Callaway Golf Case Essay

Decent Essays
Summary: In 1998, Callaway, one of the most famous brands in the golf domain, has experienced its first loss of $ 27 million after 10 years of growth. To resolve this problem, Ely Callaway, the founder of this company, wondered if CGC (Callaway Golf Company) would have to revise the way it approached retailer relationships to raise more mutually beneficial. To address possible market confusion, should the communication strategy shift? In fall 1999, Callaway faced amount of questions; the answers would guide him in refocusing CGC’s retail channels, new-product development, and marketing strategies.

As Ely Callaway’s vision: “If we make a truly more satisfying product for the average golfer, not the professionals, and make it
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2. Like Nike and Adidas, Callaway has become a well-known golf brand that customers have treated it as a professional sign. So there is difficulty for the new brand to threaten Callaway’s current market.

Power of suppliers:
1. As the case mentioned, Callaway adjusted the wholesale prices of Big Bertha metal woods rather infrequently because they are confident in their own products with so many efforts on budget and R&D. They strongly believed that after using the products, customers would understand and accept the reason why their products’ prices were higher than others’.
2. Callaway spent lots of money on R&D, and that was why the prices were higher. So, for beginning golf customers, buying new Callaway clubs was a daunting task, even if Callaway’s target market aimed at the average golf player rather than professional golf player.

Powers of buyers:
1. CGC’s target market - Average golfers (defined as playing 10 rounds minimum per year), generally had handicaps above 18, and bought new equipment every two to three years.
2. Compare with woods and irons, putters were relatively inexpensive at around $100 each. Because putting was viewed as the most critical aspect to the game and because most golfers were weak putters, they tended to update their putters fairly frequently and with less product research. In fact, many golfers owned five or more different putters

Threats of substitute’s
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