2004: Top-Flite revamps brands, strategy for ’05
By John Steinbreder
Top-Flite Golf president Bob Penicka is smiling, and not only because he has just finished 18 holes. He also is pleased with the new Top-Flite and Ben Hogan products he and his playing partners used during their rounds. Due to begin shipping Jan. 1, the offerings represent the company’s first major introductions since Callaway Golf bought Top-Flite out of bankruptcy a year ago, and also a significant step toward revival of a long-troubled business.
This has not been an easy summer for Penicka. The $200 million equipment company he has run for nearly a year will lose money again in 2004, and turnaround efforts have been hindered by a variety of problems, including an abundance of inventory that was dumped into retail channels by previous management to boost revenues. The problems at Top-Flite were a key reason that former Callaway chief executive officer Ron Drapeau, who tapped Penicka to run Top-Flite, was forced to resign Aug. 2.
But Penicka appears unfazed. He’s comfortable with the new products, pricing and strategies for the Hogan and Top-Flite brands. He also believes he has the support of Drapeau’s replacement, longtime Callaway board member William C. Baker, who made a trip to Top-Flite’s Chicopee, Mass., headquarters among his first orders of business as chairman and interim CEO.
Penicka’s challenge is to revive the battered Top-Flite line while expanding the appeal and market penetration of the underachieving Ben Hogan division.
“We want to make Top-Flte an authentic golf brand again based on its distance technology,” he explains. “And we want to get Hogan into the hands of more consumers by making it more accessible from a playability and price standpoint.”
Those are no easy tasks, especially in the flat, highly competitive golf business. Any market-share gains have to come at the expense of competitors. But the Top-Flite president predicts his company will be profitable in 2005. And Jamie Bosworth, his vice president of sales and marketing, thinks there is plenty of upside.
“On Hogan alone, I believe we can double our business next year as we reverse the downward trend of Top-Flite,” he says.
The first steps toward realizing those goals began last fall, as Penicka set out to right a listing ship by reducing salary overhead and halting the regular, end-of-the-month deals that flooded retail channels with product. Penicka has sacrificed some Top-Flite market share – about 2.2 points over the past year – to try to restore some price integrity.
Only then could he turn his attention to the development of new products.
For example, the company is set to release its first Hogan drivers in years, a pair of titanium products dubbed Big Ben with 420 cc and 460 cc heads, both retailing for $299. In addition, it will be selling stainless steel fairway metals for $179 under that same name, a price that includes Aldila NV shafts. Another rollout will be the Ben Hogan BH-5 irons, cast, perimeter-weighted clubs that will go for $499 (with steel shafts). And there is a new Hogan ball that features three-piece construction with a urethane cover and boasts six dimples that are deeper than any others on the ball, a peculiar-looking arrangement that not only helps center the core but also provides what Penicka calls “low-speed lift.”
“We got input from 1,500 golf professionals and retailers on what they wanted from Hogan, and we believe we are taking care of their needs,” says Bosworth. “Our goal is to get more people to play Hogan, and our marketing efforts will reflect that. One idea is to send each golf club champion in America two sleeves of the new ball for their comments, and if we get their feedback, we’ll give them two more.”
Top-Flite, however, is a reclamation project.
“It became such a commoditized brand and got away from the things that made it great, which were its distance, innovation and technology,” Penicka says. “Our efforts now are to build it back up.”
To do that, Bosworth says he is trying to bring “a cooler, more relevant look” to the brand, first by modernizing a decade-old logo and then by adding endorser Ricky Barnes, the 2002 U.S. Amateur champion originally signed by Callaway last year.
Additionally, Top-Flite’s sprawling line of balls will be reduced 25 percent and burnished with the introduction of the new TL series: the Top-Flite Strata TL Tour, a three-piece, urethane-cover ball with a street price of $29.99; the Top-Flite Strata TL-3, another three-piece model priced at $24.99; and the two-piece TL-2 at $19.95.
Bosworth hopes to have an advertising and marketing plan hashed out by January’s PGA Merchandise Show. It remains to be seen what form it will take, but Bosworth assures it will not contain any of the nudists and nuns featured in a print campaign that already was in place when Penicka was named president.
“Those were the worst ever in golf,” Bosworth says.
It is far too early to determine whether these new products will fuel a Top-Flite revival, and not many golf industry mavens have actually seen or used them yet. One person who has is Kerry Kabase, sales director for Edwin Watts Golf Shops.
“The new lineup makes a lot of sense,” Kabase says. “And Top-Flite has a very sharp group of guys running the show.”
If Penicka is able to engineer a Top-Flite turnaround, he’ll have more to smile about than just the chance to slip away from the office for a quick 18 holes.