Tuesday, October 17, 2006

Ping Finds Itself in Hot Water over Military Rebates

In late September, Karsten Manufacturing, maker of Ping golf clubs, has gotten itself into some hot water by forbidding retailers from offering a discount to active-duty and reserve members of the military.

The controversy exploded when Ping terminated its relationship with Bonaventure Discount Golf and Gordon Lakes Golf Course, both located in the Atlanta area, for selling Ping clubs at a 10% discount to military personnel.

Ping, well known for protecting the retail price of their premium golf products, had cut off these two golf retailers as well as another 60-plus military golf courses, for selling at a discount. Based on Ping’s actions, their pricing policy is sacred and a retailer that violates this policy, can, and often is, barred from selling Ping products.

Well, it appears that Ping had a mea culpa. On October 3rd, they relented and offered up their own, albeit lame, discount to military personnel. Ping would offer a mail-in rebate of $80 on a set of irons (retail price $749-1099) to these customers. Instead of getting the discount in-store, the military personnel customer will have to mail it in and wait 3-6 weeks for a check.

In a partial defense, according to Ping Chairman & CEO John Solheim, “For the last year, we’ve been looking for additional ways to support the troops,” Mr. Solheim said in a prepared statement. “On three occasions we’ve sent hundreds of free clubs for the troops to enjoy during their limited leisure time, but we wanted to provide them additional benefits.”

My take is that Ping got caught in a brewing PR fiasco that had to be quieted as soon as possible. Ping has had little interest in reducing their lofty pricing, but felt it was better to appease the media jackals than tell their retailers that they were wrong.

However, those retailers and military golf course pro shops that offered an unauthorized discount and had their accounts closed will not have them re-opened at this time according to a Ping spokesperson.

Wouldn’t it have been better for Ping just to say “We apologize and are sorry?”

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