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Young Golfers' Gear Launch

Penang Golf Kit (PGK) produces high-quality golfing equipment and clothing, with current annual sales of $26 million. The company plans to launch a new product range targeting young golfers aged 16-25, with a marketing budget of $1 million aimed at achieving $5 million in sales within three years. PGK is considering various promotion methods, including TV advertising, sponsorship, and digital promotion, as it seeks to adapt its marketing strategy to reach the growing young golf market.

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25 views2 pages

Young Golfers' Gear Launch

Penang Golf Kit (PGK) produces high-quality golfing equipment and clothing, with current annual sales of $26 million. The company plans to launch a new product range targeting young golfers aged 16-25, with a marketing budget of $1 million aimed at achieving $5 million in sales within three years. PGK is considering various promotion methods, including TV advertising, sponsorship, and digital promotion, as it seeks to adapt its marketing strategy to reach the growing young golf market.

Uploaded by

ourvashi.dawoor
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Penang Golf Kit (PGK)

PGK produces golfing equipment and clothing. Current annual sales are $26m and have grown steadily
in recent years. PGK's products are well known for their quality and relatively high prices. The current
promotion mix is:

sponsorship of one major golf championship each year, which is widely televised
advertising once per month in the most popular daily newspaper.

PGK does not use digital promotion or e-commerce. The directors think this might have to change. In two
months' time, the company will launch a new range of golfing equipment and clothing aimed at young
golf players, 16-25 years old. Increasing numbers of young people are playing golf and the total size of
this market segment is forecast to be $45m in three years time.

A marketing budget of $1 million has been allocated for promoting the new products in the first year
after they are launched. The promotion objectives are to maintain the image of the brand name and to
achieve annual sales of $5m to young golfers in three years’ time. The following data will be used by
PGK managers to decide on a promotion mix for the new products:

TV advertising - $0.5 million is the minimum promotion budget required for buying TV time. This
purchases 20 TV adverts of 30 seconds each. Two times are possible:
During the interval of the Saturday evening football match on TV. The audience is forecast to be
5 million, 25% of whom are likely to be under 21.
Friday evenings after a popular sports quiz show. Audience figures suggest an average number
of 6 million viewers, 25% under 21.

The cost of producing the advertisement for TV will be a further $400 000.

• National golfing magazine - A golfing magazine has offered 12 full-page adverts (1 per month) for
$33,000 each. About 250,000 people read the magazine. PGK does not know the age structure of its
readership. The additional cost of preparing the advert would be $100,000.

• Sponsorships - sponsor one of the country’s best golfers, Tim Lui. He is very popular among young
golfers. Tim’s agent is asking for $300,000 of sponsorship. Tim would wear PGK-branded clothing and
use PGK equipment during golf tournaments for one year.

• Digital promotion:
- a website linked to PGK's customer database

- opening Twitter and Facebook accounts and monitoring messages

- email marketing.
A digital promotion agency has offered to prepare everything for $250 000. An average $7 pay-per-
click fee to, based on how much the consumer spends, has been forecast.
a i)Identify one benefit of product promotion. (1)
ii) Explain the term 'brand'. (3)
b i) Calculate the share of the young golf players market PGK is aiming to achieve in three years time.
(3)

ii) Explain one limitation to PGK of TV advertising. (3)

c) Analyse two benefits to PGK of starting to use e-commerce. (8)

d) Using the data and any other information, advise PGK on the methods of promotion it should use for
the new range of products. Justify your answeri Explain one limitation to PGK of TV advertising.

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