Kingsford Charcoal Case Analysis

This case study analysis deals with the issues faced by Kingsford Charcoal and provides recommendations in the context of the four Ps (product, pricing, promotion and place).

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Date: February 9, 2019
Professor’s Name: James Munch
Course Title: MKT 6301: Marketing Management
Team Members:
Olivia Esquivel
Kaneez Khan
Merlin Paulson
Marie Saul

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Kingsford Charcoal case Analysis
Executive Summary
This case study analysis deals with two brand managers at Kingsford Charcoal, a Clorox
company. The team is facing several issues that include the advent of the technology that has
changed how people are using charcoal and the demand has diminished over time. The brand
managers are now concerned about the future of charcoal grilling and about improving the brand
image of Kingsford Charcoal. Meanwhile, many other issues such as production, branding,
advertising and marketing are affecting the company outlook, and the entire assignment is based
on analyzing and making decisions in this regard. Following case analysis will identify the key
issues, and provide recommendations in the context of the four Ps (product, pricing, promotion
and place).

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Company Background
Kingsford Charcoal started its operation in the 1920s. One of the largest brands in
Clorox’s portfolio, it represented 9 percent of the company’s total revenue and a substantially
higher percentage with respect to its overall net income. In recent times, the company has been
facing issues over its operations, as discussed in this report. The two brand managers Marcilie
Smith Boyle and Allison Warren, who work for the $350 million charcoal business, are
concerned about the future of the company. The company started facing the issues in 2000, and
management was determined to establish recommendations that would help solve Kingsford’s
problems. The cause of the issues is the advent of technology that has changed the way
companies use charcoal for cooking purposes. At the same time, the organization is facing many
other issues in the areas of production, branding, and marketing and is looking for ways in which
it can solve these and change its present status. The company has not raised the prices of its
charcoal over the years, but now, in the face of stiff competition, it is questioning this decision
and trying to make changes in this regard. A meeting was held to review the status of the
company concerning the business review. The aim of this assignment is to discuss how the
company can resolve this issue and what plans it has to make better progress and achieve success
(Boghossian).
Key Issues
Although grilling is a method of cooking food that is popular all over the world, in a
country like America it is very popular, and people grill more often there than anywhere else.
Traditionally, people use two types of grilling methods—charcoal and gas grilling—but they
have tended to prefer charcoal grilling for the overall hands-on experience and the flavor that it
imparts to the food (Meathead 2017). In the case of gas grilling, it is easier to set up and is more

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convenient in terms of setting the cooking temperature, being able to cook quickly, and the ease
of cleaning up. Thus, people have had many reasons for choosing either method. Although both
have their share of advantages, the most important reason for choosing charcoal grilling has
always been the quality of the flavor. However, people are gradually moving away from using
charcoal grilling because of the inconvenience associated with it.
The main concern for Kingsford Charcoal Company is that customers are losing interest
in charcoal grilling, which would affect the overall growth of the company. The firm has not
increased its prices in several years, and with market conditions as they are, a sudden price rise
would not be seen as conducive to growth. There are also issues associated with branding,
primarily due to lack of advertising and a decrease in spending on media, which has been
considered a waste of money that has affected progress. Market surveys and gathering
information from the public will help when performing customer analysis to understand the
current situation. Furthermore, gauging personal customer experience with the use of coal and
charcoal will enable a good analysis (Cundill et al.).
Analysis of the Issues
The advent of technology has brought several changes in how people are using charcoal.
Previously, it was used only for the business of cooking, and there was high demand for the
same. The company is now concerned about the future of charcoal grilling and about improving
its brand image. Meanwhile, many other issues such as production, branding, and marketing are
affecting the company, and this entire assignment is based on analyzing the firm’s financial
status and making decisions in this regard (Cundill et al.).

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Considering the business’s present situation, the managers should conduct a SWOT
analysis of the product, and based on the results, they should decide whether to continue in the
industry. The four Ps are used to help inform the analysis, as follows:
Product
Charcoal is produced from woods, minerals, limestones, and certain other raw materials
in a two-part process. Although the overall procedure is lengthy, production is cheap based on
the materials used. The company has its own plants that support the two-part procedure and thus
make the operations less costly; in the present situation, it should outsource its production so that
the overall cost is minimized (Johan). Charcoal package is sold in either a blue bag (regular) or
red bag (instant) in three sizes of 10 pounds, 20 pounds, and 48 pounds. The packaging could be
augmented to add benefits, such as including zip locks, instructions on the quantity and how to
use, and some easy recipes, which would attract customers. Also, Kiosks that sell charcoal bags
avoiding customers to stand in long line would give attract the customers.
Pricing
Kingsford Charcoal priced its regular 10-pound blue bag at $4.25 and its instant 8-pound
red bag at $5.20 in 2001. The company has kept its prices the same at all times, whereas
competitors, such as the private labels, have been selling products at discounts of 20 to 30
percent to boost sales and attract customers (Kang et al.). A price discount strategy, such as
offering discounts during the low sale season and the week after Memorial Day, the fourth of
July, Labor Day, and so on, would be beneficial in terms of Kingsford increasing its market
share and enticing customers. Furthermore, a slight increase of 1 or 2 percent in the price of
charcoal, which would not affect the customer’s purchasing power, would reflect the brand and
quality that Kingsford provides. The company should use the pricing and revenue optimization

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strategy, when considering to increase in price of the product, by setting the price depending on
the marketplace, combination of product, customer type and channels. Also, the strategy of
selling the products online at a lesser price to the customers would attract them more.
Promotion
Product promotion is an important aspect in which Kingsford has been diligent for many
years. However, with the growth of the overall competition in the market, there have been
situations in which the competitors have taken over, affecting Kingsford’s growth. Previously the
other charcoal brands were the main competitors, but now the gas grilling companies are the
ones to beat. One of the strategies that can be implemented would be to conduct a promotional
campaign to create product awareness, using emotional sentiments about the US culture of the
past and the taste of a charcoal barbeque. TV advertising has been proven in the past to be highly
influential for Kingsford’s business, with $6 million spent in 1998. The company should raise its
advertising budget slightly and start promoting through TV, social media, radio, and hoardings
with slogans like “Slow Down and Grill.” Moreover, the company should promote more in areas
where gas grills are not that widely used. Advertisement showing the ease of carrying small
charcoal grills verses the big gas grills at camping or at far picnic spots is a goods promotion of
the product. Also collaborating with other companies in promoting the product like drinks and
sauces that go along with grilling.
Place
The Kingsford Charcoal brand is owned by the Clorox Company, which has a good
network distribution strategy. Kingsford owns five plants that operate individually and generate
80 percent of the total capacity. They sell their products through intermediaries (e.g., Walmart,
Target, K-mart, and Costco) to reach customers. It is advisable that Kingsford ensures adequate

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stock-keeping units are available at the right time (peak time) and at the right place (high sales
location stores).
SWOT Analysis
In the case of a SWOT analysis of the given product being conducted, the following
points can be noted:
Strength
Kingsford Charcoal has both strong brand recognition and exceptional quality. The
company has been in business for a long time, and most of its products are popular among those
customers who still prefer charcoal over gas grilling (Sinclair et al.). Lab tests have proven that
Kingsford charcoal is of superior quality to Royal Oak and private label brands. Kingsford’s
charcoal business contributes a maximum revenue of approximately nine percent to the Clorox
portfolio. When its sales volumes dropped in 2000, its market share holding was 57.7%, which
was more than that of private labels and Royal Oak. As mentioned, the company has a wide
range of product offerings in blue and red bags in bulk and small sizes. Kingsford is well tied up
with its channels of distribution accounting for increases in sales. The channels that contribute to
sales are mass merchandisers, drug stores, hardware stores, retailers and distributors, and club
stores and non-tracked channels.
Weakness
In spite of a strong brand and good quality, consumer interests in alternative grilling methods
have increased. People have started to make the switch from charcoal to gas grilling because
there are many advantages associated with the latter; this has caused consumers’ interest in the
products to drop significantly. Unfortunately, one of the major factors affecting the business is
the absence of media advertising of the charcoal product. Lack of advertising, has allowed the

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brand to slip out of the minds of consumers. Sales of Kingsford Charcoal is based on the time of
year and seasons. Weather patterns such as temperature decreases and rainfall conditions for the
months of October through December have driven down sales. Lastly the cost of expansion
production would cost $30-$50 million to build and the time frame of 5 years of running
effectively.
Opportunities
Bearing in mind the company’s strengths, Kingsford has certain opportunities to increase
its sales and market share. First, 50 percent of grill owners are heavy or medium users who do a
huge amount of barbecuing, using the method for more than 85 percent of occasions; in addition,
80 percent of grill owners are younger, larger, higher-income families, which means that three
out of four US households own a barbecue grill. Considering these numbers, the company should
try to attract the medium- and small-income families by leasing grills during the occasions of
July 4th, Labor Day, Memorial Day, and so on. Second, the blind comparison test of gas grilling
versus charcoal grilling saw a positive response toward charcoal grilling, with participants
preferring it two-to-one. Such kinds of promotion at charcoal grill festivals and competitions
would attract more consumers who demand the smoky flavor of a barbecue. If the company is
able to collaborate with the gas grill companies to offer the customers, both gas and charcoal
grills under same equipment it will end the competition with gas grille and would compete with
other charcoal brands. Kingsford is an established brand and so competing with other charcoal
brand wouldn’t be challenging.
Threats
The biggest threat faced by the company is that most consumers are switching to gas
grilling over charcoal grilling, and chances are high that in the near future, customers will stop

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using charcoal grilling altogether (Pamela and Tamara). Comparing charcoal and gas grilling, the
latter is more convenient, allows greater control over cooking temperature, has a shorter cooking
time, and is easier to clean up than charcoal grilling. Second, the decline in off-season sales due
to weather conditions will also decrease the revenue of the company. To sustain itself in the
market, the company might have to increase the price of its charcoal.
Summary
Given the above action plan that has been suggested in relation to the four Ps, it can be
said that in order to deal with its competition, the management of the company should take such
steps as would help improve the overall interest of the consumer in charcoal cooking. After all,
charcoal is one of the most important cooking elements that has been used through the ages. At
the same time, they should look for ways in which they can beat gas grilling. Grilling is all about
lending flavors to the food, and charcoal is one of the best products that can be used in that
regard. It is true that Kingsford has a huge market that it has built up over the years through its
products, and it should try to capitalize by making sure that more and more people are using its
products. Furthermore, charcoal can be used in a variety of other products such as those
associated with the beauty industry, and the company should also try to venture into this field.
All this will help with the overall success of the company and assist in getting optimum results in
the face of stiff competition.

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