Considering the fact that Kingsford charcoal is a) a cash cow (high relative market share and low market growth) and b) price inelastic, we strongly recommend a total line pricing increase combined with aggressive investment in advertising and trade promotion across all channels, specifically food stores and mass merchandisers, that can exploit the greater advantages of charcoal over gas grilling. The target segment market should be Instant Acceptors because they account for 62% of total volume consumed and use both regular and instant charcoal products. This target market consists of adults, mainly males (60%) that likely belong to younger, larger, higher income families that look for quality in products (80% of grill ownership falls in this category). As mentioned before, the high relative market share (in relation to Royal Oak; 8.13 (57.7/7.1)) and low growth in the industry make Kingsford a cash cow in Clorox’s portfolio, which means that, as a market leader, the company may command premium prices and profits that can be used for investments and other projects. Marketing Mix
In order to understand the typical grilling behaviors and patterns to create an effective marketing plan, we need to take into account the fact that, according to exhibit 6 on the case, 49% of households own a charcoal grill and 20% of households own both gas and charcoal indicating that there is still a huge need for consumers to purchase charcoal; furthermore, the majority of the diehard grillers prefer charcoal grilling over gas. Product: differentiation from direct competitors and gas grilling based on the quality of Kingsford Charcoal. The regular charcoal has high quality of lighting faster and burning longer, while the instant charcoal offers convenience. Kingsford is a mature product; therefore, more brand awareness is a must to grow the market, which can be achieved through a market penetration strategy of expanding the grilling season to increase...
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