Callaway Golf Co. Harvard Case Solution & Analysis

Introduction:

The case study Callaway Golf Company is based on a scenario that is faced by the CEO and the president of the company Mr. Ely Callaway, who is also the founder of Callaway Golf Company. The company was extremely successful in terms of its marketing strategy however; a steep decline has been experienced in the overall sales of the company. In addition to this, CGC has also experienced a large amount of loss that was around $30 million in 1999. The president of Callaway Golf Company has flourished its business by working hard day and night so that the company can make a product that can satisfy the needs and demands for the golfers. Moreover, another way through which Ely established its business was through offering products and services different from their contenders and communicated it distinctively from the direct and indirect competitors. However, the negative results of the company in terms of sales and losses forced Mr. President to rethink about the business and marketing strategy made for the company.

Elements of Company strategy (1988 to 1997):

The marketing strategy of the company is based on various elements. These elements are the major determinants of company’s overall success. These factors might include advertising, distribution, Research & development and more.

R & D:

From the scratch, the research and development department of the company is served as a pillar in terms of strong marketing research and development. The primary initiative of the president at Callaway was the development of original products for the company. As the performance of the players is highly dependent upon the quality of a sports kit, Callaway put significant emphasis on the quality of their products through innovation and quality. In addition to this, bringing innovation is also important in the golf industry and specifically for Callaway Golf because the company is known to be a leader in technology and selling its products at premium pricing. The purpose of premium pricing is to maintain the quality of their products that in turn results in meeting customers’ needs and their expectations.

The overall golf industry is based on new product development as the competition is so intense and every manufacturer is in the race of competing another manufacturer and to make the best club among all. In order to stay competitive in this environment, the management of Callaway Golf is in a continuous struggle to manufacture products through which they can differentiate from their existing and potential rivals.

Richard Helmstetter believed that one way to meet customer’s expectations is through identifying the customer’s needs before them. In addition to this, Helmstetter believes that there should be a team based on engineers, scientists and golfers that can modernize the overall environment of the company. He followed a different approach to research and development. In finding the answers for its RCH project, he along with all its team created new products. These products include S2H2 that the company introduced in 1988, and it was based on three revolutionary club designs. The name of the product was based on short, straight, hollow and hosel. In addition to this, Big Bertha was introduced in 1991, and it was distinctive on the basis of the sweet spot that it provided. The metal woods with extra sized head help in making direct contact with the ball.

Advertising:

The advertising of CGC is based on setting target market based on average golfers. Average golfers can be defined as the one that has played around ten rounds on an annual basis minimum. Moreover, these golfers had handicaps more than eighteen. In addition to this, they are engaged in buying of entire new equipment’s once in two to three years just to make improvements in their performance. Moreover, the advertising of the company is also based on market segments like occasional, beginners and golfers that are extremely enthusiastic for this game. Players who play golf occasionally are the ones that played hardly one to seven rounds on an annual basis and thus are more price sensitive. These beginners are not the main target market for the company because of their price sensitive nature.

However, golfers that are experienced are the ones who like to keep their golf equipment for a longer time span. Their buying is based on going for a product with authentic brand and quality. The advertising of the company is based on various mediums like magazines, word-of-mouth, television ads and endorsements..........................

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Describes the situations in which Mr. Ely Callaway, the 80-year-old founder, chairman and CEO of Callaway Golf Co, in the autumn of 1999. Ten years after the overwhelming success of the marketing concept, Callaway suffered significant losses and have witnessed a sharp drop in sales in 1998. Mr. Callaway was built $ 800 million business by making really more satisfying product for the average golfer, making it a pleasure different from the competition and communicating the benefits to the consumer. Results In 1998, Mr. Callaway to reconsider marketing program that has successfully supported product so far. "Hide
by Rajiv Lal, Edith D. Prescott Source: HBS Premier Case Collection 23 pages. Publication Date: August 11, 2000. Prod. #: 501019-PDF-ENG

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