Calloway Case Analysis
Danielle Wahl
2/8/2013
Callaway Marketing Case Analysis
I.
Position Statement
Over the past year, Callaway Golf Company has seen a significant decrease in their sales of
golf merchandise and a decline in their customer loyalty due to the fact there is increased
competition and the target customer group has moved from true friends to butterflies. After
examining the entire case, the majority of the problems concerning these pressing issues are
arising from Callaway’s retail partner relationships and current marketing campaign and
products. Callaway needs to make important decisions including developing new products,
strengthening and reevaluating its retail partner relationships and refocusing their marketing
campaign to fit these new products.
II.
Evidence
Mission Statement:
One of the first elements that should to be examined before any further progress can be made is
that of the mission statement. Callaway’s mission statement reads “Putting the Joy of the Game
in your hands”. Throughout everything examined in this case, it is critical to keep the mission
statement in mind and make sure all new procedures and changes implemented align and support
the mission statement.
Page | 1
Calloway Case Analysis
Danielle Wahl
2/8/2013
Target Market:
Callaway’s current customer is the “avid, average, amateur golfer”, golfing five or more rounds a
year, with some sort of skill level, though not advanced. Golf for them is a sport and a pastime,
yet not a lifestyle. These individuals buy Callaway to improve their game and to impress those
they are golfing with. They like Callaway because it is known for its innovative ideas and it is a
well-recognized and respected brand. Over time though, the majority of this market has gotten
older, and has experienced an increase in their disposable income which should have a positive
effect on Callaway, though sales have decreased over time. This leads us to believe that the
problem lies somewhere in the marketing and sales representatives in the field.
Marketing Myopia (Customer Needs and Wants)
Callaway’s customers need dependability and durability in their golf supplies. They also need
clubs designed to improve their game rather than their skill. With the focus being on prestige and
impressing their friends, Callaway’s main goal needs to be making the golfer look good.
Callaway’s customers also want to look good and be known for their prestigious, highly
desirable golf gear. They want to be recognized by their friends as skilled but also as “cool”.
They want to be able to afford the latest and greatest club while still being able to hold a steady
game of golf.
SWOT Analysis

Strengths: Callaway has many positive, internal strength that will benefit it in
accomplishing the development of new products, redesigning their retail partner
relationships and also refocusing their marketing plan. First of all, Callaway’s trusted
brand name and reputation has been strengthened over time. This is considered a strength
Page | 2
Calloway Case Analysis
Danielle Wahl
2/8/2013
as it provides a competitive advantage over other companies. People know that Callaway
makes superior products and will remember that when new products appear. The effective
Research and Development Department is also a strength, as it provides Callaway with a
greater advantage of developing new, innovative products faster than other competing
companies. Finally, the grounded level of upper management is considered a strength, as
problems will be avoided and it is then easier for Callaway to stay in tune with its
Internal
Strengths: Some positive internal
strengths include Calloway’s trusted
brand name and reputation that has
been strengthened throughout time,
the grounded upper management
structure, and effective Research and
Development Department for new
products.
External
mission statement while making significant changes.
Opportunities: Some positive
external opportunities include
educating and training retailers how
to market and sell Callaway product
through the development of new
educational materials, the
opportunity to diversify their
products and their target customer
groups.
Positive

Weaknesses: Some of the negative
internal weaknesses include not being
able to come up with new innovative
products faster than other companies,
the fact that their founder, chairman
and CEO is 80 years and has been the
backbone of the company for years.
Threats: Some negative external
threats include increased competition
in the market, the economic recession
we are currently in which is leading to
a decrease in disposable income, and
also increased technology and
resources available to other
companies, and increasingly positive
reputation and brand loyalty to other
companies.
Negative
Weaknesses: Some of the negative, internal weaknesses include the inability to keep up
with the new product production of other companies. Even though Callaway has a strong
Research and Development Department, it needs to be strengthened even more. Other
companies are getting to new ideas and releasing products faster that Callaway is.
Another internal weakness is that the founder and CEO has been the backbone of the
Page | 3
Calloway Case Analysis
Danielle Wahl
2/8/2013
company since the start and is reaching an older age and may be looking to retire soon.
Even though this may be seen as a strength and opportunity for new management to enter
and redesign Callaway, the company has been based off of consistency for so many years,
this may also be seen as a weakness.

Opportunities: Many positive, external opportunities are evident for Callaway. First of all,
there are many opportunities dealing with educating and training retailers how to market
and sell Callaway products. It is the retailers that are pushing different products and since
they claim to be uneducated about Callaway, it provides for an excellent opportunity to
educate them and boost sales. This will require hours of one on one training with the
salespeople and retailers about Callaway products, in addition to informational brochures
to hand out to the customers explaining why they should choose Callaway. Another
evident opportunity Callaway has is to diversify their products in order to compete with
their competition. Offering variations of certain products, making certain products
customizable and also offering a variety of golf accessories, is a great area of untouched
opportunity for Callaway to expand their market and step ahead of their competition.

Threats: One of Callaway’s main negative external threats include increased competition
in the market. Because so many new companies have entered the market, Callaway is
being “outdone” with other products that are bigger and better. Because of the
competitive market, Callaway’s name is starting to become lost with the others. Another
threat includes an increase in resources available to other companies. They are leveling
the playing field and making it harder for one company to become better than the others.
The economic recession our country is currently in is another threat. Even though
Callaway’s target market has a greater disposable income with their age, the economy as
Page | 4
Calloway Case Analysis
Danielle Wahl
2/8/2013
a whole has decreased disposable income and return on stocks. With a decrease in
consumer purchasing power there is also a decrease in consumer confidence as well.
People don’t have as much to spend and are not as willing to spend.
Existing Markets
Market Penetration: Not a suitable
choice for Callaway based upon the
quickly changing market and emerging
new products. This is where Callaway
currently is.
Product Development: Suitable for
Callaway, they will be able to keep up
with their competition and improve the
existing markets they are marketing to
now.
New Markets
Product Market Expansion Grid
Market Development: Not a suitable
choice for Callaway based upon
emerging new products and the need to
keep up with competition.
Diversification: Suitable for Callaway,
they can keep up with competition and
explore more markets that may end up
being more profitable.
Existing Products
New Products

Market Penetration works to grow a company by increasing sales of products the
company currently has on the market to the current target markets. Here growth can be
initiated by “adjusting the product designs, advertising, pricing and distribution”. Market
penetration is where Callaway is currently but is not suitable because the golf market has
become so competitive and new products are introduced so quickly it would be
impossible to keep up with the competition. By staying with the original products and
penetrating the existing markets, Callaway will fall behind and will not have a chance to
compete with other companies.
Page | 5
Calloway Case Analysis

Danielle Wahl
2/8/2013
Product Development works to grow a company by developing new products to the
current target market. This would be a suitable option for Callaway because it will allow
them to keep developing products and therefore keep up with their competition. One
downfall may be though, that the current target market has gotten older and will soon no
longer be a market. This would be a good place for them to determine how they can
improve their current clubs by going out to the country clubs where most of their market
plays and ask 50-100 people who fit the market, what club is the most important to them
and why. After determining if it is the driver, or the irons, or the putter; this information
needs to be taken back to Research and Development and used to make a new product
designed especially for the target market’s needs. This is one possible place Callaway
should consider moving towards.

Market Development works to grow a company by increasing sales of current products in
new markets, or towards new target markets. Market development is like market
penetration in the fact that we are staying with current products just introducing them and
increasing sales in different markets. Like market penetration, this is not a good choice
for Callaway because of the competitive golf market coming out with new products
quickly. Callaway will not be successful if they were to focus on market development.

Diversification works to grow a company by developing new products into new markets,
which could also include buying other businesses outside of the current market. While
developing new products in new markets is definitely a good choice for Callaway, at this
point buying other businesses is not. Callaway needs to reestablish itself as a company
before getting other companies involved. It would be extremely beneficial though, for
Callaway to redefine its target market and develop new products specifically for that
Page | 6
Calloway Case Analysis
Danielle Wahl
2/8/2013
market. Because of the increase in popularity of golf for those that are younger, Callaway
would benefit from focusing on the emerging golfers (Ages 10-15) and market to them,
designing clubs specifically for their age and preference. This is another place Callaway
should consider moving towards.
Consumer Relationship Groups
High Profitability
Low Profitability
Butterflies: Butterflies are Callaway’s
main consumer relationship group. They
purchase new clubs every 2-3 years and
are considered highly profitable
customers. They are also considered low
loyalty customers though, as they want
whatever is the newest club that will
improve their game the most.
True Friends: True friends are those that
are extremely loyal to the company and are
highly profitable. When Callaway fully
dominated the market, their customers
were true friends but as new companies are
entering the market, the number of true
friends is significantly decreasing.
Strangers: Strangers are those with low
Barnacles: Barnacles are those that are
loyalty and low profitability. Callaway’s
extremely loyal to the company, but are not
customers were most likely strangers
where the majority of the income comes
when they introduced their first set of
from. This small population includes the
clubs. At that point no reputation or brand
older generations, who have been with the
loyalty for Callaway existed and those
company from the start and refuse to buy
that did choose to buy Callaway clubs
from any other brand. This market buys
were not loyal or customers of which
Callaway products very infrequently.
great profitability occurred.
High Loyalty
Low Loyalty
Callaway’s main consumer relationship group consists of customers with low loyalty, but also
high profitability (butterflies). These consumers purchase clubs often, but are not particular about
which brand they support and are looking for the newest, most innovative golf clubs on the
market. In order for Callaway to capture this market share, they will need to continue to provide
the latest and greatest products and outperform their competitors. This again refers back to
Page | 7
Calloway Case Analysis
Danielle Wahl
2/8/2013
increased knowledge in salesmen to inform these butterflies why Callaway is the best, and also
an increase in productivity the Research and Development department to continue to come out
with the most innovative products before competitors.
Low Market
Growth Rate
High Market
Growth Rate
Boston Consulting Group Growth Share Matrix:
Star: The main strategic business
unit in this section is that of
Callaway’s golf clubs.
Question Mark: Some question mark
strategic business units include:
merchandise and apparel and golf
accessories.
Cash Cow: Callaway’s other
brand, Odyssey Putters, would be
a cash cow.
Dog: Not applicable
High Relative Market Share
Low Relative Market Share
It is important to analyze Callaway’s strategic business units and what area they are classified
under to better analyze where they need to be in the future.
Star: Stars are considered product with a high market growth rate and high relative market share.
These products rapidly grow and require and require less funding than question marks. After
time they turn into cash cows. The main strategic business unit in this section is that of
Callaway’s golf clubs (excluding putters). They are rapidly growing, but with increased
competition in the market, Callaway’s goal needs to be to turn their “star” clubs into “cash
cows”.
Page | 8
Calloway Case Analysis
Danielle Wahl
2/8/2013
Question Marks: Question marks are low relative market share, high market growth rate
products. They grow rapidly and require a lot of funding to maintain. Strategic business units in
this category include apparel, merchandise and other golf accessories. For a long time Callaway
has focused mainly on clubs, and has minimized examining how they can grow these other
departments. Their goal needs to be to move their question marks to stars, to stabilize that
strategic business unit. This can be done through more advertising, promotion and development
of these products.
Cash Cows: Cash cows are considered low market growth rate and high relative market share.
These products produce much cash for the company. Currently Callaway’s other brand, Odyssey
Putters, falls into this section because they successfully increasing profit while having little
expense to be maintained. This is the spot where eventually Callaway needs to work to move all
its strategic business units to.
Dog: Dogs are low market growth rate, low relative market share meaning that they don’t
produce very much cash for the company. Currently there is no evident, case pertaining products,
in this section.
As a whole, when Callaway first entered the golf market, they entered in as Cash Cows because
there required little money for advertising and promotion, with a large return in sales. Callaway
dominated the market and was generating a lot of cash. But as time passed, other competing
companies entered into the market. This bumped Callaway from being a Cash Cow to a Question
Mark which it is currently at.
Actors in the Microenvironment: There are many factors in the microenvironment that affect
Callaway. These need to be taken into consideration.
Page | 9
Calloway Case Analysis

Danielle Wahl
2/8/2013
The Company: Callaway needs to work to ground their company, making sure all
employees are familiar with the mission statement and are working together to
collectively live out the mission statement. With all departments (ex. Finance, marketing,
sales, accounting, etc.) working together, the Callaway name will be strengthened and it’s
goals will be met. With getting all departments to work together collectively, it also
includes educating sales representatives in the field and giving them an incentive to
promote Callaway.

Suppliers: Suppliers are the companies and vendors that provide the resources for
constructing Callaway’s golf products. Even though they are very significant in making
Callaway’s products, minimal information is given about them in the case, and they are
insignificant in determining what needs to be done at Callaway’s current state.

Marketing Intermediaries: The marketing intermediaries are those that are “selling,
marketing and promoting” Callaway’s products. The marketing intermediaries play an
extremely important role in this case. With better educated people selling and promoting
Callaway there will be an increase in sales and better educated and satisfied customers.
The marketing intermediaries need to be a main focus in order to reestablish Callaway
and surpass the competition.

Competition: Callaway’s competitors include those that are in the golf market with
Callaway, making compatible products and essentially taking business away from
Callaway. Their main competition includes TaylorMade and Titlist. The competition
affects Callaway’s sales based upon what products they come out with and if they are
viewed as “better” in the customer’s eyes. Callaway needs to be aware of what each of
these companies are producing and work to gain an advantage over these companies.
Page | 10
Calloway Case Analysis

Danielle Wahl
2/8/2013
Publics: Publics are groups that can impact a company’s ability to achieve its objectives,
in this case for Callaway to increase its sales and strengthen its brand name. One way
publics can influence Callaway would be in associating well known, successful golfers
with Callaway by having them advertise the Callaway name. This would include giving
them free products in order to increase Callaway circulation on social media, or providing
clothing for the pro to wear with the Callaway name visible.

Customers: The customer is one of the essential actors in this case and the most important
factor. Without customers, there would not even be a business. The customers define and
determine what products are put on the market. Callaway has two different types of
customers (1) the middle man who sells the product, and (2) the actual customer who will
use the golf club. These have a great impact on Callaway’s sales: if the middle man is
educated and satisfied with Callaway, he will sell more and the customer who is seeking
to buy new golf clubs will choose Callaway.
Actors in the Macro-environment: There are many factors in the macro-environment that need
to be considered and taken into account as well.

Demographic Forces: Demographics include the study of human populations in terms of
size, density, location, age, gender, race, occupation and other variables. Callaway’s
demographics have changed over time as their target group of consumers has gotten older
in age and has had an increase in disposable income. Analyzing demographics will be
essential if Callaway decides to expand their product market through diversification. By
determining new markets, it’s also important to understand what each demographic needs
and wants.
Page | 11
Calloway Case Analysis

Danielle Wahl
2/8/2013
Technological Environment: The technological environment has been changing rapidly.
New markets have been created displaying new opportunities. The challenge for
Callaway is to create practical and affordable products for the average consumer and keep
up with these developing markets.

Political Environment: The political environment has experienced an increase of
government regulations which has decreased the amount of freedom Callaway has
without regulation.

Culture: The culture is the institutions and other forces that affect a society’s basic values,
perceptions, preference and behavior. The changing culture has also influenced Callaway.
It is important for them to be aware of the changing values and preferences of their
customers and adjust to cater to those values.

Economic Forces: Economic forces consist of “factors that affect consumer purchasing
power and spending” (Pearson, 2010). Since we are currently in an economic downturn
and slowly rebounding from a recession, it is not surprising that people are not willing to
spend as much on golf clubs. And are more cautious about making a big purchase.

Natural Forces: Natural forces include shortages of raw materials, increased pollution,
and increased government. Little information about natural forces was provided in the
text and considered important to the current case.
III. Conclusion
As evident through the use of the tools above, Callaway needs to reevaluate its current
marketing plan, by creating new products in their current target market and educating sales
people about Callaway, offering incentives to promote Callaway. Once these few steps are
taken, Callaway should see an increase in sales. It is important to consider all elements that
Page | 12
Calloway Case Analysis
Danielle Wahl
2/8/2013
play into this and also where Callaway is predicted to be in the future, where their customer
group is shifting, and also their consumers’ needs and wants.
IV. References
"Callaway Golf - Golf Company | Golf Equipment | Golf Clubs." Callaway Golf - Golf Company
| Golf Equipment | Golf Clubs. N.p., n.d. Web. 5 Feb. 2013.
<http://www.callawaygolf.com/global/en-us.html>.
Pearson Custom Business Resources: Principles of Marketing. Boston: Pearson Learning
Solutions, 2010. Print.
*I also viewed Eric Christianson’s Callaway Case Analysis from (Fall 2012 Semester) to see how
it was formatted.
Page | 13