Kingsford Charcol

Kingsford charcoal had experienced steady growth since the 1980’s. In 2000 the charcoal market softened. Kingsford was heavily driven by sales and merchandising activities. The two brand managers now need their managers to begin an in depth analysis as to why the Kingsford market had softened. My action plan would include price increase, Advertising with focus on the fun of grilling out, the better taste of food cooked with charcoal VS gas grills, and the concept that Kingsford is the best charcoal and is easy to light. Also a review of promotions to ensure that there was enough stock on hand for promotional price reductions. Partnering with beef and chicken producers to help with promotions.

2. Kings ford’s sales team had become complacent and still believed the key to sales was store displays and large amount s of stock. Their philosophy remained “Pile it high and watch it fly” and there was no media advertisement for the brand as well. They lost track of consumer behavior in the charcoal market. Kingsford also had not increased its prices as its competitor had over the past several years which narrowed the price gap across the various brands and no longer helped differentiate it from its competitors’ product as being the best charcoal on the market. The increased popularity of gas grills has also made an impact in the charcoal market as well. They were able to determine that charcoal grill sales have dropped year after year and the charcoal grill penetration had actually been trending downward since 1997. Weather patterns have also played a part in lower sales in 2000 as there was more rain and November and December experienced much colder temperatures than in 1999. A detailed internal market segmentation showed three charcoal market segments among users. They are: Regular Exclusive Users that grill exclusively with charcoal, Instant Acceptors that were comfortable with both charcoal types, and Instant Exclusive users that used only instant charcoal.

3. Grilling is most popular in the United States. It’s a way to get a great meal with a great taste with easy clean up. Grilling makes cooking not so much a chore and much more enjoyable. Grilling brings neighbors, family, and friends together for a great time!

4. A pricing increase could be have a negative impact on the sales forces ability to convince more chains to focus distribution and merchandising support on Kingsford. With the limitation that the Kingsford charcoal plants are currently working at 80% capacity and the expense and time it would take to create a new plant, there could be supply issues at a growth rate of 5% for several years in a row. If Kingsford cannot meet the growth demand it runs the risk of running out of product and then could forced into the costly situation of moving product around the country to meet the demand.

5. SWOT for Kingsford:

Internal Factors

Strengths

Weaknesses

Management

New high energy brand managers ready to address the soft market.

Complacency in advertising and monitoring consumer behavior impacts the brands image.

Offerings

Highest quality charcoal on the market

Highest priced charcoal with respect to its competitors

Marketing

Retail Sales and Promotions

Lack of Media Advertising

Personnel

New management that is researching the market and consumer behavior towards grilling.

Perception by sales staff that displays are the primary vehicle for sales.

Finance

Decrease in advertising budget for the last several years

Manufacturing

Currently able to meet the market demand.

Kingsford charcoal plants are already operating at 80% capacity

External Factors