Essay on Callaway Golf Company Marketing

1137 Words 5 Pages
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
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This importance was demonstrated in that putters and other accessories' share of Callaway sales grew from 4% in 1996 to 11% in 1998.

The figure below shows how Callaway's innovative approach made its products appealing to users.

In 1998, CGC generated 63% of its sales in the United States. The company sold to on-course and off-course golf retailers with no single customer accounted for more than 5% of revenues in 1998 within the United States. 65% of CGC business was done in off-course retail shops. One-third of off-course shops sell two-thirds of products, and two-thirds of on-course shops sell one-third of products. CGC relied more heavily on off-course shops because they are generally better financed than on-course shops.

CGC used television, golf magazines, trade publications, and word-of-mouth as its primary forms of advertising. The company also endorsed professional golfers in all major tours as a vehicle to promote its products.

Finally, Callaway was successful in offering products for every kind of golfer at every level of golf from beginner to pro. Because its clubs provided a more enjoyable golf-playing experience to beginners, the rate of them who continued playing golf after playing for the first time incremented and a new customer base was developed.

Industry changes

In 1998, Callaway reported a loss of $26.6 million. This underperformance was the reflection of

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