Essay on Golflogix Case Study

705 Words May 5th, 2014 3 Pages
Recommendation: Golflogix should sell the Distance-only and Complete-System through the golf courses channel and not in retail to golfers. However, Golflogix can reduce their pricing on the Complete-System and generate revenue from an additional stream of subscription from golfers to the Complete-system. This not only generates additional revenue but also increases demand for the system and builds pressure on the golf-courses to provide the infrastructure for it.
Analysis:
Market numbers suggest a much larger market of golfers as opposed to that of the golf courses. Units sold to target market differs with the target market in the case of golf courses because 60 units per golf course are sold. However, with various segmentation
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Sales to golf courses involve a three year lease, thus a guaranteed three year revenue stream and also the equipment can be reused elsewhere. If Golflogix goes with both channels, one may end up cannibalizing the other. If devices are sold directly to golfers, golf-courses may not see any value in buying them, since their revenue in turn on the rent of the devices would not be guaranteed. Similarly, golfers would not buy the system if they knew golf-courses already provided it with a nominal fee.

It is also noted that 80% of golfers played on public courses, which required a daily green fee. This was promising for the public golf courses channel, since with a per round fees, golf courses would make up for the cost of the golf logix systems much faster. Within the golf-courses, it would be beneficial to begin with the public courses.

Surveys performed by the GolfLogix team, had compelling results. 80% of the golfers reported that they would regularly use the system if it were available on the courses they played. Also, 70% reported that they would be willing to pay $1-$3 per round.
Appendix A is an income statement (with certain assumptions) that at the end lists the operating income per revenue stream. We see that with the retail channel, we lose one revenue stream. Up-selling to a Complete-system becomes easier with golf-courses. And although even the sum of the revenues through golf-courses is lesser than the

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