Kingsford Charcoal Case
I. STRATEGIC ISSUES
Brand managers Marcilie Smith Boyle and Allison Warren were tasked with determining the causes of the recent softening of the charcoal industry and coming up with recommendations to grow the Kingsford Charcoal brand. They faced a series of critical decisions in this task:
1. Pricing – should prices be raised, and, if so, by how much? Should they implement a total line pricing increase or just increase the price of certain products?
2. Advertising – should advertising be increased, and by how much?
3. Competition – is Kingsford competing against other charcoal manufacturers, gas grills manufacturers, or a combination of both?
4. Promotion – what was the best strategy to promote the Kingsford brand? Should Kingsford strive to increase overall grilling events, or just emphasize the Kingsford brand?
5. Capacity – if the Kingsford business could be grown substantially, is the current manufacturing capacity adequate in the near-term? Long-term?
I.1 Goals
I determined that the specific goals that the brand managers should be focused on achieving are:
1. Growing the charcoal market (resulting in growth for Kingsford due to its huge share of the market),
2. Increase profitability through growth and production optimization,
3. Strengthen the brand by employing a marked increase in advertising and specific promotional themes,
4. New product development, and
5. Increase in non-seasonal business (this will both increase volume and smooth out production).
I.2 Challenges
The challenge facing the brand managers is how to achieve these goals in the face of a declining charcoal market. Other obstacles include reluctance by management to spend money on advertising, burgeoning competition from the gas grill industry, and production capacity that could quickly be challenged with sustained growth.
II. DATA COMPILATION AND ANALYSIS
II.1 Revenue
The Kingsford Charcoal business produces revenues of $350 million per year, which
Brand managers Marcilie Smith Boyle and Allison Warren were tasked with determining the causes of the recent softening of the charcoal industry and coming up with recommendations to grow the Kingsford Charcoal brand. They faced a series of critical decisions in this task:
1. Pricing – should prices be raised, and, if so, by how much? Should they implement a total line pricing increase or just increase the price of certain products?
2. Advertising – should advertising be increased, and by how much?
3. Competition – is Kingsford competing against other charcoal manufacturers, gas grills manufacturers, or a combination of both?
4. Promotion – what was the best strategy to promote the Kingsford brand? Should Kingsford strive to increase overall grilling events, or just emphasize the Kingsford brand?
5. Capacity – if the Kingsford business could be grown substantially, is the current manufacturing capacity adequate in the near-term? Long-term?
I.1 Goals
I determined that the specific goals that the brand managers should be focused on achieving are:
1. Growing the charcoal market (resulting in growth for Kingsford due to its huge share of the market),
2. Increase profitability through growth and production optimization,
3. Strengthen the brand by employing a marked increase in advertising and specific promotional themes,
4. New product development, and
5. Increase in non-seasonal business (this will both increase volume and smooth out production).
I.2 Challenges
The challenge facing the brand managers is how to achieve these goals in the face of a declining charcoal market. Other obstacles include reluctance by management to spend money on advertising, burgeoning competition from the gas grill industry, and production capacity that could quickly be challenged with sustained growth.
II. DATA COMPILATION AND ANALYSIS
II.1 Revenue
The Kingsford Charcoal business produces revenues of $350 million per year, which