Rohm and Haas - Promotion and Distribution Strategy

Recommendation

Rohm and Haas needs to improve both its promotion and distribution strategy to realize the high growth potential of Kathon MWX. Currently, Rohm and Haas is relying on a push strategy to sell product, while they need to effectively implement apull strategy for success of Kathon MWX. The pull strategy is needed due to KathonMWX's low market awareness. To succeed, Rohm and Haas needs to focus on bolstering end-user awareness and education to increase sales and visibility. Unfortunately, Rohm and Haas iscurrentlyvery dependent on distributors for education. This is problematic as these distributors are designed to sell to large industrial consumers (Kathon 886 customers) as opposed to small end users (Kathon MWX customers), and prefer to sell branded maintenance products. In addition to distribution problems, Rohm and has needs to transition its line extensionpromotion strategy to a flanker strategy (appendix D). This can be done by rebranding/namingKathon MWX and differentiating it from Kathon 886, while focusing the distribution channel on the ferrous market. These positioning and implementation strategies that Rohm and Haas should pursue are discussed below.

Rohm and Haas Strategy for Kathon MWX

Customer

Kathon MWXtargets a market of 150,000 individual system owners(case, Table A) that use metal working fluid tanks smaller than 1000 gallons (mostly 50-100 gallon) in size. This $20 million market lacks a suitablebiocideproduct and based on survey result #5 (case, p8-9), at least 50% of the user population are eager to stopusing ineffective substitutes, like bleach, and switch to more effective products. Of those that have tried biocides, none had used Kathon MWX, illustrating KathonMWX's low market awareness. The table below highlights the key attributes of bothKathon MWX and Kathon 886 customers. This information will be used to drive the marketing strategy for Kathon MWX.

AttributeProduct Kathon MWX Kathon 886 MW

Consumer Class Individual Systems Owners Formulators that sell to Central Systems

# potential users 150,000 325

Industry Primarily Ferrous Primarily Non-Ferrous

Distribution Numerous and Fragmented Fewer and Consolidated

Usage Maintenance done by end-users Maintenance done by formulators as part of maintenance contracts

Key requirements Can have higher bacteria count. Main issues are odor, safety and convenience Need to have a very low bacteria count so metal is not tarnished

Since KathonMWXs target customers arewidely dispersed, and Rohm and Haas' distribution channel has low industrial supply house coverage, it is imperative that Rohm and Haas utilize a