Problem statements:
One of the reasons for Callaway’s loss of market share is that there are number of quality competitors, which have joined the industry since Callaway first began and they have been narrowing the gap in terms of a competitive product at a cost that is equal to, if not less than Callaway’s for a like product. Therefore, should Callaway continue to maintain their leading-edge technology, focus on average golfers target market and build strong relationship with retailers?

Objectives:
_Maintain customer value
_Obtain a growth in sales
_Maintain Premium pricing model
_Increase brand awareness

Alternatives: 1. Expand its operation in international markets 2. Focus on the baby boomer segment 3. Develop the variety of products in terms of golf accessories 4. Strengthen relationships with retailers 5. Sponsor golf camp and university or school tournaments. 6. Invest in R&D to maintain their leading-edge technology

Consequences of alternatives: (Table 1)
Callaway should focus their marketing programs on the baby boomer generation segment. One of this target segment’s characteristics is that people at the age of 50-60 have more time to play golf as they are retired and tend to remain brand loyal. Moreover, baby boomers have more disposable income, which makes them more likely willing to pay a premium for higher quality clubs.

Another alternative for Callaway Golf Company is to develop its products in terms of accessories and create a star golfer model. By doing that, they would have lower cost than producing golf clubs and golf balls. Furthermore, because the accessories are cheaper, the economic downturn does not affect as much when it comes to sales. The imitation of this product would have less effect because when it comes to accessories like t-shirts, caps and clothing people are more prone to buying them original than fakes, as fakes are more easily identifiable.
As product markets mature, the rate of overall sales growth declines. Therefore, Callaway Golf Company should expand its operation in international markets. Entering new markets can have several benefits, like increased revenues and brand awareness around the globe. For example, it would be profitable to expand in Eastern Europe where labor and production supplies are cheaper than that in America. Another benefit is that the company can extend its product life cycle by selling old products in less developed countries.
Callaway could sponsor golf tournaments or start up the golf camps (might involve all ages). This would be a great way to expand the brand awareness. The company could also integrate the idea of celebrity endorsements into golf camps, because participants could have an opportunity to meet professional athletes and learn valuable skill from them. These participants could be potential loyal customers in the future.
Innovation was always the key reason for their success that has come to be associated with Callaway brand. Thus, keeping investing in R&D would give Callaway an advantage of having superior products over competitors.
Improving the relationships with retailers would bring many benefits to Callaway. First of all, by offering customers discounts or low interest rate, which will provide better margins, customers will have more incentives to buy in a large amount. Furthermore, by training and developing salespeople and spokespeople, Callaway would enjoy the benefits from the increase in sales.
Tradeoffs:
When it comes to expand internationally into untapped market, a disadvantage for CGC would be that they will have to use lots of their capital to be introduced to new markets. They would have to do advertising and marketing campaigns in order to be successful in new markets. Another disadvantage would be that their R&D department would be more focused on researching the new markets instead of developing new innovative products. An obstacle for this alternative would be competition. With so much competition in the golfing industry, it might be difficult for Callaway to enter new markets.
If company wants to increase its variety in accessories, they would detach from their core business, which is creation of golf clubs and golf balls. A risk would be that the product that CGC designs is not successful, creating large losses for the company. In addition, CGC would have to create a department for the design and production of this new line. Recommendation
We highly recommend an expansion abroad needs to be heavily done, because the growth potential in the US is limited, the market is in the mature state. Through their sales and marketing efforts, Callaway would generate revenues from across the globe and mitigate its risk in any one market. Furthermore, it is clear that if CGC wants to keep following its differentiation strategy they should keep investing into R&D. The competition is very tough and in order to stay always in front and have a competitive advantage over them, CGC has to keep coming up with new innovations.
Another idea would be to start up golf camp should be also a good idea. This is because when participants are attending the camp, they would need to purchase golf products. By offering them a discount, this would make products more affordable for the golfers. Callaway would not be losing money because they would still be acquiring the fee from the campers while selling products. It is a win-win situation for the company