EXECUTIVE SUMMARY
In this report, we will be analyzing the current performance of Kingsford in the marketplace and identify the main cause of revenue deterioration. Thereafter, a comprehensive strategy and marketing plan will be presented. We will begin with identifying current business orientation of Kingsford. Then, we will analyze its position in the marketplace and various external forces. In-depth analysis on the strengths and weaknesses of Kingsford is done to have a clearer picture on what should be done to boost its revenue and profit. The analysis theories used are Porter’s Five Forces, PEST, and SWOT. There are a few important findings that require immediate attention.
Kingsford is a superior product compared to
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The factors are tabulated below.
Figure 6: Analysis of Internal factors - Strength and Weaknesses
Figure 7: Analysis of External Factors - Opportunities and Threats
2.5 KEY FINDINGS ON ANALYSIS
Kingsford has a very good business opportunity, as there is positive growth in BBQ grilling events. Outdoor grilling a culture in the US.
The main threat comes from gas grilling, which has several advantages like convenience and fast setup. Gas grilling has massive media spending, which increases customers’ awareness. Therefore, marketing strategies must focus on “attacking” gas grilling and improve the overall performance of charcoal category.
Kingsford possess good MBAs and premium products, but inadequate A&P to communicate the advantages of charcoal grilling to consumers.
Current marketing efforts successfully increase Kingsford market share in charcoal category, but it lacks focus on customers’ needs and wants (Marketing Orientation).
The primary and unchallengeable advantage of charcoal grilling over gas grilling is the superior food taste. It is also supported by consumer survey.
Kingsford may face production capacity problem if sales volume grows.
3.0 Proposed Strategies to Increase Revenue and Profitability
Kingsford dominates the charcoal category but overall the category is on the decline due to substitution effect by the consumers, despite the overall increase of barbeque events popularity.
3.1 Overall
If Parkland wants to achieve the aggressive growth that the board desires his ability to improve the capabilities and the operations of the company will be one of his greatest barriers. Due to the affluent nature of the customers and the possible variety in the product Parkland should focus on improving the company’s organizational capabilities. A new plant will eventually be needed but that decision can be delayed if Charles can streamline its operations. Parkland needs to institute policies that will measure productivity and develop an accurate method of forecasting sales. This will result in lower inventory carrying costs, fewer out of stock issues, and fewer backorders that need to be filled. If Charles can reduce the number of back orders and out-of-stock products it can focus on a single product line at a time which will reduce the frequency of expensive switching costs.
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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
A second alternative could be to increase their advertising budget because it has been the only brand within the charcoal industry that has been advertising. Their advertising budget is currently very low so with an increase in spending it could definitely generate more attraction and promote Kingsford charcoal as the better alternative.
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.
The Marketing Audit, Porter’s Five Forces, SWOT, PEST are used to analyze the internal and external factors to better understand Kingsford position in the charcoal business.
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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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