Kingsford Case Study
Kingdom’s products represent one of the largest product groups within Closer’s portfolio, and Kingdom’s success In the market directly affects Closer’s profits. In order to develop a new marketing strategy, it’s vital to consider the products strengths, weaknesses, opportunities and threats. First, Kingdom’s greatest strength is it’s a leading product In the charcoal industry, and it has maintained a healthy, positive relationship with charcoal consumers. In fact, Kingdoms had a 59. Percent market share compared to 6. 4 percent of Royal Oak and 32.
7 percent of the private brands. In fact, Kingdoms is considered superior in product quality compared to Royal Oak and private labels, and 60 percent of surveyed consumers indicated Kingdoms was better quality. One of Kingdom’s greatest weaknesses was decreasing advertising over the years and not raising prices to stay competitive with Royal Oak and other private brands, which narrowed the price gap between competitors and lead to decreased brand awareness.
Kingdoms is also seen as a seasonal product with nearly 60 percent of purchases happening between May and September, which Is limiting for sales volume throughout the year. The grilling Industry Is also heavily dependent on good weather, and bad weather can directly affect its’ sales.
Kingdoms is particularly vulnerable because it is heavily reliant on displays and promotional items to remind people It’s a beautiful day to grill. “Our Job Is to make Kingdoms visible and let the weather do the work,” says Allison Warren, brand manager who recalls a quote from a sales team member.
Kingdoms is also heavily reliant on retailers for promotions and in-store displays, and isn’t spending enough on media advertising to maintain brand awareness. In terms of opportunities, Kingdoms is en as the leader In the charcoal category, and It has already established valuable brand equity In the charcoal market. If It re-establishes an advertising campaign, It could build brand awareness by reminding consumers that Kingdoms is the leading brand that is associated with charcoal. The biggest threat to Kingdoms affects the charcoal Industry as a whole.
In fact, gas grills could be a bigger threat to Kingdoms more than competitors Like Royal Oak and private labels. Overall, charcoal penetration has been down since 1997 while gas grill penetration has increased. In 000, gas grill shipments grew eight percent while charcoal grill shipments fell by three percent. Another threat to Kingdoms Is how Royal Oak and the private brands raised prices and the charcoal category as a whole decreased merchandising opportunities, which could have driven some customers to gas grills for a cheaper option. 2.
In order to determine Kingdom’s success in the market, it is vital to determine Its’ target audience by segmenting grilles into two categories: charcoal grilles and gas grilles.
The case study revealed that charcoal grilles and gas grilles eave different needs and various reasons to buy a charcoal or gas grill. In fact, “charcoal grilles are die-hard griller who prefer charcoal grilling over gas grilling for its’ hands on experience and the flavor imparted to the food. Gas grilling, on the other hand, was preferred by those looking for convenience, greater control over cooking temperature, shorter cooking times, and ease of clean up. As a result, the Conrail category target audience Is a group AT ale-Nora Conrail griller won appreciate the rewarding experience and taste while the gas grilling category’s target audience look for convenience, shorter cooking times, and an hassle-free, easy clean up. In terms of segmenting heavy charcoal users, there are three categories regular exclusive users that exclusively use charcoal, instant exclusive users that only use instant charcoal, and instant acceptors that are accepting of both types.
Regular exclusive users identify grilling as a satisfying skill that is worth doing right and view making a fire with charcoal as an easy task.
Instant acceptors see grilling as a flexible, easy way to prepare a meal, and instant exclusive users think of grilling as a way to et out of the kitchen and spend time with family. In terms of the grilling category as a whole, there are three categories: gas, charcoal, and dual. Kingdoms Charcoal should target people who use charcoal grills (category) and instant acceptor grilles (consumer), who exclusively use charcoal.
Instant acceptors, who accept and are comfortable with both types of charcoal, and they see charcoal grilling as a flexible, easy way to have a hassle-free meal. Although this particular segments attitudes are similar to gas grilles’ attitudes of having a hassle free, easy meal for the family, they re committed to using both kinds of charcoal (which Kingdoms offers) and account for the majority (62 percent) of Kingdom’s sales volume, which is important to maintain and grow profits.
After successfully targeting instant users, I would recommend targeting regular exclusive users. This segment is the most comfortable with grilling, has more time to grill, and doesn’t see grilling as a hassle. These attitudes associated with regular exclusive users also indicate that they are less likely to use gas grilling as a method. It’s important to note that regular charcoal users account roughly 30 percent of heavy Kingdoms users and 28 percent of sales volume, and it’s vital to grow this particular segment.
The Colors sales team had years of experience in working with a variety of household names and many senior sales executives at the company, such as Grand Lamentable, vice president of sales, who sold charcoal earlier in their careers. Lamentable believed Colors understood the charcoal category.
Lamentable said that the key to success is not changing the brand image, and creating a consistent message across a variety of channels. 3.
Kingdom’s racketing objectives can go into three directions: increasing profits, growing market share, or enhancing brand equity, and maintaining all three marketing objectives simultaneously is difficult for a brand to implement successfully. It’s important to note that Kingdoms has already established positive brand equity within the charcoal category because it is viewed as a higher quality product. In addition, the company has the largest market share in the charcoal category compared to competing brands like Royal Oak and private label brands so the goal of increasing market share isn’t he most critical option.
The most important marketing objective is increasing profits because the brand lacked a visible presence in advertising and promotion for years, which led to a decrease in sales that directly affected Kingdom’s profit in the market. Closer’s profits are also heavily dependent on Kingdom’s success. In 2000, charcoal accounted for 9 percent of Closer’s revenues and a substantial portion of net income. 4. Positioning In order to enhance Kingdom’s brand equity in the market, it’s important to understand the brand’s current positioning and establish a new positioning in the raked.
Errantly, ten vast majority AT Klystron consumers are navy users Tanat are placed in three categories: regular exclusive, instant exclusive, and instant acceptors. In fact, the three segments account for 30,10, and 60 percent of all heavy users and 28, 1 1, and 62 percent of the total volume consumed by these users. Kingdoms should focus on targeting the instant acceptors accepters because they account for 60% of all heavy Kingdoms users; they are accepting of both kinds of charcoal, which Kingdoms sells; and they see charcoal grilling as hassle free, which sakes them less likely to choose gas grilling.
Advertising Currently, Kingdoms is considered to be the leader in the charcoal category while holding the majority of market share in that category compared to Royal Oak and other private brands. In terms of Kingdom’s advertising presence in the market, the brand has steadily cut back on spending on advertising since 1996 as more money went to sales promotion and reduced revenue spending, which had a huge impact on the brands growth in the market. In fact, Kingdoms spent $6 million on advertising in 1998 compared to $1 million in 2000.
Even though the brand managers would like to spend at least $7 million on advertising, I would spend $9 million on advertising due to Kingdom’s lack of a media presence in the market for several years. The advertising message should mention how Kingdoms is easy to use, hassle free, and convenient so the brand can compete with the gas-grilling category, which has proven to be one of the biggest threats to not only Kingdom’s success, but also the charcoal category as a whole.
In addition to increasing spending on advertising, I would also increase the amount of displays in stores because they drive sales cause over a third of charcoal purchases are impulse buys. In addition to using displays in stores, it’s vital to indicate that the brand isn’t Just a seasonal product, but it is a year-round product that can be used for fall tailgating and other events throughout the years outside of traditional grilling holidays and seasons.
Another promotional tactic that can be used is taking the product to a sporting event tailgate and providing a taste test for attendees, showing the difference in taste between using charcoal and gas. The brand can use the same “taste-test” concept in a immemorial, showing that consumers prefer food that was grilled using Kingdoms charcoal versus a regular gas grill.
Advertising also needs to focus on rekindling the interest of charcoal grilling in order to differentiate Kingdoms from gas grilles.
Pricing In regards to pricing, Kingdoms should consider raising the prices by a small margin across all channels in order to compete with Royal Oak and other private brands. Kingdom’s decision to increase prices may also drive the consumer to the competition because Royal Oaks competitive advantage is its’ lower price even Hough Kingdoms is seen as the leading charcoal brand with the best quality. If Kingdoms raised prices too much, charcoal may be viewed from others as too expensive, which may drive consumers to gas grilling.
In addition, the brand should continue pricing according to the size of the bag. Since the 20-pound bag accounts for 60 percent of sales and is the most popular size, it would be beneficial to increase the price of the 20-pound bag slightly more than the other sizes in order to achieve a higher profit.
Production Since the company would like to increase financial growth in the market, it’s Important to nave a production plant Tanat can support ten product supply slice It Is running on 80 percent capacity.
If the volume continues to increase by 5 percent over a course of several years, the brand won’t have enough capacity to produce charcoal. Since the core objective is increasing profits, Kingdoms should show significant growth yearly so it is vital to establish a new production plant with a higher capacity. Although investing in a plant costs $30-$50 million to build over a course of at least five years and it is costly, there are few alternatives to production.