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 consumer’s 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 Fishbein’s 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 person’s beliefs, perceptions, and knowledge about an object. Affective component governs to the individual’s feelings towards an object. Behavioral component is concerned with the person’s behavioral intention or actual behavior b e i 1 i k i Descriptive Research: Survey Instrument b e i 1 i k i Performance (Itemized) Rating Scale used Based on Fishbein’s attitude-toward-object model, which is a composite measure of the respondent’s 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 Cronbach’s 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. 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