In terms of a future action plan, we feel Kingsford Charcoal should target the market segment identified as Regular Exclusive, and select the pricing scenario labeled total line pricing increase. To balance advertising and promotions, we propose that Kingsford maintain the forecasted advertising budget, while implementing a promotional strategy focused on co-marketing, cross-promotions and retailer enticement. Additionally, we recommend Kingsford explore offshore options for production (Exhibit A). |Rationalization |
Based on market research data, we believe the Regular Exclusive users should be the target segment. This group identified grilling with real charcoal as a satisfying skill that is worth doing right, and view making a fire with charcoal as an easy task. Also, this segment is most comfortable with charcoal grilling, has more time to grill, is less nervous when grilling for groups, and does not see charcoal grilling as a hassle. With such attitudes characterizing the Regular Exclusive users, it is unlikely that they will be attracted to gas grilling as an alternative.
After calculating the expected monetary value (EMV) of each pricing scenario total line pricing increase is the best choice, as implementing this strategy has the greatest profit potential. With this decision, we increase both regular bag and instant bag by 5 percent across all channels. This is an appropriate change because both private label and Royal Oak have increased prices. There is never a good time to raise prices, but this adjustment can be justified with the EMV data. Plus, charcoal is an item characterized by pricing flexibility since it is a ‘happy product’ associated with family and fun, and consumers...
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