Callaway 2012 Annual Report Download - page 19

The Company also offers the full line of Callaway Golf and Odyssey products, including drivers, fairway
woods, hybrids, irons, putters, golf balls, and golf-related accessories, through its websites
shop.callawaygolf.com and www.odysseygolf.com.
Advertising and Promotion
The Company develops and executes its advertising and promotional campaigns for its products based on
the Company’s global brand principles. 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 to each region based on its 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 as well as golf bags, golf
apparel, golf footwear, GPS on-course devices and various golf accessories. For certain risks associated with
such endorsements, see “Risk Factors” 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 brand), Puma
(Cobra brand), SRI Sports Limited (Cleveland and Srixon brands), Mizuno, Bridgestone and Nike. For putters,
the Company’s major competitors are Acushnet (Titleist brand), Ping and TaylorMade. These competitors
compete for market share in the golf clubs business, with TaylorMade having a significant market share of the
golf clubs business in the United States. The Company believes that it is a technological leader 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 approximately 50% of the golf
ball business in the United States and a leading position in certain 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. The Company believes that
it is a technological leader in the golf ball market.
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, management receives and evaluates Company-generated market trends for U.S. and foreign markets, as
well as periodic public and customized market research for the U.S. and U.K. markets from Golf Datatech that
include trends from certain on- and off-course retailers. In addition, the Company utilizes Sports Marketing
Surveys for the U.K. markets and GfK Group for the markets in Japan.
For risks relating to competition, see “Risk Factors” contained in Item 1A.
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