 1%

• Peak demand over supply: 1990

• Avid golfer participation: 2%

• Women golfer participation: 3%

• Main reasons: job, family, time

• Junior golfers: 1.7 mm

2001-2002

10/20/03 5

What We Know

There is a serious economic problem . . . with many dimensions.

Overbuild -Generally

OverbuildHigh-end

Corp OutingsDown

Consumer Uncertainty

10/20/03 6

What We Know

There is also a longer-term problem . . . that is not going away.

• More activity options• Growing perception of time

limitations.

There is far greater competition . . . and the time crunch has put golf at a competitive disadvantage.

10/20/03 7

What We Know

Women

The traditional golf model is a mature market.

Women Kids/Minorities

Kids/Minorities

Avids

• The barriers for new entrants remain. • High attrition of first time and casual players dilutes the impact of acquisition.

Barriers

10/20/03 8

Even when the economy revives, the longer-term problems will

remain.

So . . .

10/20/03 9

Implication

The build it and they will come distribution strategy is dead!

We must learn to become marketers.

10/20/03 10

Ask These Guys . . .

10/20/03 11

So, What’s Marketing?

It is every touch of the customer . . .

1. Friend’s recommendation

2. Personal experience

3. Attitude of facility employees

4. Condition of the course

5. The pricing

6. Perception of equipment

7. Tournament watched

8. News stories

9. Advertising

10. Everything else

Top Ten in Impact

10/20/03 12

So, What’s Marketing?

Everything that you do - or fail to do - sends a marketing message.

Action Message

Intro to golf We welcome beginners

Disinterested pro You’ll never be good

Special group for women golfers

Golf is for people like me

18 holes only Golf takes all day

Club’s priced for beginners

Golf’s not that expensive

10/20/03 13

Ask These Guys . . .

10/20/03 14

Relevance to Golf

There is opportunity for renewed growth.

Growth requires a long-term course that involves some pain and a lot of change.

To grow beyond a mature market requires a new view of the market and marketing.

We must learn how to generate, nurture and retain customer demand.

We must view the industry as a single, interdependent “eco-system.”

10/20/03 15

A New Approach

It’s not about you . . .

. . . it’s about the customer.

10/20/03 16

A New Approach

Address the strategic issues

• A mature market

• Barriers to trial

• Retention problems

• Time disadvantage

• A fragmented industry

10/20/03 17

A New Approach

Use marketing intelligence

• Customer insights/trends

• Price/demand relationships

• Yield management

• Price elasticity

• Economic and consumer behavior trend forecasting

10/20/03 18

A New Approach

Take a holistic view

1. Generate consideration

2. Promote trial

3. Encourage adoption

4. Reward Loyalty

10/20/03 19

Feel Included

Getting Better

3. Usage• More than beginner• Equipment Investment• “My club”

Customer Experience

2.Trial• Introduction• Driving Range• Nine holes

4. Loyalty• More Rounds• More Purchases• Missionary Work

Holistic View

Can’t get enough

My Sport

1.Consideration• Friend’s invite• Tournament• Learn-to Promo

10/20/03 20

A New Approach

Extend the golf product line

Nine holes Par threes Family and ladies times Special introductory instruction Other family activity

•

10/20/03 21

A New Approach

Use Your Best Customers

Best customers are excited & they want to share that excitement.

Customer missionaries are your most credible marketers.

Avids are the most valuable and they will attract more Avids.

Arm them and they will prove your best competitive weapon.

10/20/03 22

A New Approach

Integrate your efforts

Develop an omnibus plan

Agree on common standards

Adopt common themes/ messages

Each take on a piece of the plan

Measure and critique

10/20/03 23

There is a Bottom Line

Reject magic bullets

+ Learn to become marketers

+ Coordinate marketing efforts

Renewed Growth and Profits

10/20/03 24

And success follows . . . end of story.