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 …show more content…
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 will not see a drastic price increase. (Exhibit …show more content…
Instant Exclusive users want hassle free grilling that is easy and flexible. Instant Acceptors want speed, prefer hassle free grilling, and are more nervous grilling for groups. In terms of price, the other pricing scenarios did not yield high profit potential and there is no strong justification for maintaining current prices. For advertising and promotion, reducing the advertising budget is not acceptable because research shows Kingsford needs exposure, but increasing the budget is costly and there are efficient ways to match the exposure of gas grilling. Production does not have evidence to support that Kingsford will require a new plant and it is too expensive at this time. Approaching competitors is risky and unnecessarily exposes