Strategic marketing management assignment Analysis for Kingsford Charcoal

Question

Task: How can Kingsford Charcoal effectively implement strategic marketing management assignment techniques to enhance its market positioning and drive sustainable growth in the competitive charcoal industry?

Answer

Introduction

The concept of strategic marketing is considered as one of the most crucial elements for the long-term success of a business organisation. Analysing the overall characteristics of Kingsford Charcoal and developing its appropriate market segmentation, targeting positioning and financial analysis is the primary purpose of this study. Quantitative analysis is crucial for supporting pricing related decisions, marketing spending and channel selection related decisions. Appropriate marketing and positioning strategies, help business organisations to fulfil customer demands and ensure long-term integrity within the strategic decision making passes for a business.

Market segmentation and targeting

Market segmentation is mainly associated to dividing the market into approachable groups and creating subsets of a market based on demographics, needs and different other priorities of the customers. Segmentation in market occurs through four key factors which are demographic, psychographic, behavioural and geographic. Kingsford Charcoal mainly targets its youth and middle aged customers who are mainly engaged most in BBQ practices . According to the viral characteristics of the customer base of Kingsford Charcoal it can be understood that there are three types of customers of this organisation.

Consumer personas

 

Family Grill Enthusiast
Demographics	Behavioural Traits	Psychographics
Age group: 30-50 Family structure: Married and have children Middle to high income segment  Suburban locations	Hosts family gatherings as well as backyard barbecues frequently Generally loves to enjoy outdoor activities and have proper backyard space for grilling activities Provides proper attention to spend quality time with friends and family	Prioritise purchasing large bag size for frequent utilisation Provides proper attention towards high-quality as well as reliability of products to ensure consistency in the grilling experience Marketing promotions which are integrated in holidays and family oriented events can attract

 

 

Urban Professional
Demographics	Behavioural Traits	Psychographics
Age group: 20-30 Family structure: Couple with no children and singles  Middle to high income segment  City neighbourhoods and urban locations	Hosts small gatherings frequently and enjoy socialising with friends Provides proper attention towards convenience as well as easy utilisation Generally has comparatively smaller outdoor space and might utilise communal grilling locations	Love to purchase smaller bag sizes for easy storage as well as occasional usage Appreciate sleek as well as modern packaging Discounted pricing strategies can attract them

 

 

Eco-Conscious Outdoor Enthusiast
Demographics	Behavioural Traits	Psychographics
Age group: 25-50 Family structure: Diverse Middle to high income segment  Eco friendly communities	Provides proper attention towards environmentally sustainable practises Enjoys multiple outdoor activities such as hiking, camping and many others Always select the products which have minimal environmental impacts	Generally selects chart coal which are made from sustainable sources Generally purchase small batches Provides positive response towards the sustainable packaging

 

Close-ended criteria 

 

Close-ended criteria	Description
Grilling frequency	Occasionally  Frequently
Family structure	Single  Married with children
Location	Urban regions
Income	Middle to high income segment
Awareness of brand quality	High

According to the above table, it can be understood that individuals who are living in urban regions from the middle to high income segment are the main target customers for Kingsford Charcoal. Family structure can be diverse as the target customers might be single, married and married couples with children. There should be outdoor enthusiasts and frequently or occasionally involved in the grilling activities.

Positioning

Positioning is recognised as one of the most important aspects associated with the overall sustainability and long-term marketing improvements of a business organisation. Effective positioning strategies can enhance the strategic directions of a business organisation and help marketers to penetrate in the decision-making activities of the customers . However, it is important for business organisations to collect in-depth as well as important knowledge regarding the market, competitors and alternative products of the brand. According to the provided information in the case study, it can be understood that private level brands and Royal Oak are the two biggest competitors of Kingsford Charcoal. However, the gas-grilling option is one of the biggest threats for this organisation. For instance, nearly 54% of the total US households had a gas grilling option in 2000. The criteria table has been described below and each criteria has been ranked on a scale from 1-5 (5 being high and 1 being low).

 

Criteria	Royal Oak	Private label	Kingsford Charcoal	Gas grilling
Price	4	5	3	2
Brand perception	3	2	4	3
Consumer awareness	2	1	2	4
Spending in advertisements	1	1	2	5
Media spending in gas grilling	0	0	0	5
Media spending in charcoal	2	1	3	0

 

The first perpetual map highlights two different characteristics such as brand perception and price. According to this particular map, it can be understood that Kingsford Charcoal can be positioned as a specific brand with high brand perception as well as moderate pricing. It highlights the establishment of Kingsford Charcoal as a provider of superior quality compared to private level brands, and it is ensuring competitive pricing against its nearest competitors like Royal Oak.

The second perpetual map highlights two characteristics such as consumer awareness and advertising spending. It indicates that increasing the advertisement related spending of Kingsford Charcoal is crucial to improve the concept of consumer awareness. This may be crucial for highlighting the qualities and other strengths of Kingsford Charcoal through multiple advertising channels .

Positioning statements
Perceptual Map 1	Perceptual Map 2	Perceptual Map 3
Kingsford Charcoal should be positioned as a premium choice for charcoal users as it offers high-quality grilling experiences at an affordable price range. This organisation is standing above private level brands and it is also providing comparatively higher value than Royal Oak.	Increasing investment in the advertising sector can help the business to provide in-depth information regarding the superior grilling experiences with Kingsford Charcoal. The value and quality offered by this business organisation is setting the company apart from its other competitors in the market.	The market is highly influenced by the promotional activities of grass grilling but gas grilling cannot provide the authentic experiences of charcoal. Kingsford Charcoal should be positioned as the charcoal expert and investment in media spending can ensure its long-term sustainability.

Positioning statements

Functional benefits

Positioning strategies are considered as one of the most important aspects associated with the overall engagement of a brand with its target audience. Business organisations generally utilise proper feasibility studies to identify both emotional and functional benefits of the positioning strategies to determine its efficiency . According to the overall characteristics of Kingsford Charcoal, it can be easily understood that the organisation is capable of performing surprisingly well in the brand perception and pricing sector. Consistent quality is a functional benefit of this brand and in this sector the price vs. brand perception positioning quadrant has been selected. The marketers of this organisation can position this brand with high brand perception and moderate pricing.

It helps to gain the overall loyalty from the customers from both middle and high income segments. The second functional benefit is affordable excellence and the organisation focuses on offering competitive prices to the customers and high-quality grilling experiences. The pricing structure of this organisation is comparatively lower to the nearest competitors such as private level brands and Royal Oak. Kingsford Charcoal should be received as a premium choice for the customers and its competitive pricing against the pricing strategy of Royal Oak can increase value of the brand. The third functional benefit is reliable value and it is the combination of competitive pricing and high-quality standard. Brand perception plays an integral role in this context as comparatively higher brand perception ensures customer trust .

Emotional benefits

Trust and confidence is considered as the first emotional benefit and consumer confidence is crucial for selecting Kingsford Charcoal due to its reputation in the context of affordability as well as quality. Pride in grilling experience is the next emotional benefit as the high-quality standard and premium pricing structure offers the customers to take pride in selecting this brand in place of other competitors. Smart consumer choice is the third emotional benefit as it is a smart choice for quality conscious customers who want to ensure a balance between affordability and quality. It is important for business organisations across the globe to understand the actual potential of the products to establish a strong positioning strategy .

Criteria	Kingsford Charcoal
Price	3 out of 5
Brand perception	4 out of 5

Positioning statement

Kingsford Charcoal is considered as the smartest choice for grilling as it combines consistency in quality with comparatively higher affordability. Customers can experience the pride of using a premium grilling experience without compromising their budget . It is a trusted brand by customers for its reliability as well as value. It should be recognised as the confident as well as wise choice for the individuals who appreciate comparatively higher excellence within a smart pricing structure.

Financial analysis

Historical profit and loss statement analysis is a crucial element to develop informed decisions regarding the operational sustainability of a business organisation. It is important to understand the overall stability as well as operational efficiency of a business organisation reflects on the profit and loss statements . According to the collected data regarding the financial performance of Clorox, it can be understood the net sales of Kingsford Charcoal is 9% of the total net sales of Clorox. It has been assumed that the specific percentage is consistent throughout the two years. Expenses as well as costs related to the operational activities of Kingsport are also assumed to be 9% of the total expenses as well as costs of Clorox while developing the profit and loss statement.

Historical 2 year profit and loss statement

Factors	Amount (In million) For 2000	Amount (In million) Fro 1999
Net sales	$367.47	$360.27
Gross profit	$164.97	$163.98
Promotion and advertising	$41.85	$42.66
Cost of goods sold	$202.50	$196.29
Additional expenses	$29.69	$26.57
Operating profit	$93.43	$94.75

Pro-forma profit and loss for the next 3 years

According to the provided case study information, there are some fixed elements while developing the pro-forma of profit and loss statements for the upcoming three years. Fixed elements are price point gross margin and value of a share point.

Scenario	Share points lost or gained	Investment per year
Pessimistic	2% market share loss	Maintaining the current level
Realistic	1% market share gain	Slight increment due to marketing
Optimistic	3% market share gain	Huge increment due to aggressive marketing campaigns
Aggressive		15% increment in the marketing and advertisements

Scenario A: Pessimistic

Factors	1st year	2nd year	3rd year
Net sales	$352.18	$344.13	$336.26
Gross profit	$140.87	$137.65	$134.50
Promotion and advertising	$37.56	$36.58	$35.63
Cost of goods sold	$211.31	$206.48	$201.76
Additional expenses	$28.17	$27.46	$26.77
Operating profit	$75.14	$73.61	$72.10

 

Scenario B: Realistic

 

Factors	1st year	2nd year	3rd year
Net sales	$372.90	$386.95	$401.59
Gross profit	$149.16	$155.65	$162.55
Promotion and advertising	$38.74	$39.92	$41.12
Cost of goods sold	$223.74	$231.30	$239.04
Additional expenses	$28.96	$29.85	$30.76
Operating profit	$81.46	$85.88	$90.67

 

Scenario C: Optimistic

 

Factors	1st year	2nd year	3rd year
Net sales	$394.32	$415.40	$437.92
Gross profit	$157.73	$166.73	$176.31
Promotion and advertising	$41.22	$43.42	$45.69
Cost of goods sold	$236.59	$248.67	$261.61
Additional expenses	$30.84	$32.43	$34.06
Operating profit	$85.66	$90.88	$95.56

 

Scenario D: Aggressive

Price increases from $4.25 to $5

 

Factors	1st year	2nd year	3rd year
Net sales	$398.22	$410.45	$423.08
Gross profit	$159.29	$164.68	$170.43
Promotion and advertising	$45.41	$52.31	$60.20
Cost of goods sold	$238.93	$245.77	$252.65
Additional expenses	$32.29	$37.15	$42.78
Operating profit	$81.59	$75.21	$67.46

Four different scenarios have been described based on the provided information in the case study. According to the basic characteristics of the fourth scenario, it can be understood that a price increase to $5 can introduce elastic response as well as notable increase within the promotional and advertising activities. This method is crucial to support the overall premium positioning structure of the brand. However, it is important to provide advocate attention towards understanding the expectations of the customers before developing any pricing related strategies.

Tactics 4P

Product

The company is mainly concentrated to sell its charcoal products which includes; Kingsford Charcoal Original charcoal, Kingsford Charcoal Low and slow briquets and others that provide different kinds of taste to the different meats which the customers prepare.

Price

The price of the charcoals other than the Kingsford Charcoal original is prices somewhat at an increasing rate due to its special flavours and burning rates. However the value centric pricing towards the Kingsford Charcoal original has been constantly as it is the main charcoal of the company which has a decent heritage.

Place

The company currently is only concentrated in the UK market however with time the company expects its spread in the wider global market for increasing its customers. The company is mainly present throughout the UK and the Europe at the current time with strong production facilities and logistics support and stable inventory.

Promotion

The company mainly focuses on social media based marketing which is eminent in increasing the attention of the youth customers. This has been one of the key considerations for the company through which an overall improvement in business development can be expected. The modern social media based marketing is expected to increase the reach of the products at a larger extent resulting in better sales.

Summary Recommendations

Pricing recommendation for each product

List of Products	Pricing Recommendation	Rationale for pricing
Kingsford Charcoal Low and slow briquets	$17.98	High pricing as the product is specifically used for low and slow BBQ processes The customers demand better and more even burning which is increasing price of the product
Kingsford Charcoal High heat briquets	$14.99	High pricing due to specific requirement of high heat The customer demand quick heat burning for long hours which is complicated to be provided by other charcoals in the market
Kingsford Charcoal Signature flavour charcoal briquets and Flavour boosters-Memphis BBQ	$13.98	High pricing due to especial memphis flavour Rare and less selling only for dedicated customers thus high price as it is non regular selling
Kingsford Charcoal Signature flavour charcoal briquets and Flavour boosters-Bourbon BBQ	$14.98	High pricing due to bourbon whiskey flavour in meat Only for customers who want alcoholic smoky flavour in their meat which is a specific requirement
Kingsford Charcoal Original charcoal	$10.92	Value based pricing as it is the oldest and heritage product of the company Pricing of this product always can remain competitive as it is best in fulfilling the basic need for grilling and providing authentic taste
Kingsford Charcoal Matchlight charcoal	$25.28	High pricing due to special need of quick lighting and burning  Customers can save the cost of adding any other flammable liquid due to its increased flammability
Kingsford Charcoal Cherrywood charcoal	$20.11	High pricing for the cherrywood essence which is costly  Inducing cherrywood flavour is unique and especial for the selected customers mainly for the pork lovers as it is rich in taste imbibing the essence of cherry to the meat specifically required by certain customers

Marketing channel recommendations

Promote its products through Instagram based influencer marketing

Instagram based influencer marketing is a trendy solution to modern business organisations as they are using it efficiently for increasing their sales in the international as well as domestic market. The companies generally utilise the popularity of the influences and market their products by the influences through paid partnerships. This process is highly efficient in case of the youth audience as the influencers have a direct influence over the youth.

Email marketing

Email marketing is beneficial in developing personal relationships and contact with the customers and providing them and Al together with personalised treatment. This helps in improving customer perception towards the brand and increases loyalty within them. Through this process, an overall improvement in sales development can be expected creating better value for the customers.

Keep the customers updated through Facebook page about launch of any new product

Maintaining close connection between the customers through Facebook page helps in improving the launch of any products and spreads its news. Through Facebook posts the reach for any new products gets enhanced as the customers get aware of the new launch and try to buy the product for testing. Through Facebook page based updates, the company can be able to enhance its capabilities in developing new products that are liked by the customers. This process increases a deep connection with the customers resulting in overall development of sales and customer loyalty.

Marketing Channels	Priority Level	Rationale
Instagram influencer marketing	High	Influencer marketing through Instagram has been a recent trend Kingsford Charcoal can use the popularity of the different influencers and promote their products
Email marketing	Low	Email marketing is a personalised marketing tactics The capability of convincing power of email marketing at a personal level is huge
Facebook page based marketing	High	Connecting with the people through facebook and developing relations Regular basis updates in Facebook helps in keeping people updated about any new notification

 

VRIO

Resource Capabilities	Valuable	Rare	Imitable	Organised	Competitive advantage
Good production procedure	YES	NO	NO	YES	Optimised production with shorter lead times
High brand value	YES	NO	NO	YES	Increased customer interest
Variation in products	YES	YES	NO	YES	Provides wider opportunities to the customers to get different types of products
Product innovation	YES	NO	NO	YES	Development of good quality products liked by the customers
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