The front page of TaylorMade’s website had a headline about it—“Bad Lies”—front and center. And TaylorMade’s senior director of product creation, Tom Olsavsky, appeared in an in-depth video that explained all the reasons why Callaway’s test results could be wrong.
Brands can’t put enough effort into protecting themselves when under attack—particularly when so much is at stake. TaylorMade-adidas is one of the few golf companies ever to have brought in more than US$ 1 billion in a year, doing so for the first time in 2006, 27 years after it was founded in Illinois with a $24,000 loan and two employees working with founder Gary Adams.
Adams had invented the metalwood, a golf club made of metal rather than the usual wood; he believed that some balls were better suited to his metal clubs and would go farther when hit by them. And his idea proved to be true as the company began to pick up more and more users over the years and now counts such PGA stars as Corey Pavin, Sergio Garcia and David Toms as endorsers. As a result of the professional endorsements, sales rose quickly. Only two years after its start in 1979, the company was pulling in US$ 1.2 million in sales.
There haven’t been many technological advances in golf over the centuries of its existence, and there were more than a few failures along the way (automatic ball ejectors from the cup, for example), so it is significant that TaylorMade’s breakthrough has stuck around.
Adams showed off his initial metalwoods at the 1979 PGA Merchandise Show. While some chortled about the new-fangled metal clubs, Adams proved to the pros that his drivers would hit balls farther than any other clubs out there. He somehow managed to convince 47 pros to use the metalwoods in his first year. Once those players got some distance on their drives, those who had not been interested started to change their tune. And consumers followed wherever the professional golfers led them.
Then, TaylorMade was acquired by ski-equipment giant Salomon S.A. in 1983, bringing one company a much larger distribution potential and the other a high-quality product in a market that it wanted to serve. Both companies were reportedly very focused on research and development and attempting to bring new innovations to the marketplace. For example, TaylorMade solidified its place in the market when it introduced another successful, innovative driver, the Burner and Burner Plus, and then followed that with a successful line of putters.
Then nothing of interest came out of the company for years until the mid-1990s, when it introduced the Burner Bubble drivers that allowed golfers to swing a little bit faster with no extra strength needed. TaylorMade was hopeful this new product would re-energize the organization and reportedly put US$ 18 million into advertising and marketing for it, which was allegedly 50 percent more than the company’s total marketing budget in 1994.
It worked. Half a million of the clubs were reportedly sold in the first eight months.
Shortly after that, in 1997, German-based adidas bought TaylorMade, which is now based in Carlsbad, California. The new TaylorMade was mainly focused on selling drivers, which still remains true. But it has a bunch of other products as well, including putters and golf balls at a wide variety of price points. And it’s been working on grabbing the children’s golf market as well, being the first big golf company to introduce kid-sized bags in 1998. Plus, TaylorMade also complements the extensive adidas golf clothing line.
With the idea of so many pro golfers using its product, TaylorMade has a brand message that is all about professionalism and quality. TaylorMade’s messaging continually emphasizes the point that its products are crafted and used by the best in the world.
Also, the company recently gained extra ammunition when Y.E. Yang—who uses TaylorMade clubs—improbably came from behind to beat the world’s number one golfer, Tiger Woods, at the PGA Championship in August. It was the first win by an Asian-born player in one of the four major golf tournaments. So the guy representing the fastest-growing and largest golf market in the world—Asia—won one of the biggest tournaments in the world using TaylorMade clubs and balls. That’s enough to earn him probably another $500,000 from the company—an investment that will pay off in the long run.
Yang’s endorsement deal is over in 2010, but TaylorMade will certainly pay whatever it takes to retain him. After all, the guy is dedicated to the brand: When Yang was coming off the 18th green of the PGA Championship, just after winning, he held up a TaylorMade bag. And when he won a tournament earlier this year, the Honda Classic, he spent time in post-tourney interviews pointing at the TaylorMade logo on his visor. That’s the kind of guy you want in your brand’s corner.
Of course the company needs all the help it can get in its corner right now. Adidas AG reported a 93 percent drop in second-quarter net profit. But the company claims the worst is behind it. Still, its net profit of US$ 9 million in the second quarter was nowhere near the US$ 166 million it had brought in during the same period the previous year. Obviously, the recession is taking its toll on leisure/sports items, particularly in Russia—a major market for the company—where the ruble’s value is continually getting kicked downward.
The hope for Russia and Eastern Europe as future golf powerhouses is important to TaylorMade and other golf companies. Before the Berlin Wall fell, golf was seen there as a capitalist’s game. Now, your average Russian may want to make business deals on the links. There just needs to be an uptick in course construction so that enough links exist for those deals to be made. And that’s another reason the spiraling ruble is a problem.
Still, TaylorMade has made a nice spot for itself in the golf marketplace all over the world. And you can be sure the first time a golfer from Kazakhstan or Uzbekistan wins a major golf tourney, he or she is likely to be holding a TaylorMade driver in hand.