Gettin' in the Swing of Things

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The typical golfer is no longer the white male country club member with above-average household income and a penchant for knickers. As golf equipment manufacturers gather for this month's PGA Merchandise Show in Orlando, changes in the demographics of their customer base have begun to affect marketing strategy in the $6.4 billion equipment and apparel retail markets. Fastest growth among golfers' ranks: juniors (ages 12 to 17), younger adults (ages 18 to 29), women, and those in lower income brackets (with household income less than $30,000).

The National Golf Foundation claims that 26.5 million Americans played golf in 1997, up 7 percent from 1996. Nearly one in five of those are avid golfers who play more than 25 rounds a year. More than one in five golfers is between 18 and 29, and their numbers grew by 10 percent in 1997. But the largest percentage increase of any age group was among juniors, up 34 percent in 1997, according to the NGF.

The Zandl Group, a New York City-based research company that tracks the habits of young consumers, reports that golf's stock is rising among the twentysomething set. In a recent survey, the 20-to-29-year-olds ranked golf first, ahead of such trendy sports as mountain biking, snowboarding and major league soccer. Zandl attributes golf's dramatic gains in popularity to Tiger Woods and male and female twentysomethings who've been tearing up the pro tours.

"More people are talking about golf now than in the heyday of Jack Nicklaus," says Mike May, spokesperson for the Sporting Goods Manufacturers Association (SGMA), an industry trade group.

Women are also starting to make an impact on the links. While the total number of men playing golf rose 6 percent in 1997, the number of women grew 10 percent. And in the last ten years, the number of women who have taken up the sport grew 23.9 percent, to 5.7 million. Today, women spend about $3 billion a year on equipment, apparel and greens fees, accounting for about 20 percent of total golf expenditures.

Once considered a sport for the elite, golf has been growing in popularity among people in lower income households. The NGF says the number of golfers who live in households with incomes under $30,000 rose 16 percent in 1997. Meanwhile, their wealthier compatriots, those whose incomes are between $30,000 and $50,000, declined in number by 5 percent, and those in the $50,000 to $75,000 bracket dropped by 7 percent. Golf's upper crust has seen a noticeable surge, however. The number of golfers with incomes over $75,000 rose 32 percent in 1997.

Whether it's Tiger Woods or some other force that's boosting the sport's popularity, equipment and apparel sales are on the up and up. Total golf equipment sales rose nearly 10 percent, to an estimated $3.92 billion in 1997, according to the National Sporting Goods Association. Apparel and shoe sales rose 2.7 percent to an estimated $1.89 billion in 1997.

Even as young duffers flock in droves to the golf course, matures and seniors still make up about 25 percent of total golfers. Avid male golfers average about 50 years old, and among avid women golfers, the average age is an even higher--55.4 years old. The number of golfers over age 50 is expected to explode in the coming years as maturing baby boomers continue to seek healthful, active interests that put less wear and tear on the body.

The shift in demographics is already affecting product development. Club makers are developing lighter-weight clubs for seniors, for example, as well as specialty woods, which can replace long irons and are easier to use.

Most of the manufacturers spend the majority of their ad dollars in television and magazines, according to Competitive Media Reporting. Taylor Made golf clubs spent an estimated $17.3 million on advertising in 1997, the largest amount for any one product. Callaway golf clubs ranked second at $16.5 million, and Cobra golf clubs were third with $12.2 million. Among golf ball manufacturers, Titleist spent $12.2 million to advertise its line. Fourteen of the top 20 golf advertisers spent the majority of their advertising on television versus print, but 12 of the top 20 spent at least 40 percent of their ad budgets on magazines, according to CMR data.

Click Here and Charge Web surfers can't help but notice low interest-rate credit card solicitations from an increasing number of banks. No-fee offers and rates as low as 2.9 percent are popping up on Web sites nearly as often as they arrive in the mail.

Many leading credit card marketers have turned to the Internet as another channel to attract customers. Forrester Research estimates that 15 percent of all credit-card enrollments will be initiated on the Web by 2002, compared with less than 1 percent today. One company, NextCard, markets its card solely on the Web, and others, such as First USA, MBNA, and Capital One, which saturate the market through direct mail and telemarketing, but are now adding the Web to their playbooks.

"The Internet adds a third channel to our customer acquisition methods," says Jeff Unkle, a spokesperson at First USA, the leading Internet credit card marketer. "Over the last five years, direct-mail credit card offers have become very competitive. The Internet allows us to target a specific market."

More than 15 million people logged onto the Internet to search for a new credit card in the past two to three years, according to market research firm Brittain Associates. Nearly six million completed online card applications within the last two years.

The demographics of the Web nearly mirror those adults looking for a credit card (see chart next page). Households with higher income levels are more likely to use the Internet but less likely to apply for credit cards than those with lower incomes, signifying an untapped market in a highly competitive arena.

Several card issuers hope Web marketing will eventually replace the costly process of direct mail. Brittain says many card issuers are looking for alternative methods to existing customer acquisitions, such as direct mail and telemarketing. NextCard, a San-Francisco-based card marketer, is banking its business on Internet marketing. The company looked at the credit card market and saw how highly competitive each player was in the direct-mail and telemarketing channel.

"We feel the Internet represents the next wave of credit card marketing," says Rich Goebel, director of business development for NextCard. The cost of marketing online and the demographics of online consumers also played a major role in NextCard choosing its strategy. NextCard receives between 80,000 and 100,000 applications a month, Goebel said. The company believes its share of online applications is between 16 percent and 30 percent of total applications after only nine months on the Web. Many companies fear unwanted customers fill out applications, but Goebel claims that their acceptance rate on the Internet mirrors that of other channels.

"Consumers can choose what they want in terms of rates or balance transfers, and get an answer right away," Goebel says.

Targeting remains the focus of First USA. The bank focuses on the particular interest of its customers. For example, if a Web surfer clicks on a site about jazz, First USA will promote its Jazz Enthusiast credit card there through a banner ad.

To strengthen its Internet marketing strategy, First USA, a part of the Chicago-based financial conglomerate Banc One, signed a five-year, $90 million exclusive advertising deal with the Microsoft Network, an online service that competes with America Online. The deal, one of the largest in the short history of Internet marketing, places First USA banner ads on Microsoft sites, including its travel service Expedia, its auto service CarPoint, and Sidewalk, its city guide.

Security remains an issue. A study by CDB Research and Consulting found that more than half of those surveyed believe the Internet to be somewhat unsafe or very unsafe. Only 20 percent said they thought the Internet to be very safe or safe. -T.M.

Pre-Boom a Boon to Gyms As the gourmandizing holidays wind to an end, many of us will start the new year by heading to the gym-or at least resolving to head to the gym-to burn off those extra pounds, whether it's on via the treadmill, the rowing machine, free-weights or an aerobics class.According to a recent study on health-club populations, the fastest growth in the past ten years has occurred among members who are 55 and older.

The International Health, Racquet & Sportsclub Association says that twice the number of people over the age of 55 had health-club memberships in 1997 than in 1987. More than 2.7 million of the 22.5 million health club members were born before 1943.

It's hardly surprising that the pre-boomer generation has taken exercise to heart. "The increases are due to more people in that age group ... worried about their health," says Catherine Masterson McNeil, a spokesperson for IHRSA.

These matures are also more likely to work out more often than their younger brethren. Men and women over the age of 55 exercise at a gym 93.6 days per year, compared with 88 days for leading-edge boomers aged 45 to 54, and 85.4 days for those 35 to 44. Gen Xers work out only 82.5 days a year.

Of course, those over 55 have more free time, since some are retired, but that doesn't account for the lion's share of the uptick. Their push to exercise is driven by more health studies that tie exercise to living longer, McNeil says.

More children are also joining health clubs, according to IHRSA. In 1987, only 2.7 percent of health club members were under age 18, compared with 8.5 percent in 1997. IHRSA credits this trend to parents buying family memberships.

The survey reports that women made up 54 percent of the total health-club population in 1997, up from 52 percent in 1987, but down from 56 percent in 1996. Women, though, spend less time at the gym than men.

Of the six age breakdowns, female attendance outpaces males only in the 65-plus and 25-to-34 age groups. Men ages 35 to 44 spend 101 days out of the year at the gym, the most of any demographic.

The majority of health clubs are commercial establishments, compared with tax-exempt facilities and corporate fitness centers. The largest number of health-club members (31 percent) live in the West. The amount of members there rose from 3.1 million in 1987 to 6.85 million in 1997, an increase of 120 percent. The South ranks second in terms of membership, followed by the North Central and the Northeast.-T.M.

A Pleasure Doing Business Juggling the job and family is an act more and more of us are taking on the road, according to a recent study by the Travel Industry Association of America. Business travelers who brought a child along for a business-related trip grew by 230 percent between the years 1987 and 1997. "The Travel Market Report," based on a survey of more than 15,000 adults, says 24.4 million business trips included a child in 1997, compared to 7.4 million in 1987. The figure remains a small, but growing component of the 193 million business trips taken each year.

"It appears that more Americans are turning their business trips and out-of-town meetings into partial family vacations," says William Norman, president and chief executive officer of TIA. He adds that bringing a child or the rest of the family lessens the pain of family separation.

Another contributing factor is that many conferences and meetings are held in resort areas or large metropolitan cities that families wish to visit. According to TIA, 21 percent of business travel destinations are in the South Atlantic part of the country (Delaware, Washington, D.C., Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, and West Virginia), the highest among any region. New England (Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont), meanwhile, ranks last, with 4 percent.

Of the nearly 43 million business travelers, nearly seven in ten are married, and half are raising at least one child at home.

The age of the travelers tends to affect their preference for bringing the family along. Adults over 45 comprised 37 percent of total business travelers in 1997, compared with 34 percent of Gen-X travelers. The younger group was less likely to travel with family since half of them are unmarried, compared with 22 percent of travelers in the older contingent.

Bringing the family often means combining business travel with vacation excursions. In 1996, 8.8 million business travelers combined vacation time with work time, up from 7.5 million in 1994 and 6.5 million in 1991, according to TIA. Of those travelers, 52.4 percent were men, and 65.7 percent were married.

Nearly one-third of business travelers took some time off for fun during their business trip, and 36 percent stayed over a weekend. Travelers who added vacation to the beginning or end of their business trip were older, on average, than those who traveled for business alone. However, more married people traveled for business only and left the kids at home, compared with those who bring the children along. More single, divorced, separated or widowed segments of the population planned business/vacation trips than for business only.

For young adults, there's little statistical difference between those who left the family at home or brought them along. Equal percentages of 18-to-34-year-olds traveling for business only added a mini-vacation to the mix. -T.M.

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