Prepared by :

Iwan KurniawanAnita Hutahayan

Yan AnantakusumoRizki Setyo P

Soren ChemicalWhy is the New Swimming Pool

Product Sinking

Company BackgroundFounded in 1942 by Timothy SorenSell :

Industrial-strength cleaning solutionsIndustrial chemical for lubricants and fuels

Chemical solution for treating drinking water and wastewater.

350 products line2006 revenue is $450 million.

Product BackgroundKailan MW Flocculants. (Clarifier)Flocculants can be thought as chemical

nets that works in water to filters particles as small as 0.5 microns.

Effective in dealing with:Oil (deodorant, hair spray, lotion

cause odoor and Cloudiness)Combat organic debris (algae,

dangerous pathogens such as E.Coli and Cryptosporidium)

Product SpecificationsSoren sold Kailan MW and Coracle are “flocculants”

chemicals that suspended particles in liquids to angglomreate into larger, heavier particles called “flocs”

Kailand MW found in 2002 that effective in dealing with oils that come from deodorant, hair spray and lotions hiwch cause odors na dcloudiness in water (safety hazard)

One gallon of Kailan MW could effectively threat approximately 500,000 gallon of water

Soren estimated for 2007 US Market for specialty commercial use clarifiers to be approx USD 30 Millions

PRICING

PRICINGPricing - Coracle & It's competitors

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Coracle Purity HydroPill ClearBlu

Cost per container, retail price Cost per treatment, retail price Annual cost, retail price

PRICING

30% 20% 25%Retail Price 25 22 23 Retailer - gross margin 15% 15% 15%Retailer - gross profit 3.75 3.28 3.50

Distributor Price 21.25 18.6 19.84Distributor - gross margin 30% 20% 25%Distributor - gross profit 6.375 3.72 4.96

Soren Chemical Price 14.88 14.88 14.88Soren Chemical gross margin 35% 35% 35%Soren Chemical gross profit 5.21 5.21 5.21

If Distributor MarginPricing Simulations

Problem IdentificationsCoracle as one of clarifiers product that produced by

Soren Chemical which targetiing residential pools that have smaller size againts commercial pools

The Targeted residential pools of coracle have a lower volume of water, lower volume of swimmers, and less intense maintenance program

Estimated thered are 9 millions residential pools in US

Currently corracle has 3 leading competitors for residential pools clairifiers (each of competitor has a 15% to 20% share:Keystone ChemicalKymera

Jacson Laboratories

Problem IdentificationsThe first year goal for coracle is USD 1,5 Millions

The frequency of usage of residential pools and residential pool chemicals will be increased from May (the average months of pools usage are 5 months), normally people will swim in summer time (May-September)

The Analysis

The AnalysisConsumers, wholesales distributors, pool services

professionals, pools specialty retailers, mass retailers neet to take time to know the Coracle brand

The Stock in the consumers sides, pools services professionals sides, pools speciality retailers sides and mass retailers will also impact the sales of coracle. If consumers decide not to use the pools until next may, they may not maintain the pools, and no need to purchase the clarifiers like Coracle

Consumer market of residential pools emphasized more on aesthetics and preceived cleanliness, it will become a risk to bring coracle to market without a suitable emphasis and know what the consumers concern more

The Analysis30% of the renspondents recalled receiving the corracle

materials that soren Chemical had sent in response to their inquiries. Furthermore, 70% of the renpondents stated that their distributors had not offered Coracle or it seems Coracle’s sales team did not deliver sufficient efforts to introduce this kind product

Ther is unclear gap between Kailan MW and Coracle even though kailan MW targets at the segment of commerical pool and water parks, meanwhile Coracle targets at residential segment. At least 2 formulators who dilute Kailan KW with a private label and sell to distributors for consumer market and this will compete with coracle

The Retail price for Sore per container of 0,5 Gallons has been settled as USD 25, and this is based on a manufacturer price of USD 14,88, which soren has ascertained for 35% gross margin

Coracle SWOTStrength

Has Kailan MW advantage as product.Reducing pool’s owner annual chemical cost by

20% to 30%Weakness

New product/Entry.Higher unit price than competitors.Distributors does not attracted enough to promote

Coracle.Coracle only promotes to distributor, retailer, and

profesional.End users do not realize the value of Coracle

relative to other clarifier.(from price perspective and advantage)

Coracle SWOT (Cont’d)Opportunity

Potential Great Demand70% respondents had not receive Coracle material yet.70% respondents states that coracle had not been

offered by distributor.Threat

Need additional $600,000 as advertising budget.Different purchasing behavior between

professional (from wholesale distributor) and consumers. ( buy from retailers, aesthetics and perceived cleanlines)

The AlternativesSoren had launched Coracle in insuitable

month because September is the last busy month for swimming season, it can not refered as good season for sales.

Accept Morrits marketing budget proposal, to promote to end user not only to distributor chain.Consumer education. Can be add some physical evidence and free testing.

Review the pricing and package strategy because it has sensitive to end consumer. Review the agreement between Soren and distributor

about “differentiated Chemical Agent”, cause 30% gross margin.

Action PlanPriority the restructuring of pricing product

strategy.Renegotiating with wholesale distributor about

gross margin about 20% decreasing retail price.20% $2225% $23

Promote aggresively to end consumer.Educate consumer about the advantage of products. Re-launch the product to the market on summer.

(swimming seasons).Soren has to try to bypass the wholesale

distributors, selling limited range to wall mart and homedepot.

Conclutions and SuggestionsOpportunity exists in terms of margins for

the distributers and retailersDeliver clear message to the end users,

and make then aware about the facts the product offering

Define clear margins for the distributers who may sell the diluted product