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Case Analysis

Soren Chemical: Why is the new swimmingpool product sinking?

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About Soren Chemical Company

Founded in 1942, generated revenue of $450 Million in 2007

Over 350 products, wide range of Industrial chemicals and water-cleaningsolutions

Kailan MW and Coracle are two types of water-clarifiers.

Historically Company had concentrated on B2B sales but now it is investingselectively in developing products
for consumer markets.

About Kailan MW and Coracle products

Kailan MW is used primarily for cleaning large commercial pools and waterparks (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: $0.111 Million (in 6 months) against annual target of $1.5Million (85% short of target)
Commercial-Use Clarifier Market Characteristics

Market Size:

$30 Million (2007), relatively mature market

 –

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 importanceof clarifiers for their business. Safety of their cu
stomers matters most.

Marketing strategy for Kailan MW

Strong partnership with Formulators.

Sold under “Private Label Brand”.

Product USPs are attacks organic debris which can pass through filters, effectivefor long period, lower qty needed

.
Residential Pool Clarifier Market Characteristics

Business Model:

B2C
–

Market Size:

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

Distribution Channels:

(a)

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

(b)

Manufacturer- Mass Retailers-Pool Owners

Key Influencers:

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

Buyer Behaviour:

Lack of awareness among Pool-Owners (emphasis on aestheticsand perceived cleanliness)

Major Brands:

Clearblu, Hydropill and Purity

Marketing Strategy for Coracle

In order to reach wide and fragmented market, adopted 2-level

distributorchannel
with margins as per industry norms.

No private-labeling,

focus on building Soren as consumer brand.

Packaging

highlights product benefits and potential savings.

New website

formed during product launch

Press release in three

trade journals

targeting professionals and retailers.

Good

enquiry system

adopted- receiving queries, sharing technical data with themand passing on the interested customers informa
tion to appropriate wholesaledistributors.

Aggressive pricing

vis-à-vis competitors.

Realistic target

of $1.5 Million (2.2% market share)

Survey conducted in 6 months after product launch to gauge customer feedback.

What went wrong??

Reasons for failure

Lack of support from Distributors:

Distributors are
focused on selling unbranded

products/ diluted kailan thereby earning better margins. Also, since use of Coraclewill reduce the consumptio
n of other pool chemicals by 20%-30%, its promotionwill result in reduction of their overall revenue.

Lack of awareness among Pool Owners:

Customers are happy with pool lookingclearer and hence get satisfied with compromised products at lower p
rice.

No exclusive demand of Coracle from Pool Service Professionals and contractors

Recommendations (for immediate 3 months)

Create Pull Demand by aggressive marketing campaign targeting 40-

50K PoolService Professionals and independent contractors-

(a) Aggressive Mailing campaign(b) Huge advertising in trade journals