CASE ANALYSIS STRATEGIC MARKETING

Soren Chemicals: Why is the New Swimming Pool Product Sinking

Group Members:Ankit Garg13125010Himanshu Garg 13125020Rajan Dokania 13125041Shivani Gupta 13125051Shrikant Gupta13125052Udit Jain 13125055About Soren Chemicals: Founded in 1942, generated revenue of $450 Million in 2007 Over 350 products, wide range of Industrial chemicals and water-cleaning solutions Kailan MW and Coracle are two types of water-clarifiers Historically Company had concentrated on B2B sales but now it is investing selectively in developing products for consumer markets Kailan MW and Coracle products Kailan MW is used primarily for cleaning large commercial pools (capacity 1 million gallons) and water parks (B2B) while Coracle is used for cleaning residential pools (B2C) Revenue of kailan MW: $6.1 Million in 2006, 7% growth expected in 2007 Revenue of Coracle: $111000 (7450 units) in 6 months against an annual target of $1.5 Million (100000 units)Market Characteristics Market Size: $30 Million (2007), relatively mature market Distribution Channel: Manufacturer-Formulators-Water parks & Commercial Pools Key Influencers: Formulators, water-safety consultants, Pump & Filter manufacturers Buyer Behaviour: Professional and understand the use, benefits and importance of clarifiers for their business, safety of their customers matters mostReasons for failure: Soren has launched Coracle in the month of September which is the last month of swimming season Lack of support fromDistributors: Distributors are focused on selling unbranded products/ diluted Kailan to earn better margins on these products. Also, since use of Coracle will reduce the consumption of other pool chemicals by 20%-30%, its promotion will result in reduction of their overall revenue and profits. Lack of awareness among Pool Owners: No exclusive demand of Coracle from Pool Service Professionals and contractors

Companys Dilemma:1. Does residential pool owners are aware about the benefits of Coracle over its competitors2. Per unit prices of Coracle are higher than that of its competitors HydroPill, Clear Blu and Purity3. Challenges of pass through sales of distributors and retailers as their margin will take a hit, if they continue selling Coracle at current price levelsAnalysis:Excel sheet as been attached for calculation part which is attached below and it has following tabs:1. Tab1: Potential Market2. Tab2: Value pricing of Coracle3. Tab3: Competitive Parity4. Tab4: Retailers new margin5. Tab5: Distributors new margin

Recommendations:We are suggesting following recommendations to revive the B2C market for Coracle (Soren Chemicals): (a) Aggressive Mailing campaign, advertisements, display counter in trade-shows to create awareness among pool owners about Coracle and capture the untapped market of $112.5 mn(b) Promote the Value proposition of 20-30% savings of pool chemicals by use of Coracle resulting in higher profits for professionals and contractors(c) Focus on Lower annual cost compared to ClearBlu ($39.06 vs $56.25) to gain competitive advantage(d) Retailers and Distributors should be compensated for their margins as $17.11 and $22.71 respectively as sale of Coracle will result in losses for them and it should in accordance with the excel sheet attached above

Potential Market1. Potential Market SizeNo of private Swimming pools in US9000000% of customers uses clarifiers25%Annual avg cost of claifiers at retail prices$50.00

Total Potential market$112,500,000.00

Soren's Target100000unitsTotal expected revenue2500000.00Target market2.222%Not very aggressive target, its achieveable

Value Pricing2. Value Pricing

Annual Chemical cost$300.00Savings on chemical cost if using coracle25%Avg of 20-30%

Savings$75.00

New cost per container$48.00Charge the customer based on the value of this annual savings on chemical i.e. value preposition

Competitive Parity3. Competitive ParityClosest competitorsJackson Labs (Clear Blu)Annual savings on chemicals using Clear Blue15%45

Total cost of using Clear Blue$375.00Total cost of using Coracle$264.00

So effective savings$111.00% Savings of coracle against Clear Blue29.60%Competitive advantage

Retailer Diff4. Retailer differenceChemicals loss to retailers$75.00Margin on chemicals15%So profit loss$11.25Existing margin on Corcale15%5.859

New Margin for Retailers should be$17.11New Compensated margin for RetailersNew Price of Coracle$114.06Cost of coracle per bottle$73.00

Distributor Diff5. Distributor DifferenceExisting Price$63.75Margin 20%$12.75

Existing margin on coracle30%$9.96

New Margin$22.71New Compensated margin for Distributors