Scribd Logo
Upload

Welcome to Scribd!

  • 102 views

    Soren Chemicals: Written Case Analysis

    Uploaded by

    satyam mehrotra
    This document analyzes Soren Chemical's Coracle clarifier product which is struggling in the residential pool market. [1] It finds that Coracle faces challenges due to an inefficient distribution channel with little support from distributors and lack of awareness among pool owners. [2] It also notes that Soren's marketing has emphasized performance over price advantages. [3] The document recommends modifying Coracle's pricing structure to increase sales and profitability, while addressing constraints around distributor support and consumer awareness.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Soren Chemicals: Written Case Analysis

    Uploaded by

    satyam mehrotra
    102 views7 pages
    This document analyzes Soren Chemical's Coracle clarifier product which is struggling in the residential pool market. [1] It finds that Coracle faces challenges due to an inefficient distribution channel with little support from distributors and lack of awareness among pool owners. [2] It also notes that Soren's marketing has emphasized performance over price advantages. [3] The document recommends modifying Coracle's pricing structure to increase sales and profitability, while addressing constraints around distributor support and consumer awareness.

    Original Description:

    ad

    Original Title

    Soren Chemicals

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    This document analyzes Soren Chemical's Coracle clarifier product which is struggling in the residential pool market. [1] It finds that Coracle faces challenges due to an inefficient distribution channel with little support from distributors and lack of awareness among pool owners. [2] It also notes that Soren's marketing has emphasized performance over price advantages. [3] The document recommends modifying Coracle's pricing structure to increase sales and profitability, while addressing constraints around distributor support and consumer awareness.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    102 views7 pages

    Soren Chemicals: Written Case Analysis

    Uploaded by

    satyam mehrotra
    This document analyzes Soren Chemical's Coracle clarifier product which is struggling in the residential pool market. [1] It finds that Coracle faces challenges due to an inefficient distribution channel with little support from distributors and lack of awareness among pool owners. [2] It also notes that Soren's marketing has emphasized performance over price advantages. [3] The document recommends modifying Coracle's pricing structure to increase sales and profitability, while addressing constraints around distributor support and consumer awareness.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 7

    Soren Chemicals

    WRITTEN CASE ANALYSIS

    Submitted to: Dr. Ramakrishna Dikkatwar

    Submitted by:

    Satyam mehrotra-17021141091
    K Adarsh Ram-17021141049
    Annu Chaudhary-17021141121

    Akshar Misra- 17021141009


    Ques-1 Differentiate between large pool market vs small pool market.

    Large Pool Market

    Market Size:

    $30 Million that is the market size is huge.

    Distribution Channel:

    Manufacturer-Formulators-Water parks & Commercial Pools

    (Formulators carry full range of pool-cleaning products and provide value-added

    services tailored to customer specs)

    Key Influencers:

    Formulators, water-safety consultants, Pump & Filter mfgs.

    Buyer Behaviour:

    Professional and understand the use, benefits and importance of clarifiers for
    their business. Safety of their customers matters the most.

    Small Pool Market

    Market Size:

    $67 Million (9000000*25%*$50*14.88/25), Untapped market in nascent stage.

    Distribution Channels:

    Manufacturer-Distributors-Retailers/Pool Service professionals-Pool Owners

    Key Influencers:

    Pool Builders, Cleaning & Servicing co., independent contractors, Retailers and
    Wholesale Distributors

    Buyer Behaviour:
    Lack of awareness among Pool-Owners (emphasis on aesthetics and perceived
    cleanliness)

    Ques-2 Why intermediaries are interested in creating private labels ?

    To reach service professionals and specialty retailers, Soren sold it through wholesale
    distributors. Company allowed intermediaries (formulator) to use private branding for
    kalian MW so that it may not get identified as flocculant.

    Company didn’t allowed private label for its product ‘Coracle’ but the major wholesale
    distributors wanted to sell it as a private label.

    The wholesale distributors had large number of pool chemicals, the chemical provided
    by Soren added value to their product line and was expected to sell more over the
    period of time.

    Private label will also fetch wholesale distributor a good reputation among the
    consumers as it is the differentiated chemical agent which can be used to serve the low
    pool market.

    Ques-3 Do you agree with Soren’s decision to build brand? Why?

    Soren was competing with 3 other companies for residential pool-use clarifiers. Many
    people knew about Kailan MW compared to Coracle.This was lowering the sales and
    revenues earned by the company and Soren was facing tremendous drop in sales in
    contrast with the estimated and expected sales.

    If Soren built their brand, then Coracle would be known as a pool clarifier product and
    would have a better reach. The manufacturer price for a two-quart bottle of Coracle was
    $14.88. However, wholesale distributors would be expected to maintain a 30% margin
    in selling Coracle as a differentiated chemical agent. This was only possible if Soren
    build the Brand and positioned it as a product that would reduce pool owners’ annual
    chemical cost by 20% to 30%.
    Building a brand of their own would create a market for themselves in retail stores and
    this might increase their shelf life. The customers would be more aware of the product
    and they would prefer this product compared to its competitors and the brand recall

    Ques-4 What is the market size of Coracle? Is the first year sales target
    reasonable?

    Answer: Market Size

    Number of swimming pools (taking into

    account that just 25% of consumers use

    clarifiers regularly- Exhibit 3) 2.25 Million (9*0.25)

    Average retail Price*1 44.30$

    Retailer gross margin 15%

    Retailer gross profit 6.6$

    Distributor price 37.7$

    Distributor gross margin 30%

    Distributor gross profit 11.3$

    Soren Chemical price 26.4$

    Total Price*2 59.4 million $

    First year goal 1.5 million $

    First year market share goal 2.5%


    *1 Average price including competitors

    *2 2.25 Million * 26.4$


    The addressable market is 59.4 million $. The first year goal for Coracle is 1.5 million $,

    which represents a 2.5% of market share. This is reasonable considering that

    competitors have between 10%-20% market share would be more.

    Ques-5 Why is Soren Chemical struggling to sell Coracle?

     Inefficient channel structure as of now: No support from the


    distributors/retailers. Soren Chemical sold pool chemicals like Kailan MW to
    water park and commercial pools primarily through formulators. While they sold
    pool chemicals like Coracle to residential pool owners through a two-step
    process to wholesale distributors, which supplied specialty retailers and service
    professionals. And may be because of less margin Pool service professionals
    and specialty retailers had made inquires about Coracle but only 30% recalled
    receiving the Coracle material. Also 70% of them stated that Coracle had not
    been offered by their distributors
     No Awareness in the consumers- Since Coracle sold mainly through wholesale
    in order to reach specialty retailers and service professionals which is an indirect
    sales channel, the consumers were possibly aware of the safety and cost-saving
    benefits for them. Wholesale distributors want to hold a higher gross margin of
    30% and retailers hold a gross margin of 15%, resulting in a retail price of $25
    which is higher than its competitive products. In the residential pool market, as a
    new product with such high price, consumers are not likely to buy it. Still,
    Coracle’s consumers do not realize the value of Coracle relative to other clarifiers
    (only 25% of the consumers understand clarifiers).
     Inefficient Marketing: Rather than other advantages(prices and all), the product
    lauch rather emphasized on the performance advantage of trapping dangerous
    waterborne pathogens such as E.coil and cryptosporidium.
     Consumers, wholesale distributors, pool service professionals, pool specialist
    retailers sides and mass retailers need to take time to know the new Coracle
    brand and the value they can get from the coracle if they buy it.
     There is unclear gap between Kailan MW and Coracle even though Kailan MW
    targets at the segment of commercial pool and water parks, while Coracle targets
    at the segment of residential pools. There are still at least two formulators who
    dilute Kailan MW with a private label and sell to distributors for consumer market
    and this will compete with Coracle clarifier.
     The stocks in the consumers’ sides, pool service professionals’ sides, pool
    specialty retailers’ sides, and mass retailers sides will also impact the sales of
    Coracle, especially in the last busy maintenance month of a year. Especially till
    the end of September, if the consumers decide not to use the pool until next May,
    they may not maintain the pools because in the beginning of next May, they need
    to clean again for the pools for swimming after a long time of non-use.

    Ques-6 Design the pricing strategies for Coracle. Also explore constraints

    and implementation issues.

    Pricing Strategy
    Coracle Margin Structure
    Current Structure Modified Structure
    Manufacturer
    Price $14.88 Manufacturer Price $13.50
    Retail Price $25 Retail Price $17.50
    Sales Goal ($) 1,500,000 Sales Goal ($) 1,900,000
    Sales Goal
    (units) 100,000 Sales Goal (units) 140,741
    Gross Margin 35% Gross Margin 28%
    Cost per unit $9.67 Cost per unit $9.67
    Gross Profit
    (unit) $5.21 Gross Profit (unit) $3.83
    Net Profit $525,000 Net Profit $539,037.04
    Mass Retailer Margin Structure
    Manufacturer
    Price $13.50
    Retail Price $17.50
    Gross Profit
    (unit) $4.00
    Gross Margin 23%
    Constraints & Implementation Issues:

     Lack of support from distributors: Distributors are focused on selling unbranded

    products/diluted Kalian thereby earning better margins. 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.

     Lack of awareness among Pool owners: If the product kept the pool clean , they

    were satisfied even with an inferior

     No exclusive demand of Coracle from Pool Service Professionals and

    contractors.

    Ques-7 What action plan do you recommend for Coracle?

    In my understanding the pool cleaning professionals are not well or properly aware
    about the product. So most of the actions must be concentrated around the marketing of
    the product:

    1. Increase the marketing budget to the level where we can advertise to all
    channels not only DIY.

    2. Clear message to the users – who are not technically sound, and make then
    aware about the facts the product are offering. A clear distinguishing must be
    established which clearly demonstrate a compression between the inferior
    products which just make the water look clear.

    3. Clear margins for the distributers who may sell the diluted product.

    You might also like