CALLAWAY GOLF CALLAWAY GOLF

NAVIN BAFNANAVIN BAFNAINVESTMENT BANKINGINVESTMENT BANKING

GMBA08A125GMBA08A125

INTRODUCTIONINTRODUCTION

Established in 1982 by Ely Callaway

Company was transformed from a niche producer to an innovation powerhouse

Big Bertha clubs by CGC revolutionized the golf industry

Research and Development - Key to the organization

Problem – Market ScenarioProblem – Market Scenario Product Line was Product Line was

widened – New products widened – New products from Competitors – from Competitors – AmbiguityAmbiguity

Market SaturationMarket Saturation

CGC Retail partner CGC Retail partner relationshiprelationship

Marketing Campaign Marketing Campaign

Research & Research & Developments CostDevelopments Cost

Rethink -Target Rethink -Target Customer Customer

Products Products Sales and Prices for all Sales and Prices for all

Products declined Products declined Lots of products – Lots of products –

Unclarity among Unclarity among consumer consumer

MarketMarket Taylor Made, Titliest and Taylor Made, Titliest and

Cobra major competitorsCobra major competitors Continuous Fall in Market Continuous Fall in Market

ShareShare

Sales - ProfitsSales - Profits In 1998 Loss of $ 27mn In 1998 Loss of $ 27mn Sales decreased from $ Sales decreased from $

8.5bn in 1997 to $ 7bn in 8.5bn in 1997 to $ 7bn in 19981998

Internal ProblemsInternal Problems

Change in Industry DemographicsChange in Industry Demographics Increasing share of Private labels Increasing share of Private labels Web is still not developed as a medium for Web is still not developed as a medium for

reaching Customers reaching Customers Lack of Coordination among Retail staff and Lack of Coordination among Retail staff and

CGC field representativesCGC field representatives

Marketing ExpensesMarketing Expenses Higher Emphasis on Research & DevelopmentHigher Emphasis on Research & Development Medium of AdvertisingMedium of Advertising Lack of Vision with the image of productsLack of Vision with the image of products

Stock Holding CostsStock Holding Costs Unavailability of Space Unavailability of Space Inventory Costs were very high for retailersInventory Costs were very high for retailers

Recommendations - Recommendations - ExternalsExternals

‘‘No discount Policy’ should be discontinuedNo discount Policy’ should be discontinued

Distributors should be given better terms of tradeDistributors should be given better terms of trade

Retailers Issues Should be solved on case to case Retailers Issues Should be solved on case to case basisbasis

Advertising Samples should be given so that Advertising Samples should be given so that Retailers can offer the complete RangeRetailers can offer the complete Range

Promotional Offers can be extended to Retailers on Promotional Offers can be extended to Retailers on Volume basisVolume basis

Training Issues with Retailers should be Solved on Training Issues with Retailers should be Solved on Priority basisPriority basis

Recommendations - VisionRecommendations - Vision

US markets are saturated – Market Diversification is US markets are saturated – Market Diversification is requiredrequired

R & D should be in line with optimizing Costs and efficiencyR & D should be in line with optimizing Costs and efficiency

Brand Ambassador should be used to give the product a Brand Ambassador should be used to give the product a Superior imageSuperior image

Internal Parameters should be Analyzed and to be made Internal Parameters should be Analyzed and to be made more Efficient with respect to Cost Controls more Efficient with respect to Cost Controls

Target Customer should be widened with Specific Brand for Target Customer should be widened with Specific Brand for the user the user

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