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B2B MARKETING
Executive Summary
Soren Chemicals was founded by Timothy Soren in 1942 to sell industrial strength
cleaning solutions. The initial focus of the company was on business to business sales
with very little emphasis on creating consumer awareness. In 2002 company entered
the consumer markets with its water clarifier- Kalian MW. Kalian MW was intended to be
used in large recreational water park facilities with capacities of one million gallons or
higher. Since it was unsuitable for small scale applications like household swimming
pools, Soren Chemicals launched Coracle in 2006. However, the results have been very
discouraging with sales lagging behind its target by 90% due to a number of strategic
and tactical problems. The main problems identified were the low awareness among
consumers about the benefits of Coracle, no support from distributors because Coracle
reduces the use of other chemicals by 25% thereby affecting their margins, high pricing
of retailers and professionals received a response to their enquiries from the company.
Supported by a detailed situational analysis, the report recommends the solutions to all
the problems identified. It proposes a new pricing strategy with revised retailer and
distributor margins, branding strategy to create consumer awareness and push strategy
Answer: Pools are used for commercial as well as domestic purposes. Below is the
Large pool markets are used as Small pool markets are used for
Large pool markets involve higher Small pool markets involve lower
Large pool markets include higher Small pool markets include lower
Different pool markets require different processes of maintenance and the pool markets
have to be segregated based on size and usage. This will enable suppliers of pool
cleaning agents to target a particular market based on maximum utility of the product.
Question No. 2 Why intermediaries are interested in creating private labels?
Answer: According to the case, there are 3 major competitors in the pool cleaning
agents markets with a 15% to 20% market share. Intermediaries are interested in
It is easier for them to customize the products according to the needs of the
customers
Till date, the big players in the market focussed predominantly on large pool
markets and hence there was a lower entry barrier for them in the small pool
market.
Pool service professionals end up being more loyal to the customized brands and
Private label brands work out to be more cost efficient than branded products.
Hence, the revenues made on them are more desirable and intermediaries
building. The cost incurred in selling the product is much less than bigger
branded labels.
All these factors make private labels more desirable and many intermediaries are
Answers: Yes, I agree with Soren’s decision to build the brand. Soren was fighting 3
other competitors for residential pool-use clarifiers. People were aware of Kalian MW
and its usage in the pool maintaining industry, but the awareness with respect to oracle
was very poor. In spite of this situation, Kalian MW was used on a large scale by
formulators to dilute it and sell it as a separate private label. This was lowering the sales
and revenues earned by the company and Soren was facing tremendous drop in sales
If Soren was to build its brand, the Coracle would be known as the branded pool
cleaning product. The manufacturer price for a two-quart bottle of Coracle was $14.88.
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
Increased brand building would also guarantee them increased shelf space in retail
The addressable market is 59.4 million $. The first year goal for Coracle is 1.5 million $,
Answers:
Soren chemical sold pool chemicals like Kalian MW to Water Park and
commercial pools primarily through formulators. While they sold pool chemicals
may be because of less margin Pool service professionals and specialty retailers
had made enquiries about Coracle but only 30% recalled receiving the Coracle
material. Also 70% of them stated that Coracle had not been offered by their
distributors.
order to reach specialty retailers and service professionals which are an indirect
sales channel, the consumers were possibly aware of the safety and cost saving
benefits for them. Wholesale distributors want to hold a higher gross margin of
30% and retailers hold a gross margin of 15%, resulting in a retail price of 25$
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
Inefficient Marketing: Rather than other advantages (Prices and all), the product
Answer:
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%
Coracle will reduce the consumption of other pool chemicals by 20%-30%, its
clearer and hence get satisfied with compromised products at lower price.
contractors.
Question No. 7 What action plan do you recommend to Coracle?
Renegotiate the wholesale distributor about gross margin about 20% which
At 20%- $22
At 25%- $23
Creating demand from the consumer side will force wholesalers and distributors
Soren has to try to bypass the wholesale distributors, selling limited range to