Strategy and Implementation Summary
We focus on a special kind of customer, the person who wants a very high quality golf clubs customized to his or her personal preference. Our customer will purchase the club because of the way it looks, but will use it because of the way the new technology allows them to play better.
Our marketing strategy assumes that we need to go into golf shops, pro shops, and other retail outlets to address and pinpoint our customer needs. We will offer free seminars and demonstrations of the clubs, first to retail managers and buyers, and then in individual retail shops as special events directly to our targeted consumers.
The sales strategy is based on the high quality of our products, from the combination of technical design understanding with very high quality materials and workmanship.
Our most important competitive edge is our material, which is based on a special sanding process of such high quality that assembly is not only a pleasure for our customers, it is actually a feature that enhances the sense of quality and feel.
5.1 Competitive Edge
Our competitive edge is our high-technology design and manufacturing process. With new generation materials and high-quality club workmanship, our products themselves are higher quality, more easily produced, and more customizable than those of our competitors. Although there are many golf manufacturers, none have brought technology and design together as we have.
5.2 Marketing Strategy
RA Concepts’ revolutionary proprietary technology and materials positions the company to be a leader in new putter design. RA Concepts offers a novel approach that clearly provides significant value to our customer (retail shops) and ultimately the end user.
In marketing directed at retail stores, we will offer a combination of programs:
- In-house seminars on the production and design of our putters, to educate the buyers/resellers on our products’ advantages and features
- Cost comparisons of our products with competitors’ products
- Companion advertising – we will join with the retailers in customizing advertising for their locale and age segment, to increase consumer interest in our product at their store
In marketing directed at end users (golfers), we will place ads in several specialty golfing magazines, send free clubs to the top one hundred American golfers and golfing magazine editors for their own review, and offer tours of the facility to interested golfers, so they can see for themselves our unique production process.
We have already received offers for short documentary-type spots on our new technological processes from a sports channel as part of a “high-tech and sports” series, and will pursue the newsworthiness of our products as part of our marketing campaign.
5.3 Sales Strategy
Our strategy focuses first on maintaining the identity with the high-end buyer who appreciates the best available quality, but is also very demanding regarding his/her golf game. We’ve been able to find these customers using a combination of pro shops and other retail stores.
For the next year, we will continue to focus on increasing our presence in the golf shops that target our specialty customer. We will work with golf shops and retail stores more than ever, and we expect to gain position in the pro shops as well. Specialty retail is a new channel that could become important for us. The key to our sales strategy is long-term relationships with retail buyers. These buyers make major, million dollar decisions for their stores every day, and will not buy products from people they don’t trust. Our affiliation with Van Russel, our pro-golfing sales associate, will go a long way in establishing our credibility during initial contacts. However, the design of the clubs almost sells itself – their advantages in price, turn-around time for custom work, and quality will compare favorably with any other high-end golf club on the market.
Although our forecasts here are conservative, RA Concepts anticipates that our limited production will cause our five-year plan to be revised in order to meet the demand. Our first plant is expected to produce approximately 2,000 golf clubs in the first year and 2,500 from the second year forward. The market for golf equipment is in excess of 800 million dollars annually. This takes a great part of the risk out of our project.
5.3.1 Sales Forecast
Our sales forecast is based on a conservative estimate of selling roughly 2230 putters at ~$79.60 apiece to retailers in the first year. These will mostly be D putters, since that design is the most ready to ramp up for production with increases in our other models in years 2 and 3.
Suggested retail price for the clubs is $150, a comfortable profit margin for most high-end retailers.
In year 2, we expect to be reaching full capacity with production, which will allow us to increase sales significantly. We expect year 2 sales to be roughly twice year 1 sales. Despite the large growth, these estimates are fairly conservative, based on interest we have already received from high-end retail golfing shops.
|Year 1||Year 2||Year 3|
|Direct Cost of Sales||Year 1||Year 2||Year 3|
|Subtotal Direct Cost of Sales||$50,034||$86,603||$95,259|