Callaway 2009 Annual Report Download - page 19

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place an order and have it fulfilled by a local participating retailer, or in certain circumstances by the Company
itself. The website offers the full line of Callaway Golf, Top-Flite and Odyssey products, including drivers,
fairway woods, hybrids, irons, golf balls, footwear, eyewear, golf and lifestyle apparel and golf-related
accessories, including uPro GPS on-course range finders.
Advertising and Promotion
Within the United States, the Company has focused its advertising efforts mainly on a combination of
printed advertisements in national magazines, such as Golf Magazine,Sports Illustrated and Golf Digest, and
television commercials, primarily on The Golf Channel, ESPN and on network television during golf telecasts, as
well as web-based advertising. Advertising of the Company’s products outside of the United States is generally
handled by the Company’s subsidiaries, and while it is based on the Company’s global brand principles, the local
execution is tailored by each region based on their unique consumer market and lifestyles.
In addition, the Company establishes relationships with professional golfers in order to promote the
Company’s products. The Company has entered into endorsement arrangements with members of the various
professional golf tours to promote the Company’s golf club and golf ball products. For certain risks associated
with such endorsements, see below, “Certain Factors Affecting Callaway Golf Company” contained in Item 1A.
Competition
The golf club markets in which the Company competes are highly competitive and are served by a number
of well-established and well-financed companies with recognized brand names. With respect to drivers, fairway
woods and irons, the Company’s major competitors are TaylorMade, Ping, Acushnet (Titleist and Cobra brands),
SRI Sports Limited (Cleveland and Srixon brands), Mizuno, Bridgestone and Nike. For putters, the Company’s
major competitors are Titleist, Ping and TaylorMade. In addition, the Company also competes with SRI Sports
Limited (Dunlop brand) and Yamaha among others in Japan and throughout Asia. The Company believes that it
is the leader, or one of the leaders, in every golf club market in which it competes.
The golf ball business is also highly competitive. There are a number of well-established and well-financed
competitors, including Acushnet (Titleist and Pinnacle brands), SRI Sports Limited (Dunlop and Srixon brands),
Bridgestone (Bridgestone and Precept brands), Nike, TaylorMade and others. These competitors compete for
market share in the golf ball business, with Acushnet having a market share of over 50% of the golf ball business
in the United States and a leading position in other regions outside the United States. The Company’s golf ball
products continue to be well received by both professional and amateur golfers alike, and continue to receive a
significant degree of usage on the major professional golf tours and maintained the number two position on the
PGA Tour in 2009. In addition, the Company’s golf ball products remained number two in U.S. revenue market
share in 2009.
For both golf clubs and golf balls, the Company generally competes on the basis of technology, quality,
performance, customer service and price. In order to gauge the effectiveness of the Company’s response to such
factors, its management receives and evaluates Company-generated market research for U.S. and foreign
markets, as well as periodic public and customized market research for U.S. markets from Golf Datatech.
For risks relating to competition, see below, “Certain Factors Affecting Callaway Golf Company” contained
in Item 1A.
Environmental Matters
The Company’s operations are subject to federal, state and local environmental laws and regulations that
impose limitations on the discharge of pollutants into the environment and establish standards for the handling,
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