Rohm and Haas Case Study

Rohm and Haas Case Study:

Problem Statement

The main issue at hand here is the disappointing sales of Kathon MWX. The company estimated an amount of $20 million per year, and the sales at the time of the product launch was expected to be around .2 million. However, the sales in the first five to six months have only amounted to twelve thousand dollars, well short of the target. The product itself is solid and works well, but there are factors that are interfering. Distributors are not participating, this is seen with the twenty percent of MWX packets reached the end users as part of the promotion. Adding to this is the problem that the end users themselves do not appear to be very experienced with the use of biocides in their own machines. They do not realize that the product cold solve their current problems (dermatitis, odors).

Three Alternative Solutions:

Alternative 1: Direct distribution to secondary distribution networks (supply house and tool shops) is a viable strategy. Here, a strong sales force can be created to keep close contact with the shops themselves. The profit margins will be increased by eliminating that first level of distribution, the point of sales with the shops will be strengthened, and we can increase the 20 percent distribution that we have now. The cons of this solution are that it will require extra time, money, and manpower to accomplish what should have already been in place with the original model.

Alternative 2: We can focus distribution on end users. Here a sales team can use telecommunication or the internet to contact end users, and also receive inquiries from the customers response to the company’s advertising. The per packet profit margin will significantly increase with this measure as the company goes directly to the end users. The downside to this approach is that it will be costly to focus this much attention on each client and each individual packet, as we gather feedback and set up either a call center team or website to facilitate this need.

Alternative 3: We sell the MWX product through the formulators just like we do with the 886MW. It can then be sold WITH the metalworking fluid concentrate as a package or a bundle. A promotional program can be implemented and focused on the end users. A information campaign can be directed at the various members of the chain