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Callaway Golf Case Study

Satisfactory Essays
Callaway's strategy from 1988-1997

Research and Development

From its initial existence R&D and innovative products had been the lifeline of CGC. When Callaway bought into the company his first initiative was to develop original products. Innovation and superior performing products are important in golf because equipment is thought to have a significant impact on player performance. Moreover, innovation was important because CGC had to be the technological leader to sell its products at premium price and continue to exceed customer expectations. The industry was also characterized as being driven by new product development because manufacturers were trying to bet each other to the next "best club" so CGC had to manufacture products that were differentiated from its own existing products as well as those of its competitors.

Helmstetter wanted to come up with products before consumers knew they needed them. To cultivate an environment of modernization, Helmstetter had team of scientists, engineers, and golfer working on 400 RCH Tough Questions. While trying to answer RCH questions the team was able to create the following new products :

S2H2- introduced in 1988. This club redistributed weight to the striking area of the club head by eliminating the hosel.

Big Bertha metal woods introduced in 1991. The innovative feature of Big Bertha was that it provided a larger "sweet spot". The oversized head made it easier to make contact with the ball so in turn made drivers more widely used by average golfers and revolutionalized the way clubs were manufactured.

Great Big Bertha Titanium- launched in 1995. Titanium clubs increased the moment of inertia by moving material away from the clubhead center.

Technologically superior products reinforced CGC's high quality brand and kept customers from switching brands.

Advertising

CGC targeted "average golfers" defined as golfers that played a minimum of 10 rounds per year and generally had handicaps above 18. Moreover they purchased new equipment roughly every two-three years and purchased premium equipment to boost their performance. Other market segments included beginners, occasional, and experienced or avid golfers. Beginners and occasionally golfers played one-seven rounds per year and were not targeted because they were price-sensitive. Experienced golfers kept their equipment for extremely long periods of time and when they did purchase new equipment their purchase was based mostly on brand. Experienced golfers were also not targeted because they relied more on their skill then the performance of their equipment.
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