Titleist:

Sustainable Technological Leadership

Content
Executive

Summary Background Problem Definition Research Design Data Collection Data Analysis & Findings Conclusions & Recommendations

Executive Summary

To sustain technological leadership, Titleist undertakes research to understand consumer perception of key golf ball attributes of spin, distance, speed, and feel; as well as the relative perception of leading brands on these performance attributes. A survey questionnaire administered by mail to people age 18 and above who golf resulted in a respondent base of 201. Distance is perceived as the top product attribute, followed by spin. Titleist enjoys the most favorable overall performance perception as well as spin capability. Nike who is rated second in overall performance shares top ratings with Titleist for the longest ball (distance attribute).

Background

Background: The Industry

Golf equipment industry valued at 4.7 billion dollars annually

Manufacturers rely on product innovation to gain loyalty and market shares Pursuit of the perfect golf ball is a central ambition for the golfing community.

Background: Titleist

Titleist, member of Acushnet Company, dominates golf ball sector. Leadership is sustained through continued innovation and differentiation. Golf ball innovation focuses on optimum combination of key attributes of spin, distance, speed, and feel. The above 4 attributes work in ways that compensate each another

Problem Definition

Problem Definition
Management Decision Problem How can we sustain our technological leadership?
Marketing Decision Problem "To determine consumer perception of Titleist on key performance attributes."

Research Questions
What

is the consumers perception of key performance attributes of spin, distance, speed, and feel? do consumers evaluate Titleist and competing brands on key performance attributes?

How

Operational Definitions
Spin

is the rotation of the ball in flight Speed is measure of the distance that the ball travels Distance is the length of the linear space covered Feel is the sense experience following a striking force

Research Design

Exploratory Research: Focus Groups

Five

groups, each with 10 to 12 participants, were created. Discussions provided insights into key attributes of spin, distance, speed, and feel. Findings funded content on questionnaire.

Descriptive Research: Pilot Study

30

respondents participated in a pilot study Served to detect any weakness in the instrument design Minor changes to the instrument were accordingly incorporated.

Descriptive Research: Sampling Design

Defined Target Population

People age 18 and above who golf Mail list from Survey Sampling International, syndicated research agency. Mailed to 2,500. n = 201

Sampling Frame

Sample Size

Descriptive Research: Survey Administration

The survey was mailed to selected participants. Advantages of mailing:
To include golfing consumers who are not internet-savvy To reach geographically dispersed respondents For relatively long questionnnaire (not possible with telephone and Internet administration), mail administration is superior

Descriptive Research: Survey Instrument

Marketing

research is concerned about consumer attitudes and feelings toward components of marketing mix, such as the product and the brand. attitudinal scale patterned after the Fishbeins attitude-toward-object model was employed.

An

Descriptive Research: Survey Instrument

Attitude is a learned predisposition to act in a consistent positive or negative manner to a specific object or idea and has three components, namely:

Cognitive element refers to the persons beliefs, perceptions, and knowledge about an object. Affective component governs to the individuals feelings towards an object. Behavioral component is concerned with the persons behavioral intention or actual behavior

b e
i 1 i

Descriptive Research: Survey Instrument

b e
i 1 i

Performance (Itemized) Rating Scale used Based on Fishbeins attitude-toward-object model, which is a composite measure of the respondents thoughts (cognitive) and feelings (affective) Equation: Attitude0 = where b is the strength of the belief towards an attribute and e is the expressed feeling of affective evaluation of its importance

Survey Instrument Part 1: Demographics & Lifestyle

Survey Instrument Part 2 - Affective (Importance) Scale Measurement

Survey Instrument Part 3 Cognitive (Belief) Scale Measurement

Validity & Reliability

Reliability Use Cronbachs alpha to determine the internal consistency reliability Validity Content (face) validity established by having an experienced research practitioner evaluate the questionnaire

Data Collection

Validation & Coding

Raw

data collected converted into a meaningful format and transferred to a data warehouse editing undertaken to check raw data for possible mistakes control is top priority

Data

Quality

Validity & Reliability

Table 1 Reliability Analysis: Statistics

Cronbach's Alpha Cronbach's Alpha Based on Standardized Items

N of Items

0.644

0.661

20

The Cronbach coefficient alpha for the Titleist instrument is 0.661, just above the acceptable level.

It is evident from Table 2 (next slide) that deletion of any of the questions do not improve the coefficient alpha.

Cronbach's Alpha if Item Deleted

Table 2 Reliability Analysis: Item-Total Statistics

Spin
Distance Speed Feel TitleSpin TitleDistance TitleSpeed TitleFeel NikeSpin

0.654
0.641 0.648 0.648 0.634 0.638 0.62 0.623 0.63 0.639 0.621 0.607 0.627

NikeDistance
NikeSpeed NikeFeel CallawaySpin

CallawayDistance
CallawaySpeed CallawayFeel TaylorMadeSpin TaylorMadeDistance

0.638
0.624 0.609 0.632 0.643

TaylorMadeSpeed
TaylorMadeFeel

0.629
0.629

Data Analysis & Findings

The Respondents
Male respondents formed a majority proportion (82.6%). Seven in 20 were aged between 26 to 45 years old 37% golfed monthly; 3 in 10 golfed bi-weekly. Profile of the golfer: Male, between 26 to 45 years old, plays at least once a month for social reasons, but does not have country club membership.

The Respondents
Figure 1 People age 26 to 45 years old who golf at least once a month
40

Number of Respondents

35 30 25 20 15 10 5 0

Weekly or More Bi-weekly Monthly Once a Quarter 1 to 3 Times a Year

18 or Younger

19 to 25

26 to 35 Age

36 to 45

46 to 55

56 or Older

This group, which is 68% of the sample, is identified as the most distinct active golfing group. Almost four in ten golf monthly, 27 percent golf bi-weekly, and almost 19 percent golf weekly.

Perception of Key Attributes

Figure 2 Index Analysis: Perception of Key Attributes
140 120 100

Index

80 60 40 20 0 Average Spin Distance Attribute Speed Feel

Distance is the most important characteristic (19 percent above average perception score) while the spin attribute is next in importance (rated 5 percent above average). Speed is 5 percent below the average perception score. Feel is the least important element.

Compared to the sample: Females ascribed lower importance to the feel attribute Golfers 18 years and younger as well as those 56 years or older place greater value on speed attribute People who golf weekly or more places greater emphases on spin and feel attributes Those who golf 1 to 3 times a year value speed attribute Those who golf competitively places greater value on spin and feel attributes

Table 3 Attribute Perception by Demographic/Lifestyle Variables

Perception Of Key Attributes

Figure 3 Perception of People Age 26 to 45 years Old who Golf At Least Once a Month
5.000 4.500 4.000 3.500 3.000 2.500 2.000 1.500 1.000 0.500 0.000 Average Spin Distance Attribute Speed Feel
26 to 35 26 to 45 36 to 45

Distance attribute is perceived as the most important, followed by spin and speed. Feel attribute is the least important. Compared to their younger counterparts, golfers age 36 to 45 years old place a greater emphasis on feel attribute. Apart from this, both sub-groups showed very similar perception of each of the three remaining attributes of spin, distance, and speed.

Mean Scores

Competitive Analysis: Brand Perceptions

Hypothesis Statement: The null hypothesis is that there is no difference in brand perceptions.

H o : 1 2 3 4.

Rationale for Statistical Analysis: An one-way ANOVA analysis to establish if the mean perceptions of the brands (Titleist, Nike, Callaway, and Taylor Made) were different represents the best multivariate technique to test for significant difference.

Ho : 1 2 H a : 1 2

Competitive Analysis: Brand Perceptions

Table 4 ANOVA Analysis

Competitive Analysis: Brand Perceptions

At 95 percent confidence level, = 0.05 for a one-tail test. Since the p-value is 0.000, we fail to reject the null hypothesis that there is no difference.

P-values of the test of interaction effect were statistically significant. This means that perception of Titleist is affected by the interaction of the perception of the other brands.

Competitive Analysis: Brand Perceptions

Table 5 Means Analysis

Competitive Analysis: Brand Perceptions

Means Analysis: Titleist enjoyed the most favorable overall perception, followed by Nike. Perception of Callaway and Taylor Made were similar; they were rated the least positive. Titleist enjoyed a distinctively higher rating in terms of spin and feel attributes. Top rating for perception of the distance attribute was shared between Ttileist and Nike. Nike showed a marginally higher rating than Titleist on the speed attribute.

Conclusions & Recommendations

Market Segmentation
The report on demographic and lifestyle characteristics reveal that age and frequency of play may be used to segment the market. The recommended primary target market for Titleist is: People age 26 to 45 years old who golf at least once a month. This specific group description meets the criteria of measurability, size, durability, and accessibility for effective market segmentation.

Consumer Attribute Perceptions

Consumers value the distance attribute the most, followed by spin. Technological innovation should focus on improving these attributes. Marketing communication may leverage on the performance of Titleist golf balls on achievement of the longest ball and spin capability. There is market potential for Titleist to produce a golf ball to meet the preference of frequent golfers as well as competitive players since they place a great emphasis on the importance of the spin and feel attribute. Further research is necessary to ascertain the size of the purchasing power of this subsegment.

Consumer Brand Evaluations

In terms of overall performance perception, Titleist is the market leader with Nike as the close runner-up. Callaway and Taylor Made are perceived as lesser in performance of key attributes of spin, distance, speed, and feel. In view of the importance attributed to distance and spin features by consumers, it is evident that Titleist will have to differentiate itself from Nike; the latter shares the same leadership positioning in terms of providing the longest ball (distance attribute). Nike, who had no clear market profile until its $40 million contract with Tiger Woods as the celebrity spokesman, has significant presence in the golf clubs and balls market segments. Nike is the key competitor to watch.

References
American Marketing Association [AMA]. (2008). Marketing News, Vol. 42 (2), p. 15-19. Chicago, IL: American Marketing Association. Anonymous. (2007, December). Titleist NXT Tour and NXT Extreme Balls. Golf Magazine, 49(12), 118. Retrieved June 23, 2008, from Research Library database. Acushnet company announces multi-year deal with Davis Love III to remain Titleist and Footjoy equipment ambassador. (September, 2000). Business Wire,1. Retrieved June 23, 2008, from Business Dateline database. StatMasters. (2008). Retrieved June 23, 2008 at http://www.leaderboard.com/GLOSSARY.HTM Gay, L. R. & Airasian, P. (2000). Educational research: Competencies for analysis and application (6th ed.). New Jersey: Merrill Prentice Hall. Hair, F. H., Bush, R. P., & Ortinau, D. J. (2006). Marketing research: Within a changing information environment, 3rd ed. Boston: McGraw-Hill Irwin.

John (2008, May 1). Golf: Understanding spin is so important: Dr John's Golf Clinic. Journal, 55. Retrieved June 19, 2008, from ProQuest Newsstand database.
Kleinfield, N. R. (1986, February). In pursuit of the perfect golf ball. New York Times, p. A1. Retrieved June 23, 2008, from Banking Information Source database.

References
Kupelian, V. (2001, April). Improving ball makes it easier for touring pros: Players prefer new solid core over wound. Detroit News, p. E01. Retrieved June 19, 2008, from ProQuest Newsstand database. Kupelian, V. (2008, January). Titleist targets recreational players with new golf balls. Detroit News. Retrieved June 23, 2008, from ProQuest Newsstand database. Malhotra, N. K. (2007). Marketing research: An applied orientation (5th ed.). Upper Saddle River, NJ: Pearson Prentice Hall. McDaniel, C., & Gates, R. (2007). Marketing research (7th ed.). Hoboken, NJ: John Wiley & Sons, Inc. Newport, J. P. (2007, March). PURSUITS Sports -- Golf Journal: Spin Control; Golf's police are tweaking clubhead rules, but a bigger issue looms: the balls. Wall Street Journal (eastern ed.), p. 7. Retrieved June 19, 2008, from ABI/INFORM Global database. Sens, J. (2008, July). The Quest For 300 Yards. Golf Magazine: British Open Preview, 50(7), 94. Retrieved June 19, 2008, from Research Library database.

References
Speers, J. D. & Tiger, A. A. (2007). Modeling the impact of new technologies on pace of play in golf: Segway GT, range finders, RFID golf balls, and longer hitting drivers. Academy of Information and Management Sciences Journal, 10(1), 1-10. Retrieved June 19, 2008, from ABI/INFORM Global database. Tays, A. (2007, March). Gold becomes accustomed to company consolidation. Palm Beach Post, p. 12B. Retrieved June 23, 2008, from Business Dateline database. The new Titleist Pro V1 and Pro V1x. (2007, May). Golf Magazine, 49(5), 29. Retrieved June 23, 2008, from Research Library database. Watson, S. T. (2006, August). High-tech gizmos put golf in the digital kingdom; GPS technology, microchips in balls, range finders -- the game is going digital (final ed.). Buffalo News, p. A1. Retrieved June 19, 2008, from Business Dateline database. Wertz Jr., L. (2008, February). Want more roll or more carry? Titleist has new ball for you. McClatchy - Tribune Business New. Retrieved June 23, 2008, from Business Dateline database.