Chemical: Marketing and Retailer/service Professional Margin

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1.- What is the addressable market size for Coracle? Is your first year goal reasonable?
Market size| | |
Number of swimming pools (taking into account that just 25% of consumers use clarifiers regularly – Exhibit 3)| 2,25| Millions (9 · 0,25)| | | |
Average retail Price *1| 44,30$|  |
Retailer gross margin| 15%|  |
Retailer gross profit| 6,6$|  |
Distributor price| 37,7$|  |
Distributor gross margin| 30%|  |
Distributor gross profit| 11,3$|  |
Soren Chemical price| 26,4$|  |
| | |
Total Market *2| 59,4| Million $|
First Year Goal| 1,5| Million $|
First Year Market Share Goal| 2,5 %|  |

*1 Average Price including competitors
*2 2,25 Million · 26,4$

The addressable market is 59,4M$. The first year goal for Coracle is 1,5M$, which represents a 2,5% of market share. This is reasonable considering that competitors have between 10%-20% market share.

2.- Why is Soren Chemical struggling to sell Coracle? How would you describe the selling process for Kaylan MW vs. Coracle?

* Retailers might not be interested in selling Coracle as they loss profits due to the benefits that Coracle produces to the end consumer (20%-30% reduction on other chemical costs).

Previous profits for retailers:
| Cost| Margin| Profit|
Clarifiers (average)| 44,30 $| 15%| 6,64 $|
Other Chemicals| 300,00 $| 20%| 60,00 $|
TOTAL| 344,30 $| | 66,64 $|
With Coracle:
| Cost| Margin| Profit|
Coracle| 39,06 $| 15%| 5,86 $|
Other Chemicals*1| 225,00 $| 20%| 45,00 $|
TOTAL| 264,06 $| | 50,86 $|
*1 (25% reduction on chemicals).

For each client retailers lose revenues of about 16$ a year if they sell Coracle, due to reduced consumption of other products. The channel is discouraged to sell our product.

Different situation for the product Kaylan MW. In this case, formulators use the clarifier in large recreational water parks and buy directly to the chemical...
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