Kingsford Charcoal

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Case: Kingsford Charcoal

Define problem
Kingsford is a branch product group of Clorox. The main product of Kingsford is charcoal. The business performance of this brand was good among the competitors, but during the recent years, it tends to be worse.The marketers of this company are trying to find a way to solve this problem by using the analysis and informations they got which cover many aspects. According to the analysis, the biggest competitor of Kingsford is Royal Oak and Private Label. Kingsford, as a brand with good brand awareness, keeps having better sales and earning performances than that of other FY, the sales volume dropped in 2000 and the category has become soft. At the end of 2000, about 5.7% decline happened in food channel and the entire category was down compared with 1999. By using the analysis, the marketer found that 54 percent of U.S. citizen have a gas grill and 49 percent are using charcoal. Therefore, the main alternative products that consumers would choose to use to take place charcoal is gas and the market of it is keep extending. The price of charcoal was keeping the same while the other brands were increased. So, if the price of Kingsford should be changed is a problem. There are some reasons that may cause the poor performance. First of all, since the business of Kingsford is seasonal, the sales would go down in off season, so the markers are trying to extend the grilling season to get more profits. Moreover, the advertising and promotion strategy have not been improved and the cost of them have been reduced, yet other companies spent lots of money in this area. The segment analysis showed that Kingsford has three target groups which are regular exclusive users, instant exclusive, and instant acceptors.The 2001 business decision focused on pricing, advertising, promotion and production. Compared with the other brands,the price of Kingsford is lower than the average. The marketers believe that rising price would not influence the customer desire, and it could increase short term profits if the sales doing well. After researches, they found that gas grills should be their key advertising competitor, so they are trying to take the data which they got from a taste test between Kingsford charcoal and gas grill into the ads and higher their ads budget. The marketer also improved their promotion by building close connection ties with customers and managing channels in effective ways. Moreover, brand management also need a change. They prefer supporting less brands of charcoal than spending too much money on brand management like before, and they noticed that developing new products recently is not necessary.

External situation analysis

1. Clorox has a long history and a big number of loyal customer groups. The current loyal customers provide great opportunities for Kingsford to keep having steady sales performance and do not lose profits from that. The existing market share shows that Kingsford takes half of the market, which means that they still keep the leading position of the market. 2.Based on the test, although gas grill is more convenience, for some customers who focus on the taste, the potential market of charcoal should be bigger than gas. The analysis of grill penetration trends show that the rate of gas is just 5 percent more than charcoal. As a traditional grill materials, people need more informations about them to guide them back to the taste they were familiar with. Crisis

The development of gas market is rapid. As a new grill method, gas grill has attracted some customers from charcoal market since it is more convenience and safe. There is problem that most old company may face is that their products are going to become less competitive if they do not promote them as effective as before. The same as Kingsford, their products are still welcomed by customers, but they just become not that loyal. Moreover, the market share of Kingsford is big, which means...
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