Kingsford Charcoal Brief Case Report
Company and competitors: Kingsford is a well known brand of charcoal for barbeque purpose in US. Clorox purchased it in 1973. It accounts for 9% of Clorox’s revenue in 2000. Kingsford only have two main competitors in the market, Royal Oak and private labels.
Key trend and key success factor: Grilling is a popular event in US. Common reasons for barbecuing are great flavor, outdoor social activities, change of pace etc. Charcoal and gas grilling are the most common methods. The success of Kingsford is due to discipline in delivering constant marketing, sales action and message communicated across different parties. The key sales techniques are high quality charcoal and visible display location of the charcoal in the stores.
SWOT
Strengths | Evidence | Premium quality brand positioning | 60% consumer perceived Kingsford as high quality brand compared to its competitors | Market leader | Kingsford owned huge market share in charcoal category, 57.7% in year 2000 | Established and strong relationship with distribution channels | Kingsford charcoal are distributed in different channel and have goodwill with channel partners over the years. | Annual sales increase by small percentage | Since 1980s, Kingsford has moderate growth of 1-3% each year | Weakness | Evidence | Substantial cut-down in advertising budget | Kingsford cut down its advertising budget from $6 million in year 1998 to about $1 million in year 2000. | Seasonality of sales | Charcoal sales are mainly on limited period, 60% of sales are within May till September. | Limited production capacity | There is only 20% production capacity for growth. It will be a constrain for the company expansion. | Failing trend of Kingsford growth | In 2000 summer, charcoal category growth is softening. | Advertising for the industry as a whole | As market leader, Kingsford sales are highly affected by the product category sales. Thus it needs to advertise for the market as a whole which cost a lot. |
Key trend and key success factor: Grilling is a popular event in US. Common reasons for barbecuing are great flavor, outdoor social activities, change of pace etc. Charcoal and gas grilling are the most common methods. The success of Kingsford is due to discipline in delivering constant marketing, sales action and message communicated across different parties. The key sales techniques are high quality charcoal and visible display location of the charcoal in the stores.
SWOT
Strengths | Evidence | Premium quality brand positioning | 60% consumer perceived Kingsford as high quality brand compared to its competitors | Market leader | Kingsford owned huge market share in charcoal category, 57.7% in year 2000 | Established and strong relationship with distribution channels | Kingsford charcoal are distributed in different channel and have goodwill with channel partners over the years. | Annual sales increase by small percentage | Since 1980s, Kingsford has moderate growth of 1-3% each year | Weakness | Evidence | Substantial cut-down in advertising budget | Kingsford cut down its advertising budget from $6 million in year 1998 to about $1 million in year 2000. | Seasonality of sales | Charcoal sales are mainly on limited period, 60% of sales are within May till September. | Limited production capacity | There is only 20% production capacity for growth. It will be a constrain for the company expansion. | Failing trend of Kingsford growth | In 2000 summer, charcoal category growth is softening. | Advertising for the industry as a whole | As market leader, Kingsford sales are highly affected by the product category sales. Thus it needs to advertise for the market as a whole which cost a lot. |