The evaluation that follows is based upon the Harvard Organization School Case Study " Callaway Golf CompanyвЂќ (9-501-019), revised September 21, 2005. Unless otherwise observed, all data referenced thus refers to HBS Case Amount 9-501-019.
In the matter of Callaway Golfing Company (CGC), the corporation appreciated years of accomplishment and popularity inside the golfing community by understanding its client base: players believed a more expensive club signified high quality, better performance, and greater position. Although CGC targeted amateurs seeking to improve their game at nearly any expense, by 1998, 69% of professional golf players sought CGC clubs since the revolutionary instrument of the operate. Despite a great inevitable decrease in product sales as CGC neared the top limits of its prices range, CGC gleaned serious profits simply by entering a price-elastic industry and giving avant-garde products. As displayed in Display 1, CGC can continue to maximize profitability and brand understanding by changing production and marketing methods.
In terms of marketplace mapping and subsequent setting, CGC did not opt to sell technologically-advanced golf clubs to those currently able to find the money for it. In the same way, the company would not price clubs so beginners could manage them. In the words of CGC's Ely Callaway, the corporation chose to produce superior golf clubs for hobbyists and sell these people at high grade prices. Essentially, less-skilled players would shell out dearly to possess a competitive advantage, but they should be skilled enough to be experienced about the game of golf, reliant after the suggestions of retailers who have could recommend forgiving golf clubs, and willing to compete with the lifestyle status with their golfing friends by investing in CGC clubs. CGC responded to this type of segment with assorted, revolutionary club designs. CGC market research noted that normal golfers using irons will not be a great source intended for residual revenue, as flat iron purchases happened once every decade. However, if players were also new to the activity, they...