LPGA Case Analysis

8/7/2019 LPGA Case Analysis

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Ladies Professional Golf Association

Business Proposal

Presented to:

Alan Pogroszewski

At

Saint John Fisher College

Prepared by:

Giorgio VarlaroStudent

Saint John Fisher College



Introduction

The purpose of this proposal is to help the Ladies Professional Golf Association in:

(1) Making sure revenues for the future are maintained or even increased

(2) Make sure attendance increases annually

(3) Have the LPGA gain a new brand identitya. Broader market segment

(4) Gain more interest from the international environment

(5) Increase the number of tournaments and total earnings

(6) Decrease the gap between the PGA and LPGA

(7) Recognize the LPGA as a popular televised sport in the United States

(8) 1st to provide for financial opportunities for their players and to 2nd have a

mission of raising money for charity

Golf, a televised sport of today, is considered a form of entertainment to the public

because of its ability to be unpredictable, perishable, involve social interaction, and besubjective. Since the early 1900’s when the Ladies Professional Golf Association was

introduced to the public, many American consumers flocked to the product because of itsuniqueness. This association, promoted by George S. May and Fred Corcoran, has

become an official sport of the United States and a staple in many American households.

Though the Ladies Professional Golf Association has been a constant professional sport

in the United States, the ability of the association to become one of the most popular

professional forms of entertainment has been unachievable. An abundance of marketing

and market research has been developed by the Board of Directors in trying to better thelong-range planning, policy development, and sponsor-relationship issues, but again, the

objectives have never become a reality. With the Board of Directors of the LadiesProfessional Golf Association realizing that their efforts are not producing new customersand thus higher revenues, it is safe to believe that they are becoming frustrated.

The obstacle of the Ladies Professional Golf Association is to find new ways toreposition itself against the competition with the hopes of gaining more viewership of the

professional sport. The ability of the association to gain mass recognition has been

somewhat of a disappointment, so new tactics have to be viewed and tested on the marketsegment. Examples of, downsizing the LPGA Board of Directors, finding better

promotional partners and licensees, administering new network deals, incorporating

branding, stopping the moving of the headquarters, advertising to a larger audience, and

improving facilities at matches will help improve already established objectives, but aswell incorporate new hypothesizes. These new ideas will hopefully help the LPGA

viewership and become implements of positive change to the Ladies Professional Golf

Association.

Issues



The PGA Tour and Senior PGA Tour, which includes all professional male golfers, are

the LPGA’s biggest competitor. This viable threat, the PGA and Senior PGA have all the

top television contracts, marketable athletes, highest revenue per tour event, brandedproducts, and prestige. Since the LPGA gets what is left over from the two male golf

associations, this also puts them in the back of the mind of the consumer. It only makes

sense that having the best only increases your chances of being marketed properly to your market segment. This is what the male golf associations receive because of the resources

associated with the PGA and Senior PGA. With the LPGA not having the resources that

either men’s golf has, they have to live with what they get, and thus appreciate it. Sincethe LPGA is not the most watched or demanded type of sport entertainment, they cannot

demand anything from sponsors, television contractors, or licensers.

The LPGA Board of Directors, responsible for the overall direction of the association iscomprised of five independent members, six tour executives (Tour players), the

commissioner, and a representative of the Teaching and Club Professional Division. In

total, that makes thirteen individuals overseeing the direction of the LGPA. As a result of

this, there are thirteen different voices and thirteen different visions. To run thisassociation, there has to be a good amount of qualified individuals, but only a few that

take responsibility for the direction of the organization. Good decision-making has to bespecific. Too many ideas will not keep the associations directors on the central task.

Collaboration has to occur because five minds working on one specific objective entails

better success than five minds working selectively on three different objectives.

Television rights between the PGA and LPGA are different, and because of this

difference, the LPGA suffers in the revenue area. Negotiations of television rights for the

LPGA must be changed into the same rights the PGA receives. With the LPGA having topay a fee up front to the LPGA Tour and the network, it puts the LPGA tournaments in

the hole before the event is even held. The time it takes to fill the commercial spaces for

each tour event, takes away from what the LPGA can do. This could take away time fromthe public relations people or marketers, thus not allowing them to do what they do,

which is gain more new customers.

The Ladies Professional Golf Association, as a whole, has the wrong mindset when it

comes to its association. The LPGA should be focusing only on the revenues of the

future, and have an independent contractor working on their Public Relations. With the

LPGA putting a significant amount of resources in its Teaching and Club ProfessionalDivision, they are putting time and resources in the wrong places. The company as a

whole should be making advancements for the Tours, thus gaining more revenues and

popularity. With the new flourishing revenues, the LPGA could buy an independentcontractor or even have their own in-house agency working on the image of the LPGA.

With the players now being the main focal point of the directors (which should be the

case), brand imaging can take place. With a positive brand image, the association willgain more attendance and revenues, and since the attendance has stayed the same (1.73

million in 1994 and 1.64 million in 1996) the incorporation of a brand image should be

welcomed. With a better understand of what the LPGA now is (brand image); I would



believe that sponsors and licensors would be waiting in line now for this new trend, the

Ladies Professional Golf Association.

Solutions

The student team here at Saint John Fisher College has been striving toward ways to gainmore attendance and revenues for the LPGA. Finding new ways to reach the consumers

has yet again become more challenging. This has forced the department here at Saint

John Fisher to devise new specific hypothesizes, thus allowing us to test new advances onthe consumer.

1. Downsize the LPGA Board of Directors

The downsizing in the Board of Directors will help concise the ideas of the members, and

help them be more on target with what has to be done to help the LPGA. The players will

become the focal point of the Directors and charity, though very important, will become

second.

2. Finding better Promotional Partners and Licensees

Simply finding better promotional partners and licensors will help the LPGA out

dramatically. Instead of having Budget Rent a Car as you car Rental Company, use Avis.

The slogan used by Avis is “We Try Harder”. Hertz being the number one used car Rental Company, Avis had to position itself against the competition. Avis positioned

itself as number two to Hertz, and because of that they try harder. The LPGA is not

number one, so affiliation of being number two could work for the company like it didfor Avis. The official car of the LPGA has to change as well. Instead of using Lincoln-

Mercury, use Chevrolet. Specifically market the new sporty cars on the market, like the

solstice or cobalt. This will allow the LPGA to gain a younger audience because that iswhat the solstice and cobalt market to. The idea is to move consumers up the escalator.

Incorporating newer cars to a market that is in the market for a cheap vehicle, like the

solstice or cobalt, can only help lure new people to your product.

3. Administer new Network deals

With the LPGA unable to find a good way to produce its Tours on cable television, theassociation has to look to new places of distribution. A new place to seek is Directv.

Directv a satellite service provider already has an outstanding sports package, which

include: Sunday NFL Ticket, NHL Center Ice, NBA League Pass, and MLB ExtraInnings. The golf industry has yet to incorporate itself into this medium. Being the only

golf association on this medium will put it at center stage, thus allowing the association

excellent credibility against the PGA and Senior PGA.

4. Incorporating Branding



The LPGA has to create a new brand image of its association. To gain more recognition

the association has to portray ladies golf as something cool and trendy. A good way to dothis is with product affiliation. The trend lately of skater pants and shirts have raised a lot

in the recent years. Having the lady golfers wear this clothing associates them with the

product and thus new customers (or maybe a new clothing line which incorporates thegolf and punk look together). This could as well allow the golf tours to be at different

cities across the United States. With better tour events the association will have different

customers and in relation to that, higher revenues.

5. Stop moving the Headquarters

The LPGA since its inclination to the environment has moved three times over the pastfive decades. With the headquarters only worrying about building new state of the art

facilities in important cities, this results in hurting the LPGA. Valuable resources, time,

and money which should be used on the product, is not, so it hurts the overall quality of

the association.

6. Advertise to a larger audience

Spending some “Crazy Money” as Jon Spoelstra would suggest, is something the LPGA

has to consider. Spending some “Crazy Money” to lure different market segments and

demographics is something the association should try. If the association does not see asignificant jump in attendance, then the association knows what not to do. Knowing what

not to do is as positive as knowing what to do.

7. Improving Facilities at Matches

With most Tour games being present at country clubs, the golf association is not trying togain a wider audience segment. Not secluding the golf course, as well, will help increase

the number of attendees. A lot of times golf courses are put in remote areas. Put these

golf courses near X-games facilities, skate parks, or in higher traffic areas. This shouldhelp the association reach a higher demographic. As well, allowing your promotional

sponsor and licensors to put their name on the greens of the field will help gain more

money. I can imagine an advertisement from Mountain Dew “Amp” being on the 18th

hole of the green saying Get Amped-Up with a hole-in-one. If a player would hit a hole-in-one on this specific green, a lucky customer, who attended the tour, would win a

lifetime supply of Mountain Dew “Amp”.

Recommendations

With the Ladies Professional Golf Association in a bind and proposals of new solutionsin the works, the ability of the Ladies Professional Golf Association to find there own

position or niche in the consumer market is of optimal concern. It is suggested that the

Ladies Professional Golf Association follow the solutions mentioned in the previous



sections, so the future of the Ladies Professional Golf Association will see expansion.

The recommendations offered to increase LPGA revenue and attendance include:

Downsize the LPGA Board of Directors

Finding better promotional partners and licensees

Administer new network deals

Incorporate branding

Stop the moving of the headquarters

Advertise to larger audiences

Improving facilities at matches

Conclusion

Much time and research went into the solutions provided for the Ladies Professional Golf

Association. It is believed that if our recommendations are followed in a concise manner,changes will occur for the Ladies Professional Golf Association. These positive changes

will thus then lead the Ladies Professional Golf Association into a direction where the

entity can become one of the most popular professional forms of entertainment in theUnited States. This being the ultimate goal would result in attendance and revenue

increases for the fiscal year.

Documents

LPGA Case Analysis