Case summary
The case consists of a dilemma facing Joan Macey the Market Manager at
Rohm & Haas regarding the 3 Ps, pricing, place, promotion of a product
(Kathon MWx) that meets the requirements of customers (with reservoir
capacity < 1000), of a Biocide that removes smell, dermatitis symptoms.
Also Kathon MWKX provides higher value vis-a-vis competitors due to life-
extension of fluids (2-5 weeks), resulting in significant savings to the end
users.
No competitor product offers these characteristics and only ‘ Tris Nitro Sump
Saver’ along with Kathon MW are compatible with tanks of 25-100 gallon
capacity.
It has managed sales of only $12000 against a target of $0.2 million in a
market with potential sales of $20 million. Kathon 886 MW, is doing well with
number of plants to which it can cater being only 325 as compared to 150,000
smaller plants that would require the new offering Kathon MW.
Recommendations
It is recommended that more marketing effort and resources to be utilized to
promote Kathon MW in the following ways:
Pricing: A minimum price of $ 5.68/gallon needs to be charged, so that
formulators get higher margins on Kathon MWX, a maintenance product which
due to its fluid-life-extension properties will cannibalize fluid sales.
Distribution Channel: The present distribution channel should be used, as a new
one will be costly and adversely affect Kathon 886 MW as well. The formulators
and the sales force need to be educated about the benefits of the product.
Promotion: Advertising should focus on the benefits in terms of cost-savings of
the metal concentrate, disposal costs, and reduction in rancidity, dermatitis, cost
benefit analysis of household disinfectants and maintenance biocides. Product
demonstrations with free samples can be provided. A follow-up survey for
customers using free samples and a call back system needs to be developed.