Callaway Analysis

Problem statements:

One of the reasons for Callaway’s loss of market share is that there are number of quality competitors, which have joined the industry since Callaway first began and they have been narrowing the gap in terms of a competitive product at a cost that is equal to, if not less than Callaway’s for a like product. Therefore, should Callaway continue to maintain their leading-edge technology, focus on average golfers target market and build strong relationship with retailers?

Objectives:

_Maintain customer value

_Obtain a growth in sales

_Maintain Premium pricing model

_Increase brand awareness

Alternatives:

1. Expand its operation in international markets

2. Focus on the baby boomer segment

3. Develop the variety of products in terms of golf accessories

4. Strengthen relationships with retailers

5. Sponsor golf camp and university or school tournaments.

6. Invest in R&D to maintain their leading-edge technology

Consequences of alternatives: (Table 1)

Callaway should focus their marketing programs on the baby boomer generation segment. One of this target segment’s characteristics is that people at the age of 50-60 have more time to play golf as they are retired and tend to remain brand loyal. Moreover, baby boomers have more disposable income, which makes them more likely willing to pay a premium for higher quality clubs.

Another alternative for Callaway Golf Company is to develop its products in terms of accessories and create a star golfer model. By doing that, they would have lower cost than producing golf clubs and golf balls. Furthermore, because the accessories are cheaper, the economic downturn does not affect as much when it comes to sales. The imitation of this product would have less effect because when it comes to accessories like t-shirts, caps and clothing people are more prone to buying them original than fakes, as fakes are more easily identifiable.

As product markets mature, the rate of...