PERFORMANCE INDICATOR
Market Overview for Golf Balls
 National Golf association indicated that 586Mn rounds
of golf balls were played in US in 2000, growing at just
1.6% CAGR over last 10 years
 However, only 49.2Mn dozen balls were sold in 2000,
increasing at 4% CAGR over 10 years
 Retail gross margin of 30% of retail price &
Manufacturer gross margin was around 63% of
wholesale price.
 Golf balls are highest margin item among all
categories
 US Golf association specifies characteristics of
balls, so little room for product innovation
 Product innovation mainly on surface coating
& dimple patterns
 3 types of balls- 1. Three-piece ball 2. Two-
piece ball 3. Multi-layered ball
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Used Ball Market

 Total new balls sales sold (590Mn) totalled almost exactly no of rounds
played (586 Mn)
 However, average golfer lost 3-6 balls per round (averaged 4.5
balls/round)
 Total used balls = 4x (No. of new balls purchased)
 Golfers bought used balls or ball retriever (scooping balls out of water
hazard)
 A single golf course yield 100,000 balls per year
 Companies began to retrieve, clean, recondition & repacked used
balls, selling them through golf retail channels
 Most of the balls that were used are refurbished, refinished or
rethreaded ball
 But used balls suffer some performance degradation when
submerged for long period
 Greater market which is yet to be captured
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Breakthrough Idea
 Robb & Bob came with a breakthrough idea, which help golfers know
that whether used balls had suffered performance degradation or
not.
 PI have exclusive rights to employ any technology that would lead to
change in appearance of golf ball as a signal that its performance
has been impaired by exposure to water
 Included both appearance & disappearance of markings or colors
 Protect the idea by developing a brand & logo around the idea
 BMI succeeded & met Performance Indicator’s idea
 They patented the technology that would change colour or
appearance of balls will change when submerged in water for long
time.
 Color change is irreversible making it difficult for ball companies to
re-use
 No impact on flight performance
 Easy & cheap to incorporate

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Major Challenges

To convince manufacturers that used ball was a problem.

 As per audience, Annual sales of new balls is 50 Mn
Dozen.
 Actually, Golfers were putting 150-300Mn balls in play per
year (3-6 balls per round)
 Incorporating Performance Indicator technology every
dozen balls, would eliminate 1.7 dozen balls from the
used market.

Market analysis
 They Enlisted market research firms Harris Interactive, to
learn more about golf ball purchasing habits
 Mullen, conducted consumer focus group studies and
consumer interviews to supplement the study
 An advisory board was setup consisting of golf industry
insiders, chemical and polymer scientists, to gain insights
on how manufacturers, golf pros would respond to the
ideas
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Creating Awareness
 Golfers were confident of their ability to identify the balls, which have undergone performance degradation. They
believed that the ball shall be scuffed, discolored and damaged in a way visible to the naked eye if it has been
degraded.
 Osinski & Winskowicz convinced the golfers that the ball may not show visually discernible damage but may suffer
significantly in performance.
 It was proved through experimentation that long time submergence of ball in water shall affect basic physical
characteristics such as coefficient of restitution etc.

Business Models
Performance Indicator technology led to colour change in only
those balls that had been submerged in water for a long time, to
affect the performance.
Osinski & Winskowicz met many golf ball manufacturers, inorder
to license their technology
The business plan laid out 3 options
 Licensing to the new ball golf manufacturer
 Licensing to one strategic licensee who can use it as a
competitive advantage
 Outright sale to strategic acquirer 6
Market Response
Dunlop Maxfli
The company believed that the technology is workable and
identified the problem of performance degradation, magnitude
of used ball market and its impact on used ball sales. Despite
believing in the fundamental logic of the proposal, the firm was
not interested in pioneering the technology for the following
reasons
 Titleist response to counter market against maxfli’s
adoption of strategy
 Customers may thing it as an infringement on their access
to cheap used balls
 Ramifications of their golf ball turned gray
Bridgestone
 Bridgestone too was not ready to pioneer the technology
and would rather prefer to look for what the competitors
did.
 The firm was interested to implement technology in
japan, where they had less competition, but that also
didn’t worked out
Titleist
 When they discussed with Titleist, they were highly
convinced by the performance indicators idea and also
had several meetings for discussing the Ideas with the top
management.
 Implementation didn’t go through, as Titleist launched
Pro VI, a new line of balls, which received great response
from the market. When Pro VI was out of stock, the
retailers directed customers to other brands providing
similar products.
 As a result it was catastrophic to the titleist’s core brand.
These difficulties delayed the implementation of new
technology.
Apart from the firms mentioned above, Osinski &
Winskowicz approached many other firms but none seemed
interesting in pioneering the technology for reasons such as
firm restructuring, competitions and fear of adopting a new
technology may lead to adverse effect on their image if it
goes wrong.
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THANK YOU!