Kingsford Case Summary
To improve its softening situation, I believe that Kingsford should increase prices and shift its spending from sales promotion to media marketing in order to improve Kingsford’s profit in the short term and invest more in R&D to create new products in the long term.
Pricing strategy plays a key role for Kingsford’s profitability in 2001. Recent price increases for private label brands reduced its price gap with premium brands, which eroded the premium brand image of Kingsford (see exhibit 1). Among the four pricing scenarios (see exhibit 2), the option of increasing both regular (blue bags) and instant (red bags) charcoal products by 5% across all channels would deliver the highest profit prospect. Although raising price likely hurts volume,
Pricing strategy plays a key role for Kingsford’s profitability in 2001. Recent price increases for private label brands reduced its price gap with premium brands, which eroded the premium brand image of Kingsford (see exhibit 1). Among the four pricing scenarios (see exhibit 2), the option of increasing both regular (blue bags) and instant (red bags) charcoal products by 5% across all channels would deliver the highest profit prospect. Although raising price likely hurts volume,