Chapter 11: Golf and Club Marketing

Marketing to Millennials

Read: Marketing to Millennials by Darren Cabral in Golf Business Canada (p.22)

 

What Is Marketing?

When you consider the functional areas of business—accounting, finance, management, marketing, and operations—marketing is the one you probably know the most about. After all, as a consumer and target of all sorts of advertising messages, you’ve been on the receiving end of marketing initiatives for most of your life. What you probably don’t appreciate, however, is the extent to which marketing focuses on providing value to the customer. According to the American Marketing Association, “Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.” ^[1]

In other words, marketing isn’t just advertising and selling. It includes everything that organizations do to satisfy customer needs:

• Coming up with a product/services and defining its features and benefits
• Setting its price
• Identifying its target market
• Making potential customers aware of it
• Getting people to buy it
• Delivering it to people who buy it
• Managing relationships with customers after it has been delivered

Think about a typical golf business. It’s easy to see how the person who decides what golf promotion/deal is involved in marketing: he or she selects the promo, time of day/week to sell the tee times. It’s even easier to see how the person who puts ads on social media works in marketing: he or she is in charge of advertising—making people aware of the promotion/deal and getting them to buy it. What about the food and beverage department and the person behind the counter who sells hot dogs, sandwiches and beverages? Are they marketing the business? Absolutely. The purpose of every job in the golf business is satisfying customer needs, and as we’ve seen, identifying and satisfying customer needs is what marketing is all about. Marketing is a team effort involving everyone in the organization.

If everyone is responsible for marketing, can the average golf course do without an official marketing department? Not necessarily: most golf organizations (that can afford to) have a marketing department in which individuals are actively involved in some marketing-related activity—product/service design and development, pricing, promotion, sales, and distribution. As specialists in identifying and satisfying customer needs, members of the marketing department manage, plan, organize, lead, and control the organization’s overall marketing efforts.

The Marketing Concept

The following flowchart is designed to remind you that to achieve company profitability goals, you need to start with three things:

1.        Find out what customers or potential customers need.

2.        Develop products/services to meet those needs.

3.        Engage the entire organization in efforts to satisfy customers.

At the same time, you need to achieve organizational goals, such as profitability and growth. This basic philosophy—satisfying customer/member needs while meeting organizational goals—is called the marketing concept, and when it’s effectively applied, it guides all of an organization’s marketing activities.

The marketing concept puts the customer first: as your most important goal, satisfying the customer must be the goal of everyone in the organization. But this doesn’t mean that you ignore the bottom line; if you want to survive and grow, you need to make some profit. What you’re looking for is the proper balance between the commitments to customer satisfaction and company survival.

Selecting a Target Market

Businesses earn profits by selling goods or providing services. It would be nice if everybody in the marketplace was interested in your product, but if you tried to sell it to everybody, you’d probably spread your resources too thin. You need to identify a specific group of consumers who should be particularly interested in your product, who would have access to it, and who have the means to buy it. This group represents your target market, and you need to aim your marketing efforts at its members.

Identifying Your Market

How do marketers identify target markets? First, they usually identify the overall market for their product/service—the individuals or organizations that need a product/service and are able to buy it. This market can include either or both of two groups:

1. A consumer market—buyers who want the product/service for personal use (ie. playing golf for entertainment)
2. An industrial market—buyers who want the product/service for use in making other products (this is most common in manufacturing settings)

In the case of golf and clubs, you will focus primarily on the consumer market

Segmenting the Market

The next step in identifying a target market is to divide the entire market into smaller portions, or market segments—groups of potential customers with common characteristics that influence their buying decisions. You can use a number of characteristics to narrow a market. Let’s look at some of the most useful categories in detail. 

Typically, marketers determine target markets by combining, or “clustering,” segmenting criteria. What characteristics does a golf course look for in marketing its service/products? Three demographic variables come to mind: age, geography, and income. Buyers are likely to be males and females ranging in age from about 18 to 65 . Geography is a factor as customers tend to live or work in cities or upscale suburban areas. Those with relatively mid to higher incomes are willing to join a golf course and so income—a socioeconomic factor—is also important.

The Marketing Mix

After identifying a target market, your next step is developing and implementing a marketing program designed to reach it. As the graphic below shows, this program involves a combination of tools called the marketing mix, often referred to as the “four P’s” of marketing:

1. Developing a product or service that meets the needs of the target market
2. Setting a price for the product or service
3. Distributing the product or service—getting it to a place where customers can buy it (or attracting customers to your location)
4. Promoting the product or service—informing potential buyers about it

Developing a Product or Providing a Service

The development of a golf proposition is multi-faceted. In the golf business, we generally do not develop products (unless you count the overall aesthetics of the golf course as a product), we promote products and work with our golf suppliers to buy and sell what is best suitable for our range of customers and to ultimately maximize profits by seasons end.  The services we provide are crucial to fulfill the needs and wants the brings “value” to our members and guests.

A value proposition is part of a golf operation’s overall marketing strategy. The value proposition introduces a company’s brand to consumers by telling them what the company stands for, how it operates, and why it deserves their business. This message can convince a customer that the company’s product or service offering will add more value than offerings will. ^[2] For example, the Nike value proposition focuses on satisfying its customers with a superior product made out of the best available materials and latest technologies, which is also fashionable and worn by supreme athletes and accessible to anyone. [Footnote] Bandara, I. (n.d.). The unbelievable story behind the top shoe brand in the world. EconHustler. https://ecomhustler.com/nike-value-proposition/[/Footnote]

Conducting Marketing Research

Before settling on a strategy for your Golf Course, marketers need to some homework. First, to zero in on the target market, the marketers need to find out what various people thought of the location, product and service. More precisely, they needed answers to questions like the following:

• Who are our potential customers?
• What do they like about the golf course? What would they change?
• How much are they willing to pay for a tee time?
• Where will they purchase green fees?  At the pro shop counter or online?
• How can we distinguish it from competing golf courses? What sets us apart from the competition?
• Will enough people buy tee times to return a reasonable profit for the golf course?

The last question would be left up to management, but, given the size of the investment needed to bring a new golf course to market, management can’t afford to make the wrong decision. Ultimately, a golf course can make informed decisions based on information from the marketing team called marketing research—the process of collecting and analyzing the data that are relevant to a specific marketing situation. This data had to be collected in a systematic way. Market research seeks two types of data:

1. Marketers generally begin by looking at secondary data—information already collected, whether by the company or by others, that pertains to the target market.
2. With secondary data in hand, they’re prepared to collect primary data—newly collected information that addresses specific questions.

Secondary data can come from inside or outside the organization. Internally available data includes sales reports and other information on customers. External data can come from a number of sources. Statistics Canada, for example, posts demographic information on Canadian households (such as age, income, education, and a number of members), both for the country as a whole and for specific geographic areas. Population data from reliable sources, also helps marketers estimate the size of its potential target market. 

Using secondary data that is already available (and free) is a lot easier than collecting your own information. Unfortunately, however, secondary data didn’t answer all the questions that marketers might ask in this particular situation. To get these answers, the marketing team had to conduct primary research, working directly with members of their target market. First, they had to decide exactly what they needed to know, then determine who to ask and what methods would be most effective in gathering the information.

We know what they wanted to know—we’ve already listed example questions. As for whom to talk to, they randomly selected representatives from their target market. There is a variety of tools for collecting information from these people, each of which has its advantages and disadvantages. To understand the marketing-research process fully, we need to describe the most common of these tools:

• Surveys – Sometimes marketers mail questionnaires to members of the target market. The process is time-consuming and the response rate is generally low. Online surveys are easier to answer and so get better response rates than other approaches.
• Personal interviews – Though time-consuming, personal interviews not only let you talk with real people but also let you demonstrate the product. You can also clarify answers and ask open-ended questions.
• Focus groups – With a focus group, you can bring together a group of individuals (perhaps six to ten) and ask them questions. A trained moderator can explain the purpose of the group and lead the discussion. If sessions are run effectively, you can come away with valuable information about customer responses to both your product and your marketing strategy.

Marketers use focus groups and personal interviews because both approaches have the advantage of allowing people to interact or perhaps play the new golf course and provide feedback on their experience. In particular, focus-group sessions provided valuable opinions about the product and service, proposed pricing, quality, and promotion strategies.

Branding

The term branding refers to a business and marketing concept that helps people identify a particular company, product, or service. Brands are intangible, and they help shape people’s perceptions of companies, their products, or service. ^[3]Brands commonly use identifying markers (i.e.. the Nike swoosh or master’s logo) to help create brand identities within the marketplace. They provide enormous value to the company, giving them a competitive edge over others in the same industry. As such, many entities seek legal protection for their brands by obtaining trademarks.

Branding Strategies

Companies can adopt one of three major strategies for branding a product or service:

1. With private branding (or private labelling), a company makes a product and sells it to a retailer who in turn resells it under its own name. Big golf companies like Titleist will allow golf courses to add their club logo or crest to Titleist hats and Foot Joy Golf Shirts.
2. With generic branding, the maker attaches no branding information to a product except a description of its contents. Customers are often given a choice between a brand-name a cheaper generic version 
3. With manufacturer branding, a company sells one or more products under its own brand names. Adopting a multi-product branding approach, it sells all its products under one brand name (generally the company name). Using a multi-branding approach, it will assign different brand names to different products covering different segments of the market. Golf suppliers generally use multi-branding. For example, Achushnet is the parent company that markets various equipment and apparel, such as Titleist, Foot Joy, Scotty Cameron and Vokey.

With the popularity of global golf travel, hotels are competing for consumer business. Branding is used in hotels to allow chains (i.e. Marriott, Hyatt, and Hilton) to offer brands that meet various customers’ travel needs in hotels while still maintaining their loyalty to the chain. The same customer who would choose an extended stay hotel with a full kitchen when on a long term golf trip might stay at a convention hotel when attending a golf trade show and then stay in a resort property when traveling with their golf buddies.

By segmenting different types of hotel locations, amenities, room sizes and décor, hotel chains can meet the needs of a wide variety of travelers. In the past decade “soft” branding has become common to allow unique hotels to take advantage of being part of a chain reservation system and loyalty program. For example, Marriott has over 100 affiliated independent hotels in its Autograph Collection. ^[4]

Loyalty programs are heavily used in the hospitality industry, especially airlines and hotels, as part of their Customer Relationship Management programs.  Some examples of popular Canadian Loyalty programs include Air Miles, Canadian Tire Rewards, Aeroplan, HBC Rewards, and PC Optimum. Airline loyalty programs such as Air Canada Loyalty, are often targeted to high-value business travelers with less price sensitivity. They achieve loyalty status and perks while traveling as well as earning points to use for personal travel rewards. Once a loyalty program member obtains elite status with significantly associated perks such as guaranteed room availability, airport club lounge access, etc., the customer is much less likely to use other brands. 

This is a concept that has been embraced at golf courses as well.  Whether it is collecting customer data through VIP cards or special promotions, obtaining customer information  is very important. Once members and guests have opted to receive communications, golf course’s can provide special offers to keep bringing them back to the course.  Loyalty can be gained through tracking golfers spending and rewarding them for their business.  

Building Brand Equity

Brand equity refers to a value premium that a company generates from a product with a recognizable name when compared to a generic equivalent. ^[5] Companies can create brand equity for their products by making them memorable, easily recognizable, and superior in quality and reliability. Mass marketing campaigns also help to create brand equity.

When a company has positive brand equity, customers willingly pay a high price for its products, even though they could get the same thing from a competitor for less. Customers, in effect, pay a price premium to do business with a business they know and admire. Because the company with brand equity does not incur a higher expense than its competitors to produce the product/service and bring it to market, the difference in price goes to their margin. The businesses brand equity enables it to make a bigger profit on each sale.

Packaging and Labelling

Packaging can influence a consumer’s decision to buy a product or pass it up. The packaging gives customers a glimpse of the product, and it should be designed to attract their attention, with consideration given to color choice, style of lettering, and many other details. Labelling not only identifies the product but also provides information on the package contents: who made it and where or what risks are associated with it (such as being unsuitable for small children).

When we think of the packaged products in the pro shop, what comes to mind? Perhaps golf balls, and golf gloves. Meanwhile, the labelling on the package details some of the products attributes. The name is highlighted in big letters above the descriptive tagline “Titleist: #1 ball in golf.” 

On the side or back of the packaging you will find the composition of the materials and perhaps what type or level of golfer the product might best suit. These colorful descriptions are conceived to entice the consumer to make a purchase because its product features will satisfy some need or want.

Place

A great deal is involved in getting a product to the place in which it is ultimately sold. If you’re a golf retailer, for example, you’ll want your business to be in high-traffic areas to maximize your potential business. If your business is selling beer, you’ll want it to be offered in the golf course restaurant, bar and most importantly, on the beverage cart! Unlike golf courses, placing a product in general retail locations requires substantial negotiations with the owners of the space, and often the payment of slotting fees [an allowance paid by the manufacturer] or product discounts, to secure space on retail shelves.

Retailers are marketing intermediaries that sell products to the eventual consumer. Without retailers, companies would have a much more difficult time selling directly to individual consumers, no doubt at a substantially higher cost. Gaining positive relationship with suppliers that understand your business and the customers you cater to, will help product placement that drives profits.

Promotion

Your promotion mix—the means by which you communicate with customers—may include advertising, personal selling, sales promotion, and publicity. These are all tools for telling people about your product/service and persuading potential customers to buy it. Before deciding on an appropriate promotional strategy, you should consider a few questions:

• What’s the main purpose of the promotion?
• What is my target market?
• Which product/service features should I emphasize?
• How much can I afford to invest in a promotion campaign?
• How do my competitors promote their products/services?

To promote a product/service, you need to imprint a clear image of it in the minds of your target audience. What do you think of, for instance, when you hear “Augusta”? What about “Top Golf”? They’re both golf related, that have been quite successful in the golf and hospitality industry, but they project very different images to appeal to different clienteles. The differences are evident in their promotions. Augusta, which is the home of the Master’s tournament and can be described as the “gold standard” of golf, with meticulously manicured turf and ultra-exclusive. Whereas, Top Golf is known for easy access to the public and a fun way to spend time with friends of all golfing levels.  The concept of golf and hospitality is what promotes returning customers.

Promotional Tools

We’ll now examine each of the elements that can go into the promotion mix— advertising, personal selling, sales promotion, and publicity. 

Advertising

Advertising is paid, non-personal communication designed to create an awareness of a product or company. Ads are everywhere—in print media (such as newspapers, magazines, mailers), on billboards, in broadcast media (radio and TV), and, increasingly, online. It’s hard to escape the constant barrage of advertising messages; it’s estimated that the average consumer is confronted by about 5,000 ad messages each day (compared with about 500 ads a day in the 1970s). ^[6] For this very reason, ironically, ads aren’t as effective as they used to be. Because we’ve learned to tune them out, companies now have to come up with innovative ways to get through to potential customers. A New York Times article ^[7] claims that “anywhere the eye can see, it’s likely to see an ad.” Subway cars are plastered with ads for cell phone companies. Advertising is still the most prevalent form of promotion. The choice of advertising media depends on your product, target audience, and budget. In the golf industry, many clubs have turned to social media to identify and solicit to their target audiences rather than the traditional forms of mass media, which will be explored further on in the chapter.

Personal Selling 

Personal selling refers to one-on-one communication with customers or potential customers. This type of interaction is necessary in selling large-ticket items, such as selling a golf membership, and it’s also effective in situations in which personal attention helps to close a sale, such as the sale of a $3,000 set of Titleist clubs!

Many pro shops depend on the expertise and enthusiasm of their salespeople to persuade customers to buy. Traditional pro shops have a lot of competitors like Golf Town and Online retailers such as Amazon. Therefore it is very important that golf professionals and staff engage with the members to help educate them on the products they are seeking.  Where local pro shops lack the space to carry large inventory, they make that up in the relationships they development with members and the trust that they are experts in their respective fields.  Members make contact with the pro shop several times per week, so it makes sense that “Personal Selling” is a contributing factor to successful sales for the golf club.

Sales Promotion 

It’s likely that at some point, you have purchased an item with a coupon or because it was advertised as a buy-one-get-one special. If so, you have responded to a sales promotion – one of the many ways that sellers provide incentives for customers to buy. Sales promotion activities include not only those mentioned above but also other forms of discounting, sampling, trade shows, in-store displays, and even contests. Some promotional activities are targeted directly to consumers and are designed to motivate them to purchase now. You’ve probably heard advertisers make statements like “limited time only” or “while supplies last”. If so, you’ve encountered a sales promotion directed at consumers. Other forms of sales promotion are directed at dealers and intermediaries. Trade shows are one example of a dealer-focused promotion. Mammoth convention centres such as the Enercare Centre in Toronto host enormous events in which golf manufacturers can display their new products to golf retailers and other interested parties. At the annual golf shows, for example, potential buyers can sample products (i.e.. test drive) that golf manufacturers hope to launch on the market in the upcoming season. Feedback from prospective buyers can even result in changes to new product designs or decisions not to launch.  

Publicity and Public Relations

Free publicity—say, getting your company or your product mentioned or pictured in a newspaper or on TV—can often generate more customer interest than a costly ad. In the golf industry, we commonly get free publicity when we host a charity tournament. The charity advertises the tournament on social media, TV, Radio and News Print with the golf course being the attraction for interested golfers aside from donating to a worthy cause.

Consumer perception of a golf course is often important to it’s success. Many golf courses, therefore, manage their public relations in an effort to garner favorable publicity for themselves and their products/services. When the golf course does something noteworthy, such as sponsoring a fund-raising event, the public relations department (if one exists) may issue a press release to promote the event. If the golf course does something negative, the public relations department will work to control the damage to the golf courses reputation. An example of this is customer reviews on line or negative responses on social media platforms.

Customer-Relationship Management (CRM)

Customers are the most important asset that any golf business has. Without enough good customers, no company can survive. Businesses must not only attract new customers but also retain current customers. In fact, repeat customers are more profitable. It’s estimated that it costs as much as five times more to attract and sell to a new customer than to an existing one. ^[9] Repeat customers also tend to spend more, and they’re much more likely to recommend you to other people.

Retaining customers is the purpose of customer-relationship management—a marketing strategy that focuses on using information about current customers to nurture and maintain strong relationships with them. The underlying theory is fairly basic: to keep customers happy, you treat them well, give them what they want, listen to them, reward them with discounts and other loyalty incentives, and deal effectively with their complaints.

Golf Software companies like Tee-On have integration of email marketing and loyalty programs that allow them to communicate with their customers and generate more sales. Another advantage of keeping in touch with customers is the opportunity to offer them additional products. Amazon is a master at this strategy. When you make your first purchase at Amazon, you’re also making a lifelong “friend”—one who will suggest (based on what you’ve bought before) other things that you might like to buy. Because Amazon continually updates its data on your preferences, the company gets better at making suggestions.

Social Media Marketing

In the last several years, the popularity of social media marketing has exploded. You already know what social media is — Facebook, Twitter, Instagram, TikTok, LinkedIn, YouTube, and any number of other online sites that allow you to network, share your opinions, ideas, photos, etc. Social media marketing is the practice of including social media as part of a company’s marketing program.

For golf courses, the answer is clear. The days of trying to reach customers through ads on TV, in newspapers, or in magazines are over. Most television watchers skip over commercials, and few golf customers read newspapers or magazines, and even if they do, they don’t focus on the ads. Social media marketing provides a number of advantages to golf businesses, including enabling them to: ^[10]

• create brand awareness;
• connect with golfers and potential customers by engaging them in two-way communication;
• build brand loyalty by providing opportunities for a targeted audience to participate in company-sponsored activities, such as contests;
• offer and publicize incentives, such as special discounts or coupons;
• gather feedback and ideas on how to improve products and marketing initiatives;
• allow customers to interact with each other and spread the word about a company’s products or marketing initiatives; and
• take advantage of low-cost marketing opportunities by being active on free social sites, such as Facebook.

Social Media Marketing Example

To get an idea of the power of social media marketing, think of the ALS Ice Bucket Challenge. According to the ALS Association: “the ALS Ice Bucket Challenge started in the summer of 2014 and became the world’s largest global social media phenomenon. More than 17 million people uploaded their challenge videos to Facebook; these videos were watched by 440 million people a total of 10 billion times.” ^[11] The ALS Association raised $115 million in six weeks (their usual annual budget was only $20 million). ^[12]

Social Media Marketing Challenges

The main challenge of social media marketing is that it can be very time-consuming. It takes determination and resources to succeed. Small companies often lack the staff to initiate and manage social media marketing campaigns. ^[13] Even large companies can find the management of media marketing initiates overwhelming. A recent study of 1,700 chief marketing officers indicates that many are overwhelmed by the sheer volume of customer data available on social sites, such as Facebook and Twitter. ^[14] This is not surprising given that in 2017, Facebook had more than 2.1 billion active users, ^[15] and five hundred million tweets are sent each day. ^[16] The marketing officers recognize the potential value of this data but are not always capable of using it. A chief marketing officer in the survey described the situation as follows: “The perfect solution is to serve each consumer individually. The problem? There are 7 billion of them.” ^[17] In spite of these limitations, 82 percent of those surveyed plan to increase their use of social media marketing over the next 3 to 5 years. To understand what real-time information is telling them, companies will use analytics software, which is capable of analyzing unstructured data. This software is being developed by technology companies, such as IBM, and advertising agencies.

The bottom line: what is clear is that marketing, and particularly advertising, has changed forever. As Simon Pestridge, Nike’s global director of marketing for Greater China, said about Nike’s marketing strategy, “We don’t do advertising anymore. Advertising is all about achieving awareness, and we no longer need awareness. We need to become part of people’s lives, and digital allows us to do that”. ^[18]

A New Marketing Model

The 4 P’s have served marketers well for generations, but new innovations can disrupt even the most tried-and-true ways of doing business. A new framework is taking hold in marketing – the SAVE method. SAVE is an acronym that stands for Solution, Access, Value, and Education. The framework was developed by Richard Ettenson, Eduardo Conrado, and Jonathan Knowles, and was first published in Harvard Business Review in 2013. ^[19] The authors advocate replacing the 4P’s with SAVE as companies define their offerings. The essence of the SAVE framework is as follows:

The SAVE framework appears to be gaining traction, and it may eventually replace Marketing’s 4 Ps altogether.