1. The Golfer Mindset 2011Presented January 28, 2011 Ready to Recover? 1

2. Agenda Two Minute Take-Aways Golfer expectations for 2011 perceptions, participation, spending andretail channel preferences Golfer attitudes in 2011 and their implications for the industry2 3. Two Minute Take-Aways The Hangover lingers, but golfers perceive themselves to beremoved from its effects, as they slowly emerge from the cocoon. Golfers begin to find value opportunities and that coincides withheightened expectations. Service remains a key differentiator. Equipment innovation creates challenges (lack of loyalty;differentiation) AND opportunities (demand, custom fitting). Offcourse specialty benefits. Amidst significant membership losses, private club members areconcerned about future viability. Corrective action is slow in coming. 3 4. Background, Objectives and Methodology Winter 2011 SLRG Sports Omnibus Assess the attitudes and perceptions of golfers Control sample of non-sports fans Sports and Leisure Research Group launched the survey in January2009, 2010 and 2011 The 2011 online survey included 1,150 golfers 4 5. Golfs Popularity: Less Mass but More FansIndicate whether you feel this sport has become morepopular, less popular or stayed the same over the past I watch and follow closely two-three years6% Net Change64%20%PGA Tour GolfPGA TOUR47%26% 11% 36% LPGA LPGA TOUR14% 13%- 23% Net Change0% 10% 20% 30% 40%50% 60%70% 0% 5% 10% 15% 20% 25% 30% 35%40% Less PopularMore PopularWinter 2011Winter 2010 LPGA tournaments drop from 34 in 2008 to 24 in 2010Top 3 Box5 6. Up Trend in Expectations.But There is a Gap BetweenExpectations and Reality Do you expect to/Did you actually play the same Do you expect to spend the same amount or moreamount or more in next year?100%100% 96%94% 90% 90% 80% 77%77%80% 76% 72% 70% 70% 66% 60% 60% 50%Expected 50% 40%Actual 40% 30% 30% 20% 20% 10% 10%0% 0%20092010 201120102011Top 3 Box6 7. Why Golfers are Playing More Among those who expect to play more in 2011 (44% in 2011; 44% in 2010)70% 60%61%60%50% 42%40% 37% 31%30%30%22% 20% 18%19% 18%20%15%17%16% 15% 14% 13%15% 13% 13%11%10%6%0%I have more I have more My game has FamilyI have reduced My family is Ive recently My health has There is better Ive joined a Im playingtimegolf partners improvedobligationsbusiness more involved bought new improvedvalue in the golf league or more businessto play with havepressures in golf equipment marketplace local programgolfdecreased Winter 2010 Winter 2011 Hierarchy remains unchangedTop 3 Box7 8. Why Golfers are Playing LessAmong those who expect to play less in 2011 (4% in 2011; 7% in 2010)47%16%I have less timeIts harder to find people to play with 42% 14% 28% 15%Family/Children responsibilitiesGolf is too expensive 25% 18%26%My game has not improved or has10% Health reasons 31% gotten worse11% 22% 8% More business pressuresCourses are too crowded20% 7%17% New golfers are making golf less 5%Costs have gone up22% enjoyable5% 0% 10% 20%30% 40%50% 0% 5%10%15%20%Winter 2011Winter 2010 Winter 2011Winter 2010 Top 3 Box 8 9. Perceptions on New Equipment Purchasing: Innovation is still alive, but the process is complex Mean 7.5 Custom Fitting is a game changing opportunity Brand Loyalty remains compromised60% 56% Mean 6.250%38% 39%40% Mean 6.137%30%30% 28%24%19%20%Mean 5.1 15%10%Mean 7.5Mean 6.2 Mean 6.1Mean 5.1 Mean 5.0 3%0% New golf equipment continues Buying new5.0 equipment has Mean golfBuying the right new golf I wont buy new golf equipment Ive found one brand of golfto become more technologically become more complicatedequipment can help me towithout having a custom fitting equipment that I plan to stick innovative every yearprocess in recent years immediately improve my game firstwith, when I make my next purchase Top 3 BoxBottom 3 BoxMean: 10 point scale 9 10. Golf Purchasing Trends; Actual Purchasing IncidenceExceeded Expectation.and 2011 Shows Promise80%73%70% 68%60%60% 57% 53%50%39%40% 35% 34%32%30%28% 27% 24%21%21% 22% 21% 21%19%20% 16% 17%15%14%12% 13% 12% 9% 10%9%9%9% 9% 10% 11%10%0%Golf Balls Golf Apparel Golf Shoes Driver(s)ReplacementHybrids Other Faiyway WedgesGolf Bags PuttersIrons Grips Woods/MetalsPlan to Purchase in 2010 Purchased in 2010Plan to Purchase in 2011Top 3 Box10 11. Spending Levels: Expectations Continue to Rise, butActual Purchases Generally Lag Them Expected PurchasingActual Purchasing 2011$3082010$243Drivers Drivers 2010$2712009 $221 2011$2452010$192Fairway Woods Fairway Woods 2010 $232 2009 $175 2011$1992010 $162Hybrids Hybrids 2010 $178 2009 $161$-$50 $100 $150 $200 $250 $300 $350 $-$50 $100 $150 $200 $250 $30011 12. Spending Levels: Expectations Continue to Rise, butActual Purchases Generally Lag Them Expected Purchasing Actual Purchasing 2011$655 $498 2010Irons Irons 2010 $550$478 2009 2011 $161 2010$149WedgesWedges 2010$1332009$120$138 2010$127 2011Putters Putters $1242009$129 2010$-$100 $200$300 $400 $500 $600 $700 $-$100$200 $300 $400 $500$600 12 13. Spending Levels: Expectations Continue to Rise, butActual Purchases Generally Lag Them Expected PurchasingActual Purchasing2011 $1272010 $122Golf Balls Golf Balls2010 2009$112 $1152011 $1192010$117 Golf Shoes Golf Shoes2010 $1192009 $109$216 2010$2152011Golf Apparel Golf Apparel $2112009$2112010 $-$50 $100$150 $200$250$-$50$100$150 $200$25013 14. Spending Levels: Expectations Continue to Rise, butActual Purchases Generally Lag Them Expected Purchasing Actual Purchasing 2011$782010 $68Replacement GripsReplacement Grips 2010 2009 $68 $59 2011 $1382010$137 Golf BagsGolf Bags$140 $120 2010 2009$- $20 $40 $60 $80 $100 $120 $140 $160 $- $20$40 $60 $80 $100 $120 $140 $160 14 15. In An Increasingly Value Driven Economy,Service is Still a Differentiator70%64% 65%61%60%50%40% 34%30%23% 21%20%10%0%Quality service can make the ultimate difference in what I buy If I see something I like, I dont worry about the priceWinter 2009Winter 2010 Winter 2011Top 3 Box 15 16. After Temporary Aberration, Off-Course SpecialtyRegains Primacy; Sporting Goods Still FormidableTop Anticipated Purchase Channels for Golf Equipment40%37% 35%35%31%30% 28%25%26% 25%20% 20% 20%15%10%5%0% Winter 2009Summer 2009Winter 2010Winter 2011 Off-Course Specialty Sporting Goods Retail16 17. Brand Loyalty May be Challenged;But Familiar Names Stay Top of Mind17 18. A Significant Minority of Country Club Members AreFeeling Concerned About The Private Club Model Private clubs in general, need tomake aggressive changes to remainMean 6.9 49% relevant in the coming years Less significant in theMy club must make aggressivechanges to remain viable in the 35%South U.S. Mean 6.1coming years More prevalent in Westthan Mid-West Im concerned about the financial Mean 5.7 35%stability of my club0%20% 40% 60%Top 3 Box Mean: 10 point scaleBase: National Sample of Private Club Members 18 19. Efforts to Attract Juniors, Families and Women Are Minimal. Nearly 1/3 Report Aggressive Discounting50%45% 43%40%35%30%30% Mean 6.827%25%25%Mean 5.320% Mean 6.0 17%15%Mean 5.210% Mean 5.55%0%My club has made concerted My club has aggressivelyMy club has been puttingMy club recently instituted aMy club has been puttingefforts to attract youngerreduced the cost of more emphasis on junior golf variety of new non-golf more emphasis on womensmembers in the past few years membership to attract newprograms recently programs to attract familiesgolf programs recentlymembers over recent years Top 3 BoxMean: 10 point scaleBase: National Sample of Private Club Members 19 20. Country Club Members Estimate The Hit to MembershipLevelsMore than Half Report Losses19% report again inmembership MembershipLevel Over the 18% 22%11% 29% 10% 6% 3%Past TwoYearsLost more than 10%Lost between 5% and 10%Lost less than 5%Remained flat or consistent over the past two yearsIncreased by 5% 51% report a Increased by 5-10% loss inIncreased by more than 10% membershipBase: National Sample of Private Club Members20 21. Perceptions on Retirement Lifestyle: First, The Good70%62%60% 54% 49%50%43%44% 42% 42%40%39%40% 36%33%30%28% 22%20% 14%10%0%Im confident that I will haveI feel that I will be more I plan to scale down my lifestyle I plan to continue working even I invest so I can retire early enough to retire in comfort comfortable in my retirement in my retirementin retirement than my parents are/wereWinter 2009Winter 2010Winter 2011Top 3 Box21 22. But Its Not All A Rosy Picture0.7 61%0.650%51%50%0.5 45%45% 45%43%0.4 38% 31% 29%0.30.20.1 0Im looking forward to my I consider myself to be health The best years of my life are still Age 60 is the new 40 This year will be a better year"golden years"consciousto comefor me than last year Winter 2009 Winter 2010 Winter 2011 Top 3 Box22 23. Trend to Watch: Are Golfers Breaking Out of theCocoon???70%60%60% 58%50%50% 47%39%40% 31%30%24%20%15%10%0%Im spending more time at home than I Id rather spend time with family than Im spending more time these days withSpending time with and caring fordid two years ago with friends or business associatesfriends and family, than I did in the past children and aging parents will reducethe time I can dedicate to playing sportsand attending sporting eventsWinter 2010 Winter 2011Top 3 Box 23 24. But Child Centricity and Ubiquitous Technology Remainan Impediment90%81%80% 72%73%70%65%65% 60%60%50% 48% 41% 39%40%34%30% 26%20%10%0%Theres too much new technology to We live in an age of constent updates The world is less safe for children today Golf is my personal "oasis" from day-to-keep up withthan when I was growing upday chaosWinter 2009 Winter 2010 Winter 2011Top 3 Box24 25. Golfers Still Question the Economy70%63%60%60%50%40% 31%30% 24%20%10%6% 4%0%Theres really no such thing as job security any more We have seen the U.S. unemployment rate reach People will go back to spending freely on luxuries bottom, and it will add jobs in 2011 again in 2011Winter 2010 Winter 2011 Top 3 Box 25 26. But They Feel Better About Themselves!!60% 55%50%47%46%44%42%40% 34%32%30% 27%20%10%0%Im more budget conscious today than I Today, I have to make more difficult I feel better about my financial situation Im planning to take a major vacationwas two years agodecisions about purchases than I did 5 today than I did a year agothis year years agoWinter 2010 Winter 2011 Top 3 Box 26 27. Attitudes: Tiger Can Come BackBut Its Still All AboutThe Golf80%70%68%60% Mean 7.850% 43%43%40% 35% 32% 28% 29%30%20%20% Mean 6.6Mean 7.0Mean 6.310% 7%6%0%Im interested in learning Once an athlete becomes a Professional athletes areTiger Woods willI expect Tiger Woods to The golfing public ismore about the private public figure, it isrole modelsultimately go down in make a big comeback on rooting for Tiger Woods to lives of top sports starsacceptable for his or her history as the greatest the PGA TOUR in 2011 come back strong in 2011private life to be open to golfer of all time public scrutiny Winter 2010 Top 3 Box Winter 2011 Top 3 Box Mean: 10 point scale 27 28. So What Does This All Mean For Golf Marketing? Messaging and Marketing Communication should be sensitive to these culturaland perceptual realities: Emphasis on Personalization and heightened service With the proliferation of new products, guidance is still coveted Acknowledgement of more grounded and pragmatic values, while harkening back to the nostalgia of simpler times and a desire to enjoy them. Private clubs need to evolve with The Sandwich Generation and seizethe opportunity to provide real time relevance, escape and familyfocus Continue to tone down conspicuous consumption imagery andmessaging, given lingering sensitivity and economic uncertainty28