2006: Power play
There are few people in the equipment industry these days who are on as much of a roll as Jeff Harmet.
In the past few years as Cobra’s president, Harmet has orchestrated
a string of best-selling clubs that has catapulted Cobra back into the lead pack of metalwood makers. What for years had been a two-brand battle for market dominance between TaylorMade and Callaway has become a three-way race: Cobra is right on their heels, surging past a host of other rivals including Nike, Cleveland and Ping.
“Our brand is stronger than it has ever been,” Harmet says.
So just how good is he feeling? Bold enough to forge ahead in a product category from which other equipment makers have retreated: Composite, or graphite clubhead, drivers.
Once considered the next big thing, these drivers have had limited commercial success, and in some cases they’ve been major flops. But with the June introduction of the HS9 – a 460cc driver with a carbon-composite crown and sole – Cobra intends to make a statement about the technology and its competitors. Asked why composite drivers haven’t been more of a hit, Scott Rice, Cobra’s R&D chief, answers matter-of-factly: “We think it’s been much more of an execution problem.”
The belief that Cobra can do it better than anyone else is a reflection of how far the brand has come. Since adopting its smashmouth, ball-bashing marketing style and delivering hot products to match, Cobra has rebuilt its business, reaping nearly $200 million in annual sales and more than quadrupling its metalwood marketshare from a low of 2.5 percent in July 2001 to 11.7 percent this March, according to research firm Golf Datatech LLC. (TaylorMade, Callaway and Cobra are the only three brands in the category with double-digit share.)
Betting further on composite drivers, however, seems like a huge gamble that potentially could derail Cobra’s momentum.
Harmet prefers to view it more as a calculated risk. It’s all part of his master plan to boost sales and win over more consumers. That explains why Cobra has returned to Tour marketing with a vengeance – its staff boasts young stars such as Camilo Villegas and J.B. Holmes. A greater brand profile, combined with a new high-tech driver, should enable Cobra to fetch super-premium prices.
Cobra also plans to leverage its recent success by venturing backinto a product category it has largely ignored: a putter line debuts this fall.
Says Harmet of the bigger picture he envisions: “I define the next level as generating unaided demand for our product. There are other brands, because of their past history, that still have a stronger overall equity relative to our brand.
“We want to be considered in that top three. We are with a lot of golfers, but not as high of a percentage as we’d like to be. To make that next step we need a Tour presence.”
So after three years without a Tour staff, Cobra recruited a young, internationally diverse, hip team with a ton of talent. The type of players Cobra executives knew could hit it long and hoped would get some face time on Sundays. They’ve scouted skillfully: Holmes and Geoff Ogilvy have won. Villegas is a gallery and media darling. Kevin Na and Ian Poulter seem on the cusp of bigger things and round out a staff that should help market the HS9.
The company plans to dedicate its entire advertising effort in June to the HS9 driver, including a big splash in print, TV and online during the U.S. Open. The HS9 began shipping to retailers June 1 and replaces Cobra’s Comp 454 and 414 drivers, earlier graphite models. The HS9 will sell at retail for $399, and its Speed drivers will remain at $299.
Cobra achieved much of its sales growth by thriving at the $299 price point, which it helped establish as “the sweetspot” for the category. But the price differentiation Cobra created has been nullified because competitors have lowered their prices, too. Demanding more for its top-of-the line HS9 gives Cobra a chance to separate itself from the pack again.
But the $399 plateau is rarefied air where few have survived.
“Cobra is outside its comfort zone at $399,” says Drew Pettengill, a hardgoods buyer for the PGA Tour Stop in St. Augustine, Fla. “The Comp driver was a dud at that price. I’ll be cautious.”
Aside from pricing issues, the HS9 could face other challenges considering consumers haven’t embraced composite drivers. Callaway, Cleveland, Mizuno and Yonex are
among some of the manufacturers that offer such models, but their sales have been modest. Consumers haven’t “bought in” to the technology story behind these clubs and in some cases have dismissed them for other reasons. (Golfers, for example, complained about the sound of impact produced by Callaway’s earlier composite drivers, the C4 and ERC Fusion. The company’s newest model, the Fusion FT-3, is faring better, but retailers attribute its success to the club’s cup-face technology rather than its composite features.)
Nevertheless, Cobra executives believe in composites. They say carbon integration makes the HS9’s clubhead lighter and superior in strength. The 50 grams saved from the crown and sole moves the weight lower, farther back and outward, enabling a larger face and better launch conditions.
The HS9 model is also “Speed Tuned,” offering consumers several stock shaft and driver head options to match ball speed and optimize distance, accuracy and forgiveness. Ball speed, Rice says, is the most important variable in determining what kind of driver a golfer should use.
“The shaft is FedEx. If you don’t have the right delivery system, then you are never going to get your package,” he says. “The clubhead is the Christmas present.”
Some retailers think Cobra has what it takes to sell the masses on composites.
“This driver could be big,” says Nate Carl, hardgoods manager for Desert Mountain’s six courses in Scottsdale, Ariz. “There’s bound to be one composite that takes off and becomes the next big thing.”
And the company is leveraging its success by reinvesting in putters. Cobra has sold putters on and off, most notably with Bobby Grace in the mid-1990s and an Australian blade model in recent years. It will attempt to bolster its presence in the category with the Optica SL, which Cobra says is the first putter to use fiber-optic technology. It’s the same technology used for alignment in gun sights.
Ultimately, Cobra knows its continued success lies mostly with the HS9. Company executives are confident, and they know the stakes.
“You’re only as good,’’ Rice says, “as your latest product.”