Callaway Golf Company Case Study Analysis

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Callaway Golf Company (CGC) excelled in designing, development, manufacture and marketing of Golf clubs and accessories. Established in 1982, the publicly traded company recorded a steady growth in sales from $5million in 1988 to $800 million in 1997. This was possible due to clarity in vision of its CEO Ely Callaway, which was aimed at making a satisfying product which was uncommon and enjoyable for the average player rather than professionals. The revolutionary clubs were sold to professional as well as average players at premium prices driven by the high performance delivered by them.
The company’s CEO and founder Ely Callaway was a golf champion himself during his twenties and was a powerful motivator defining the company’s culture
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The products were placed in both off-course and on-course retail stores but 65% of sales came from off-course stores since on-course stores had other priorities than just selling clubs. Thus the off-course sales team had various responsibilities on field which included running demos, correcting CGC displays, maintaining physical inventory, providing product seminars, taking customer orders and accustoming with store sales people. The promotions for CGC products were done through golf magazines, trade publications, television and word of mouth. Although the company endorsed certain professional golfers on the five major tours, there were many notable professional golfers who used their products throughout the world without being under contractual obligations. CGC also promoted via television ads aired during golf tournaments on CNN and ESPN increasing the budget allocation from $45 million in 1996 to $79 million in 1998.
New golfers increased from 1.5 million to 3 million between 1988 and 1998, but most of them quit due to increased cost of playing which went up by nearly 50%, unavailability of courses and time involved in playing. The global premium equipment market declined post 1998 due to various reasons like decreased demand, Asian economic turmoil and saturation of product in the market place. To CGC’s benefit the competition on golf equipment
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