Rohm and Haas Case Study Essay Example

Rohm and Haas Case Study Paper ROHM AND HAAS CASE WRITE-UP Problem Statement Rohm and Haas have a great product with the potential to make millions of dollars; however the end user is not aware of this product or its potential benefits due to their uninspiring promotional strategy, which really has only targeted large formulators and distributors leading to disappointing sales of Kathon MWX. The Kathon MWX has barely reached 6% of their targeted sales volume during its first five months and is nowhere near the potential $20 million market to individual systems. Alternative 1 Maintain Status Quo Pros: Kathon MWX is in the introductory stage of the product life cycle and the individual adoption process may take longer than expected, therefore sales may increase once consumers become aware of the product without additional cost to change marketing efforts. No additional cost, man hours, accounting, or clerical work would be incurred if they maintained the same marketing plan. Cons: The cost of doing nothing may snowball the poor sales and cause a decrease in long term profits. The more time it takes for consumers to become aware of the product, the more time it is giving the competition to react to the market. We will write a custom essay sample on Rohm and Haas Case Study specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Rohm and Haas Case Study specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Rohm and Haas Case Study specifically for you FOR ONLY $16.38 $13.9/page Hire Writer Market potential for Kathon MWX is estimated at $20 million, therefore allowing competition to be the first to reach consumers. Management may withdraw product from the market if this plan does not work. The current marketing strategy does not focus efforts on bringing awareness or knowledge of the product to the 150,000 individual system plants or the small companies that rely on supply houses and machine tool shops. Alternative 2 Adjust promotional strategy of Kathon MWX using extensive sales promotions along with advertising and personal selling focused on penetrating industrial supply houses and machine tool shops. Pros: By focusing promotions and advertising towards the secondary network instead of the large distributors helps create awareness of the product to the actual users of the product. This creates a pull or demand from consumers as opposed to a push from suppliers. Also, the concentrate biocide market is predicted to be cannibalized by the maintenance biocide market, hence adjusting the promotional strategy more towards the end users can boost sales by expediting this process sooner. Since Kathon MWX is a far superior product and more cost effective to users, creating a buzz or awareness of the product can sway consumers away from the competition and assist in gaining the untapped market. Personal selling and trade shows would allow the retailers and customers to become familiar with the product and ask questions regarding usage and safety since the previous marketing survey revealed consumer apprehension about safety. Cons: Adjusting a promotional strategy and implementing changes can be costly and time consuming. Additional sales force would be needed to help penetrate the smaller markets. The cost of implementing could be hard to predict and management may be reluctant to invest money into a product that is doing poorly. Formulators may resent the change since the product extends the life of the product they sell, which could decrease their sales. Alternative 3 Rerun the full-page advertisements in American Machinist and offer sampling again for an additional 5 months. Pros: Little time or effort would be needed to implement since it has already been done. This could be compared with the last effort to see if this promotional strategy is working. They could use the information gathered to add to their survey. No additional staff would be needed and cost would be minimal compared to other options. Cons: Since it had little response the first time, the odds of new customers reading the magazine are not high and they really will not be raising awareness of the products benefits or reaching the small users of the product. The only readers who received samples had to fill out reader service coupon, which may act as a deterrent. Each ad cost $3,800. Distributors are expected to follow up and generate orders, which takes an element of control away from Rohm and Haas and leaves the â€Å"selling† up to the distributors who have other products to sell. Recommendation My recommendation is for Alternative 2. Adjusting the promotion strategy to target the new â€Å"small users† instead of the industry formulators brings awareness of the product which should be the first step in the introduction phase of the product life cycle. The results of the previous survey showed that the majority of users sourced from small, local supply shops close to their business, therefore this promotional strategy will make Kathon MWX more visible and accessible to wider range of consumers. If Kathon MWX can capture just 15% (each competitor in biocide markets holds 15-20%) of the potential $20 million dollar market, it can increase sales by $3 million, which is outlined in Table A. This will offset the major drawback of this alternative which is the cost to implement a new promotional strategy. Table ASales Potential Potential Market$20 million Rohm and Haas’ Share of Biocide Market15% (low end) Potential Sales$3 million I would implement the plan by first approaching the sales group at Rohm and Haas that is under Specialty Chemicals. This will assist with internal relations since the sales group may feel some resentment towards a new sales team and this will allow for inputs and determine the most effective plan. Sales promotion that focuses on store demonstration with large, easy to read advertisement and free sampling would be most effective, along with trade promotion and making multiple appearances at trade shows. Second, I would hire a sales team to help with the promotional campaign and sales and then distribute target areas by region. All promotions would be backed up by advertising that would specifically target the individual systems to make them aware of the product and its benefits. I would evaluate the effectiveness of the new promotional campaign followed with another survey in five months. This would assist in determining the promotional strategy’s impact on the end user. I would also continue amicable relations with the current customers to ensure service is not impact. In general, the consumer only needs to be aware of a great product that is superior in performance and cost effective to buy it; therefore making them aware is the first step.