1. What is the addressable market size for Coracle? Is the first year goal of $1.5 million sales reasonable? (10 points)
2. Why is Soren struggling to sell Coracle? (10 points)
3. What is the highest price Soren can set for Coracle? (7 points)
4. What action plan do you recommend for Coracle? (13 points) Q1.
Coracle is one of the clarifiers developed and produced by Soren Chemicals targeting residential pools which have smaller size than commercial pools and water parks, that are served by other clarifiers like the Kailan MW produced by Soren Chemicals. Very small quantities of Kailan MW are sufficient to treat large volumes of water but it is unsuitable for smaller-scale applications such as residential pools due to the fear of misuse and 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.
It is estimated that there are 9 million residential pools in the United States. According to what illustrate in the last paragraph of the case in page 7, the frequency of usage of residential pools and residential pool chemicals will be largely increased from May. Also as introduced by the Table A in the page 5, the average months of pool usage are 5 months, which makes great sense because normally people will swim in summer time from May to September, and less people will swim in cold whether from October to April.
According to the Exhibit 3 shown in the case, 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.
Currently, Coracle has three leading competitors for residential pool-use clarifiers: Keystone Chemical, Kymera, and...