Soren Chemical Case Analysis Essay

1603 Words Nov 25th, 2010 7 Pages
Soren Chemical Case Analysis

Jaimie DeVries
Mark Lesko
Katherine Milliken
Lori Quintavalle

Florida Atlantic University

Advanced Marketing Management – MAR 6815 – Online – Fall 2010

Dr. Gopalkrishnan Iyer

October 25, 2010
Problem Statement

Soren Chemical produces industrial strength chemicals, cleaning solutions, and chemical solutions for treating water. Since it’s founding in 1942, Soren has operated as a business-to-business company. They have recently introduced Coracle, a pool clarifier aimed at the consumer market. The goal for first year sales is $1.5 million. At 6 months, sales of Coracle are just $111,000. For Coracle to improve sales in the second half of the year and come closer to meeting the first
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The organization has determined that this pull strategy aimed at creating strong demand among end-users would require a $600,000 advertising budget. Because building relationships with, and marketing to, other businesses comes more naturally to Soren’s marketing department due to decades of experience marketing commercial products, utilizing a push strategy may be a more feasible option, at least in the short-term. Currently, Soren’s relationship with distributors appears to be weak, as Coracle is not being stocked by distributors whose customers are requesting the product. The optimal push strategy, that would allow Coracle to compete more directly with current market leaders and maintain margins while increasing appeal among distributors and retailers, would require an adjustment to both the container size and price per container. Appendix-Exhibit 4 displays Coracle’s current pricing structure in addition to several alternative pricing structures created by adjusting the cost per container to customers as well as container size to better reflect those offered by competitors Keystone Chemicals and Jackson Labs (HBS, Table A). Comparing annual gross profits per customer to retailers, distributors, and to Soren, across size/price alternatives, decreasing container size from 0.5 gallons per container to 0.25 gallons per container while simultaneously, but not proportionately, decreasing the end-price per container from $25 to either $15 or $20 per

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