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Kingsford Charcoal Case Brief Essay

Clorox Corporation depends upon Kingsford Charcoal as an important revenue (9% in 2000) and net income contributor in the product portfolio. Since the 1980’s Kingsford had enjoyed steady 1-3% growth, but summer 2000 revenue was expected to fall short of forecast. The Kingsford brand managers took on a challenge to assess and propose solutions to the first-time overall softening of the charcoal category.

The softening of the market could be attributed to various causes. Some causes explored include:
Changes in consumer demand:
* Downward trend in charcoal grill purchases and upward trend in gas grill purchases since 1997 Changes in marketplace:
* Further fragmentation of market with introduction of Royal Oaks’ private label brands
* Price climbing in private label brands

Product-related challenges:
* Seasonal imbalance, with sales highest in summer months Kingsford-related factors:
Increased sales promotions (and associated increase in volume) do not make up for the decreased media expense, as evidenced by reduced revenue.
Figure 1

Recommended Marketing Objectives for Kingsford Brand
We recommend two primary marketing objectives for the Kingsford brand:
1. Grow the charcoal category
2. Differentiate Kingsford among other charcoal products

In order to achieve the above two objectives, Kingsford should focus on the entire grilling customer need related to grilling—it’s not just about charcoal product specifications!

In order to serve the entire grilling customer need, it’s important to first understand customer attitudes around grilling. The brand managers collected valuable information in this regard. Across all attitude groups, people grill when they want to enjoy the process of cooking, when they want to impress or entertain friends, and when they want to enjoy seasonal weather. Notably, people utilize gas grills for similar reasons, but they also note that they prioritize simplicity, even cooking, and easy clean-up. The entry of affordable gas grills into the marketplace mark a big change that Kingsford did not appropriately anticipate or blunt against.

Proposed Action Plan

We recommend positioning Kingsford Charcoal as the charcoal that delivers the best in grilling taste. With a new positioning that allows potential to focus on solving the entire grilling need, we recommend strategies that include product co-packaging, increased media spend, and tighter control on sales promotions.

The existing messaging for Kingsford charcoal products focuses on charcoal product specifications as the differentiating point among products—quicker lighting time, burning time, etc. Our newly recommend product positioning would drive a messaging strategy that aligns with the overall marketing objectives: to grow the category and to differentiate Kingsford among other charcoals. Kingsford, as the market leader has the responsibility to at least maintain the market category, and all charcoal producers will benefit from this market maintenance.

Messaging aligned with strategy is a good start, but spreading the message and actually aiming to meet the full customer need is important. We recommend Kingsford initiate an advertising campaign focused on media spend of $6M. The ads should focus on driving the message more than the brand name. The same messaging will be present in stores, and when consumers want the best in grilling, they’ll recognize the Kingsford message and more likely select Kingsford.

We understand that sales promotions are important, especially in impulse buys. However, as illustrated in Figure 1, increased sales promotions do not close the revenue gap when media spend trends opposite. Further, the sales force is incented based upon store sales volume, which incents price cutting and possibly unfavorable SKU mix. Tighter control on promotions and sales incentives, not to exceed $6M, aligned with net revenue would be helpful.

Regarding product co-packaging, we recommend coupling Kingsford Charcoal with the KC masterpiece grilling sauces and seasonings, offering ultimate taste grilling packs. This would meet the needs of the customers who express that they don’t consider themselves grilling experts (61%-74%) and allow for a true best taste experience. It’s also a great way to drive additional revenue through our portfolio. Interestingly, co-packaging with spices and sauces could help our charcoal encroach on other areas of the supermarket floor space, which could give more opportunity for impulse buys.


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