Kingsford Charcoal, founded in 1920 by Henry Ford and E.G Kingford, produces high quality charcoal and accounts for roughly 9% of Clorox revenues, which is its parent company. Its main competitors in the charcoal market are Private Label brands and Royal Oak; and faces heavy competition from gas grills as substitutes for charcoal grilling. In addition, with declining growth, seasonal sales pattern, and slashed advertising funds, from $6 million in 1998 to $1 million in 2000, Kingsford has encountered a softening market and is need of a new marketing strategy.
Statement of the Problem
Softening market for charcoal and the need for a new marketing strategy that focuses on advertising, pricing, promotion, and production capacity.
Recommended Course of Action
Kingsford should adopt a strategy that achieves two objectives: increase profitability & growth and improve brand awareness. Kingsford should protect its current strong market share, while trying to build a stronger market and hedge against the gaining competition from gas grills.
Rationale For Proposed Actions
As indicated by the lab tests, Kingsford is regarded as a “high quality brand”. Additionally, as the company was the inventor of the charcoal bricks it has a strong image.
Utilizing Kingsford’s strong public image and quality to its advantage can help with bolstered advertising and set up the company with a differentiation strategy that focuses on taste, quality, and the “true” barbeque experience.
Changing consumer opinions will be challenging in a declining market. Increasing spending and production can also become an obstacle from management resistance and limited production capacity, respectively.
As a market leader, Kingsford could choose to just increase its prices by 5%, in alignment with price increase that its competitors have taken. It can also choose to go with the market trends and choose to shift...
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