How TaylorMade Drives Global Sales
When England’s Justin Rose tapped in a winning one-foot putt for par in a playoff at the Quicken Loans National, a social media wave began for TaylorMade.
It was a wave that not only affected the social media aspect, but also other targets for business.
Tweets fired off about the playoff, then Rose’s victory on Twitter. Turns out, it was a win-win situation for TaylorMade. Rose beat Shawn Stefani on the first extra hole, earning his sixth PGA Tour victory, at Congressional Country Club in Bethesda, Maryland, in June this year.
Rose and Stefani are referred to as “TM Staffers,” on Twitter, as they are both on the TaylorMade Team of endorsed players, a vital cog in the golf company’s marketing machine. The tweets reached more than 205,000 TaylorMade Twitter followers. Plus, the majority of golf fans in the United Kingdom and the United States watched the two pros battle in the playoff.
Marketing is very important for TaylorMade, says President John Kawaja, who has been with the Adidas company the past 10 years. He says TaylorMade spends $75 million each year on marketing.
Rose, the 2013 U.S. Open champion, won on a Sunday, proof that work at TaylorMade isn’t just a Monday-through-Friday job, Kawaja says.
A day after Rose’s victory, Kawaja sat down for an exclusive interview with Global Trade magazine at TaylorMade headquarters in Carlsbad, Calif., to discuss the powerful brand’s strategy in what the company president calls, “an emotional game.”
He talked about Rose’s win as an example for how TaylorMade does business.
The company doesn’t play with those emotions, Kawaja says, but its staff knows that each golfer, pro or everyman, wants to achieve their best when they are out on the course. TaylorMade wants to provide them with the greatest equipment so they can meet that goal—that’s how the golf brand aims to prove it is the best. However, the convincing doesn’t always work out as perfectly as Rose’s win.
Kawaja remembers the days when TaylorMade designed strategies for the U.S. market and plopped in the same plans abroad. That left the brand behind its competitors in fertile grounds for golf business such as Japan and the U.K., Kawaja says.
The shaft for a driver that’s sold in the U.S. must be different than a driver advertised in Japan, Kawaja explains. A mid-handicap-type player from Japan is not as strong and his swing speed isn’t as fast as a typical American player, according to Kawaja.
“[Japanese golfers] need a performance in the shaft that’s different than the typical player in America,” Kawaja says. “So, we typically have U.S. spec product and we have Japan spec product.”
Kawaja calls that realization a learning lesson for the company, and it came from asking the simple question: Why aren’t we doing better than the Japanese golf companies?
“When you’re trying to give the Japanese [golf] market kind of a global specification, we find ourselves at a disadvantage to the Japanese companies who really understand that consumer and really know what they need to perform at their best.”
TaylorMade knows golf is popular in the U.S., but those days of teeing up American standards for international consumers are gone.
“We’ve recently created global business units that oversee the different key product categories that we have,” Kawaja says. “And, they’re thinking globally now. They’re looking at global forecasts. They’re looking into global markets and asking questions, finding out consumer projections in China, Japan and the U.K., for example, to become more knowledgeable about what the global consumer wants from us.”
About 55 percent of TaylorMade’s revenue comes from its international business, or business outside of the U.S., Kawaja says.
And, the profit from international business is slightly more than 55 percent.
Kawaja and the rest of the TaylorMade staff know business done outside of the U.S. is very important. Looking back, Kawaja saw that his company really didn’t have an internal culture of thriving on a global market.
“Looking forward, it’s absolutely essential that we do,” he says.
While TaylorMade is highly focused on the established market of Japan, the burgeoning growth in China is difficult to ignore. The middle class in China is large, growing and becoming westernized, Kawaja says, and golf is a big part of that. Plans to capture the market will be made from TaylorMade’s Carlsbad global headquarters and rely on the company’s new “global business units,” which will become more and more important for China.
“Everyone is talking about China being the next big thing when it comes to the golf industry,” Kawaja says. “I believe that it will in time … it’s inevitable in China.”
Kawaja believes TaylorMade has been successful internationally due in part to Adidas, because “they have established business in every corner of the world.”
“Where there’s golf, we’re there,” Kawaja says. “I would say we are not underrepresented in any market and we’ve been able to do that quicker than most golf companies.”
Specifications and strategies formed at TaylorMade headquarters are carried out in other parts of the world in a great methodical wave similar to the social media reaction to Rose’s tap-in putt for the win at Congressional, though perhaps not as easy.
Rose followed that win at Congressional with a Scottish Open victory, just as the company launched its newest technology, known as UDI—the Ultimate Driving Iron.
Other golfers surely wanted to know what was in Rose’s bag after his two consecutive wins. That created perfect timing for TaylorMade and its staff, who are often just as passionate as pro players with regard to having the best equipment and staying ahead of the innovation game.
It was reported that Rose had the 2-iron version of UDI in his bag during both wins. Call it a follow-up victory for TaylorMade: its product was winning before it was even unveiled in stores.
Rose’s wins helped England be a hot spot for TaylorMade’s global business, but the success of a TaylorMade team player can pay dividends mostly anywhere. That’s why endorsements are at the tip-top of the pyramid that is the company’s $75 million annual marketing budget.
Overall, the proof of each TaylorMade product’s effectiveness can be found at the pro level. When a TaylorMade product works for a pro, especially when it results in Pro Tour wins, the company wants to advertise it.
Why? Just remember Kawaja’s wise words: Golf is an emotional game.
Forget the pros for a moment. If a typical, weekend-type golfer sees his friend hit farther off the tee than him, he will usually want to find out what driver his friend is using. So TaylorMade delves into this equipment—and anything from golf balls to shirts and footwear to answer questions like, “Can your shirt actually provide you with more energy when you’re at the 18th hole?” The sport’s myriad intricacies; TaylorMade challenges itself to find the best technology for each.
“Our whole building is not only filled with smart people, but it is filled with people who are really passionate about golf,” Kawaja says. “It’s not only a sport that drives our passion. It’s something we live, eat and breathe. We don’t really leave the job on Friday afternoon and pick it up on Monday morning.”
That’s one of several reasons Kawaja believes TaylorMade remains such a powerful golf company. And because of its success in the golf industry, TaylorMade runs separately from Adidas, or as Kawaja calls it, “the mother ship.” Golf has a unique distribution and culture, Kawaja says, and it makes sense for TaylorMade to function independently.
“It’s a formula that works for our group,” he says. “[Adidas] has a long history in footwear and apparel. Golf has a different collection of consumers. It’s a specialty business. It’s unique to the sports that Adidas competes in every day.
“I think for both of us, working as an affiliate business allows us to move faster. They understand we know the golf business and that the business is in good hands. As long as we continue to deliver financial results that they’re happy with then I’m sure it will stay the same way.”
TaylorMade’s success drives its employees to avoid complacency, Kawaja says. He’d rather be the company that’s chased or imitated than a brand that looks up at others.
“We’re the largest and most successful company in the industry,” he notes. “With that comes a healthy degree of responsibility for moving the sport of golf forward, moving the industry forward. We need to continue to evolve in the way we do things to have the opportunity to stay at the top.”
Kawaja says TaylorMade has been established in Japan for the past 30 years, but the country remains an important focus for the company’s business outside the U.S. While TaylorMade does its best to use different strategies and specifications for equipment, Kawaja says some of the same plays in the U.S. actually do work in places like Japan.
The company’s tendency to produce more advertisements around a tournament or a golf event is case in point. The launching of a new product, such as UDI, is done in a big way at course golf shops and other stores, and again on social media.
Marketing materials with tour pros are produced, as well as club pros and even celebrities, tapping into that emotion Kawaja speaks of. Everyone on the TaylorMade team wants to help the company’s claim to No. 1 in the industry, and they all want their customers to reach their top potential on the golf course—that emotional payoff.
TaylorMade, too, wants to reach its highest standard.
“We wake up every day, maybe a little more paranoid than we should be,” Kawaja says. “It’s easy to fall in love with your formula when you’re successful. But we try to challenge it all the time.
“We’re more apt to change it before it gets old. We’ll get the question: ‘Why are you changing that? It’s working so well.’ Because we have that fear we’ll wake up and we see that our [stuff] doesn’t work anymore.”