Leadership Presentation

A. Marketing Case

Answer Part 'A' Market Analysis

Soren Chemicals had developed new water clarifier called Coracle for use in small recreational and household swimming pool, while the other clarifier like the Kailan MW used in large commercial pools and water park, which produced by Soren Chemicals. Very small quantities of Kailan MW clarifier are sufficient to treat large volumes of water capacities but it is unsuitable for smaller-scale applications such as residential pools due to the fear of misuse and potential safety risks. The targeted residential pools of Coracle have a lower volume of water, a lower volume of swimmers, and a less intense maintenance program. As per the industry reports there are are 9 million residential pools in the United States. As mentioned in the report that the selling season for residential pools will be largely over by May. Also in Table A is shown that the average months of pool usage are 5 months from May to September, because normally people swim in summer time and less people will swim in cold whether from October to April.

Moritz identified three leading competitors for residential pool-use clarifiers: Keystone Chemicals, Kymera, and Jackson Laboratories. Each of the companies has a 15% to 20% share of the residential pool clarifier market. That means the total shares for the three competitors has 45% to 60%. So the remained reasonable and addressable market share for Coracle is maximum 40% to 55%, that without consider the competition and market share of other smaller competitors.

According to the Exhibit 3, there is only 25% of consumers who understand and use clarifiers regularly, so there are around 2,250,000 (=9,000,000*25%) residential pools which use clarifiers regularly every year. Thus the maximum reasonable marketing revenue for residential pools is $52,309,152 (=39.06*2,250,000*25%*14.88/25) if we calculate based on the manufacturer price of Coracle.

Considering the facts like distributors typically carried tens of the thousands of products from many suppliers, including the regional formulators that sold Kailan MW, at least two of the formulators sold Kailan MW with a diluted version as a private label clarifier, and the competition from leading competitors and small competitors, I think that 15% should be market share of residential pools market for which Coracle needs to struggle and address. Therefore the addressable market size for Coracle should be $7,846,373 (52,309,152 * 15%) based on the 15% of market share.

Based on the above analysis, although it seems that the first year goal of $1.5 million sales is quite reasonable if we decide the addressable market size $7,846,373 by 5 (it means Soren Chemical generates their sales revenue mainly in 5 months from May to September for Coracle), which is around $1.57 million and higher than the target, but it is not the case, and it is not reasonable if the marketing team study it carefully. The $1.5 million sales goal is too aggressive for the first year for Coracle.

Answer Part 'B' Channel Analysis

As per the case study the Coracle had launched in September 2006 by Soren Chemical, which its the end of the preferable and suitable months for swimming season.

The sales team for Coracle did not consider following effects, which will impact the sales revenue extremely for the first year:

1. Consumers, wholesale distributors, pool service professionals, pool specialty retailers and mass retailers need to take time to know the new Coracle brand and the value they can get from Coracle if they buy it.

2. The stocks in the consumers sides, pool service professionals sides, pool specialty retailers sides, and mass retailers sides will also impact the sales of Coracle, especially in the last busy maintenance month of a year. Especially till the end of September, if the consumers decide not to use the pool until next May, they may not maintain the pools because

...