Case Analysis_ Soren Chemicals

September 9, 2017 | Author: HimanshuGarg | Category: Retail, Sales, Distribution (Business), Marketing, Business Economics
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case analysis of soren chemicals...



Soren Chemicals: Why is the New Swimming Pool Product Sinking

Group Members: Ankit Garg


Himanshu Garg


Rajan Dokania


Shivani Gupta


Shrikant Gupta


Udit Jain


About 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 most

Reasons for failure: 

Soren has launched Coracle in the month of September which is the last month of swimming season

Lack of support from Distributors: 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

Company’s Dilemma: 1. Does residential pool owners are aware about the benefits of Coracle over its competitors 2. Per unit prices of Coracle are higher than that of its competitors HydroPill, Clear Blu and Purity 3. Challenges of pass through sales of distributors and retailers as their margin will take a hit, if they continue selling Coracle at current price levels Analysis: Excel sheet as been attached for calculation part which is attached below and it has following tabs: 1. Tab1: Potential Market 2. Tab2: Value pricing of Coracle 3. Tab3: Competitive Parity 4. Tab4: Retailers new margin 5. Tab5: Distributors new margin

Soren Chemicals.xlsx

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

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