Callaway Golf Company Marketing Case Study

Callaway Golf Company Marketing Case Study

Over the years there have been many different factors contributing to the success of Callaway Golf Company (CGC). In 1988 a revolutionary club design that CGC called S2H2, which stood for short, straight, hollow, hosel (Lal & Prescott, 2000, p. 2). The revolution in this design was the weight distribution of the hosel, which is the piece of the head that attaches to the shaft. The technology moved weight from the hosel farther into the head and allowed the shaft to extend deeper into the head (Lal & Prescott, p. 2). Not only did this design move weight to the striking face of the club allowing for more energy transfer to the ball, but also gave the golfer more feel when using the club due to the extended club shaft. The next year CGC used the technology in their line of irons and changed out the old hickory shafts for newer steel and graphite materials. By incorporating this new technology, the S2H2 driver became the number two driver used on the Senior PGA tour by 1990 (Lal & Prescott, p. 2).

The next big development made by CGC came with the introduction of Big Bertha drivers in 1991. This driver differentiated itself from the competition by having an oversized metal head. Because of the larger size, the "sweet spot" was enlarged which allowed even lesser skilled golfers to drive the ball longer and with more accuracy (Lal & Prescott, 2000, p. 3). Golfers who had detested their drivers found that the driver was now one of their favorite clubs in the bag. It took nearly six years of the competition to effectively compete with the technology introduced in Big Bertha. In the meantime, CGC was expanding its Big Bertha line by using the technology in a line of irons as early as 1994 (Lal & Prescott, p. 3).

In 1995, while other companies were trying to compete with the Big Bertha products, CGC released its third technological breakthrough in seven years: titanium. What titanium allowed CGC to do was to again redistribute the overall weight of the club to maximize the moment of inertia when the club impacts the ball (Lal & Prescott, 2000, p. 3). The new Great Big Bertha, made with titanium, was introduced in the $500 price range which caused Taylor Made to follow suit with a similarly priced club. This competition resulted in the notion of golf clubs being status symbols which further intensified demand (Lal & Prescott, p. 4). Under the guidance of Don Dye, who joined the company as CEO in 1996, CGC further expanded its line of titanium Big Bertha clubs. Odyssey Golf was purchased for $130 million which added a line of putters to the CGC. The additional product line was important to CGC to expand its product mix (Kotler & Keller, 2009, p. 171). With the acquisition of Odyssey, CGC now sold the number one selling line of putters, the best-selling irons in history in the Big Bertha X-12 line, and its top selling Big Bertha drivers (Lal & Prescott, p. 4).

Many changes occurred in the CGC's marketplace that required them to reconsider their existing strategies. The golf company was successful because of its careful watch of changing consumer buying behavior. There were many changes in consumer behavior, which describes how individuals or groups buy, use and dispose of the goods in a satisfying way. Cultural background and social class both influence consumer behavior (Kotler & Keller, 2009, p. 77).

CGC directed their clubs towards certain levels of golfers. Beginner golfers would go for cheaper sets of clubs, while experienced golfers would buy clubs that were recommended by their friends during a game. The company also realized that golfers were buying new clubs quicker than in previous markets. Golfers wanted the newest technology and average golfers depended on good clubs to help their games.

Another change in the market was the sales of golf equipment. CGC realized that they had to stay ahead of the market in technology and new and innovative products. They realized they had to make products before there was even a customer demand for them. The golf company also realized a change in the retail environment