Performance Indicator Essay example

901 Words Feb 10th, 2012 4 Pages
Performance Indicator Memo

Executive Summary
The aim of Performance Indicator is to increase golf ball manufacturers’ value by increasing revenue from new ball sales as a result of eliminating older, used balls through its color change coating technology. Although there appears to be a possible financial benefit based on the future perceived demand for new golf balls, PI’s new technology does not appear to have any transparent benefit or value creation for the end consumer (golfer). Consequently, no manufacturer has yet to adopt this technology.
Inconsistency Between Sales-Pitch and Willingness to Pay
Performance Indicator (PI) has developed a technology that will enable the golf industry to reduce the number of used golf balls in
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Used balls can be purchased for significantly less or even found by many golfers and have an acceptable performance level. Diminishing the used golf ball supply may cause frustration for the average golfer.
If this technology were universally adopted by all manufacturers, there may be benefit to the industry as a whole. However, value brand manufacturers feel that brand image might be tarnished by concern about consumer’s “infringement on their access to cheap used balls.” Additionally, high-end manufacturers’ sales, which represent 67% of total new balls market, will be reluctant to adopt the technology due the belief that the consumers may buy new value brand golf balls rather than their own premium brand golf balls.
The decision for an individual manufacturer to adopt PI’s technology will be determined by the potential increase in sales as golfers replace performance degraded balls with their brand. It is reasonable to assume that individual manufacturers are hesitant to pioneer this technology because there is no assurance that a performance degraded golf ball would be replaced with their own. The data indicate that golfers are comfortable using used balls, or value brands. By removing approximately 50% of the used balls from circulation, numerous golfers may utilize the lower cost alternatives to fulfill their required quantities.
In attempting to convince potential customers of the perceived value of the technology, Performance Indicator provided
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