The New Callaway Golf


San Diego, Ca. ' It was emotional, seeing him again.
Ely Callaways ghost did not pop up at the companys second annual Partnership Event here, a gathering of key retailers Callaway Golf uses to introduce new products. But images of him, which appeared occasionally and without warning in videos and presentation stills, raised momentary lumps in many throats.
The golf industry, and the media that follow it, miss Ely, who died July 5 at the age of 82 of pancreatic cancer. From the press point of view, he was good copy, but theres more to it than that. We reporters didnt always agree with him, but we still admired his integrity.
Ely Callaway Those who now run the company he founded also miss Ely. But they are determined to go on. The two-day meeting at the Rancho Bernardo Inn here, which wrapped up today, showcased the broadest product introduction in Callaways history. It also showed some notable changes in approach, if not in overall objective.
Callaway still wants to be the golf company of the average player, with its primary focus on innovation in the premium segment. That goal aint broke, and therefore needs no fixing. The new products, some of which have already been announced, toe that well-worn line.
* The C4 driver, for compression cured carbon composite, features a huge (360 cc) head of what is generally called graphite. Its very light, and Callaway claims this helps add noticeable distance to drives. The company insists this is not simply a graphite model of a titanium design, and that it is better than the graphite-headed clubs that enjoyed a kind of fad status in the early 1990s. One new element of this club will be sound that it makes ' or more accurately doesnt make, as there is no metal to clink.
* The Steelhead III metalwoods conform to U.S. Golf Association strictures on spring-like effect (as does the C4), but Callaway is billing them as having that hot feeling as the ball leaves the clubface. The marketing will focus on three concepts: excitement, solidity, and agility.
* The latest Big Bertha irons feature the undercut channel of the originals. Its a nod to what Callaway calls retro technology. A lot of the usually equipment-cranky golf writers who hit them yesterday nodded in approval.
* Two new golf ball models, each with a red (firm) and blue (soft) option, have already been announced. The HX model features a 332-polygon dimple configuration that Callaway prefers to call a tubular lattice network instead of traditional dimples. (Trust me, theres more science in this than there was in your college organic chemistry final.) And the CTU30 (for cast thermoset urethane) ball is a new entry into the thin cover, big core ball at the top of most makers lines now.
* Two new Odyssey putters are coming. The 2-Ball is a derivation of an old Dave Pelz idea, which has two ball-shaped disks lined up back to back behind the putter face as an alignment aid. The other model is an updated Dual Force Rossie II, the most popular Odyssey putter ever, but now with Callaways successful White Hot insert instead of the old Odyssey Stronomic.
* An expanded line of golf bags and other accessories is on the way, all designed to spread the Callaway brand farther and wider (about which more below).
The product introduction is a significant undertaking in itself. But Callaway brass also want to adjust the way the company does business in certain areas, even admitting mistakes when necessary.
Let me start by saying what will not change, said chairman and CEO Ron Drapeau moments after he took the podium to open the meeting. We are Callaway, and we will stay focused on the average player.
But later: Our clubs have been friendly. Our customer relationships were not. That will change now.
Drapeau referred to an undercurrent of retailer complaints from some quarters over the past five years. Callaway was hard to deal with, some retailers said. Aggressive account openings in some regions required price shaving at retail, squeezing margins to sometimes ridiculous lows.
Only Callaways enemies ever depicted the problem as pervasive. But Drapeau and his staff have clearly decided to take the matter seriously, no matter what its true magnitude may be. The public acknowledgement of the problem, certainly for the first time with this degree of frankness, underscores the new approach to this side of the business.
Drapeau, who in the opinion of many industry observers is settling into his role wisely by not trying to mimic Elys one-of-a-kind persona, was also frank about conditions facing the market. Taking the lead from Mick McCormick, his chief merchant, who asked for a minute of silence to remember the victims of September 11, Drapeau admitted that the recent tragedies force all leisure industries onto unfamiliar and uncertain terrain. Big-ticket purchases will be a hard sell in the months to come. But, Drapeau reasons, golf can be positioned as a temporary escape from the worlds new stressors. Callaway, with virtually no debt and cash reserves of more than $100 million, is poised to take advantage of any opportunities that can be found, Drapeau said.
One of those opportunities may be in golf balls, the company believes. Tour relations manager Mike Galeski promised an aggressive campaign to increase ball counts on tour by signing more players before the end of this year. On the PGA Tour, Callaway has in its sights no specific type of player or money-list stratum. Galeski plays this issue close to the vest, but Callaways endorsement strategy of late has been to secure solid names (such as Palmer and Player) while stocking up on young guns (Howell III, Tryon, Quinney), all the while concentrating on an A-list of proven performers in their primes (Annika Sorenstam is the leader in this group).
Hand-in-hand with this strategy is the expansion of bags, luggage and other accessory lines to get the brand name firmly entrenched in the national recreational mind. Here, Callaway has a firm foothold already; perhaps only Titleist is more ubiquitous as a golf brand in the United States.
Look for chief merchant McCormick to figure significantly in the companys plans in both the short and long term. His enthusiasm for selling and customer relations could, if harnessed, solve Californias energy crisis. Another key figure will be Ian Rowden, who was recently brought in from Coca-Cola to handle advertising, but was then given expanded marketing duties. Rowden perceives some serious competitive threats, including that of Nike, whose new clubs will debut next year. But he promises Callaways advertising will head off in a different direction than the ones he sees from other companies.
Recent notable golf ball ads from Nike feature a golfer climbing a fence while yelling Ball Go Far, the tagline for the companys new balls. And the usually buttoned-down Wally Uihlein, chief of Titleist & FootJoy Worldwide, recently allowed his sense of humor some free rein when he took a pie in the face from a mad golf course architect (played by Monty Python veteran John Cleese) in an ad for the companys new NXT golf balls.
It seems to me right now that there are a lot of people reacting to each other, Rowden said. We are not going to compete with Nike on their terms.
Its also clear that at least in some aspects, Callaway isnt planning to do business on its old terms.