Kingsford Charcoal

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Discussion questions for case Kingsford Charcoal 1. Describe the main challenges faced by brand managers Marcilie Smith Boyle and Allison Warren. Of what relevant trends should they be aware? Main challenges specifically relevant to brand managers at Kingsford Charcoal: * A slow down in the growth in the charcoal category from 4% growth to just 2%, which is only predicted to decline further. *Possibly a symptom of weather conditions or changing consumer trends which lend themselves toward gas grilling* * A rise in the use of gas grilling (shown through number of shipments), as opposed to charcoal grilling also may have been a symptom of the underlying problem, that of the competitor’s price increases * The decision of…show more content…
Specifically, what action should they take in regard to pricing, advertising, promotion and production for the Kingsford brand? Pricing: It would appear that Kingsford has, from CY99 – CY00 experienced the lowest percentage increase in price on a weighted average basis (see exhibit 4). Coupled with the concerns from Smith Boyle that “retailers inevitably resist” price increases, a 3% price increase per year seems a reasonable standard that the team should avoid exceeding. However, a proposed plan may be to increase prices within a particular channel, namely the mass merchandisers. In line with exhibit 3, which shows the only total year volume growth for CY00 in all channels of 3.5%, an acceptable price increase is 5% for this particular channel. Based on the weighted average price increases (exhibit 4) of Royal Oak and Private Label, a 5% increase for Kingsford sits between the increases of the last year that were offered by both these brands, exempting the instant 15# category. This seeks to satisfy to some extent Gordon’s idea that a price increase may induce short-term profits, but should not exacerbate Nick Vlahos’ concern that a price increase will have a negative impact on the firm’s desire to drive out the Royal Oak brand. Thus, the proposed prices for products in CY01 in all mass merchandising outlets should be: Regular 10# = approximately $4.32 Regular 20# = approximately $7.19 Instant 8# = approximately

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