Rohm & Haas - Kathon Mwx

Problem statement: Rohm and Haas launched Kathon MWX, a maintenance biocide targeting the metalworking industry. Rohm and Haas have achieved a 30% market share with their primary biocide, Kathon 886 MW, which was designed for large central systems that are in excess of 1,000 gallons. The market for this segment consists of 325 plants that are serviced through a distribution channel consisting of 12 major metalworking fluid formulators. The new product, Kathon MWX, targets the individual system segment consisting of 150,000 smaller plants. One of the key reasons for the slow sales performance of Kathon MWX is related to the distribution channel that is being utilized by Rohm and Haas. The target market for the new Kathon MWX is primarily serviced through various industrial supply houses and machine tool shops, and cannot be effectively reached by the larger metalworking fluid formulator channel.

Alternative 1: Continue to push Kathon MWX through the large formulator channel.

Pros: The formulators control a majority of the large machine shop business that makes up a majority of the biocide business that Rohm and Haas currently enjoys. The channel is already in place which will make future strategy changes quicker to deploy. Working with the formulators will ensure that Kathon MXW is being distributed and represented by organizations that specialize in metalworking fluids which is in the best interest of Rohm and Haas.

Cons: The formulators do not directly call on the smaller machine shops that make up the target market for Kathon MXW. Actively promoting the use of Kathon MXW is also not in the best interest of the formulators due to the fact that the product will potentially reduce the fluid used by roughly fifty percent.

Alternative 2: Push sales through industrial supply houses and machine tool shops.

Pros: This alternative will allow Rohm and Haas to directly reach the target market for Kathon MXW. Supply houses and tool shops have direct relationships and make frequent sales calls on the end user aiding in the education of Kathon MXW's features, advantages, and benefits. This channel strategy could also prove effective due to the broad nature of products carried by this channel allowing Kathon MXW to be bundled with a packaged preventative maintenance approach. With the small sales force at Rohm and Haas that is dedicated to this product line, this alternative allows for more time to be spent on training channel representatives on becoming product experts rather than attempting market penetration with only Rohm and Haas's sales team. This strategy will also free up the Rohm and Haas sales force to execute pull tactics with key customers.

Cons: The industrial supply houses and machine tool shops are often large distributors carrying multiple brands in the same product line. This could present a problem with cannibalization if the distributor