Rohm and Haas Discussion

Rohm and Haas Case

Rohm and Hass company was originally founded in Germany and after several years they had their US branches. The company is mainly focus on chemical industry. This paper is going to analysis their new product of Kathon MWX which is a very powerful biocide.

The metalworking fluid has microorganisms which will cause poor maintenance of metal machining. The biocide will kill the microorganisms in water-based metalworking fluid without affecting fluid performance. The Kathon MWX biocide was generally 10 times more effective than competitive biocides.  And their biocide can be used for 70% of the metalworking fluids. Compare to their competitors’ biocides were only able to be used for 45% of commercial metalworking fluids. The reference value which is the price of competing product is $7.75 per pound. Considering MWX is 10 times more effective and last 7 times longer (3 weeks vs 3 days) than the competing product, the economic value to the customer(EVC) should be $79.83 per packet. The calculation will be shown on appendix.

The main reasons for MWX is not selling well is that it is a new product and it takes time for customers to know it. The advertisement was not remembered by most of the participants. The customers tend to buy their product within 30 miles of their business, and the large national distributors for supplies are not locally available. About half of the users never tried biocide and they just keep using disinfectants although it does not work well.

The working environment can be dangerous. Some product is toxic to the workers. The customers who make the purchasing decision are industry suppliers and machine tool shops. They want something that safe and easy to use and they care less about effectiveness.

Rohm and Hass company should continue to sell MWX because their product is much better than the competitors. They should be able to have significant shares of the market in a few years. They should ‘push marketing’ because the customers are more willing to buy product near their business. This way more local shops will sell their product and therefore they can sell more product.

Appendix: calculation of EVC based on Exhibit 6.

Metalworking Fluid Concentrate Cost for 4 weeks:

$5.86*50*22/24=$260.33