Soren's Chemicals
Soren Chemicals Case Study
1. What is the addressable market size for Coracle? Is the first-year goal of $1.5 million sales reasonable?
Answer:
Currently there are 3 major players in the residential pool clarifier market, Keystone chemicals, Kymera and Jackson Laboratories as well as several distributors who are diluting and private lebeling Soren’s Kailan MW for residential use. Soren’s Jen Moritz estimates that these players have between 15 and 20 percent (15-20%) of the residential pool market. Assuming that Soren stops the private labeling of Kailan MW, current participants hold anywhere from 45-60 Percent of the current market, leaving the addressable market some between 40-55 percent, or between 12-million to 16.5 million in sales per year.
Soren’s Moritz estimates that the market for residential is larger than the $30- million market for commercial pool fluccolants. Assuming that Soren will capture sales 15- percent representing the low end of the current residential market, it should see sales of about $4,500,000 per year ($4.5 Million/yr.), making the $1,500,000 per year( $1.5 million/yr) target more than achievable.
2. Why is Soren Chemical struggling to sell Coracle?. What are the implications of the channel structure for pool chemicals? . How would you describe the selling process for Kailan MW versus Coracle?
Answer:
Coracle was introduced at the end of the pool season in 2006, leaving little time for Soren to build brand awareness of the product. By this time of the year, retailers most users have purchased all of the chemicals needed and may have sufficient stock to carry them into next years pool season, for Soren this means sales are limited until consumers are made aware of this product and its benefits and need to resupply their chemicals.
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
1. What is the addressable market size for Coracle? Is the first-year goal of $1.5 million sales reasonable?
Answer:
Currently there are 3 major players in the residential pool clarifier market, Keystone chemicals, Kymera and Jackson Laboratories as well as several distributors who are diluting and private lebeling Soren’s Kailan MW for residential use. Soren’s Jen Moritz estimates that these players have between 15 and 20 percent (15-20%) of the residential pool market. Assuming that Soren stops the private labeling of Kailan MW, current participants hold anywhere from 45-60 Percent of the current market, leaving the addressable market some between 40-55 percent, or between 12-million to 16.5 million in sales per year.
Soren’s Moritz estimates that the market for residential is larger than the $30- million market for commercial pool fluccolants. Assuming that Soren will capture sales 15- percent representing the low end of the current residential market, it should see sales of about $4,500,000 per year ($4.5 Million/yr.), making the $1,500,000 per year( $1.5 million/yr) target more than achievable.
2. Why is Soren Chemical struggling to sell Coracle?. What are the implications of the channel structure for pool chemicals? . How would you describe the selling process for Kailan MW versus Coracle?
Answer:
Coracle was introduced at the end of the pool season in 2006, leaving little time for Soren to build brand awareness of the product. By this time of the year, retailers most users have purchased all of the chemicals needed and may have sufficient stock to carry them into next years pool season, for Soren this means sales are limited until consumers are made aware of this product and its benefits and need to resupply their chemicals.
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