Rohm and Haas Case Study

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BUAD 880
Rohm and Haas Case Study
1.Purpose of the Report:
Joan Macey, the Rohm and Haas market manager for Metalworking Fluid Biocides, was reviewing the marketing approach for the recently introduced Kathon MWX maintenance biocide. Rohm and Haas is one of several manufacturers that develop liquid biocide chemicals for eliminating microorganisms in metalworking fluids. The company currently manufactures the Kathon 886 MW concentrate biocide, the leading biocide in the concentrate biocide market. Kathon 886 MW is a very powerful concentrate used for large-capacity reservoir systems (above 1,000 gallons) and is too powerful for small fluid reservoirs. As a result, the company developed the Kathon MWX maintenance biocide for use in small-capacity tanks (less than 1,000 gallons). The problem is the new product is not selling as expected and Joan is not sure why. The purpose of this analysis is to: •Evaluate the strengths and weaknesses of the current marketing plan •Recommend whether the current marketing strategy should be continued, rejected, or modified 2.Recommendations:

Continue with the current marketing strategy with the following changes: •Establish a fixed price for end-users
Provide product demonstrations at customer businesses with free samples •Develop a follow-up survey for customers using free samples and develop a call back system to ensure distributors follow up on leads •Demonstrate the product at trade shows

Develop a new print advertisement with a cost / benefit analysis where typical household disinfectants are used in place of a maintenance biocide oDisplay the savings opportunity prominently on the advertisement oExplicitly state the safety and ease of use on the product oKeep the advertisement short – minimize word usage

Allow formulators to privately brand using a fixed specification that cannot be deviated from 3.Analysis:
Market / Customer Analysis:
The maintenance biocide market is a $38 million industry with competitors using all sorts of methods to treat metalworking fluids. Maintenance biocides are starting to be considered the preferred choice for bacteria and odor control and by 1993 are expected to completely replace the concentrate biocide market. The end-user for the maintenance biocides are the metalworking operators and shop foremen in the machine shops. These individuals are generally the decision making units for purchasing the product as they are the most familiar with the equipment and what is required to maintain them. The decision making process for selecting a maintenance biocide involves determining whether the product is needed for their operation and if so, what is the least expensive, most effective, and easiest to use solution available. Many consumers are unaware of the need or benefit of a maintenance biocide in small capacity fluid reservoirs so first hand customer training and education is usually required. Industry / Competition Analysis:

The maintenance biocide industry is composed of four major manufacturers each with a 15 – 20% market share with products that range in price and fluid capacity treated. These manufactures provide biocide solutions in many different forms and it is up to the end user to determine what is best for their application. A lot of time and energy is spent developing biocide solutions therefore the barriers to entry into the market are rather substantial. The main competitors in this market utilize different marketing and sales approaches with some manufactures choosing to sell directly to end-users and others choosing to sell to formulators and distributors before passing the product on. Company – SWOT Analysis:

Known for developing Kathon 886 MW, the primary maintenance biocide on the market, generally 10 times more effective than competitive biocides •All salespeople have advanced technical degrees to support the customers •Positive return on net assets for the past five years

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