Case Study Analysis: Kingsford Charcoal | MGMT 563 Marketing Management September 18, 2012 | Cheryl Banks, Jacqueline Robinson, Mabel Tsahey, Stephanie White |
History
Charcoal grilling is an American tradition that brings communities together through a shared celebration of food. An important aspect of grilling is food preparation and charcoal is used to heat and cook food. Established in the 1920’s by Henry Ford and his relative E.G. Kingsford, the purpose of charcoal briquettes was to burn longer and hotter than regular wood. Through the years, the firm was purchased by an investment group and later acquired by Clorox in 1973, which owns 50 other products that it distributes. Kingsford had one of the largest products groups
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Weather patterns have also impacted the grilling season and can potentially affect overall sales.
Alternatives
In a response to the strengths, weaknesses, opportunities and threats to the organization, several alternatives should be considered in strategizing the best way to increase the wealth of the organization.
Expand Product Line: Kingsford has the option to set the pace for charcoal innovation by expanding product lines to generate additional interest in charcoal grilling. Engineering more environmentally friendly, flavor imparting and scented charcoals such as vanilla or mint flavored charcoal may do this. In response to the trending up of gas grill usage from previous years, Kingsford could consider entering into wood chips production for gas grills. Additionally, to prevent seeing charcoal as a seasonal product, awareness could be drawn to other uses of charcoal, such as an odor remover in the home or a type of soil amendment by gardeners to improve crop growth. Education on these other uses will increase demand for charcoal all year round and not just during the warm months when grilling is prevalent.
Increase advertising: An increase in advertising focusing on brand quality, affordability, and flavor adding benefit, as a way to counter the growth of gas grilling is another alternative considered. Integrated marketing
Recognizing an organization’s alternatives for growth is an important process for companies. By evaluating and selecting the competitive advantages within a market a company can distinguish themselves from their competition. For an organization the “grand strategies indicate the time period over which long-range objectives are to be
Grilling is engraved in American culture as well as a highly seasonal activity. Kingsford Charcoal is in the business of selling charcoal for grills. Even though Kingsford increased its market share in 2000, their forecast indicates they will not reach the initial revenue mark. With the charcoal market’s growth slowing, and the gas grill market gaining market share, Kingsford needs to revise its strategy, and their marketing mix to meet original expectations for itself and Clorox. The following report will identity the issues Kingsford faces in the market place and recommend actions to take to resolve these problems. First we will examine
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Executives have noted that beef consumption in the US is declining and this explains why volume sales have remained stagnant over the past few years. On the other hand, consumption of chicken and turkey has doubled since the 1970s (AMI, 2009). Considering this information, one recommendation is to offer a sale “Buy one A.1. Steak Sauce, get one A.1. Marinade free”. This type of sale will appeal to customers who plan on grilling both steak and chicken during Memorial Day weekend. Because of the small amount of steak sauce used at one time some consumers do not find it necessary, nor are they interested, in buying 2 bottles of steak sauce for $5. This promotion would also help increase brand awareness for A.1. marinades without spending a lot of money on outside advertising.
Kingsford had reduced its media spending from over $6 million in 1998 to a little over $1 million in 2000. Gas Grill increased its media spending during the same time period. * Reduction in Promotions: Royal Oak had contributed substantial funds towards merchandising opportunities at retailers such as temporary price reductions, features and displays. Kingsford’s merchandising in 2000 was consistent with that in 1999. * Weather Pattern: Precipitation and temperature comparison with 1999 showed a slight increase in rainfall in October through December 2000, coupled with major drop in temperatures. Cold weather reduced the opportunities for grilling occasions. * Lack of R&D: Kingsford was consistent with research and development and had spent $63 million since 1998. Kingsford’s research team not focused on how to overcome to Gas Grill. Lack of research on what makes the charcoal easy to use and require less preparation. These key problems cause the decline in the Sales. Let’s see what are the alternatives available to this key problems and how can we overcome with it. Some of the Key problems require funding, for example Media Advertising.
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