KINGSFORD CHARCOAL CASE STUDY
GB-513 MARKETING MANAGENET
PROF. KARL ALORBI
SAINT PETER’S COLLEGE, NJ.
SUBMISSION DATE: 08/08/2011
TABLE OF CONTENT
| Page No.
| Executive Summary
| Key Problems
| Analysis and Evaluation
| Implementation Plan
Clorox Company produce 50 different products by 2000, includes different categories such as Household products such as glad, water filters (Brita), cleaning products, auto care; Specialty products such as charcoal and lighter fluid; and International products such as dressing and sauces. Kingsford Charcoal is the one from Clorox’s products and mostly used in the barbeque parties and in restaurants for grilling. Kingsford has 2 sub categories, are Kingsford Charcoal (“regular” or “blue bag”) and Kingsford Lighter Fluid (“instant” or “red bag”).
Since 1980, Kingsford had continued to enjoy steady, moderate growth of 1-3 percent in revenue each year. In the mid of 2000 Clorox had annual sale of $4.1 billion and net earnings of $394 million. Charcoal represent approximately 9% of Clorox revenues and substantially higher percentage of its net income, so decline in the sale of charcoal can affect the Clorox’s share prices and net income. The charcoal category had slowed from 4% growth from 1998 to 2% growth from the first half of 1999 to first half of 2000, and by end of 2000 the entire category was down relative to 1999.
The decline in sales drove the marketing and sales team to analyze and figure out what causes the decline and what to do next. Causes are- by the end of 2000, competitors Royal Oak and private label brands had raised 10% price, while Kingsford was having the same price; In 2000 gas grilling grew 8% relative to 1999; Had not did adverting and promotion in any significant way since 1998; And changes in weather and heavy rain was one of the cause of declining the use of Kingsford.
After the analysis of causes and risk, the team should focus on Pricing, Advertising, Promotion, and Production. The strategic implement plan should be the one which use all the aspects of marketing and sales. It should advertise with some effective message and attract the consumers, price advantage promotion during peak season (From May to September), Event promotions, introduction of new inventions, show Kingsford quality is better than others, Charcoal grill over Gas Grill, Use different franchise category, and focus on different uses of charcoal and advertise them as well.
Apply all the different and possible forces to push the product in market. The strategic plan should be measured and first-aid plan should be there. The plan surely increase its market share to at least 70% from 59.5%, the pricing strategy help in increasing net income, outsourcing will help the company to do business with other companies. These recommendations will surely benefit Kingsford and Clorox.
Key problemsKingsford’s business is seasonal, with nearly 60% of consumer purchases occurring between May 1 and September 1; the Memorial Day and July 4th holiday weekends represents 35% of Kingsford’s annual sales. Kingsford didn’t do well on July 4th as hoped in fiscal 2000, and if the same situation will be there then fiscal 2001 would be worst. The causes to softening the sales are: * Competitor’s price hike move: Prices rarely moved more than 5% over the course of the year, but Royal Oak and private label brands raised 10% of the price than it was in 1999 across all channel; while Kingsford’ price were constant. * Gas Grill: The Gas Grill picked up its market and grew 8% than 1999. People attract to Gas Grill because it provide convenience, greater control over cooking temperature, short cooking times and easy clean-up. In 2000, approximately 54% of U.S. households owned a gas grill, relatively 49% that owned a charcoal grill, and...
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