Callaway – As Good As It Gets

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  • Callaway – As Good As It Gets

    1. 1. Callaway – As Good As It Gets? <ul><ul><li>Simon, Cora, Rodney, Denise </li></ul></ul><ul><ul><li>MBA – BMG 777J1 </li></ul></ul><ul><ul><li>A Strategic Marketing Review </li></ul></ul><ul><ul><li>& Analysis </li></ul></ul>
    2. 2. Agenda <ul><li>Introduction & Background </li></ul><ul><li>Market Overview & Size </li></ul><ul><li>Callaway Analysis </li></ul><ul><li>Competitor Analysis </li></ul><ul><li>Key Success Factors </li></ul><ul><li>Results & Conclusion </li></ul>
    3. 3. Introduction <ul><li>Golf, long a game </li></ul><ul><li>dominated by the country club set, </li></ul><ul><li>has gotten a boost in popular culture </li></ul><ul><li>thanks in a large part to </li></ul><ul><li>the appeal of </li></ul><ul><li>“ Mr Woods”. </li></ul>Keynote, 2001
    4. 4. Background <ul><li>Twenty years ago, </li></ul><ul><li>a tiny three person company in California began </li></ul><ul><li>making wedges and putters, that were different </li></ul><ul><li>from anything else on the market. </li></ul>Today that company is Callaway Golf, growing from the smallest golf club manufacturer in the world, to the largest clubmaker & force in golf ball manufacturing.
    5. 5. Background “ To create golf equipment that is demonstrably superior & pleasingly different, and to help golfers of all skill levels to enjoy the game” Callaway’s Vision … a good walk spoiled (Twain) Golf is an easy game…. it’s just hard to play (Anon)
    6. 6. Market Overview Source: Euromonitor Growth in Market (Sports)
    7. 7. Market Overview Source: Euromonitor Growth in Market (Golf)
    8. 8. Market Overview Source: Euromonitor <ul><li>Consumer Profile (2001) </li></ul><ul><li>26.6 million golfers </li></ul><ul><li>88% male </li></ul><ul><li>45% of sales by 44-64 yr olds - $1.75 billion pa </li></ul><ul><li>High per capita spend required at all levels - Travel, Social – 19 th hole, Sports holiday market </li></ul>
    9. 9. <ul><li>Key Industry Trends </li></ul><ul><li>Heavy emphasis on product innovation </li></ul><ul><li>Various performance enhancing technologies </li></ul><ul><li>Increased TV viewer-ship – US Masters, Ryder Cup </li></ul><ul><li>Relationships with key athlete icons who embody distinct lifestyles, with the construction of premium brand image. </li></ul>Market Overview
    10. 10. Porters Five forces analysis Market Overview POTENTIAL ENTRANTS SUBSTITUTES SUPPLIERS BUYERS COMPETITIVE RIVALRY
    11. 11. Callaway Analysis Competitors & Market Share 0.48 10.1% Others 0.68 14.2% Wilson 0.83 17.3% Nike 0.88 18.3% Titleist 0.92 19.2% Taylor-Made 1.09 20.9% Callaway RELATIVE MARKET SHARE MARKET SHARE Company ☺ ☹ ☺ ☹ ☹ ☺
    12. 12. Callaway Analysis Callaway operates in the Premium & Super Premium niche. There are 4 main areas. Product Segmentation
    13. 13. <ul><li>&quot; Callaway Golf... tries to design, create, build and sell the most forgiving golf clubs in the history of the game - giving more golfers more opportunities to hit a few additional &quot;great&quot; shots each round. &quot; </li></ul><ul><ul><ul><ul><ul><li>Founder Ely Callaway , January 2001 </li></ul></ul></ul></ul></ul><ul><li>Golfers - amateurs / professionals </li></ul><ul><li>Non-golfers </li></ul><ul><li>Sports people </li></ul>Target Market Callaway Analysis
    14. 14. <ul><li>Bags </li></ul><ul><li>Headwear </li></ul><ul><li>Gloves </li></ul><ul><li>Apparel </li></ul>Product Portfolio Callaway Analysis Golf clubs Great Big Bertha II Big Bertha Irons Odyssey 2-ball putter HEX Red/Blue Golf balls Accessories
    15. 15. Boston Box Callaway Analysis Key Woods Irons Wedges Putters Other 2-ball ERC II Irons BB1 BB2 Wedges Steelhead III Hawkeye Dual Tri-hot Accessories Clothing Stars Problem child Cash Cows Dogs
    16. 16. Product Life Cycle Callaway Analysis BB2 BB1 ERC II Hawkeye Steelhead III
    17. 17. Sales by product Callaway Analysis
    18. 18. <ul><li>Target Market </li></ul><ul><ul><li>Experienced / Amateur golfers </li></ul></ul><ul><li>Positioning </li></ul><ul><ul><li>Great Big Bertha II </li></ul></ul><ul><ul><ul><li>'club that changed everything' </li></ul></ul></ul><ul><ul><ul><li>‘ most beloved titanium driver in the history of golf’ </li></ul></ul></ul><ul><ul><li>Odyssey Putters </li></ul></ul><ul><ul><ul><li>'improve your alignment' </li></ul></ul></ul><ul><ul><li>Big Bertha Irons </li></ul></ul><ul><ul><ul><li>'They're back – More Innovation, More Forgiveness, More Performance' </li></ul></ul></ul>Callaway Analysis - Golf Clubs
    19. 19. <ul><li>Marketing Strategy </li></ul><ul><li>Product families </li></ul><ul><ul><li>GBB2 / Hawkeye /Steelhead families </li></ul></ul><ul><li>Global distribution channels </li></ul><ul><li>Premium price </li></ul><ul><li>Promotion </li></ul><ul><ul><li>TV advertising </li></ul></ul><ul><ul><li>Arnold Palmer putters </li></ul></ul><ul><ul><li>Pro Tours – 50+ golfers </li></ul></ul>Callaway Analysis - Golf Clubs
    20. 20. <ul><li>Target Market </li></ul><ul><ul><li>all golfers </li></ul></ul><ul><li>Positioning – Golf Balls </li></ul><ul><ul><li>HX Blue /Red </li></ul></ul><ul><ul><ul><ul><li>'Next Generation Aerodynamics' </li></ul></ul></ul></ul><ul><ul><ul><ul><li>'for more spin' / 'for more distance' </li></ul></ul></ul></ul><ul><ul><ul><ul><li>technical superiority </li></ul></ul></ul></ul><ul><ul><ul><ul><li>performance in bad conditions </li></ul></ul></ul></ul><ul><ul><ul><ul><li>part of the Callaway brand and tradition </li></ul></ul></ul></ul>Callaway Analysis - Golf Balls
    21. 21. <ul><li>Marketing Strategy </li></ul><ul><ul><li>‘ Revolution in aerodynamics’ </li></ul></ul><ul><ul><li>Global distribution </li></ul></ul><ul><ul><li>Premium and Super Premium Price </li></ul></ul><ul><ul><li>Promotion </li></ul></ul><ul><ul><ul><li>corporate logo programmes </li></ul></ul></ul><ul><ul><ul><li>tours </li></ul></ul></ul><ul><ul><ul><li>merchandise </li></ul></ul></ul>Callaway Analysis - Golf Balls
    22. 22. <ul><li>Target Markets </li></ul><ul><ul><li>Avid golfers </li></ul></ul><ul><ul><ul><li>apparel - Country range </li></ul></ul></ul><ul><ul><ul><li>gloves/headwear/bags </li></ul></ul></ul><ul><ul><li>Traditional golfer </li></ul></ul><ul><ul><ul><li>Classics apparel range </li></ul></ul></ul><ul><ul><li>Sports people </li></ul></ul><ul><ul><ul><li>surfers / patriot range </li></ul></ul></ul><ul><ul><li>Social golfers </li></ul></ul><ul><ul><ul><li>Club range </li></ul></ul></ul>Callaway Analysis - Accessories
    23. 23. <ul><li>Positioning </li></ul><ul><ul><li>Fun/ relaxed /traditional brand </li></ul></ul><ul><li>Marketing Strategy </li></ul><ul><ul><li>Mainly N. America </li></ul></ul><ul><ul><ul><li>Europe, Japan (‘03) </li></ul></ul></ul><ul><ul><li>Premium price </li></ul></ul><ul><ul><li>Promotion </li></ul></ul><ul><ul><ul><li>exclusive fashion shows as launchpad </li></ul></ul></ul>Callaway Analysis - Accessories
    24. 24. <ul><li>Part of Adidas Salomon Group </li></ul><ul><li>Posted revenues of US$5.4 billion in 2001, down 1.5% from 2000. </li></ul><ul><li>High visibility - apparel sectors e.g. Winter Olympic Games </li></ul><ul><li>Sporting goods e.g. Salomon skis, snowboards, and in line skates; Taylor Made golf clubs; and Mavic bike components. </li></ul><ul><li>Adidas products accounted for 79% of total sales, Salomon 12%, and TaylorMade 9% in 2001. </li></ul>Competitor Analysis - Taylor Made
    25. 25. <ul><li>Revenues increased by 5.5% in 2001, to reach sales of US$9.5 billion. </li></ul><ul><li>Tiger Woods </li></ul><ul><li>4 regions (US, Europe, Asia Pacific, the Americas) - US is the largest market segment </li></ul><ul><li>experienced 1.8% increase in revenues in 2001. (9.2% increase in apparel sales and a 54.4% increase in equipment sales) </li></ul><ul><li>Sports clothing, equipment, and accessories and operates retail outlets. </li></ul><ul><ul><li>(NIKETOWN & NIKE goddess stores) </li></ul></ul>Competitor Analysis - Nike
    26. 26. Key Success Factors <ul><li>Industry leaders in R&D - cutting edge technology </li></ul><ul><li>Brand loyalty </li></ul><ul><li>Key distribution channels </li></ul><ul><ul><li>Soneil International / Ashworth </li></ul></ul><ul><li>Custom fitting </li></ul><ul><ul><li>IBM partnership at on-course locations </li></ul></ul><ul><li>Callaway - Connect </li></ul><ul><li>Most extensive product range in the industry </li></ul><ul><li>High profile pro-golfers promotion </li></ul>
    27. 27. Results <ul><li>Strengths </li></ul><ul><ul><li>Marketing - Brand loyalty/ Product range /Sponsorships </li></ul></ul><ul><ul><li>Partnerships </li></ul></ul><ul><ul><li>R & D </li></ul></ul><ul><li>Weaknesses </li></ul><ul><ul><li>Pricing? </li></ul></ul><ul><ul><li>Large marketing budget required to sustain market leading position </li></ul></ul>
    28. 28. <ul><li>Opportunities </li></ul><ul><ul><li>Strategic partnerships e.g. accessories in different geographies </li></ul></ul><ul><ul><li>Raise profile outside US </li></ul></ul><ul><li>Threats </li></ul><ul><ul><li>Global brands entering market e.g. Nike </li></ul></ul>Results
    29. 29. As Good As It Gets !

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