If the golf I&B industry shrunk?

[Steve Lang]

 

Lou,

I think you're psychic..  last thurday at lunch I bought a Titleist 975D, scuffed but very playable for 48$ tax included, from a 1/2 price barrel at Bob's Golf.. I was looking at a used 983K for $250 versus a brand new one for $400.. and couldn't help but think, hey, I never really gave one of those 975D's a decent try..   And I'm very happy with my TM510..  WHat's $50??  I have $150 worth of found ProV's in a bucket in my trunk..

I can't believe how manufacturers can continue to mass produce Irons and woods and make a profit when there's so much affordable used equipment out there as you note for entry players.   I played early on with my mom's clubs and was thrilled to get my first McG's in 7th grade, I still remember that plaid bag!  So that type buyer is always out there, but its the seduction and marketing of those extra yards that bring mature folks in eh?  

I agree with your premise of # rounds and golfers must increase for all in the game to grow, but I wonder if its such a direct linkage to the greater good of the game, economy, and golfers in general..  that's why I say let the bubble burst..  are we seeking a lowest common denominator for growth?

The good of the game could perhaps be better linked to smarter golfers, demanding custom clubs from the start for all, versus off the rack models and courses better designed for capability of players etc.. something in between the exclusive club model of the past and the open muni model of the present, but not necessarily the CCFAD of the present.

Tour 18 in Houston is now advertising join the club for $29 and buy I&B at wholesale prices + 10%..   How is a pro-shop to fight that shrinking margin and make any money?  +7% ...

   

[Willie_Dow]

Eric and Tom

You both are fitting together part of the growth vs the shrink pattern.  Eric knows the market and you are studying the growth.

The pro should control the pro shop.  We outsiders, studying the pro shop, should stay out of pro's way.

Golf equipment will grow because of the pro, and his advice to his patient.  

There are going to be many auctions around because of the Clubs trying to run the pro shop.

Just my thoughts.

[Eric Pevoto]

Steve,

Plaid bag, eh. I think I had that one too!  My first set was a hand-me-down from my aunt.  Those lasted about 2 years until I got a very used set of 1971 Wilson Staff (screw-in weight chamber in the toe).  I loved those clubs.

The margins on new clubs, except in custom fitting, are extremely low.  With the exception of golf balls (a strong margin item), it's likely Tour 18 would make around 10% anyway.  It's obviously a loss leader.  

The growth of custom fitted clubs is certainly a valuable service to the customer, but the value-added is also one of the few ways to help make any significant margin.

I'm not economically astute enough to make any predictions concerning the manufacturers' bubble bursting.  Tim Weiman brings up a good point; I don't believe enough of the manufacturers are attempting to carry any savings from technology over to the golf professional and consumer.  They spend unbelievable amounts of money on marketing.  Would a burst be helpful to consumers?

I don't think it's a situation of appealing to the lowest common denominator.  As billg points out, historically the growth of the game has hinged upon groundbreaking technology and resultant affordability.  As a golf professional, I'd like to be able appeal to new players with custom fitted, reasonably-priced new clubs.  It's available in components now, but the branding of the named, major manufacturers is a significant issue.  

I love the idea of an affordable, family-focused, private golf club.  As you know, the ccfad simply grew out of client oriented golf and that idea flopped in the recent economy.    

[Bill Gayne]

Tim and Eric,

I think the change in the capital structure of these firms is a major reason why we have not seen manufacturers carrying greater savings to consumers from technology. Until recent history, the equipment manufacturers were mostly stand alone privately held companies focused on their product line. When opportunities to provide greater value to the consumer were present, they were realized.

Today's manufacturers are publicly traded and have very diverse product lines that extend well beyond golf. Any excess profit that would come from driving down unit cost is used in the diversified company to either grow other lines, to acquire independent competitors for further consolidation, marketing to lock in current share, or return capital to the shareholders. If all of your competitors are working the same way and you squash niche competitors by buying them out or out marketing them, there is no economic reason to pass on margin to the consumer.

Bill

[Tim_Weiman]

Billg,

If manufacturers are building products that encourage or require golf courses owners to spend large amounts of money modifying their courses, obviously these are inferior products - NOT an improvement. All they are doing is raising the cost of the game.

This point needs to be repeated over and over and over again.

We need several years of telling people that tournament level golf should emphasize player skill rather than being a corporate research and engineering contest.

Today’s golf courses don’t need to be lengthened. We don’t need to spend ever increasing amounts of money building and maintaining golf courses.

We just need a much greater emphasis on achieving the required balance between player skill, the equipment used and the configuration of the playing field at the lowest cost possible.

[Dan Herrmann]

But just how many companies are making golf balls today?  For example, I know Nike balls aren't made by Nike  - they're made by Precept, which are (I think) a Bridgestone company.  

There's been a lot of consolidation in the rubber/tire industry, where a lot of golf balls start - Dunlop and Bridgestone come to mind.  Heck - I bought Dunlops for my car, only to find out that they'd been purchased by Goodyear.

As a consumer, it's a confusing world.  Is a ProV1 best for me?  Probably not because my swing speed isn't high enough - but you won't hear Titleist (Fortune Brands, who also make whiskey and faucets) telling me that.

I think we're seeing the same globalization in the golf industry as we are everywhere else.  

Unfortunately, globalization taken to it's logical conclusion will result in significantly fewer Americans playing golf because we won't be able to afford it.  Many of our professional jobs are being lost to India, China, and Singapore.  What'll be left?

[John Keenan]

Regarding the world of golf gear there is yet another realm that of "Tour Equipment". If the situation of new clubs and gear coming out on a monthly basis isn't enough many better players feel that they are above retail and need the same clubs that PGA players use. The tour vans that tweek the pros clubs have become a cottage industry for this emerging class. These clubs, be they Cameron putters or TaylorMade 500+ drivers are sold on e-bay, web sites and a few golf shops around the country. The prices are quite high.

I guess PT Barnum was right.  

 

[Steve Lang]

 

Do you want your game to fit your clubs or your clubs to fit your game?

I agree that PT was right.  But the journey to seek that last advantage from club tech will always be there..

[Willie_Dow]

Steve

You are so right.  Tiger is still counting on his council after marriage.

As we get older our demands change, and we need coaching.

It will only come from the pro shop - and I'm not a biggie there as my Pro knows - but I'm hopeful.

Who should earn the result, or the failure?

Willie

[Michael Moore]

No one ever defined I&B.

Is it irons and balls?

Why are they grouped together, as in the USGA I&B committee?

Stamp out GCA abbreviationorrhea.

[Brian_Gracely]

I&B - Implements and Ball