Kingston Charcoal - Research Paper Example

However, there is a concern in production regarding the adequacy of Kingsford's existing capacity. Grilling has been described as a passion and a way to party of common Americans during celebrations and occasions, the Clorox Company, founded in 1913, decided to acquire Kingsford Charcoal as one of its products in 1973. Kingsford Charcoal is the one of the 50 products and the largest product group that Clorox Company markets around the world to consumers. It represented around 9 percent of Clorox's revenues in the year 2000.

In addition to this, in the charcoal grilling business, Kingsford is the leading in sales, constantly getting more than 50 percent of the market share from 1997 to 2000. This is as opposed to Royal Oak's 14.2 percent share in 1997, which then gradually declined to 6.4 in the year 2000, and the constant range of 33 to 34 percent of market share of private label. Charcoal briquettes are manufactured from wood, minerals, limestone, starch, borax, sodium nitrate, and sawdust in a two-part procedure.

These charcoal briquettes were packaged in its present condition in blue bags and sold as Kingsford Charcoal as either "regular" or "blue bag." In addition, other briquettes are treated with Kingsford lighter fluid and sold as Kingsford Match Light in red bags, packaged as either "instant" or "red bag." Both types of briquettes were available in three sizes: 10 lbs., 20, lbs., and 48 lbs. for the regular or blue bags; and 8 lbs., 15 lbs., and 30 lbs. for the instant or red bags.Kingsford Charcoal briquettes Size and PricingRegular or Blue BagsInstant or Red Bags10 lbs.$4.258 lbs.$5.2020 lbs.$6.7815 lbs.$8.0748 lbs.

(2 x 24 lb. bags)Not available30 lbs. (2 x 15 lb. bags)Not availableTable 1. Various packaging sizes with prices of both types of Kingsford Charcoal briquettes.The largest sizes were usually just available in club stores like Costco amd Sam's Club. However, food stores and supermarkets, merchandisers, and drug stores, and Wal-mart, carried a variety of the other smaller sizes. The prices given varied by type and size, and it has been found that the main competitors of Kingsford, Royal Oak and private label brands, were cheaper than Kingsford by 25 to 30 percent.

Key Success Drivers The business of Kingsford Charcoal was seasonal, with its peak of 60 percent between the period of May 1 and September 1, which covers the holidays Memorial Day and 4th of July. These two holidays represent about 35 percent of Kingsford's annual sales. Aside from the holidays, another factor that Kingsford sales are dependent on is the weather. When the weather is good, the tendency for sonsumers is to think that it would be a great time to barbecue. In this essence, a big part of the sales are from impulsive purchases.

Factors to ConsiderPricing The team of Smith Boyle and Warren found that there was a narrowing price gap because of