Golflogix case study composition

Examination:

Market amounts suggest a much larger market of golfers as opposed to those of the golf courses. Units sold to marketplace differs while using target market in the case of golf training because 60 units per golf course can be purchased. However , with assorted segmentation methods, it can be figured the golf players who would buy the Distance-only or perhaps Complete System, would be people who measured all their performance simply by measuring their handicap, hence forming the first target market within the players.

Discouragingly, this was only 20% of the players. Also, the golfer market would additional be divided by some. Since a game usually contains 4 players, only one of them would need the product, regular players may reveal the cost. Although the distance-only method is easy to get ready to go, when sold directly to the golfers, the golfers might themselves have to outfit all their green for the golf course. This would take away through the key value proposition for the golf programs that is ‘pace of play’.

The game of golf courses might need to charge a primary amount to the modern customers (golfers) to take into account period spent in setting up the distance-only program. Also with the technical set up requirements in the Complete-System, it might be almost impossible for a golfer to obtain himself. Also, with the golf-course channel, in other words to lock-in the golf players. The real advantage of the “Complete System would be realizable towards the end-user (golfers) when they see improvements in their game with the regular usage of the system. Thus, locking the golf courses in who will push to throw in the system to the players per round would make it is value proposition realizable.

Sales to golfing courses require a three 12 months lease, thus a certain three yr revenue stream and also the products can be used again elsewhere. If Golflogix matches both channels, one may end up cannibalizing the other. If devices are sold directly to players, golf-courses might not see virtually any value in buying them, as their earnings in turn within the rent with the devices would not be assured. Similarly, players would not choose the system if they understood golf-courses previously provided it with a nominal fee.

It is also noted that 80% of golfers enjoyed on community courses, which required a daily green cost. This was promising for the general public golf programs channel, seeing that with a every round fees, golf training would make up for the cost of the golf logix systems much faster. Within the golf-courses, it would be beneficial to begin with people courses.

Research performed by the GolfLogix staff, had compelling results. 80% of the players reported that they can would on a regular basis use the system if it were available on the courses they will played. Likewise, 70% reported that they would be willing to pay $1-$3 per round. Appendix A is earnings statement (with certain assumptions) that by the end lists the operating profits per income stream. We come across that with the retail route, we drop one earnings stream. Up-selling to a Complete-system becomes much easier with golf-courses. And although even the amount of the profits through golf-courses is reduced than the income for Distance-only for golf players, two key points need to be considered: 1) The equipment with the golf-courses channel can be reusable, and therefore costs sustained in the next three years will be reduced, and 2) # of units purcahased by golfers may reduce by 4, since the game is definitely played in groups of 4. (# of unit quantities is derived from the industry numbers above. A 1% penetration is definitely assumed in the first 3 years)

Appendix A

Players

Golf courses

Income Statement

Length Only

Complete Program

Range Only

Complete System

Revenue per unit

bucks 300

$ “

$ 54, 1000

bucks 72, 1000

# of products

267, 000

$ “

168

169

Total revenue

$ 80, 100, 500

$ “

$ being unfaithful, 180, 000

dollar 12, 240, 000

Cost of Goods Sold every unit

$ 200

$ “

dollar 12, 000

money 17, 000

# of models

267, 000

169

170

Total cost

$ 53, 400, 000

dollar “

$ 2, 040, 500

$ 2, 890, 000

Gross Margin

dollar 26, seven hundred, 000

$ “

bucks 7, 150, 000

$ being unfaithful, 350, 000

Operating Expenses

$ a couple of, 700, 000

dollar “

$ a couple of, 700, 1000

$ 3, 000, 000

Setup Expenditures

dollar “

$ “

money 85, 500

bucks 340, 000

Functioning Income

$ 24, 000, 1000

money “

$ some, 355, 1000

money 6, 010, 000

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