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.
SMC is a relatively small manufacturer with a long history and strong brand image. Sales had been consistent for approximately the past 5 years when SMC received a proposal in early 1996. They were currently selling three main mower units. A zero-turning radius riding mower, the Ride King, which accounted for 63.6 percent of SMC’s total sales and 57.8 percent of their total gross profit in 1995. SMC sold a trail mower, the T-44, which accounted for 8.2 percent of total sales and 13.2 percent of total gross profit. They also produced push mower kits, which contributed 8.2 percent of total gross profit. The sells of replacement parts made up the remaining 20 percent of total sales and 29 percent of total gross profit. SMC had the Trim-Max to introduce as a new product line.
In the second year of business at Golf Challenge Corporation the company is struggling. The cost of their inventory is rising, and they are in grave danger of losing their bank loan (their prime source of financing) due to not meeting the required financial ratios agreed and set forth by the bank at the time the loan was given. The owner comes up with a solution, and figures that instead of using Last in-First out (LIFO) the company can use First in-First Out inventory cost system (FIFO) and meet their required financial ratios set forth by the bank. Ultimately, Golf Challenge Corporation should not submit documents to the bank using FIFO as opposed to their previous system LIFO in order to meet the bank requirements
Contrary to what most think, an “Arnold Palmer” is not just a blend of tea and lemonade. One day, all might be able to swing a golf club like Arnold Palmer. Golf has been around since the thirteenth century and was introduced by the Scottish and Dutch. The main goal of golf is to reach the hole in the fewest amount of shots possible. One main difference between golf and many other sports is the lower the score the better. Regardless of the fact that the game was once banned, golf is now enjoyed by many (“The History of Golf”). Despite the images in common golf commercials, the golf swing is endlessly complicated.
Callaway Golf Company CEO Ron Drapeau told CBSMarketWatch, "We have become known as the company that brings innovation to the game for the average golfer. We're not focused on the elite professional players. It's been a very successful approach for us."
In 1982, Ely Reeves Callaway had bought his small wedge and putter golf business and called it Hickory Stick USA and created clubs that were enjoyable for the average golfer. He called these clubs the Demonstrably Superior and Pleasingly Different (DSPD) clubs. This was a code he had always lived by. The family of Ely Callaway are not involved with the company today because he was told to choose his successor, and had chose Ron Draqpeau. He is a man who only shared the same vision and thought of golf, but also had the skills as a leader to continue his wonderful golf company. The goal was to make a good product and tell the truth about the game. In those days Ely would provide them to his customers personally in the back of his Cadillac. He made sales calls and talked to pros, amateurs, and those who came to be known as an average golfer. Finally, Hickory Stick USA came to be knows as Callaway Hickory Stick U.S.A, and not too long after that, Callaway Golf.
First, before you can drive a ball, you need the right equipment. You will need a number one wood, or driver, a golf tee, and, preferably golf shoes for extra traction to prevent your feet from sliding. Now that you have the proper equipment, you can begin the drive.
Nicholson’s position in the file and rasp market where it holds a 50% market share of a $50 million dollar market meets all three of Cooper’s objectives. Furthermore, Nicholson’s brand name within the hand saw and saw blade industry is strong and Nicholson holds a 9% market share in the $200 million dollar – their only major competitor was Sears and Diston who held a larger market share.
S2H2- introduced in 1988. This club redistributed weight to the striking area of the club head by eliminating the hosel.
Callaway Golf Company began to take form in 1983, after Ely Reeves Callaway Jr. sold Callaway Vineyard and Winery for a $9 million dollar profit. Shortly after the sell of the winery, Callaway ventured in to the golf equipment industry and bought 50 percent of Hickory Stick USA. Callaway knew from the very beginning that this company’s profits were limited as long as the product line wasn’t changing. “Callaway noticed that most golf equipment had changed very little since the 1920s and believed that , due to the difficulty of the game of golf, recreational golfers would be willing to invest in high-tech, premium-priced clubs if such clubs could improve their game by being more forgiving of a less-than-optimum swing.” (Thompson, c205) Callaway then purchased the company outright and changed the name to Callaway Hickory Stick USA and then hires Richard Helmstetter as the companies’ chief club designer. With the help of five aerospace engineers, Helmstetter developed line of clubs that was set apart form competing brands by its technological innovation. In 1988, the S2H2 was launched as well as another name change to Callaway Golf Company. In 1992, sales are more than double recent years and Callaway Golf Company goes public and begins trading on the NYSE. Throughout the 90’s, Callaway leads the golf equipment industry with ongoing new lines of clubs and eventually adds golfing apparel. Donald Dye, Callaway’s new CEO, took the much of the blame for the downturn in Callaway Golf Company. Dye was ultimately responsible for initiatives that took managements focus off golf clubs. The company’s financial and market performance suffered immensely in 1998 causing Ely Callaway to return to rebuild the company. The textbook states on page c208, “Ely Callaway’s first efforts upon his return to active management at Callaway Golf were to ‘direct resources---talent, energy, and money--- in an ever-increasing degree toward the creation, design, production, sale and service of new and better products.’” In Callaway’s turnaround strategy, he initiated a restructuring program and operational improvements. By the end of 1998, Callaway’s strategies allowed the company to regain it s technological leadership.
The Titleist brand was inspired by an event which occurred in 1932. An amateur golfer, Phil Young, missed a putt while playing in a match with his friend. Convinced that it was the ball 's fault, Young and his opponent went to the hospital, x-rayed the golf ball in question and found that its core was, in fact, off-center.
Golf is the ultimate battle between man and nature. It is a beautiful sport in which dreams come true and hearts are broken. Man is challenged on every stroke by nature’s elements. Wind and rain are only a few of the conditions that affect this great game. Undulating hills, sand bunkers, thick rough, and even creeks and ponds come into play on most golf courses. These features are fierce at Augusta National Golf Course. Located along the fall line, the natural beauty of the region is the perfect complement to this championship golf course. Every spring when the flowers are in full bloom, Augusta plays host to The Masters Championship and is transformed into the Mecca of Golf.
...ne and the advancements that the equipment has made. For a physical project I will build a set of golf clubs to use for the upcoming golf season. I will compare the score that I have shot with my old clubs and the clubs that I have built for my senior project. This will help me further understand how it was to build the clubs that you play with like many men did generations ago. The great Ben Hogan sums up the game of golf the best with," It's the hardest darn game that will bring you back every time with that one elusive shot."(Hist. Of golf coarse, 7)
Speaking of the golf cart, it is wild symbol in this game. It will substitute for all other symbols in order to complete any active paylines you may have. If you really want to win big in Closest to the Pin, you’re going to need the wild symbol on your side.
Sharp’s business philosophy is to focus on developing innovative products to benefit people and society. However, for much of its history, the company was too small to successfully develop and market its own new products and instead relied on imitating others. Only recently has the company grown large enough to be able to research and develop innovative new technologies and products that truly differentiate it from its competitors.
Millions of people around the world take pleasure in the game of golf every day, but few know when and where this complicated sport began to evolve. The game is played outdoors on a large course with a series of 9 or 18 holes placed far apart. The intention is to hit a small hard ball using various clubs into each hole with as few hits as possible. The game is loved and hated with equal amounts of interest by many. Golf though is much more to me it is just not exercise it’s an exciting activity which I love. I am very passionate about the sport. For me I find it a very rewarding pastime and an extremely challenging game. As I play the game I wonder, how did the game of golf evolve and who are the people that made the game what it is