Marketing strategies and their business applications

Marketing strategy: High price/low volume luxury 'niche' marketing

Market segmentation is a critical aspect of selling luxury goods (Kotler & Keller 2006). A good example of this can be seen in the form of sporting goods stores that cater specifically to golfers. Golf is a pricey sport, particularly because admission to golf courses and driving ranges is high, as are lessons and equipment. The game also requires a great deal of leisure time. It is thus often popular amongst retirees, or people in professions who use the golf course as an extension of the 'networking 'aspect of their business. Golf stores may focus their marketing on a narrow population segment that often has much more disposable income than the rest of the population, as well as a fanatical devotion to the sport. The stores carry a wide variety of clubs and balls, and have store associates who are golfers themselves. Sellers can provide specific, individualized advice about the right kind of equipment to suit a golfer's unique needs. They may spend a great deal of time with every customer to find just the right club, rather than focus on high volume sales. This is typical of a high price, low volume marketing strategy (Marketing strategy, 2009, Quick MBA).

Of course, golf clubs and accessories can be fond in almost any sporting good store. But golf is particularly well-suited to a high level of customization and a high-price range of specialized goods because of the nature of the sport. Although runners might like specialized running shoes and clothing, there is not an infinite amount of training and equipment that can be sold in relation to running. Also, many runners may feel able to pick out their own shoes, or feel they do not need the most expensive shoes and may not seek out a specialty store. Golfing requires a major investment for a golfer to be even remotely competitive. A golf store, for example, might offer free advice clinics, specifically designed to lure prospective customers into the store who will buy a large amount of the recommended equipment to address their particular problem. Because so many businesses have 'golf outings' a golf store might offer members of the business a discount on any gear they wish to purchase, as a way of establishing a client base of high-spending consumers.

One interesting aspect of small, specialty stores is that they may not even offer lower-priced goods pertaining to the sport that are available at franchises, such as socks and polo shirts. These are not stocked in high quantities, but merely for the convenience of one-stop shopping. The real profit comes from selling the luxury items at full price to a consumer who is willing to pay for the store experience and the additional service as well as the added cache of a famous name. Basic sporting goods are unlikely to be the focus of the store -- instead the types of brands that are only available at high-end golf stores will be showcased.