Marketing to the Emerging Fan Marketing to the Emerging Fan BaseBaseJoe Louis Barrow Jr.Joe Louis Barrow Jr.Senior Vice PresidentSenior Vice PresidentWorld Golf FoundationWorld Golf Foundation
THE EMERGING POPULATIONTHE CHALLENGE:THE CHALLENGE:Expand the participation in golf to Expand the participation in golf to reflect the changing population.reflect the changing population.
THE EMERGING POPULATION• PART ONEPART ONE
– THE SHIFTING DEMOGRAPHICSTHE SHIFTING DEMOGRAPHICS
• PART TWOPART TWO– WHAT CORPORATE AMERICA IS DOINGWHAT CORPORATE AMERICA IS DOING
• PART THREEPART THREE– WHERE DO WE GO FROM HERE?WHERE DO WE GO FROM HERE?– WHAT CAN WE LEARN FROM CORPORATE WHAT CAN WE LEARN FROM CORPORATE
AMERICAAMERICA
The Emerging Population
• The culture and buying habits of the U.S. The culture and buying habits of the U.S. are changingare changing
• The Golf Industry must understand and The Golf Industry must understand and actively market to this emerging actively market to this emerging customer base.customer base.
• Supplier diversity and workforce diversity Supplier diversity and workforce diversity is critical to the golf industry’s long term is critical to the golf industry’s long term success in the evolving marketplace.success in the evolving marketplace.
The Business CaseThe Business Case
The Emerging Population
• The emerging market focus must be The emerging market focus must be integrated into business plans and integrated into business plans and strategies, otherwise these efforts are strategies, otherwise these efforts are doomed to fail.doomed to fail.
• Industry diversity initiatives must have Industry diversity initiatives must have total buy-in from the top executives total buy-in from the top executives including leaders from all sectors. including leaders from all sectors.
The Business CaseThe Business Case
Shifting Demographics and Shifting Demographics and Economic OpportunitiesEconomic OpportunitiesKen LovellKen LovellDirector, Research & DevelopmentDirector, Research & DevelopmentPGA TOURPGA TOUR
Presentation Overview• Golf Demographics and the Economic Golf Demographics and the Economic
OpportunityOpportunity• Demographic ProjectionsDemographic Projections• Characteristics of the Emerging Fan Characteristics of the Emerging Fan
Base – And Competition for ItBase – And Competition for It
GOLF DEMOGRAPHICSGOLF DEMOGRAPHICS
% In
tere
sted
in P
ro G
olf
20
22
24
26
28
30
32
34
36
38
40
Sep-95 Jun-96 Mar-97 Dec-97 Sep-98 Jun-99 Mar-00 Dec-00 Sep-01 Jun-02
Minority Fan Penetration(12 Month Moving Average)
+49% Minority Interest Since 1995!
Source: ESPN Sports Poll
Fan Base DemographicsPro Golf Minority Fan Base Growth, 1995-PresentPro Golf Minority Fan Base Growth, 1995-Present
Fan Base Demographics%
Inte
rest
ed in
Pro
Gol
f
Source: ESPN Sports Poll
20
25
30
35
40
45
Sep-95
Jun-96
Mar-97
Dec-97
Sep-98
Jun-99
Mar-00
Dec-00
Sep-01
Jun-02
Pro Golf Fans
White
Minority Pro GolfFans
Fan Penetration(12 Month Moving Average)
Minority Fan Base Growth Versus Total Growth Minority Fan Base Growth Versus Total Growth
Fan Base• Fan base becomingFan base becoming
more diversemore diverse• Remains below levelRemains below level
of non-minority fansof non-minority fans• TV audience showsTV audience shows
similar trends andsimilar trends andsome opportunitiessome opportunities
74%
1%3%
12%
10%
Source: ESPN Sports Poll / US Census
1995 DEMOGRAPHICSUS Population Pro Golf Fans
Recent Shift in Golf FansIn 1995 whites were overrepresented in the golf In 1995 whites were overrepresented in the golf
fan base compared with the US populationfan base compared with the US population
Source: ESPN Sports Poll / US Census
2001 DEMOGRAPHICS
US Population Pro Golf Fans
White White
Profile of Today’s Golf FansNon-white population is 30.9% of totalNon-white population is 30.9% of total
US Population versus 25.6% of Pro Golf Fans US Population versus 25.6% of Pro Golf Fans
Television ViewershipAv
erag
e Ra
ting
00.20.40.60.8
11.21.41.61.8
2
1994 1995 1996 1997 1998 1999 2000 2001
White
Black
Hispanic
Pro Golf Television Ratings
Source: Nielsen Media Research
The Future of Emerging Markets• Minority youth are disproportionately more Minority youth are disproportionately more
interested in watching golf interested in watching golf
21%
14%
6%
0%
5%
10%
15%
20%
25%
HispanicYouth
BlackYouth
WhiteYouth
Hispanic YouthBlack YouthWhite Youth
% o
f Kid
s Wat
chin
g Pr
o Go
lf
Source: Nielsen Media Research
DEMOGRAPHIC DEMOGRAPHIC PROJECTIONSPROJECTIONS
1%
71% 12%
12%4%
White Black Hispanic Asian Other
Year 2000
Demographic Profile• Today, there are Today, there are
275m Americans275m Americans– 196.7m White 196.7m White – 32.5m Hispanic 32.5m Hispanic – 33.5m African 33.5m African
Americans Americans – 10.6m Asian 10.6m Asian
AmericansAmericans– 2.0m Other2.0m Other
Source: US Census 2000
1%
64%
13%
17%
6%
White Black Hispanic Asian Other
Year 2020
Demographic Projections• By 2020, it is expected By 2020, it is expected
that there will be 325m that there will be 325m AmericansAmericans– 207m White 207m White – 55.0m Hispanic 55.0m Hispanic – 41.5m African 41.5m African
Americans Americans – 18.5m Asian Americans18.5m Asian Americans– 2.5m Other2.5m Other
Source: US Census 2000
1%
56%
13%22%
8%
White Black Hispanic Asian Other
Year 2040
Demographic Projections• By 2040, it is expected By 2040, it is expected
that there will be 390m that there will be 390m AmericansAmericans– 212.5m White 212.5m White – 82.7m Hispanic 82.7m Hispanic – 49.6m African Americans 49.6m African Americans – 29.5m Asian Americans29.5m Asian Americans– 3.0m Other3.0m Other
Source: US Census 2000
Demographic ProjectionsBy 2060, “Minorities” will no longer be the minorityBy 2060, “Minorities” will no longer be the minority
0102030405060708090
1980 2000 2020 2040 2060 2080Multi-ethnic White
% o
f US
Popu
latio
n
Source: US Census 2000
CHARACTERISTICS OF THE CHARACTERISTICS OF THE EMERGING FAN BASE - AND EMERGING FAN BASE - AND COMPETITION FOR ITCOMPETITION FOR IT
Characteristics ofEmerging Markets
• Black consumers will spend 572.1 billion this year, nearly double the 301 billion in spending power Blacks had in 1990
• Hispanics are more brand loyal than non-Hispanics - 39% of Hispanics buy products based on quality rather than price vs. 20% of Non-Hispanics
• In the past 20 years, HH Hispanic Median Income grew 130%, vs. 17% for the general population
Source: Selig Center for Economic Growth and DYG
Ratio of Whites to People of Color In Successive Age Groups
0 2 4 6
Over 70
40-70
Under 40
0-9
White People of Color
Shifting Demographics• Minorities youngerMinorities younger• Generation to be majorityGeneration to be majority• Developing recreationDeveloping recreation
preferences nowpreferences now
Source: US Census 2000
Minority Buying PowerAs The Minority Population Grows, As The Minority Population Grows,
Its Purchasing Weight Grows ProportionatelyIts Purchasing Weight Grows Proportionately
$0
$250
$500
$750
$1,000
1990 2000 2002 2007
Black
Hispanic
Asian
NativeAmericansBu
ying
Pow
er (B
illion
s)
Source: Selig Center for Economic Growth
Competitive Landscape –Media Spending• Corporate America Increasing Multicultural SpendingCorporate America Increasing Multicultural Spending
1. Procter & Gamble 55.0 +19%
2. Ford 51.0 +264%
3. AT&T 42.0 +20%
4. WorldCom 41.3 +10%
5. Sears, Roebuck 38.0 +9%
6. Americatel 30.0 +20%
7. Miller Brewing 30.0 +20%
8. General Motors 29.5 +82%
9. McDonalds 27.0 -0-
10. Altria Group (formerly Phillip Morris) 25.0 -0-
Top Hispanic Advertisers (2001 Media) % change
vs. 2000 $M
Source: Hispanic Business Magazine
PARTICIPATIONPARTICIPATION
Participation
12%
5% 5% 5%
0%2%
4%6%8%
10%
12%14%
White African-American
Hispanic Other
Estimated Participation Rates2001
• Minorities have lower participation rates than whitesMinorities have lower participation rates than whites
Source: National Golf Foundation
Participation
24.6
1.3 1.4 0.4 0.10
5
10
15
20
25
30
White Hispanic Black Asian Other
Mill
ions Estimated Total Participants
2001
• Leading to much lower numbers of participating golfersLeading to much lower numbers of participating golfers
Source: National Golf Foundation
Measuring GolfParticipation Rates• Estimating ParticipationEstimating Participation
– Overall numbers reliableOverall numbers reliable– Subgroups difficult to Subgroups difficult to
measuremeasure– Most data sources under-Most data sources under-
representrepresent– Financial upsideFinancial upside
worthy of investmentworthy of investmentin better datain better data
THE ECONOMIC THE ECONOMIC OPPORTUNITYOPPORTUNITY
Objective: Estimate the revenue available to Objective: Estimate the revenue available to the industry if minorities were fully activatedthe industry if minorities were fully activated
Quantifying the Opportunity
• Assume “upside” is Assume “upside” is current US average current US average participation rateparticipation rate
• Assume spending Assume spending remains constant remains constant based on Golf 20/20 based on Golf 20/20 per golfer spending per golfer spending studystudy
Quantifying the Opportunity• Average Spending per golferAverage Spending per golfer
– African Americans:African Americans: $988 per year$988 per year– Hispanics:Hispanics: $872 per year$872 per year
• Average Participation RateAverage Participation Rate– Assume 12% for all minority golfersAssume 12% for all minority golfers
• Projections based on US Census Projections based on US Census population projections through 2020population projections through 2020
1.91.8
0.6
0.10.0
0.5
1.0
1.5
2.0
Black Hispanic Asian Other
Mill
ions
Participation ProjectionsEstimated Incremental Minority Golfers in 2001
(Assumes 12% participation rate)
Participation Projections
3.7 3.8 3.9 4.0 4.1 4.2 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.8 4.9 5.0 5.1 5.2 5.3 5.4
2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
.
Estimated Incremental African-American and Hispanic Golfers Through 2020
(Assumes 12% participation rate)
Milli
ons
0.00.00.50.51.01.01.51.52.02.02.52.53.03.03.53.54.04.04.54.55.05.05.55.56.06.0
Quantifying the Opportunity
• DefinitionDefinition– Must be a golfer (at least 1 round in last Must be a golfer (at least 1 round in last
year)year)– Age 18+Age 18+– AND EitherAND Either– Play 25+ Rounds ORPlay 25+ Rounds OR– Household spends at least $1,000 per year Household spends at least $1,000 per year
on equipment and feeson equipment and fees
Best Customer Upside
Quantifying the Opportunity• Total Incremental African AmericanTotal Incremental African American
and Hispanic Golfers in 2001and Hispanic Golfers in 2001– African Americans:African Americans: 1.9 Million1.9 Million– Hispanics:Hispanics: 1.7 Million1.7 Million
• Percentage of “Best Customers”Percentage of “Best Customers”in each group:in each group:– African-Americans:African-Americans: 42%42%– Hispanics:Hispanics: 32%32%
• Total Incremental “Best Customers” in Total Incremental “Best Customers” in 20012001– 1.3 Million1.3 Million
Participation Projections
1.3 1.4 1.4 1.4 1.5 1.5 1.5 1.6 1.6 1.6 1.7 1.7 1.7 1.8 1.8 1.8 1.8 1.9 1.9 1.9
2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
Incremental African-American and HispanicIncremental African-American and Hispanic“Best Customers” Through 2020“Best Customers” Through 2020
Note:: Assumes a jump from 5%-12% in participation and current rates of “Best Customers” in each group and growth based solely on population
Milli
ons
0.00.0
0.50.5
1.01.0
1.51.5
2.02.0
2.52.5
Quantifying the Opportunity• Estimated 2001 Incremental Minority Estimated 2001 Incremental Minority
SpendingSpending• Average Spending per golferAverage Spending per golfer
– African Americans:African Americans: $988 per year$988 per year– Hispanics:Hispanics: $872 per year$872 per year
• Incremental GolfersIncremental Golfers– African Americans:African Americans: 1.9 Million1.9 Million– Hispanics:Hispanics: 1.7 Million1.7 Million
• Estimated Incremental Spending in 2001:Estimated Incremental Spending in 2001:–$3.4 Billion$3.4 Billion
Incremental Spending Projections
Estimated Incremental African-American and Hispanic Core Golf Spending
Note:: Assumes a jump from 5%-12% in participation rate and current rates of spending for each group and growth based solely on population
Milli
ons
$0.0$0.0
$1.0$1.0
$2.0$2.0
$3.0$3.0
$4.0$4.0
$5.0$5.0
$6.0$6.0
Summary• Minorities are growingMinorities are growing• Minority interest in golf is growingMinority interest in golf is growing• Minority participation is lowMinority participation is low• The upside for golf marketing to The upside for golf marketing to
minorities is substantialminorities is substantial
MARKETING TO THE FAN MARKETING TO THE FAN BASEBASEGregory DixonGregory DixonManager for Diversity Marketing and CommunicationsManager for Diversity Marketing and CommunicationsVolvo Cars of North AmericaVolvo Cars of North America
VCNA MISSIONWe, Volvo, deliver the Best Product, the We, Volvo, deliver the Best Product, the Best Value and the Best Experience Best Value and the Best Experience
To a Diverse Target AudienceTo a Diverse Target Audience
Via our Product-, Communication- and Via our Product-, Communication- and Retailer Network Strategies and ActionsRetailer Network Strategies and Actions
* = Source: Strategic Vision 2002 NVES Early Buyers Study
Lagging in DiversityCHALLENGES FACING VOLVO:
• Lowest ratio of Lowest ratio of sales to African sales to African Americans, Asians Americans, Asians and Hispanics and Hispanics among all among all Premium/Luxury Premium/Luxury brands.*brands.*
• Diverse Diverse consumers consumers represents 9% of represents 9% of total Volvo sales.*total Volvo sales.*
Volvo Acura Audi InfinitiCars Cars SUV Cars Cars SUV
African American 4% 4% 2% 4% 5% 7%Hispanic 3% 4% 3% 3% 2% 2%Asian American 2% 11% 12% 5% 5% 7%Share of total 9% 19% 18% 12% 12% 15%
BMW Mercedes LexusCars SUV Cars SUV Cars SUV
African American 4% 2% 8% 8% 5% 4%Hispanic 3% 2% 4% 6% 3% 2%Asian American 14% 21% 9% 9% 8% 10%
Share of total 21% 25% 21% 23% 16% 15%
KEY INITIATIVES RECENTLY LAUNCHEDSponsorshipSponsorship• Hispanic Heritage AwardsHispanic Heritage Awards• LA Black Business ExpoLA Black Business Expo• Hispanic Chamber of CommerceHispanic Chamber of Commerce• Latin Grammy’sLatin Grammy’s• Little Saigon ExpoLittle Saigon Expo
AdvertisingAdvertising• Incorporate diversity into mainstream advertisingIncorporate diversity into mainstream advertising• Measure the reach of placement in diverse Measure the reach of placement in diverse
communitiescommunities
KEY INITIATIVES IN LAST 90 DAYSPeoplePeople• Team Planning Session with the Marketing Team Planning Session with the Marketing
Business Unit to establish diversity objectivesBusiness Unit to establish diversity objectives• Review diversity focus group material conducted Review diversity focus group material conducted
by Market Intelligenceby Market IntelligenceResourcesResources• Meetings held with diversity events vendor to Meetings held with diversity events vendor to
renew contract and review events for 2003renew contract and review events for 2003• Solicit feedback for the Marketing Diversity Solicit feedback for the Marketing Diversity
Council Sub-committeeCouncil Sub-committee
SPECIAL FOCUS ON DIVERSE CONSUMERSAction Plan:Action Plan:
For any diversity strategy to work there For any diversity strategy to work there needs to be multiple levels of commitmentneeds to be multiple levels of commitment
• Diversity must be integrated in everything Diversity must be integrated in everything we do.we do.
• The face of diversity should be blended into The face of diversity should be blended into communications in an “ethnic neutral” way.communications in an “ethnic neutral” way.
SPECIAL FOCUS ON DIVERSE CONSUMERS• Dedicating an incremental budget to Dedicating an incremental budget to
reach these groups in non mainstream reach these groups in non mainstream ways: targeted events, publications, ways: targeted events, publications, one-to-one relationship building, media one-to-one relationship building, media etc.etc.
• Dealer appointments when available.Dealer appointments when available.• VCNA and dealer employment.VCNA and dealer employment.
KEY INITIATIVES FOR 2003• Inclusive Marketing ApproachInclusive Marketing Approach
– Diversity to be a component of everything we doDiversity to be a component of everything we do– Advertising and one-to-one consumer events to Advertising and one-to-one consumer events to
reflect this approach.reflect this approach.
• Dedicated budget to support diversity Dedicated budget to support diversity effortsefforts– Recommend 10% to be allocated towards Recommend 10% to be allocated towards
diversity by each cost center managerdiversity by each cost center manager– Continued allocation of funds for diversity Continued allocation of funds for diversity
opportunities. Target is 3% of the marketing opportunities. Target is 3% of the marketing budget. budget.
PRODUCT MARKETINGINITIATIVESINITIATIVES• Get understanding of different ethnic groups' Get understanding of different ethnic groups'
"hot buttons" "hot buttons" • Bring awareness to VCC/VCC PPL Bring awareness to VCC/VCC PPL
• Focus groups Focus groups • Purchase motivators Purchase motivators
• Cut existing data by ethnic group Cut existing data by ethnic group
CRM & eBUSINESS • Today Online Ads Today Online Ads
– Terra.com Terra.com – Netnoir.com Netnoir.com – BET BET – AOL (Aolla/latin Grammys) AOL (Aolla/latin Grammys)
• Opportunities Opportunities – Asian (AsiaAve – P1)Asian (AsiaAve – P1)– Chinese Chinese – Web: Multilingual site (with new platform) Web: Multilingual site (with new platform) – Call Center: Multilingual Volvo Personal ShopperCall Center: Multilingual Volvo Personal Shopper
CONSUMER MARKETING• Drive ProgramsDrive Programs
– Special focus events (local Chamber of Special focus events (local Chamber of Commerce) Commerce) • African American African American • Hispanic Hispanic • AsianAsian
– Consumer Recruitment Focus (for 2003 events) Consumer Recruitment Focus (for 2003 events) – Auto Shows Auto Shows – Best Buddies Best Buddies
• Hire and support Hire and support
ADVERTISING/MARKETING INTELLIGENCE • Understand how the brand is perceived Understand how the brand is perceived
by various diverse groupsby various diverse groups• Baseline measurement of current year's Baseline measurement of current year's
media delivery against diverse targetmedia delivery against diverse target• Diversify champion/council at Diversify champion/council at
advertising agencyadvertising agency• Integrate messages with community Integrate messages with community
outreach activitiesoutreach activities
PRODUCT PLANNING • Ordering cars (masks) – Are masks Ordering cars (masks) – Are masks
contented to best represent contented to best represent – Who is building the mask?Who is building the mask?– Is it product content related/image/offer? Is it product content related/image/offer?
• Focus groups – internal/externalFocus groups – internal/external• Verbiage in ads/monroney Verbiage in ads/monroney
labels/owner's manuals labels/owner's manuals • Reviewing and acting on market data Reviewing and acting on market data
DIVERSITY EVENTS AND SPONSORSHIP RECAP• Volvo Safety CampaignVolvo Safety Campaign
– Presence in twelve cities and Presence in twelve cities and collected 6,030 names captured for collected 6,030 names captured for the Marketing Database and sales the Marketing Database and sales matchesmatches
– Print, radio and online presencePrint, radio and online presence
DIVERSITY EVENTS AND SPONSORSHIP RECAP• Celebrity & High Profile Events Celebrity & High Profile Events
– Marilyn CrawfordMarilyn Crawford– Art For Life introduced Volvo to Star Jones and select Art For Life introduced Volvo to Star Jones and select
the XC90 as the vehicle of choice for the XC90 as the vehicle of choice for The ViewThe View..– Celebrities have purchased such as Bill Cosby. Celebrities have purchased such as Bill Cosby.
Director Lee Daniels interested in positioning a Volvo Director Lee Daniels interested in positioning a Volvo in his next film.in his next film.
– Retailer support and traffic generatedRetailer support and traffic generated
• Tour For Success – Magic JohnsonTour For Success – Magic Johnson– 12 city tour in diverse communities 12 city tour in diverse communities
with a theme for small business with a theme for small business ownersowners•Captured approx. 5,860 names for the Captured approx. 5,860 names for the
Marketing Database and sales matchesMarketing Database and sales matches•Radio, print, TV and online exposureRadio, print, TV and online exposure
DIVERSITY EVENTS AND SPONSORSHIP RECAP
• Local Events and SponsorshipsLocal Events and Sponsorships– Chamber of Commerce, NAACP, Chamber of Commerce, NAACP,
NAMAD, Hispanic Heritage NAMAD, Hispanic Heritage Awards, Chicago Financial Awards, Chicago Financial SeminarSeminar•Data capture of names and support Data capture of names and support
corporate citizenshipcorporate citizenship
DIVERSITY EVENTS AND SPONSORSHIP RECAP
MARKETING TO THE FAN MARKETING TO THE FAN BASEBASEMike de MaioMike de MaioManaging DirectorManaging DirectorBurrell Communications, Inc.Burrell Communications, Inc.