Callaway As Good As It Gets

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Callaway As Good As It Gets?

• Simon, Cora, Rodney, Denise

MBA BMG 777J1
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Agenda

• Introduction Background
• Market Overview Size
• Callaway Analysis
• Competitor Analysis
• Key Success Factors
• Results Conclusion

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Introduction

• Golf, long a game
• dominated by the country club set,
• has gotten a boost in popular culture
• thanks in a large part to
• the appeal of
• Mr Woods.

Keynote, 2001
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Background

• Twenty years ago,
• a tiny three person company in California began
• making wedges and putters, that were different
• from anything else on the market.

Today that company is Callaway Golf, growing from
the smallest golf club manufacturer in the world,
to the largest clubmaker force in golf ball
manufacturing.
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Background
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Market Overview
Growth in Market (Sports)
Source Euromonitor
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Market Overview
Growth in Market (Golf)
Source Euromonitor
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Market Overview

• Consumer Profile (2001)
• 26.6 million golfers
• 88 male
• 45 of sales by 44-64 yr olds - 1.75 billion pa
• High per capita spend required at all levels
  - Travel, Social 19th hole, Sports holiday
  market

Source Euromonitor
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Market Overview

• Key Industry Trends
• Heavy emphasis on product innovation
• Various performance enhancing technologies
• Increased TV viewer-ship US Masters, Ryder Cup
• Relationships with key athlete icons who embody
  distinct lifestyles, with the construction of
  premium brand image.

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Porters Fiveforces analysis
Market Overview
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Callaway Analysis
Competitors Market Share
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Callaway Analysis
Product Segmentation
Callaway operates in the Premium Super Premium
niche. There are 4 main areas.
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Callaway Analysis
Target Market

• " Callaway Golf... tries to design, create, build
  and sell the most forgiving golf clubs in the
  history of the game - giving more golfers more
  opportunities to hit a few additional "great"
  shots each round. "
• Founder Ely Callaway, January 2001

• Golfers - amateurs / professionals
• Non-golfers
• Sports people

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Callaway Analysis
Product Portfolio

• Bags
• Headwear
• Gloves
• Apparel

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Callaway Analysis
Boston Box
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Callaway Analysis
Product Life Cycle
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Sales by product
Callaway Analysis
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Callaway Analysis - Golf Clubs

• Target Market
• Experienced / Amateur golfers
• Positioning
• Great Big Bertha II
• 'club that changed everything'
• most beloved titanium driver in the history of
  golf
• Odyssey Putters
• 'improve your alignment'
• Big Bertha Irons
• 'They're back More Innovation,
  More Forgiveness, More Performance'

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Callaway Analysis - Golf Clubs

• Marketing Strategy
• Product families
• GBB2 / Hawkeye /Steelhead families
• Global distribution channels
• Premium price
• Promotion
• TV advertising
• Arnold Palmer putters
• Pro Tours 50 golfers

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Callaway Analysis - Golf Balls

• Target Market
• all golfers
• Positioning Golf Balls
• HX Blue /Red
• 'Next Generation Aerodynamics'
• 'for more spin' / 'for more distance'
• technical superiority
• performance in bad conditions
• part of the Callaway brand and tradition

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Callaway Analysis - Golf Balls

• Marketing Strategy
• Revolution in aerodynamics
• Global distribution
• Premium and Super Premium Price
• Promotion
• corporate logo programmes
• tours
• merchandise

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Callaway Analysis - Accessories

• Target Markets
• Avid golfers
• apparel - Country range
• gloves/headwear/bags
• Traditional golfer
• Classics apparel range
• Sports people
• surfers / patriot range
• Social golfers
• Club range

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Callaway Analysis - Accessories

• Positioning
• Fun/ relaxed /traditional brand
• Marketing Strategy
• Mainly N. America
• Europe, Japan (03)
• Premium price
• Promotion
• exclusive fashion shows as launchpad

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Competitor Analysis - Taylor Made

• Part of Adidas Salomon Group
• Posted revenues of US5.4 billion in 2001, down
  1.5 from 2000.
• High visibility - apparel sectors e.g. Winter
  Olympic Games
• Sporting goods e.g. Salomon skis, snowboards, and
  in line skates Taylor Made golf clubs and Mavic
  bike components.
• Adidas products accounted for 79 of total sales,
  Salomon 12, and TaylorMade 9 in 2001.

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Competitor Analysis - Nike

• Revenues increased by 5.5 in 2001, to reach
  sales of US9.5 billion.
• Tiger Woods
• 4 regions (US, Europe, Asia Pacific, the
  Americas) - US is the largest market segment
• experienced 1.8 increase in revenues in 2001.
  (9.2 increase in apparel sales and a 54.4
  increase in equipment sales)
• Sports clothing, equipment, and accessories and
  operates retail outlets.
• (NIKETOWN NIKE goddess stores)

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Key Success Factors

• Industry leaders in RD - cutting edge
  technology
• Brand loyalty
• Key distribution channels
• Soneil International / Ashworth
• Custom fitting
• IBM partnership at on-course locations
• Callaway - Connect
• Most extensive product range in the industry
• High profile pro-golfers promotion

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Results

• Strengths
• Marketing - Brand loyalty/ Product range
  /Sponsorships
• Partnerships
• R D
• Weaknesses
• Pricing?
• Large marketing budget required to sustain market
  leading position

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Results

• Opportunities
• Strategic partnerships e.g. accessories in
  different geographies
• Raise profile outside US
• Threats
• Global brands entering market e.g. Nike

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As Good As It Gets !