Callaway Golf Company Marketing

Case Write-Up: Callaway Golf Company

Callaway's marketing strategy from 1988 to 1997

Since 1982, Callaway Golf Company (CGC) evolved from a small golf club manufacturer established in California to the world's largest manufacturer and marketer of golf clubs with sales of $842.9 million in 1997. The company's extraordinary growth began in 1988, two years after Richard Helmstetter became CGC's vice-president and chief of new products. Helmstetter led the development of the S2H2 driver. By making the S2H2's hosel hollow and short, CGC delivered a product that put more feel into the player's swing and transferred the freed-up weight into the striking area of the clubhead, thus giving players more distance in their swings. By the end of 1990, CGC's sales had reached $22 million.

Callaway incorporated the S2H2 technology into the driver that would go on to revolutionize the golf-playing experience: the Big Bertha. Introduced in 1991, this model virtually eliminated the hosel and provided a larger sweet spot which allowed a player to miss-hit the golf ball off-center of the clubhead and not suffer much loss of distance or accuracy. Both professional and average players could significantly improve their game using the Big Bertha and thus derive more pleasure from playing golf. As a result, CGC was able to price the club at $250 and still enjoy sales of 2.355 million units in 1994.

In 1995, R&D utilized titanium to introduce the Great Big Bertha and Biggest Big Bertha drivers. The greatest factor that accounted for Callaway's strategic success from 1988 to 1997 was its strength in research and development. CGC developed products that exceeded customers' expectations. Helmstetter approach of tough questions was the framework in ...

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...y suitable channel for this resell, because it provides a convenience to the customer that cannot be attained if s/he had to purchase it from a Callaway facility and at the same time reduces inventory costs associated with the sale. This effort would differentiate Callaway, at least temporarily, and build brand loyalty and maintain a lifetime customer.

CGC also needs a higher-profile male endorser, as most golfers are male. The company should substantially increase its endorsement budget so as to have figure like Phil Mickelson or Tiger Woods.

Finally, the company could tap into, say, the aging Chinese market, whose increase in purchasing power offers auspicious conditions for the growth of the golf market in that country. At the same time, the company should improve efforts in targeting juniors domestically. This approach creates brand loyalty at a young age.