The Performance Indicator Dilemma

Topics: Golf, Golf ball, Ball Pages: 3 (1098 words) Published: February 4, 2013
The Performance Indicator Dilemma
Discussing the inconsistency between the PI value proposition and the lack of adoption There is a clear inconsistency in the claim that Performance Indicator (PI) offers significant profit uplift potential for golf ball manufacturers and the fact that no single manufacturer is yet to adopt the technology. This memo discusses the key arguments on why this is the case. There are several key factors that explain this apparent inconsistency, including: customer preferences and buying behavior; manufacturers’ agendas, concerns and willingness-to-pay; and the reliability of financial forecasts proposed by PI. Overview of Performance Indicator value proposition

PI offers an innovative, patented technology, aimed at golf ball manufacturers, which can clearly identify the degradation of golf balls after exposure to water for prolonged periods. This would effectively eliminate a significant amount of used golf balls from the market, driving increased sales of new balls. Customer Preferences and Buying Behavior

There are several key factors regarding customer preferences and buying patterns that are likely to prevent golf ball manufacturers from widely adopting the technology. Firstly, consumers retain tremendous confidence in their ability to visually assess a ball’s quality. Given the increased durability of ball, consumers don’t perceive there to be a quality issue with most used balls. Furthermore, golfers have tended not to blame balls for poor performance. Accordingly, there appears to be a significant investment in market education required to alert customers to this “inconvenient truth”. On a positive note, customers do appear receptive to the benefits of the technology, once these are sufficiently well explained through PGA Magazine & Golf Digest. Data from Harris Interactive is encouraging in that it demonstrates that 60% of golfers would buy new balls, obviously driving up overall new ball demand. However, switching to other...
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