In the summer of year 2000 however, the overall charcoal industry including Kingsford charcoal experienced a softening in their growth and revenue. Kingsford Charcoal now faces in pressure to increase its revenue in an environment where consumers in the grilling market are slowly shifting from charcoal to gas grilling. Brand managers Boyle and Warren must address trends relating to; competition, pricing, advertising, promotion and production: strategic decisions that impact the brand and affects the company's overall success. CORE ISSUES: The core situation Kingsford Charcoal is faced with are: • Poor pricing strategy • Lack of media advertising • Poor brand positioning • Competition • Promotion ANALYSIS OF CORE ISSUES: Kingsford Charcoal's problems came as a result of: Poor Pricing Strategy: Kingsford had not raised prices in several years. It's competitors in the charcoal industry (Royal Oak and Private Label) did raise their prices allowing them to earn extra income.
By doing so, a corporation may reduce commodity price affecting its share price. J&L Railroad had most of its revenue fixed for a long term, because it was industry practice for railroads to enter into long-term fixed-price contracts with their freight customers. On the other hand, fuel cost was a large cost item for J&L, and fuel prices have high volatility. Price competition in the railroad industry was fierce that railroads could not increase freight prices based on fuel price increase. Thus, J&L’s operating margin was exposed to the volatility of fuel prices.
As we all know, the government loves to raise taxes to support their social programs. Indiana Governor Frank O’Bannon proclaimed, “Raising cigarette taxes is a win-win situation” young teenagers are less likely to start smoking and adult smokers are more likely to quit when the tax is higher”. (Patrick McMahon) What about the health benefits when smokers finally quit smoking and why is this important to all of us? Smoking is the leading cause of preventable death in the world. Assuming current smoking trends continue, as many as 650 million of the people alive today will die from smoking-related disease.
These strategies if used by Company G are the best mix to achieve their objectives because they allow Company G to maximize its profit while supporting the mission statement. The remote control features of the product combined with the variety of colors available and the convenience of not having to place the product near an outlet provide unique high-quality features that will best allow Company G to achieve its goal of increasing its revenue by 25% over the next three years. Using the previously stated price strategies will help Company G sell higher amounts of the product to big retailers at a competitive price, best equipping the company to reach a breakeven point by the second year. By using the place strategies stated earlier Company G will have a fast delivery cycle and get its new product out to more stores enabling them to have the product available in most major retail stores within a few months, and by using these promotion strategies of advertising on television as well as the internet they are best able to increase product awareness among the target audience by at least 30 percent in one
With the recognition that the world’s demand for energy will soon deplete fossil fuel supplies, interest in alternative energy sources has greatly increased. In fact, the United States has implemented a plan to reduce the nation’s fossil fuel consumption by 25% by the year 2025 known as the 25 x ’25 plan.1 One way of reaching this goal is to enrich regular petroleum based gasoline with ethanol as an alternative transportation fuel. In the United States, ethanol is one of the most popularized and highly produced biofuels on the market. Since 2000, ethanol production has increased from 1.6 billion gallons per year to 14.9 billion gallons per year in 2012.2 An increase of this magnitude in the demand of corn for ethanol production may eventually have a tremendous impact on the price of food and its availability, in addition to significant impacts on the environment. Although we consider ethanol an environmentally friendly alternative to fossil fuel-based petroleum because of its lower greenhouse gas emissions, the idea of any large-scale use should raise many questions for government agencies, scientists, and farmers alike.
But in the meanwhile smaller competitors started to quickly erode market share with prices cut. In 1997, instead of cutting prices, UST reacted to the growth of this value players with the introduction of premiumRed Seal but it was late considering that other brands were already successful in this segment. Moreover, UST is over dependent on smokeless tobacco business that contributed in 1998 for about 97% of
Q1: Marlboro, a famous cigarette brand, dropped its prices 40-50% a pack in 1993. Was it the right move? Explain (Read case study on page 193 before answering this question). A1: As we can see during the recession, resources become even scarcer, which implied to the corporate of time for cultivation. As marketer’s decision of reducing on price, which we can consider it as investing on potential customers, to ensure their interest in one specific brand.
Using the single allocation rate would lead Coffee Bean Inc. to believe that Moana Loa costs them more but also is more profitable with a $1.80 gross profit versus Malaysian which has a gross profit of $1.50. Using the single allocation rate will most likely lead management to make incorrect decisions regarding their different product lines. After recalculating costs and gross profit using the activity based costing method Moana Loa has a gross profit of just $1.45 and Malaysian has a gross profit of $2.26 making it more costly to produce but at the same time more profitable. Coffee bean Inc. in the future should use the Activity Based Costing method rather than their single allocation rate. Activity Based Costing leads to more accurate cost assignment, and will keep management better aware of which products cost the most and which products are the most profitable.
A number of managers are in favour of this strategy as they believe it is important to reduce costs. The second strategy is too have a much higher expenditure on advertising and promotions and set a selling price of £190. With the higher selling price the annual fixed costs would increase to £27,000,000. The marketing department are very clear that greater expenditure on advertising and promotions is essential for this product. The following probability distribution has been agreed with the managers after consultation and is the same for both selling prices.
In 2002, tariffs on imported steel intended to aid the ailing steel industry raised the price of steel within the United States to between 35% and 60% above pre-tariff prices. As a result, customers of steel companies struggled to stay in business and overall demand for steel dropped sharply. Tariffs are not the