Callaway Golf Case Study

What factors contributed to Callaway Golf Company’s success?
Callaway Golf Company (CGC) was founded in 1982 by Ely Callaway a former Burlington Industries textile president. Ely Callaway accomplished most of CGC’s success because of his clarity of what the company had to be in order to be profitable “If we make a truly more satisfying product for an average golfer, not the professionals, and make it pleasingly different from the competition, the company will be successful”. Ely’s understanding of how important it was to provide customers with products that were both unique and of high quality guided him in making good decisions during the development years of CGC. One of the good decision being, hiring Richard Helmstetter (RCH) as the chief of new products. A highly successful manufacturer of Japanese Billiard cue sticks Helmstetter, transformed CGC from being a niche producer to an innovative powerhouse. Helmstetter had a unique approach to designing products, he tried to technically capture the key parameters that would improve the performance of players into the products he developed for CGC. For Example, he led the engineers in the product development team to find out that clubhead needed to be bigger in order to hit the ball farthest. His approach to innovation in golf products, led to three major technology breakthroughs at CGC that gave them a competitive edge in the market. CGC’s Big Bertha changed the way clubs were manufactured forever and the way customers purchased them. Big Bertha made the game easier and pleasurable for customers who were not professionals. After Big Bertha, it took competitors one year to introduce oversized metal wood and six years before their performance really caught up to challenge CGC. This period gave them a good competitive advantage. As a result of which by 1998, 69% of all professional golfers played with CGC products. Helmstetter apart from following a unique approach to deliver products with great technology, he followed the strategy of developing products which the customer did not know they wanted. That is, develop a need which would attract the customer and then convince customers to buy the product. CGC tried to maintain how their customers perceived their brand, they delivered products not only differentiated from their competitors but also from its own. They worked towards delivering products that golfers thought would help them play better. Their consistency is providing leading edge technology driven products and continually exceeding customer expectations, put them at an advantage of selling their products at premium prices. Another good move by CGC was the acquisition of Odyssey brand who were known for their better feel and forgiveness, as compared to other putter manufactures. This acquisition placed CGC, as the best-selling putters in the market. CGC understood consumer behavior quite well, which helped them with the way they planned their marketing. In making a purchase, golfers accepted word-of-mouth recommendations,

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