Callaway Marketing Strategy

Marketing Strategy

Callaway’s main strategy is differentiation based on technologically advanced products which (supposedly) have performance advantages sufficient to justify the premium price. Callaway’s goal is to maintain its #1 position as the world’s largest golf merchandise company. To maintain its status and distance itself even further from the competition, Callaway will need to utilize its size and unique technological advances to continue to produce great products that maintain customer loyalty while attracting a broader customer base. Callaway now can also use the products of its recent acquisition of Spalding to further reach a wider customer base. As it continues to pursue a better research and development program this will enhance its value chain capabilities and allow them to compete even stronger within the golf industry. The case speaks about Callaway’s principal value chain activities being product development, purchasing, assembly, quality assurance, and marketing. Callaway’s value chain does not appear to differ significantly from that of its rivals, outsourcing versus internal activities seem to be similar. Some resource and capabilities that I think will be important for Callaway in the future are:

• Continuous product innovation and improvement.

• A strong image and reputation among golfers.

• Good distribution in on-course and off-course pro shops.

• Sufficient financial resources and sales volumes to advertise and promote the company’s brand.

Some improvements that will help make this company even better are:

• Growth is dependent on continuous replacement of existing product line and superiority to competition. Although they are focused on improving their technological design strength and concentrated in club head design, they may want to improve in other products such as golf balls, grips, etc.

• Other companies may have closed the technology gap, or at least clouded the issue and that should concern them.

• Vulnerability to an outbreak of price competition may cause a feud within the industry.

If you guys would also like to incorporate some other interesting facts here is a list of other capabilities that are good.

- Technical staff

- Reputation and popularity

- Track record

- R&D facilities

- Relationships with professional golfers

- Drivers are most widely used on pro tours

- Strong balance sheet . . . liquidity

- Good customer service, advertising and legal staffs

Table 3:

Relationship between golf clubs and golf balls: