Case Analysis Soren Chemical: Why is the new swimming

pool product sinking?

About Soren Chemical Company

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

– Over 350 products, wide range of Industrial chemicals and water-cleaning solutions

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

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

About Kailan MW and Coracle products

– Kailan MW is used primarily for cleaning large commercial pools and water

parks (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 $1.5

Million (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 importance

of clarifiers for their business. Safety of their customers matters most.

Marketing strategy for Kailan MWMarketing strategy for Kailan MW

• Strong partnership with Formulators.

• Sold under “Private Label Brand”.

• Product USPs are attacks organic debris which can pass through filters, effective

for 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 in

nascent 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 aesthetics

and perceived cleanliness)

– Major Brands: Clearblu, Hydropill and Purity

Marketing Strategy for Coracle

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

channel 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

them and passing on the interested customers information to appropriate

wholesale distributors.

– 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??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 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: Customers are happy with pool looking

clearer and hence get satisfied with compromised products at lower price.

– 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 Pool

Service Professionals and independent contractors-

(a) Aggressive Mailing campaign

(b) Huge advertising in trade journals

(c) prominent display counter in trade-shows

(d) Message should be centered around 20-30% savings of pool chemicals by use

of Coracle resulting in higher profits for professionals and contractors.

(e) Focus on Lower annual cost compared to ClearBlu ($39.06 vs $56.25)

Recommendations (considering long-term results)

– Impart education to Pool Owners regarding adverse affect of waterborne

diseases: Live Demos in societies, buzz around rewarding cleanest pool in city etc.

This will increase the % of customers using clarifiers regularly

– Made Pool Owners aware about potential savings and economic benefits of

using Coracle.

– Price revision to $30: Survey indicates acceptable treatment price of $50/annum.

Retail price of $30 will lead to treatment price of $46.8/annum, hence

acceptable. Soren will have cushion to bear the marketing expenses and

additional distributor margin to promote sale.

Thank You !