Are Golf Clubs Becoming 2% Milk?
Many might say they already have.
The signs have been showing up for some time indicating “Commodification” might be happening to the golf equipment industry right now as I speak.
- A commodity is a product that has the same characteristics no matter who produces it.
- A commodity is a good for which there is demand, but which is supplied without qualitative differentiation across a market. Examples are notebook paper, milk, copper, power, etc.
Notebook paper is all pretty much the same. Are there some pieces of paper better then others…yeah sure. But for the most part and in general consumers look at one brand of paper pretty much the same as any other type pf paper. The quality of one brand compared to another is so close that it really doesn’t matter which piece of paper you buy. Same with milk…everyone has a particular brand they like but for the most part they are all on a level playing field…it’s all cow’s milk.
So when it comes to golf clubs in today’s time…does quality & performance still offer much value to golfers (or) is marketing the key to the success of a golf club and a brand?
What Makes A Brand Successful Nowadays? Marketing or Performance?
What makes a brand unique or better then any other brand nowadays? Outside of having a great PR/Marketing firm and some deep pockets…what is the measuring stick for the success of a new piece of golf equipment today? It’s such a basic question, but finding the answer can leave you scratching your head if you put some thought to it. Yes, there are those products that stand out in a crowd because of the amount you see them in ads on TV or how many golfers play them on Tour. But how many of those clubs actually stand out when it comes to outperforming their competition? Not many.
And yes you see a lot of new flashy designs with all kinds of visual (so-called) technology…but how many are any different then their predecessors when it comes to out dueling them in regards to distance and accuracy? Once again…not many.
Commoditization of an industry often starts with the lowering of your prices (check), lowering your margins (check), which results in loss of the traditional distribution channels (check), which results in less enthusiasts for the industry and a product that is all pretty much the same and (if something is not done about it), the demise of your brand.
Some might be thinking…”there have been all kinds of new technologies released in the last 5 years for golf clubs”. And you would be right…but…how much difference have they actually made for the golfers that buy that technology? There were definitely less technological advances in times past…but those advances did make a noticeable difference to players games. Going from persimmon (wood heads) to titanium for example. Or bigger sized heads is another. Thinner faces also made a big difference. Yes these are not ground breaking technologies when you think about them…they all sound simple…but they did all make a visible difference to those golfers that made the change.
The patents and ideas for golf club designs in the past few years on paper looks great…often times incredible but with all the limitations made to equipment it has shown to be a tough road to actually produce something that is as game changing as the Big Bertha driver was for golfers years ago.
So golf is in a creative design drought. Which has created somewhat of a level playing field for much of the competition performance wise. And it has taken a few years for consumers to notice this but you definitely hear more rumblings now from golfers not believing everything they read or hear or buying into all hype surrounding the far more often new product releases. You also hear golfers holding on to equipment longer then they used to…one reason is because they don’t see the benefit to upgrading. That was not true for the golf industry up until just recently.
Wonder why you see all those bright colors and odd shaped clubs with special promotional offers…like buy one driver get a FREE fairway wood or buy a set of X brand get another set FREE? Because with pricing all being about the same (typical of commodities) they have to find a way to differentiate themselves. What makes you choose one brand of milk over another? Marketing. How do you actually know which brand is better? You don’t…you buy what you see other people buying or hear other people talking about. So if performance is no longer a way to separate yourself…you are left with only these kinds of promotions to grab the golfers attention and the market share. The days of the $500 driver are over…but not because they won’t sell. Trust me if someone comes out with a technology that will lower golfers scores or provide a benefit like titanium did when it first came out…you’ll once again see $500 drivers selling like hot cakes. But like I said we are in an the “Golf Club Design Creative Drought Era”. And until someone breaks through with something pioneering again we will remain in this era.
So now just like paper or milk and with an economy struggling like it is…a large % of golfers are simply looking for the best deal on their golf equipment. But for every golf shop out there abiding by the manufacturers MAP pricing model there are hundreds of others willing to sell it for what ever they can get. Just like milk and paper. Everyone promotes the lowest price over the highest quality product. The performance of the product plays second fiddle to price.
So How Do You Not Become A Commodity?
You see this trend currently with companies like Wal-Mart and Best Buy. Which are both showing signs of trouble…which is forcing both of them to look at their business models. Both these businesses have put their entire focus and resources into offering the lowest prices possible…which in the long term is showing to be detrimental. Even with Best Buy’s main competitor closing up shop they are still losing market share. So how do they change that? Well one way is to put more focus on customer service and taking care of the customers you have better then your competition. I am sure we have all been frustrated a time or two trying to find help at a Best Buy. You find yourself standing around waiting what seems like hours for an employee to come to the section you are in so you can ask them a simple question. And the majority of the time they don’t have the answers you are looking for even when you do finally get their attention.
Hope Depot is another example. They built that business on the backbone of customer service…but in recent years have strayed from this model in order to have a bigger bottom line. And early on this often works but like I said over time it can and usually is detrimental. Customer service has an incredible value and the golf equipment companies you see that properly employ this usually do well. It creates unique individual buying experiences for consumers which can set you apart from other brands. The opposite of this seems to be happening in golf. The companies that are left have gotten bigger and bigger…many of which are driven by a stock price and the concern for only the bottom line. Golf companies and the stores that sell their golf products need to get back to the way things used to be or else it will simply become only about who has the lowest price which in the end will lead to even more “commodification” in the golf industry.
Original/Creative & Effective Technologies:
When companies become worried more about their stock price then they are the quality of the equipment they provide their customers…creativity suffers and becomes stifled . Companies become less willing to take chances on new technologies. They stick to what works or to put it more clearly “what sells”. Why do you think you see the same putter designs being made year in and year out? Or why do you think you see all these amazing patent ideas that never get developed? It’s not because there are a lack of ideas and technologies out there to be produced. It’s because no one wants to go out on a limb and take a chance on something that has even the smallest possibility of bringing down their market share. Why take a risk when you can re-package last years design with a couple simply modifications and know it will sell. So in the end you get putter designs that look the same as designs 20 years ago…with a simple change in the finish color or some new creative engravings with some different color paintfills. Or you get a driver that is almost identical to the last 3 models that have been released…except for a different paint color, or slightly improved materials with an insignificant amount of weight being taken from one spot and moved to another. Or maybe even a fancy new name for technology that already existed spun to make you believe it’s revolutionary.
Information about product releases happens at an alarming rate nowadays with social media. And consumers now have the ability to voice their opinions to a much larger audience much faster with blogs, forums, facebook, twitter, etc. So more golfers are having their voices heard. They are tired of all the marketing hype that swirls around what they now are starting to realize are simply re-packaged concepts and designs from years past. One of the most requested review I now get is to test old equipment vs. new equipment. They want to know once and for all if that new driver is any better then one released 3-5 years ago. What the industry calls the “first adopters” which were the golfers that bought all the new gear as soon as it was released are now starting to change their buying habits. They are now starting to wait until that technology goes on sale or waiting to hear actual reviews on the product before they make a purchase. Which is a good sign…because if it continues golf companies will start to listen. And start to become less concerned about how much they have to spend to market their new commodity and become more concerned with coming out with equipment that they know offers an improvement in performance.
What are your thoughts on this topic?
What do you think about this topic? How do you think things have changed over the past few years with golf equipment? Do you see this trend continuing? Or do you think golfers voices will begin to be heard and companies will respond with new technologies that provide actual benefits? Don’t agree with the article? Let’s hear what you think.