IntegralBusi_Kingsford_MarketingPlan

Author:

Deepank Gupta (BE, MIT, Grad Cert in Business Administration)

Disclaimer:

All data and information provided in this report is for informational purposes only. While every effort has been made to ensure the accuracy and completeness of the information, no guarantee is given nor responsibility taken by Integral Bussi or the authors for errors, inaccuracy or omissions in the report’s content. Integral Bussi or the author(s) will not be liable for any losses, injuries, or damages arising from the display or use of this report.

The information is provided solely on the basis that readers will be responsible for making their own assessment of the matters. Readers are advised to verify all relevant representation, statements and information with their own professional advisers.

Marketing Plan: Kingsford Charcoal US i

1. EXECUTIVE SUMMARY

This report critically reviews Kingsford Charcoal’s (Kingsford) approach to marketing.

In this report, as a marketing consultant to Kingsford, Integral Bussi have

recommended an improved marketing plan to add value to Kingsford’s present

market share, sales and profitability. The recommended marketing plan is

formulated using a five-step process: analysing the current situations, identifying the

issues, defining the objectives, determining strategies and an action plan to

implement these strategies.

The report emphasises the importance of marketing in businesses. It has become

clear that the companies without a marketing mindset will be at a disadvantage in

today's business world. Those who are still centred around their products, rather

than their customers, are doomed to fail.

It is highlighted in the report that threat of new entrants and bargaining power of

buyers are some of the forces influencing the competition in the market. To counter

these forces and gain a sustainable competitive advantage, the proposed plan will

position Kingsford strategically in the market.

Marketing Plan: Kingsford Charcoal US ii

TABLE OF CONTENT

1. EXECUTIVE SUMMARY---------------------------------------------------------------------------i

2. BACKGROUND-------------------------------------------------------------------------------------4

2.1 Current Marketing Situation------------------------------------------------------------------4

3. SWOT ANALYSIS-----------------------------------------------------------------------------------5

3.1 Internal Analysis--------------------------------------------------------------------------------5

3.2 External Analysis-------------------------------------------------------------------------------5

3.3 Confrontation Matrix---------------------------------------------------------------------------6

4. ISSUE ANALYSIS-----------------------------------------------------------------------------------7

5. RECOMMEDED MARKETING PLAN----------------------------------------------------------8

5.1 Objectives----------------------------------------------------------------------------------------8

Financial Objectives---------------------------------------------------------------------------------------8

Marketing Objectives--------------------------------------------------------------------------------------8

5.2 Strategy-------------------------------------------------------------------------------------------8

5.3 Action Plan---------------------------------------------------------------------------------------9

5.3.1 PRICING---------------------------------------------------------------------------------------------10

5.3.2 PROMOTION---------------------------------------------------------------------------------------11

5.3.3 PLACE-----------------------------------------------------------------------------------------------15

5.3.4 PRODUCT------------------------------------------------------------------------------------------16

5. CONCLUSION-------------------------------------------------------------------------------------16

6. APPENDIX------------------------------------------------------------------------------------------18

6.1 Market Situation-------------------------------------------------------------------------------18

6.1.1 SIZE, TARGET MARKET & MARRKET GROWTH--------------------------------------18

6.1.2 CONSUMER ANALYSIS------------------------------------------------------------------------19

6.2 Product Situation------------------------------------------------------------------------------20

6.2.1 KINGSFORD PRODUCT RANGE------------------------------------------------------------21

6.3 Competitive Situation------------------------------------------------------------------------23

6.3.1 INDUSTRY COMPARISON: CHARCOAL Vs GAS BARBEQUING-----------------24

6.3.2 MEDIA SPENDING COMPARISON----------------------------------------------------------25

6.3.3 PRODUCT COMPARISON: KINGSFORD, ROYAL OAK & PRIAVTE LABLES- 25

6.4 Distribution Situation-------------------------------------------------------------------------26

6.5 Macro Environment Situation--------------------------------------------------------------28

7. REFERENCES-------------------------------------------------------------------------------------29

Marketing Plan: Kingsford Charcoal US iii

2. BACKGROUND

Kingsford is a well known brand of charcoal in barbequing community in the

United States of America. Provided case study discusses and analyses the issue

of decline in sales of Kingsford in the year of 2000.

Brand managers Marcilie Smith Boyle and Allison Warren were assigned a task to

analyse the market situation and come up with a robust future marketing plan to

overcome the softening of the market.

Kingsford started in 1920 with the invention of charcoal by the pioneering efforts of

Henry Ford and E.G. Kingsford. Since 1973, it has become one of the product

group within Clorox’s portfolio. In 2000, Kingsford with $ 350 million turnover

represents 9% of the total turnover of Clorox’s revenue. Kingsford in 2000 faced

competition from Royal Oak and Private Labels. In addition to this a recent shift

towards gas barbeque also threatened the sale results.

2.1 Current Marketing Situation

To come up with a suitable strategy to define the overall action plan for achieving

Kingsford’s goals and objectives, I have carried out the analysis of the following

current marketing situations of year 2000:

1) Market Situation

2) Product Situation

3) Competitive Situation

4) Distribution Situation

5) Macro-environment Situation

Refer to Appendix.1 for detailed analysis and discussion on Kingsford’s current

marketing situation.

Marketing Plan: Kingsford Charcoal US 4

3. SWOT ANALYSIS

As a first step to deploy strategies to improve Kingsford’s business goals, I

have carried out the following SWOT analysis of Kingsford’s current situation.

The gist is to identify the strengths and weaknesses of Kingsford, pinpoint

opportunities and note threats.

3.1 Internal Analysis

Strengths

1) Good image of the product’s quality

2) Market leader (almost 57.7% of charcoal market)

3) Product Range (Regular and Instant)

4) Regular-20 pounds (covers 45% total sales)

5) Established distribution channels

6) Strong relationship with distribution channels

7) Backing by the parent company (approx 9% share in Clorox’s revenue)

8) Annual price increase by small percentage

Weaknesses

1) Substantial cut-down in advertising

2) Limited scope to increase the production level to meet the growth

3) Sales are season driven

4) Falling trend of Kingsford growth

3.2 External Analysis

Opportunities

1) Increase in number of barbeque events in USA

2) 2 out 3 barbeque users prefer charcoal grilling

3) Charcoal barbequing is related to real barbeque experience

4) 1/3 sales are impulse based.

5) More than 50 % grill owners are medium or heavy users.

6) Approx 80% of barbeque grills are owned by younger, larger and high

income family.

Threats


1) Increase in trend of gas barbequing

2) Absence of advertisement in charcoal industry

3) Weather pattern

4) Price increase of charcoal

5) Charcoal barbeque is time consuming and inconvenient.

3.3 Confrontation Matrix

The following table combines internal and external factors affecting Kingsford.

This matrix provides a better perspective on the issues faced by Kingsford and the

areas of opportunities and improvements.

Opportunities Threats

Strength

Aggressive

Kingsford is the market leader and

has a good quality image. Traditional

Barbequing is preferred by target

customers. Kingsford has the

opportunity to increase the gains by

providing a fun filled real barbeque

experience for the whole family.

Adjust

Market-leader’s initiative will

provide positive boost to the

charcoal market

Weaknesses

Defensive

Increase in barbequing. More

advertising especially around peak

times will help to boost sales.

Promoting instant charcoal as a

product for users who find charcoal

an inconvenient way of barbequing.

Survive

Declining trend of the charcoal

market. Decrease in

Kingsford’s advertising

expenditure may result in

sharp business decline and

therefore it should be rectified.


4. ISSUE ANALYSIS

The best marketing plans should address the issues by focusing on customer

needs and wants (Vistage.com n.d.). On the basis of SWOT following are the

potential issues Kingsford’s future marketing plan should address to achieve its

business objectives:

1) Should Kingsford increase their advertising effort and spending and by how

much?

2) Should Kingsford try to increase the production capacity?

3) Should Kingsford promote extending the grilling season or try to increase

demands during off-peak times?

4) Should Kingsford try to promote Regular charcoal more than Instant or vice

versa or promote both equally?

5) Should Kingsford change the rate of annual price increase and by how

much?

These issues can be combined and simply divided into two main issues:

Emerging trend of the gas barbeques

Decline in Kingsford charcoal market and growth i.e. profitability.


5. RECOMMEDED MARKETING PLAN

5.1 Objectives

Objectives, in simple terms, are where the business is heading for, and strategies

are the means for getting there (Fardon et al n.d.). The objectives can be divided

into two key categories, Financial and Marketing. The following are the objectives

Kingsford’s marketing plan should aim:

Financial Objectives:

Improve profitability

Improve growth

Marketing Objectives:

Improving brand awareness

Improve sales

5.2 Strategy

In the following discussion, I have carried out the analysis for selecting a suitable

marketing strategy to prepare the marketing plan for Kingsford.

On analysing the internal and external factors of Kingsford, it is clear that the

market of charcoal is getting weaker (refer to Graph A.5 in Appendix). However,

Kingsford has a good public image; has a good distribution channel and is the

strongest in the industry. Further, on the basis of Kingsford’s market share and

dominance with in the charcoal industry, the marketing plan should consider

Market Leader Strategies (telecollege.dcccd.edu n.d.). The market leader

strategies focus on three main tasks, which are:

1) Expanding the market

2) Protecting the market share

3) Expanding the market share (access.imi.ie n.d.)

Kingsford charcoal also faces a huge competition from the gas barbeque industry.

The increasing trend of gas barbeque poses a great threat on charcoal industry,

ultimately on Kingsford’s business (refer to Graph A.5 in Appendix). To protect its


total barbeque market share, Kingsford’s marketing strategy should also consider

Market Challenger Strategies such as:

Flanking/Bypass Attack

To attack where gas barbeque competitors are not focusing

Find a new market segment

Price Discount Strategy

Buyers are sensitive to price

Works if other competitors do not cut prices (mgt.unm.edu 2005)

Ansoff Product / Market Growth Matrix:

Existing Products New Products

Existing Markets Market Penetration Product Development

New Markets Market Development Diversification

In light of Kingsford’s current situation and ‘Ansoff Product/Market Growth Matrix’,

Kingsford’s marketing plan should attempt to focus on ‘Market Penetration’ and

‘Market Development’ growth strategies.

From the above analysis, it is clear that Kingsford needs a strategy based on

market growth and should be customer oriented. Kingsford, by using a pull

strategy, can direct its marketing activities (primarily advertising, consumer

promotion and direct marketing) towards the customer needs (i.e. to experience

real barbeque, better taste etc.) encouraging them to buy Kingsford charcoal

(Kotler et al 2006, p.431). This customer oriented strategy will help Kingsford to

achieve new users and more usage.

5.3 Action Plan

On reviewing the action plan of Kingsford’s Brand Managers (Marcille Smith Boyle

and Allison Warren) and on the basis of identified current situations, SWOT

Analysis, Issue Analysis and the selected marketing strategies, following is the

recommended action plan to address important issues involved in the marketing


activity of Kingsford. These issues include: promotion of charcoal, pricing, the

place where it should be sold and further development of charcoal as a product.

5.3.1 PRICING

Pricing should help Kingsford to achieve the following:

1) Growth in revenue

2) Improved sales

3) Long term profitability

Kingsford should set its prices considering:

1) Market Based Pricing Strategy

2) Competitor Reactive Pricing Strategy

Kingsford within the barbequing market (gas and charcoal) is in heterogeneous

oligopolistic market (Refer to Section 6.1 in Appendix). Therefore, there is a risk

of customer migration form Kingsford to its competitors if they increase its prices

at higher rate. However, there is no guarantee that Kingsford would gain

customers by not increasing or cutting down the prices (Kotler et al 2006, p.341).

Considering the above a sharp price increase is not recommended because:

1) price increases by competitors have led to their own market share fall (refer

to Table A.7 in Appendix). In addition, price increases have turned

costumers to gas barbecue resulting in decline of total charcoal market.

2) it may hamper the Clorox’s promotion of two brand strategy for charcoal. As

Nick Vlahos (Clorox’s Sales Director) suggests in the case study that price

rise could lead to loss of all merchandising momentum.

I suggest Kingsford should consider a marginal increase in its prices about 2.5%.

Consumers will adjust with the slight price increase as Kingsford charcoal –‘a

happy product associated with high quality, fun & family’; provides some flexibility


in pricing. Small price rise will assist Kingsford to gain some funds for re-

investment in Kingsford and potentially in Clorox’s specialty products.

I also suggest that Kingsford should use price-discount strategy and offer

discounts during the low sales and the weeks before high sale days (i.e. Memorial

Day, 4 July etc) (refer to Table A.9 in Appendix). Price discount during these times

can be very beneficial in alluring more customers and increasing the market

share.

5.3.2 PROMOTION

“Promotion is all about companies communicating with customers” (tutor2u.net

n.d.). The total marketing communications program of an organization is called the

"promotional mix" and consists of a blend of:

1) Advertising

2) Personal selling

3) Sales promotion

4) Public relations

5) Direct Marketing

I suggest that Kingsford’s promotional campaign should aim to pull customers

(both existing & new) and create a demand for Kingsford charcoal. This campaign

should be designed to improve the brand and product awareness. It should also

campaign heavily in the areas where gas barbeque industry is not very active. In

line to these promotional goals, I advise the following promotional mix for

Kingsford:

Advertising

Research by ‘Marketing Management Analytics’ (MMA) shows that TV advertising

has a big influence on the final turnover of Kingsford. The study indicated that the

media spending of $6 million in advertising resulted in incremental growth of 7% in

1998.


I also agree with Kingsford Brand Managers that Kingsford should increase their

advertising budget. Though this budget should primarily focus on TV advertising,

Kingsford should also spend a percentage of it into radio advertising, print

advertising and hoardings.

I recommend that the advertising should follow seasonal pattern of sales. It should

be pulsed and the frequency should be more during the peak times (Kotler et al

2006, pp.445-446).

The advertising theme should build the brand image and promote charcoal grilling

as a "real" barbecue experience. The advertisement should communicate the core

of Kingsford charcoal to customers such as:

1) Fun

2) Family

3) Masculinity

In addition, the existing Kingsford-slogans like “Lights twice as fast as other coals”,

“Lights faster, burns longer”, “Ready in 15 minutes” can be used. These slogans

are known and relevant to customers and will easily communicate everything

about the strengths of the product.

Personal Selling

It is the most effective tool influencing the purchase decision and includes

persuasive communication between a company’s representative and potential

customers (quintcareers.com n.d.). However, it is a very expensive method of

promotion (Kotler et al 2006, p.431) and should be brought into practice very

carefully.

As seen in ‘Distribution Situation’ (refer to Table A.8 in Appendix), there has been

a decline in the sales at food stores which account for about 66% of total sales of

Kingsford. Personal selling at these locations at peak sale times will help

Kingsford to increase its sales.


I recommend that Kingsford should organise onsite charcoal barbequing and

promote the good taste of charcoal grilling. This onsite promotion should also

include the demonstration on how to use charcoal and person to person

informative communication. This will help to form a good public relation by building

the product and company’s image.


Sales Promotions

Sales promotion is all about providing consumers with a reason to buy the

products. Kingsford’s sales promotion should aim:

1) to lure customers away from gas barbequing

2) to sustain and create new customers

The main types of sales promotion include (Kotler et al 2006, pp.466-471):

1) Consumer promotion

It is noted that Kingsford’s one third sales are impulse driven, making it very

important to have a correct display of the product mix. For this Kingsford should

consider point-of-purchase (POP) promotions. Kingsford’s merchandising

activities should ensure that the right mix of products is available and displayed in

right quantities at the right shelves or selling points at right time (high sales days

such as 4 July). I recommend that Kingsford should create good business relations

with their retailers for displaying and shelving at strategic points. For example:

Middle position in the path, at the entrance, end of aisle displays, high on the

shelf; so that they are easily visible.

In addition, Kingsford while promoting the product to consumers should offer

redeemable coupons at each purchase. For example, coupons with every pack

of charcoal offering a free gift or a discount on the next buy.

Sales promotion can be very expensive; therefore, I suggest Kingsford should look

for the opportunities of co-marketing with other brands and products like

beverages or meat.

2) Trade promotion:

Many sales promotions aimed at consumers are accompanied by trade

promotions (Kotler et al 2006, p.470). Kingsford should also provide incentives or

rewards to their retailers and wholesalers on achieving the target sales in an

endeavour to gain distribution, good merchandising space and cooperative


advertising. For example Kingsford can reward the first 10 retailers achieving the

sales of 100,000 pounds of Kingsford Charcoal with a free pass and return trip for

2 persons to NASCAR.

Sponsorship

Agreeing with Kingsford marketing team, I also suggest that Kingsford should

continue to sponsor cars. NASCAR is a very popular event in USA and shares the

core values (fun, family, masculinity) with Kingsford. These promotions should be

aimed before and after peak seasons to help Kingsford extend the grilling season.

Direct Marketing

I suggest that Kingsford should also consider ‘Direct Marketing’ for a more direct

follow-up in adjunct to their media advertising. Kingsford should primarily use

internet for this in addition to direct mails, leaflets and flyers. The website must

include the following information to establish relationship with current and potential

customers:

Products

Information on how to use charcoal

Barbecue Recipes

Newsletter

Information on Kingsford relation with Nascar.

Barbecue-Game (free downloads)

Feed back

5.3.3 PLACE

Kingsford under Clorox has a good and massive distribution network. I suggest

that Kingsford should make a good use of this inheritance by choosing the

promotional campaign and prices of their products in collaboration with

distributors’ strategies.


I recommend that Kingsford merchandisers should ensure that the adequate

quantity and mix of Kingsford’s SKUs are available at the right place (high point of

sales, e.g. food stores, other distribution channels) and at the right time (peak

time).

5.3.4 PRODUCT

66% barbeque lovers prefer charcoal cooked meat over gas (refer to Section 6.1.1

in Appendix). However, the convenient and quick cooking by gas barbequing is a

growing threat to charcoal market, ultimately Kingsford.

It is also noted that almost 50% of consumers are not comfortable in making a fire

with regular charcoal. I propose Kingsford to promote instant charcoal for this

segment of customers as it is easier to use and will also have a benefit of great

taste of charcoal.

Product augmentation in addition to its core benefits will also help Kingsford to

meet its strategic objectives (Kotler et al 2006, p.256). These extra features can

include all or some of the following:

1) Attractive Packaging

2) Instructions on how to use charcoal with in the charcoal packet

3) Instructions to use common type of charcoal grill with in the charcoal packet

4) Selected recipes with in the charcoal packet

5. CONCLUSION

To conclude, Integral Bussi strongly advises Kingsford brand managers to

consider the recommended marketing plan. This plan would not only help them to

cover the year 2000 deficit but also help them to attain sustainable growth.

Kingsford growth will help Clorox to achieve its strategic objectives. The proposed

marketing plan will also help Kingsford to bring back the momentum in charcoal

industry.


However, every coin has two facets and success is no accident. It has to be

strategically and methodically planned. Kingsford will need to monitor the impact

of the plan on volume sales for the continuous improvement of the plan. This is

very important as they have a limited scope to increase their production. In the

interim, Kingsford should undertake market research and feasibility study to look

for affordable sources of charcoal to increase its supply capacity.


6. APPENDIX

6.1 Market Situation

‘Barbeque’ from a long time, has enjoyed the passion of Americans. It has

become a very important part of US households and is associated with family and

community, outdoor activities, informality, change of pace and flavours.

Kingsford in USA stood under the heterogeneous oligopolistic market in charcoal

industry. The products in this market are generally distinguished by the price,

quality and promotion.

The following matrix shows various market types and products.

Product Type Many Providers Few Providers A Provider

Homogeneous Full competitionHomogenous

oligopolyMonopoly

HeterogeneousMonopolistic

competition

Heterogeneous

oligopolyMonopoly

Table A. 1

Kingsford were the product leader in a market of small number of providers (Royal

Oak and Private label).

6.1.1 SIZE, TARGET MARKET & MARRKET GROWTH

By the end of 90s, 75% of all households in America owned a barbecue grill.

Approximately 80% of these belonged to the younger, larger and high income

families. The following graph represents the trend of growth in the number of

barbeque events in America:


GROWTH: BBQ EVENTS in US

1.4

2.7

3

0

0.5

1

1.5

2

2.5

3

3.5

1987 1995 2000

BBQ Events in Billion

Graph A. 1

It is clear from the above graph that, within 15 years the number of barbecue

events in America has seen more than two fold increase (114%).

In 2000, almost 66 % of barbeque lovers preferred charcoal than gas. However,

the gas barbeque is becoming popular mostly because it is less complex and

quick to use.

6.1.2 CONSUMER ANALYSIS

The case study revealed that die-hard barbeque lovers believed that the charcoal

barbeque is the real culinary art and a source a great flavour. It further revealed

that 60% of the charcoal users perceived Kingsford as the high quality product

while only 13% believed in private labels.

More than half of the grill owners are medium/heavy users i.e. those who grilled at

least six times a month. In light of Kingsford product range and this data, these

heavy users are further segmented based on their liking for the kind of Kingsford

product (Regular Charcoal and Instant Charcoal).

Kinds of Kingsford

Users

Segmentation of

users in percentage

Total volume used in

percentage

Regular Exclusive Users 30 28


(use only regular charcoal)

Instant Exclusive Users

(use only instant charcoal)10 11

Instant Acceptors Users

(use both forms)60 62

Table A. 2

Segmentation of Users and their Usage

10%

60%

30%

28%

11%

62%

0%

10%

20%

30%

40%

50%

60%

70%

Regular Exclusive Instant Exclusive Instant Acceptors

Type of Users

Per

cen

tag

e

Segmentation of users in percentage

Total volume used in percentage

Graph A. 2

It is clear from the above graph that 60 % of the Kingsford users are comfortable

with both types of products, giving leverage to the company to experiment with the

production or marketing regime.

6.2 Product Situation

Kingsford with 9% share of Clorox’s total revenue in 2000 was one of the

important product groups within Clorox’s portfolio. It also represented a substantial

part of Clorox’s net income.

Clorox divided it product portfolio into three product categories – US Household

Products, US Specialty Products and International Products.


Clorox Product Category in 2000

40%

45%

15%

US House Hold Products US Specialty Products International

Graph A. 3

Amongst these categories, Kingsford comes under ‘US specialty Products’. The

following table shows segmentation of products under these categories.

US House Hold

Products

US Specialty

ProductsInternational

Glad

Formulae 409

Water Filters(Brita)

Pine Sol,

Soft Scrub

Liquid Plumr

Tilex

Ready Mop

Fresh Step

Scoop Away

Armor All

STP

Kingsford

Match Light

Hidden Valley

KC Masterpiece

Table A. 3

6.2.1 KINGSFORD PRODUCT RANGE

In year 2000, Kingsford with five plants in the USA was producing charcoal at 80%

of its total capacity. Therefore, the growth rate of 5% or more will make Kingsford

to look for other sources to meet the capacity within a short span.


Following is representation of the Kingsford product range and sizes available in

US market in year 2000.

Blue Bags or Regular Red Bags or Instant

Product Name Kingsford Charcoal

Kingsford Match Light

(Charcoal treated with lighter

fluid)

Available

Sizes

1 pound = 454 gms

10-pound / 20-pound /

48-pound (2 * 24-pound bags)

8-pound / 15-pound /

30-pound (2 * 15-pound bags)

Table A. 4

Regular Charcoal leads the list of products sold by Kingsford and is very important

for Kingsford marketing strategy. Regular charcoal has proven itself over the years

and Kingsford relies on it for its major part of the income. However with the

change of time and instant charcoal being simple and quicker to use, people

buying trend is shifting. There can be potential for Kingsford to groom this product

in its new marketing plan.

Regular charcoal represents approximately 75% of the total products sold, within

it, the 20-pound packs account for 60% of sales. Overall, ‘Regular-20 Pound’ is

responsible for 45% of total turnover of Kingsford.


Kingsford Sale Segmentation

45%

30%

25%

Regular - 20 Pound Regular - Other Instant

Graph A. 4

Since the 1980s, Kingsford has seen a continuous growth of 1-3% of its revenue

each year. This trend however took a negative plunge in 2000.

Kingsford with more than 50% market share sees itself as not only an absolute

market leader but also a trend setter in the charcoal industry. In past, Kingsford

product was sold at nearly 25%-30% premium to private labels and Royal Oak

was typically priced between the two. However, this price gap was narrowing as

private labels increased their prices in greater ratios. From 1999 to 2000, private

labels changed their prices in the range of 5-10% where as Kingsford increased its

prices in range of 0-5% only.

6.3 Competitive Situation

Kingsford, a player in the heterogeneous oligopolistic market was subjected to

various competitions at different levels. First of all, there was a competition at the

industry level, between the traditional barbecue and gas barbecue. Secondly,

Kingsford within the charcoal industry faced competition with Royal Oak and other

private labels.


6.3.1 INDUSTRY COMPARISON: CHARCOAL Vs GAS BARBEQUING

Both methods have a number of advantages and disadvantages. The following

table lists a few differences.

Charcoal Gas

Advantages

True barbeque experience Convenient and Quick

Tastier food Better control of temperature

Traditional Easy to use and clean

Disadvantages

Time consuming The "real" barbecue flavour

missing

Table A. 5

It is ultimately to the barbecue lovers to determine their preference. On

interpreting the Americans view on barbecuing, it appears that they would prefer

traditional way of barbecuing (charcoal). However, there are external factors

(price, product) that can lead to the transfer to gas barbecuing. Period from 1997-

2000 show the decline of about 3% in charcoal grills in US households.


Grill Penetration Trends

52% 52% 50% 49%

0%

10%

20%

30%

40%

50%

60%

1997 1998 1999 2000

Gas Charcoal Dual Linear (Charcoal)

Graph A. 5

6.3.2 MEDIA SPENDING COMPARISON

Kingsford Gas Barbeque

1998 $6 million $4 million

2000 $1 million $10 million

% Change -83,3% +150%

Table A. 6

The above table clearly shows the attitudes of Kingsford and Gas barbeque

industry towards media spending. Kingsford should consider increasing its media

spending even if the other brands within the charcoal market fail to advertise.

6.3.3 PRODUCT COMPARISON: KINGSFORD, ROYAL OAK & PRIAVTE LABLES

The following extracts the current trends of competitors in the charcoal market:

Kingsford Royal Oak Private Labels

Media Advertisement ReducedNo

advertisingNo advertising

Sales Promotion Slight increase Sharp decline Slight decline

Annual Price Increase Marginal Substantial Substantial


Market Share Improved Declined Constant

Looked as High Quality

Product by Charcoal

Users

60 % 27% 13 %

Table A. 7

It can be inferred from the above analysis that, the decline in Kingsford advertising

as well as reduced promotional activities by other charcoal competitors may be

one of the prime causes for reduced trend of penetration of charcoal barbeque

with in US households. Still, Kingsford improved its position of market share within

the charcoal industry.

6.4 Distribution Situation

Clorox used aggressive growth strategy for marketing supported by recruitment,

internal research, R&D and vast sale network. True to this, Kingsford product was

available at food stores, mass merchandisers, drug stores, club stores and other

non-tracked channels. The following graph represents the percentage of sales of

Kingsford by various distribution channels in 2000.

Distribution Channel Segmentation by Sale % in 2000

66%

15%

2%

16%

Food Stores

Mass Merchandisers

Drug Stores

Club Stores & others

Graph A. 6


It is clear that the food stores are the major distributors, accounting for up to 66 %

of total Kingsford’s sales. Thus, food stores will play a significant role while

deciding a marketing plan for Kingsford. Further, the case study revealed that food

stores were the biggest contributors for decline in Kingsford sales in 2000.

Channels First Half

CY 2000

Second Half

CY 2000

Total Year

CY 2000

Food Stores 2.0% (5.7)% (1.9)%

Mass

Merchandisers

6.7% 0.2% 3.5%

Others 2.4% (4.7)% (1.1)%

Table A. 8

It can be inferred that Kingsford would need to emphasise its marketing and

distribution planning around food-stores to sustain and increase its sale.

Distribution channels are important for Clorox and Kingsford in meeting their sale

targets. Case study mentions that, even when Kingsford did not increase the

prices, several of their channel partners increased Kingsford’s product prices. This

highlights the need of marketing strategy encompassing the strategies of

distribution partners.


6.5 Macro Environment Situation

Kingsford charcoal sales vary with seasons. March to September is very

favourable period for barbeque activities in USA. This time frame is also

responsible for 60% of Kingsford’s sales.

SEASON DATES HOLIDAYS SALES %

Early 1 March – 1 May Easter 17%

Peak 1 May – 1 August

Mother’s Day,

Father’s Day,

Memorial Day, July

4th

46%

Late1 August – 1

OctoberLabour Day 18%

Off

Season1 October- 1 March

Thanksgiving,

Christmas,

Superbowl Sunday

19%

Table A. 9

It is clear from the above table, that the summer holidays are the lucrative

business days for Kingsford with almost 35% of their annual sales occurring on 4th

July weekends.

On analysing this data, it can be deduced that to increase the sales:

1) Kingsford can put in more efforts for promotional and advertising activities

around the peak times,

2) Kingsford can also opt to extend the peak period or create the demand

outside the peak periods.


7. REFERENCES

access.imi.ie n.d., Developing a Marketing Strategy, viewed 29 November 2007, <http://www.access.imi.ie/access/mstrategy.html>

Fardon, M, Adcock F & Prokopiw, J n.d., AS Applied Business for Edexcel Single Award, ‘Marketing Objectives and Customers’, viewed 05 December 2007, < http://www.osbornebooks.co.uk/pdf/bs_as_sample_marketing_chapter.pdf >

Kotler, P, Adam S, Brown, L & Armstrong G 2006, ‘IMC: advertising and public relation’ in Principles of Marketing, 3rd edition, Pearson Education Australia.

Kotler, P, Adam S, Brown, L & Armstrong G 2006, ‘IMC: sales promotion and personal selling’ in Principles of Marketing, 3rd edition, Pearson Education Australia

Kotler, P, Adam S, Brown, L & Armstrong G 2006, ‘Pricing considerations and approach’ in Principles of Marketing, 3rd edition, Pearson Education Australia.

Kotler, P, Adam S, Brown, L & Armstrong G 2006, ‘Products: goods, services and experiences’ in Principles of Marketing, 3rd edition, Pearson Education Australia

mgt.unm.edu 2005, Strategy, viewed 26 November 2007, <http://mgtclass.mgt.unm.edu/Hozier/MGT%20722/Course%20Outlines/03%20%20Strategy.ppt>

telecollege.dcccd.edu n.d., Marketing Planning, viewed 29 November 2007, <http://telecollege.dcccd.edu/mrkt2370/Chapters/ch6/6plan.htm>

tutor2u.net n.d., Promotion - introduction to the promotional mix, viewed 05 December 2007, <http://www.tutor2u.net/business/marketing/promotion_mix.asp>quintcareers.com n.d., Job-Seeker's Glossary of Key Marketing Terms, viewed 05 December 2007,<http://www.quintcareers.com/jobseeker_marketing_glossary.html >

Vistage.com n.d., best practices, viewed 02 December 2007, < www.vistage.com/programs/best-practices/marketing-strategy.html >


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