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Essay / Callaway Golf Case Study - 1446
Callaway's Strategy from 1988 to 1997Research and DevelopmentSince its initial existence, R&D and innovative products have been the lifeline of CGC. When Callaway bought the company, its first initiative was to develop original products. Innovation and superior performance products are important in golf because equipment is believed to have a significant impact on player performance. Additionally, innovation was important because CGC needed to be the technology leader to sell its products at a high price and continue to exceed customer expectations. The industry was also characterized as being driven by new product development, as manufacturers tried to bet on each other for the next "best club", so CGC had to make products differentiated from its own existing products as well than those of its competitors. wanted to offer products before consumers knew they needed them. To cultivate an environment of modernization, Helmstetter had a team of scientists, engineers and golfers work on 400 challenging RCH questions. In trying to answer RCH's questions, the team was able to create the following new products: S2H2- introduced in 1988. This club redistributed weight to the hitting area of the club head by eliminating the shaft. Big Bertha metal antlers introduced in 1991. The innovative feature of Big Bertha was that it offered a larger "sweet spot". The oversized head made contact with the ball easier, which made drivers more widely used by average golfers and revolutionized the way clubs were made. Great Big Bertha Titanium - launched in 1995. Titanium clubs increased the moment of inertia by moving the material. Technologically superior products reinforced CGC's high-quality brand and kept customers from switching brands. CGC's advertising targeted "average golfers" defined as golfers who played a minimum of 10 rounds per year and generally had handicaps greater than 18. Additionally, they purchased new equipment approximately every two to three years and purchased high-end equipment to improve their performance. Other market segments included beginner, casual and experienced or avid golfers. Beginning golfers and sometimes golfers played seven rounds a year and were not targeted because they were price sensitive. Experienced golfers kept their equipment for extremely long periods of time and when they purchased new equipment, their purchase was based primarily on brand. Experienced golfers were also not targeted because they relied more on their skills than the performance of their equipment..