Callaway Golf Canada

Topics: Golf, Value added, Golf club Pages: 6 (1876 words) Published: November 30, 2012
Callaway Golf Canada: The Mobile Performance Team|
Case Study|
Jamie Merrimen
October 12, 2012
Business 1703 D1
Dr. Conor Vibert


Problem Statement
Wayne Mallette is the director of performance management for Callaway Golf Canada, the world`s largest golf club manufacturer. In 2004, Mallette launched the Mobile Performance Team (MPT), a team of 20 consultants who demonstrate the Callaway equipment line as well as measuring customers for custom equipment at private golf courses during the golf season. Mallette has been asked by Callaway Canada`s managing director to design a plan for the approaching 2008 golf season to make sure that Callaway Canada will stay ahead of its competitors. Mallette is faced with multiple choices for possible improvement, or the option to continue with the current operations.

Important Facts
* The golf manufacturing market is highly competitive. It is important for Callaway Golf Canada to stay ahead of the competition in order for them to keep their reputation and status, as well as increasing their sales. * After the success of Callaway Golf`s Mobile Performance Team, other golf manufacturers are likely to follow lead and provide more service to their customers. * Callaway Golf philosophy states that the company intends to give more golfers more opportunities, by designing, creating, building, and selling the best golf clubs. Callaway Golf also believes that by making golf more enjoyable for the average golfer, the game of golf will grow. * In early 2008, Callaway Golf was the largest golf club manufacturer in the world. * Golf equipment products have a life cycle of about two years, resulting in pressure on companies to release successful new products every year. Failure to release successful new products will result in poor sales in the current year, as well as future sales by hurting the company’s reputation. * Companies in the industry used two strategies: focusing resources on research and development to develop new, innovative products; or focusing resources on securing endorsements from professional golfers on tours, which led to an increase in sales from exposure. Callaway preferred to maintain a small amount of endorsements with high-profile players, while investing and focusing more on research and development. * From 2005 to 2007, nearly 65% of Callaway’s sales occurred during the first half of the year. * Callaway’s customers are players from every ability level and a wide range of socioeconomic groups. * Small golf specialty stores were the Callaway’s biggest customer. Other customers included sporting goods retailers, mass merchants, golf retailers, and pro shops. * The United States Golf Association began to institute policies limiting manufacturer innovation. This leaves manufacturers struggling to find different ways to compete. Other firms had cut prices as a way of competing, which resulted in a loss of margins across the industry. Firms were also focusing more on securing endorsements with tour professionals. * The goal of the MPT is to maximize the performance of each individual golfer, not to maximize Callaway’s sales, even if it means recommending a competitor’s product. * The MPT program costs about $500,000 annually.

* Callaway has a sales conversion of about 75% from custom fitting sessions.

Alternative Solutions
1) Mallette has many different ideas on how to improve Callaway’s sales. His first option is to leave the MPT program unchanged; as it has been so successful he does not want to jinx it by changing something that could potentially decrease profit for Callaway’s Golf.

2) Callaway Golf does not currently require their mobile performance consultants (MPCs) to be professionally certified. If the MPCs were to be professionally certified, they would not only be able to give a hybrid service of custom fitting, but they would also be authorized to provide...
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