Club makers line up a new sales approach

by Adrian Michaels
Financial Times; Jun 10, 2004

Golf equipment makers, like the caddy in Goldfinger who cheated by secretly dropping a hidden ball on to the course, are keeping very quiet about something important: the promise of greater distance, which they have relied on for decades to sell clubs and balls, is coming to an end.

Their advertising material rarely reflects it - the website of TaylorMade, one of the best-known equipment makers, confidently proclaims the "way to more distance" - but when put on the spot, executives acknowledge that technological advances aimed at propelling golf balls ever further have almost reached the limits of physical possibility.

As a result the Callaways, Titleists and TaylorMades of this world have been adopting more subtle ways of selling their armouries, while still keeping distance at the forefront of marketing.

The new approach, which focuses on tie-ins with local golf professionals, greater customisation of clubs for amateurs and improved branding, is also being driven by a more profound problem. Contrary to popular perceptions that the sport is taking over the countryside and that Tiger Woods has encouraged a new generation of players, golf in the US seems to be becoming less popular.

The National Golf Foundation says that the number of rounds played last year in the US was 495m, down from 518m two years ago.

The reasons for the decline are complicated: some put it down to the weather, the economy, high membership prices and restrictions on access; others cite demographics, the fact that courses are being made too difficult or take too long to play.

Whatever the cause, some manufacturers are preparing for consolidation in the industry as growth stalls. There are already fewer equipment companies than there were just two years ago and the remainder are gearing up for a more intense bout of competition.
Ron Drapeau, chief executive of Callaway, says: "There has to be fall-out at the manufacturing level - we're oversaturated in a no-growth industry."

Wally Uihlein, head of Titleist, part of Fortune Brands, points to moribund industry revenues. Golf equipment sales were $2.4bn (£1.3bn) in the US in both 2003 and 2002, according to SGMA, a sports product trade association. "Some of us are looking forward to the challenges," says Mr Uihlein.

Amateur and professional golfers alike tend to accept that advances in technology have allowed the ball to be hit further and further. Some believe this has been to the detriment of the game, though of course not to their game. But Frank Thomas, who was technical director of the US Golf Association for 26 years, says some of the people making complaints have selective memories.

Mr Thomas says Jack Nicklaus, by many criteria the most successful golfer in history, is one of those who complain about the distances that modern golfers hit the ball. Yet Mr Thomas says Mr Nicklaus won a long-drive contest in 1963 with a belter of more than 340 yards.

His suspicions are backed by the statistics. According to charts from the Professional Golfers Association and Mr Thomas, the average top professional's driving distance in 1968 was 255 yards and only 265 yards in 1995. The development of titanium golf club heads and new ball designs in recent years has admittedly lifted that to 285 yards, but the technology has now neared its limit.

Mr Thomas says the authorities, by putting restrictions on the size and design of clubs, are claiming some credit for curbing the growth in distance. "But it's not the USGA, it's Newton and Mother Nature," he says. Put simply, the velocity at which a ball leaves the club face can only reach 93 per cent of the velocity at impact because of other forms of energy loss, such as noise and heat.

Modern clubs, Mr Thomas says, already achieve 83 per cent of that level. The remainder - if manufacturers succeed in closing the gap and are allowed to do so by regulators - will add five yards or so at most, he believes. There are some "trampoline"-style clubs - with a sprung face - allowed outside competition play and outside the US, which propel the ball in innovative ways. But these too will be outlawed in 2008.

Manufacturers are going to have to find other ways to woo a declining number of amateur golfers, many of whom still believe that they can find a red-hot driver burnished on the ninth green in Dante's Inferno.

Mr Uihlein says Titleist is now trying to put across a more sophisticated message: "Amateurs believe that by forking out $700 to get a new driver they're going to get better. That's naive and myopic."

Titleist sells more than half its clubs through local professionals - the ordinary pros who work out of shops on courses where people have club memberships. Mr Uihlein says Titleist has more than 200 sales representatives in the US who try to strike deals with the club pros, encouraging them to give lessons when clubs are sold. The costs of the lessons are reimbursed by Titleist.

The representatives also offer to train club pros on how to sell the right equipment. Ping, another manufacturer, began selling customised equipment about 20 years ago but it has caught on only slowly. Titleist now wants to sell more custom-fitted equipment.
Callaway's Mr Drapeau sees greater customisation too but also a branding challenge as equipment becomes harder to differentiate. "The advertising and public relations messaging will become a significant part of the equation," he says. Instead of only having golf professionals endorse their clubs, Callaway hired Bill Gates and the singer Celine Dion, which has "helped create a brand that is something one can aspire to own".

Mr Drapeau also emphasises the "forgiveness" of clubs - the increased chance that even with a bad swing some clubs will yield a decent result. But the maker of the "Big Bertha" - the breakthrough driver for amateurs that kick-started Callaway's success in the 1990s and whose very name evokes power, length and testosterone - is not conceding to Mr Thomas's arguments just yet.

Mr Drapeau is still a practised exponent of golf's traditional marketing-speak. "We have to engineer our way round the rules. There's still room for technology . . . we're applying carbon- composites, aerospace materials . . . a bigger-headed golf club produces a lower moment of inertia."

BELLY PUTTERS PREVENT RED FACES ON THE GREEN BUT LEAVE THE TRADITIONALISTS FUMING

Putting - one of the most maddening parts of any golfer's game - is an area where Frank Thomas concedes there has been a golf-changing technological breakthrough. And it is his biggest regret. Of all the technical standards Mr Thomas wrote, he declined to outlaw the new "belly" putters - significantly longer clubs that an increasing number of professionals are using.

The belly putters - so-called because they are tucked into the stomach - and their even longer cousins that are held under the chin, were first used by golfers perceived to be desperate to cure the dreaded "yips". These uncontrollable nervous tics ruin a putting stroke, have killed many a promising career and are a well-documented part of sporting endeavours, including darts, where minutely-controlled movements are critical to success. Now the long implements - vilified by golf traditionalists - are growing in popularity.Vijay Singh, a top ten golfer with many tournament victories under his belt, uses one.

Mr Thomas openly concedes that the length of the club cuts down considerably on wobbles at the clubface level. When it is tucked into the gut it minimises twisting during the putting stroke. "The putters are very efficient from inside 8 feet," he says, "but you start losing feel for the putt over longer distances." Mr Thomas says the discerning golfer could before long be carrying two putters in the bag - the outsize model for short putts and the conventional one for greater distances.

Meanwhile, the company Mr Thomas started after leaving the US Golf Association, Frankly Golf, happens to be selling its own putter. The Frankly Frog is "extra wide with two heavy tungsten weights positioned low and behind the face to give it perfect balance and maximum forgiveness". In tune with the new marketing world, purchase of the Frog confers on the owner membership of a special website where there are tips on the psychology of putting and regular newsletters. "It is the first putter to be sold with instructions for use," Mr Thomas says. But the putter is a traditional length - so, by Mr Thomas's own admission, you might be better off going for the belly.