Marketing Strategy
Callaway's main strategy is differentiation based on technologically advanced products which (supposedly) have performance advantages sufficient to justify the premium price. Callaway's goal is to maintain its #1 position as the world's largest golf merchandise company. To maintain its status and distance itself even further from the competition, Callaway will need to utilize its size and unique technological advances to continue to produce great products that maintain customer loyalty while attracting a broader customer base. Callaway now can also use the products of its recent acquisition of Spalding to further reach a wider customer base. As it continues to pursue a better research and development program this
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- Technical staff
- Reputation and popularity
- Track record
- R&D facilities
- Relationships with professional golfers
- Drivers are most widely used on pro tours
- Strong balance sheet . . . liquidity
- Good customer service, advertising and legal staffs
Table 3:
Relationship between golf clubs and golf balls: Identify in this column the areas of the value chain: Use this column to discuss whether you see or don't see relatedness in terms of this strategy:
Horizontal Marketing Utilize advertising golf equipment within the same advertisement. Technology Not related because they are two different types of inventory made primarily by two separate machines. Inbound Logistics The computer software that controls the inventory could be utilized for both the golf balls and the golf clubs. Operations The manufacturing could take place in the same facility which would allow a lot of shared responsibilities. Outbound logistics Warehousing could be shared as long as utilizing the same trucks to move the products. Service Golf clubs and balls go hand in hand you need one with the other and training is vital in learning the game. A golf ball would be an added value to the golf club.
Golf balls and golf clubs are definitely a horizontal relationship. In the game of golf it would be hard to use a soccer ball or basketball or for that matter a tennis ball in
Hitler managed to captivate and motivate an entire country by using propaganda, the youth, and the power, to make the entire population of germans hate Jews. Hitler succeeded indoctrination of the German people, in many ways: through the Hitler Youth, education, and propaganda. The main form of indoctrination was the Hitler Youth. Hitler was believed that children could be totally indoctrinated in their education.
Dan Shay and George Patton formed a partnership and began developing their dream golf range. Their dream range and financial expectations fell short after the initial construction and first year of business. Martha Rawles presented Dan and George with a marketing plan that exposed the weaknesses of their golf operation. The marketing plan revealed a strong need for an advertising plan and expansion to cater to a greater segment of the golf market.
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.
Golf ball manufacturers would be looking to achieve several key strategic goals, such as increased sales, increased market share and / or increased profitability, to adopt and implement PI’s technology. Accordingly, manufacturers are mainly concerned with the cost and implications on manufacturing, competitor reactions (and customer perception), the forecast growth in the new balls market, the share they could capture and the financial details of agreement.
Callaway Golf Company is considered a leader of the golf equipment industry through its development of technologically advanced golf clubs that compensated for the most amateur players with poor swings and helping them achieve a better golf game with the introduction of Big Bertha in 1990 and launched Callaway Golf Company forward at great speed into notoriety of the golfing community (Gamble, 2000). This analysis will thoroughly dive into the many parts of the case of the Callaway Golf Company.
The founder, Ely Callaway’s vision is: “If we make a truly more satisfying product for the average golfer, not the professionals, and make it pleasingly different form the competition, the company would be successful.” However, this vision is change from other company’s visions; the difference being that the price is not mention.
The U.S. Golf Association (USGA) specified the characteristics of legal balls within tight parameters. These restrictions on size, weight, materials, texture, etc., seemingly left little room for product innovation. In fact, the USGA regulations specified not just what went into a ball, but how it could perform, stipulating to within 10-20 yards how far the ball could travel when hit by a certain type of club traveling at a certain speed, all verified under controlled conditions with robotic testing equipment. Nonetheless, new product introductions were rampant in the industry, with slight changes in surface coatings and dimple patterns, for example, being touted for their ability to add a handful of yards to a golfer’s shots, to give more accuracy, or to create greater control through faster spin on the ball. In addition, ball manufacturers spent millions of dollars on advertising campaigns for their balls. There were three basic types of balls, all conforming to the same general specifications. The oldest technology still in use was the three-piece ball, which consisted of a core, windings, and a cover; this ball was good for spin and overall control. The second, and most popular, type of ball was the twopiece ball, which eliminated the windings of the three-piece ball; this ball produced more distance. The newest technology was the “solid core, multi-layered ball,” which had taken the
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founder of Callaway Golf Company turned the most-feared club into the most-loved almost overnight. The driver became the fastest-selling club at retail. Many innovations have followed. From woods, irons, and putters to golf balls and golf accessories, Callaway Golf has consistently used ingenuity, quality construction, and technology to make the finest premium products in the industry.
Fourteen clubs - four wedges, six irons, a rescue, a three wood, a driver, and a putter - this is golf. It is one of the most mentally challenging sports in the world. It can fool beginners who are deceived by its simplicity. Golf is often underestimated by those who have never attempted to play the sport. While it has often been known as a “rich man’s” sport, in recent years this perception has begun to change. There are a number of other generalizations made when talking about golf, yet these are most always from those who have never experienced, played, or followed the game. One should question how a critic with no knowledge of the activity could state whether or not golf should be considered a sport. Golf is a sport, regardless of what any critic has to say. Studies and experimentation, along with the experience itself, reveal all of the athletic aspects that make golf better than most sports.
The decision for an individual manufacturer to adopt PI’s technology will be determined by the potential increase in sales as golfers replace performance degraded balls with their brand. It is reasonable to assume that individual manufacturers are hesitant to pioneer this technology because there is no assurance that a performance degraded golf ball would be replaced with their own. The data indicate that golfers are comfortable using used balls, or value brands. By removing approximately 50% of the used balls from circulation, numerous golfers may utilize the lower cost alternatives to fulfill their required quantities.
Imagine the sun bursting through the trees for the first time of the new day, the smell of freshly cut grass still potent to your nose as you tee the ball up for a round of golf in the cool mist of a spring morning. "That is what brings you back every time, the smell of the air, the coolness of the whether and the beautiful surroundings that make every shot enjoyable." (Suess, PI) This is the game of golf in its finest and most exquisite time to many people and many people it has touched in its long history. Golf is a lifestyle and not just games to people that are avid in playing. The game of golf has a history that is rich in technological advances and personal accomplishments, which through time has shown to shape
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Callaway has experienced its first loss of $ 27 million after 10 years of growth. Competitors had finally caught up to Callaway's superior R & D capabilities and are flooding the market with new products and promotions, raising the bar for consumers on when to replace their equipment.
Unfortunately, the golf industry is out of balance with the number of courses (supply) outweighing the number of golfers looking to play a round of golf (demand). Course owners struggle to attract rounds. In order to stay competitive in today’s market, you need to have differentiators that set you apart from your competitors. This module enhances the golfer’s experience at those courses that have it and they have a decided advantage over the competition with all other things being equal. If you are looking to attract more rounds, use the Golfer Experience Module to make the round more enjoyable resulting in more rounds and revenue.