Rohm & Haas
Rohm and Haas
Executive Summary
Joan Macy, Rohm and Haas (R&H) market manager for Metalworking Fluid Biocides, has the primary responsibility of marketing R&H’s new consumer packaged MWX metalworking fluid biocide aimed at the small, individual cutting fluid system market. MWX, has been on the market for the past five months, but has only $12,000 in sales when it has been projected for $84,000 during that time span. Initial surveys have shown that there is a vast potential for MWX in the market, but the end user has not been receptive to the advertisements.
Situation Analysis
Though Rohm and Haas has tied up with the formulators for the distribution of Kathon MWX, the main target segment for this product, the Individual Systems customers, rely on industrial supply houses and machine tool shops entirely for all their metalworking fluid requirements. Hence our current strategy of selling through formulators appears ineffective and maybe a prime reason for the low sales of Kathon MWX as explained by the following reasons:
• Formulators primarily deal with users of large central metalworking fluid systems and not with users of small individual metalworking fluid systems, which are the target market segment for Kathon MWX.
• Rohm & Haas has disallowed private branding of Kathon MWX and that can be disincentive for the formulators to promote the product.
• Kathon MWX potentially increases the life of metalworking fluid by 2-4 weeks. This would cause a significant reduction in revenues for the formulators since the individual system customers would now be purchasing fluids less frequently.
For a typical small machine shop for a year they use 13,200 Gallons (22 machines * 50 gallons * 12 times a year). This is because they are currently discarding fluid every four weeks. By using Kathon MWX they increase the life span by 2-5 weeks. This would reduce the sales of the fluid by roughly 50%, the loss of which will be borne by the
Executive Summary
Joan Macy, Rohm and Haas (R&H) market manager for Metalworking Fluid Biocides, has the primary responsibility of marketing R&H’s new consumer packaged MWX metalworking fluid biocide aimed at the small, individual cutting fluid system market. MWX, has been on the market for the past five months, but has only $12,000 in sales when it has been projected for $84,000 during that time span. Initial surveys have shown that there is a vast potential for MWX in the market, but the end user has not been receptive to the advertisements.
Situation Analysis
Though Rohm and Haas has tied up with the formulators for the distribution of Kathon MWX, the main target segment for this product, the Individual Systems customers, rely on industrial supply houses and machine tool shops entirely for all their metalworking fluid requirements. Hence our current strategy of selling through formulators appears ineffective and maybe a prime reason for the low sales of Kathon MWX as explained by the following reasons:
• Formulators primarily deal with users of large central metalworking fluid systems and not with users of small individual metalworking fluid systems, which are the target market segment for Kathon MWX.
• Rohm & Haas has disallowed private branding of Kathon MWX and that can be disincentive for the formulators to promote the product.
• Kathon MWX potentially increases the life of metalworking fluid by 2-4 weeks. This would cause a significant reduction in revenues for the formulators since the individual system customers would now be purchasing fluids less frequently.
For a typical small machine shop for a year they use 13,200 Gallons (22 machines * 50 gallons * 12 times a year). This is because they are currently discarding fluid every four weeks. By using Kathon MWX they increase the life span by 2-5 weeks. This would reduce the sales of the fluid by roughly 50%, the loss of which will be borne by the