|
By
Steve Pike,
PGA.com Senior Writer
07.26.2004
03:05 pm (ET)
Callaway Golf Company (NYSE: ELY) Chairman Ron Drapeau expects his company's new pricing initiatives on its drivers "will generate additional excitement at retail and build some momentum around our wood products.'' Callaway Golf last week announced to retailers that it is lowering the wholesale prices of its ERC Fusion, Great Big Bertha II 415cc and Big Bertha drivers. Drapeau said the price reduction should lower the shelf prices of the ERC Fusion and Great Big Bertha II by around $100 each and the shelf price of the Big Bertha by approximately $50. A check of major retail chains, such as Edwin Watts Golf Shops and The Golf Warehouse, show the price reductions and other incentives are already in effect. The decision to reduce the wholesale prices of its core products is a rarity for Callaway Golf -- and one the company has long resisted. But as some of its major competitors have cut costs and developed equally and lower-priced products the past couple of years, Callaway could no longer afford to stand pat as its market share and sales eroded. "On average, these price adjustments amount to a 24 percent reduction in our woods' wholesale selling prices," said Drapeau, who added that the adjustments are included in Callaway's revised earnings and sales forecast for 2004. In addition to the price reductions, Callaway Golf is offering one dozen free Callaway golf balls with the purchase of any of its titanium drivers; for consumers who purchased the ERC Fusion at its original price, the company is offering two dozen free Callaway HX Tour golf balls. To support the new initiatives, Callaway Golf is launching a new print advertising campaign aimed focusing on the ERC Fusion. "The (new) price points should stimulate more consumer interest and hopefully purchases," Drapeau said. "However, it will take some time before we get a read on the success of these programs." Copyright (c)2004 PGA.com. All rights reserved.
|
