Kevin Skettini, Michael DiDonato, Ryan Fitzpatrick and Ryan D’Alessandro

7 December, 2015

Intermediate Micro

Dr. Kohn

The Baseball Glove Market: Market Analysis

The baseball glove market is a seasonal monopolistic competitive market, because

baseball is played by the majority of people in the spring. A glove is similar to buying a car,

you don’t need a new glove every season, but usually replace it about every 4 years. A glove is a

necessity to play baseball because you can’t play without one. A big characteristic of the market

is the quality of the glove. Buyers tend to pay more for a better quality baseball glove because it

will last longer, compared to a lesser quality glove. The majority of the market consists of

players from the Little League, high school, and college level of baseball. There are 5.3 million

players aged 7 to 17, which consists of Little League and high school levels, and 48,408 players

at the collegiate level (Howdeshell 2015).

The direct competitors for the product are Rawlings, Mizuno, Wilson, Nokona, Nike

(The Top Tens 2015). All five of these glove companies share a strength when it comes to the

quality of the glove itself, as well as the quality of the leather used to make the glove. Baseball

Glove brands have many competitors. In each brand there are separate “Tiers” of gloves. Usually

these “tiers” begin with youth Baseball Gloves and run up to professional style and caliber

gloves. For example, on Dick’s Sporting Goods’ website, Rawlings has youth baseball gloves

listed from $39.99 to $139.99 and Adult gloves listed from $75.99 to $499.99. Each brand has a

very similar price scheme so that it can tailor to the need of all types of baseball players, whether

it be the player who tosses the ball around in the yard or the player who travels the country

professionally. Nike is a diverse company, which means they may not put as much time and

effort into making their gloves as well as possible. As a result, the quality would not match up to

a company like Rawlings or Wilson. Although the participation in youth baseball has gone down,

the lack of glove sales has not hurt their company, however, a company like Nokona, Rawlings

or Wilson would be worse off because they are known solely for their gloves (Schactman 2015).

Baseball glove substitutes are fairly simple. The Avid baseball player will buy a new

glove every 2-5 years, However, the substitute to buying a new glove, would be a

purchasing a used glove or lowering the caliber of glove. As stated above, each brand has its

own tier for gloves. If a glove is out of a buyer's price range, then a substitute for the glove could

be a glove in a separate tier however; this would be a lower quality glove. In addition to

purchasing a lower tier glove a buyer can substitute with a used glove as well. For the avid

player a used glove may not be an option because gloves can become worn out after only a few

years.

There are many complements to baseball gloves, some of these include glove oils,

glove lacing and of course baseballs. Often times companies that sell baseball gloves will offer

these complements as well. Most of these companies’ state that these compliments are

necessities, while in fact some of these complements can be found by individual distributors.

One perfect complement of a baseball glove would be the lacing it self. Glove lacing has only

one use and although all new gloves come pre laced, if at any point in time the lace were to break

the glove lacing would need to be replaced immediately. The glove industry is very difficult to

get into, because of various barriers to entry. It is simply because most customers are brand

loyal. Buying a glove is a lot like buying a car, many people know what they want before they

decide to do any research on a glove even though it is an investment. This is because of how long

the glove will be used, many players will stick to the brand that they have had before because

they know that it is a much safer bet. There are 5 major players in the glove market and because

of this it is very difficult to enter and compete in the market. There are just simply too many

powerful companies, unless a smaller company's product can completely outshine these major

players, it is just to difficult to get the name to become mainstream.

The customers looking to buy baseball gloves are baseball players, coaches or those

just around the game of baseball (avid baseball fans); baseball gloves are a necessity for

baseball. There are many customers who buy in small volume. Players and coaches who are

active in the game may buy a glove every two to five years. Those who are out of the game

might not buy another glove again after finishing their time in baseball.  Customers have many

different tastes and preferences when it comes to baseball gloves. This leads to why there are so

many different kinds and combinations of gloves. Whether it's different types/quality of leather,

color, size and model.

The main material needed to make a baseball glove is leather. 3 of the 5 major glove

companies in the baseball glove industry use Horween Leathers as the supplier of their leather

(Sherony and Davidson, 2007). The other two firms Nokona and Mizuno produce their own

leather.  Because of this Nike, Rawlings, and Wilson have higher marginal costs that can change

due to the production of leather by their provider. This makes the price elasticity of supply more

elastic because the industry for these companies are more dependent on the price of leather.

The government provides regulation in a monopolistic competitive market so

consumers can choose from a variety of firms (Springer Reference 2011). To ensure no one

firm has complete control over the market, the government provides regulation in order for

buyers to consume a variety of close substitutes rather than forcing them to consume a single

brand. The top five baseball glove firms are close substitutes of each other and their top gloves

are all in the similar price range. This is considered a positive for the buyer because a glove is an

experience good. Buyers would rather have a variety of choices so they can find one that fits

their individual needs and that’s in their price range. This can be considered a negative for firms

because they need to spend extra for advertising in order to stay competitive.

These graphs illustrate the monopolistic competition and the firm supply and

demand for the baseball glove market. The demand is less than perfectly elastic. No single

firm dominates the glove market due to product differentiation. The demand curve slopes

downward due to the varied tastes and preferences of consumers. The supply is determined by

the change in quantity supplied over the change in price. In this graph, it is more elastic because

as stated in a previous paragraph, there are firms who don’t produce their own leather. The

buyers in the market influence where the y-intercepts for demand and supply. If demand

increases, then quantity will increase decreasing the price. The areas of producer and consumer

surplus tell us that consumers are better off than producers. Consumer surplus can only be

achieved if there is less quantity and a higher price. Consumers have the power to demand more

gloves to be made by firms.

If we were starting a new business, we conclude that we wouldn’t go into the

baseball glove market as a new firm. Although the area of producer surplus shows potential

profit, it is not rational to enter. This is because of the fact of brand loyalty, causing a barrier to

entry. The top five firms have proven themselves to the buyers. Companies like Rawlings,

Wilson, Nokona, Mizuno have been around for over one hundred years, and have established

themselves with buyers in the market. If there were a possibility to purchase a top existing firm

in the market, then it would be a good idea to go into the baseball glove market. This is because

of brand loyalty; you would already have an existing group of buyers that would be willing to

buy your product. If we were to tax the market, suppliers would be hurt more because they

would make less profit. The goal for a firm is to make profit with minimal costs. This regulation

would effect consumers more because they have to spend more money for baseball gloves. As

shown in our graphs, demand increases as the prices of the firm’s gloves go down.

Works Cited:

Schactman, Brian. "Kids Aren't Playing Baseball, So Is That Bad News for Nike and Under

Armour?" The Street, 22 May 2015. Web. 06 Dec. 2015.

<http://www.thestreet.com/story/13161326/1/kids-arent-playing-baseball-so-is-that-bad-news-

for-nike-and-under-armour.html>

Sherony, Keith., and Alan. Davison. "Smartball: Are Low-Revenue Teams Redefining the

Market for Baseball Talent?" NINE: A Journal of Baseball History and Culture 16.1 (2007): 21-

36. Active Network Rewards. 2007. Web. 6 Dec. 2015.

<http://www.activenetworkrewards.com/Assets/AMG+2009/Baseball.pdf>

Costa, Brian. "Why Children Are Abandoning Baseball." Wall Street Journal, 20 May 2015.

Web. 06 Dec. 2015. <http://www.wsj.com/articles/why-baseball-is-losing-children-

1432136172>

"Best Baseball Glove Brands." The Top Tens, 2015. Web. 06 Dec. 2015.

<http://www.thetoptens.com/baseball-glove-brands/>

Howdeshell, Bob. "Inside The Numbers." Inside The Numbers, n.d. Web. 06 Dec. 2015.

<http://www.hsbaseballweb.com/inside_the_numbers.htm>

"Product Differentiation." SpringerReference (2011): n. pag. Ox.ac.uk. Web. 6 Dec. 2015.

<http://users.ox.ac.uk/~sedm1375/Teaching/Micro/productdiff.pdf>