Use the case study after the questions to solve, please. 1. Provide a quantitati
ID: 421579 • Letter: U
Question
Use the case study after the questions to solve, please.
1. Provide a quantitative analysis of how much money Kathon MWX saves the user: [i.] how much does it cost the user for cleaning and not using it, [ii.] what is the cost using the Kathon, and [iii.] what is the difference (i.e., how much are you saving the customer)?
2. Why isn't Kathon MWX selling? Would you abandon the current strategy or continue on with it? Why?
3. Describe the user environment. How are decisions made to purchase the product? Who makes the final decision?
4. What would your marketing strategy be? Your strategy is to have the following elements: [i.] Pricing (give a quantitative reason along with your explanation) [ii.] Positioning [iii.] Channel sales
5. Based on your answers, your boss, Dr. X, asks you to be candid with him: do we try your recommendations or should the company just abandon the project? Dr. X doesn't like quitters, but he hates to lose money even more. Dr. X is also a boss who more than anything wants a justification for any action taken. What would you say to him?
Rohm and Haas (A) New Product Marketing Strategy On May 15, 1984, Joan Macey, Rohm and Haas market manager for Metalworking Fluid Biocides, was reviewing distributor purchases of Kathon MWX, a new biocide that killed microorganisms in metalworking fluids. She found that total sales to distributors for the first five months were 74 boxes against a first-year target of 1,350 boxes. "I have a super product but I can't sell it," she said. "I am in the process of reviewing our approach of taking this product to market, but at this point I am not convinced we have a better alternative." Macey was also responsible for the marketing of Kathon 886 MW, a liquid biocide used in large metalworking fluid tanks (above 1,000-gallon capacity). Kathon 886 MW was a powerful biocide, and very small quantities were sufficient to treat large tanks. Because of its low-use level Kathon 886 MW was not suitable for smaller-capacity tanks, and Kathon MWX was developed specifically for use in tanks with less than 1,000-gallon capacity Kathon 886 MW had a sales volume of $5.4 million in 1983; sales for the first five months of 1984 were at the budgeted level of $2.1 million. Kathon MWX had been launched in December 1983 with a targeted sales volume of $0.2 million in 1984; sales in the first five months were about $12,000 Macey estimated the market potential for Kathon 886 MW to be $18 million and Kathon MWX to be $20 million. Explaining the poor sales of Kathon MWX, she said The total usage of Kathon MWX and its substitutes is nowhere near the $20 million potential for this market. Many small users are either unaware or don't see the need for biocides in their metalworking fluid treatment. We do poorly because we do not have enough competition to build primary demand Company Background In 1906, Otto Rohm and Otto Haas founded the company in Germany to sell chemicals to that country's leather tanning industry. The U.S. branch opened in Philadelphia in 1909. At the end of World War I, Otto Haas incorporated the American branch as an independent company. Over the years it became a leader in chemical technology, especially in acrylic emulsion polymers.1 In 1983 the American company reported worldwide sales of $2 billion derived from four business segments:Explanation / Answer
1-Kathon MWX is safer to handle for the customers. Its packet contains highly water-soluble biocide which controls bacteria and fungi to grow and also controls the odour they produce.
2- Though Kathon MWX was more effective that the metalworking fluid supplied by the competitior, it was not able to reach its first 5 month sales-target. Kathon MWX is not selling because of the marketing strategy of the organization. As per the company, they are not able to sell it because they believe that customers are unaware of their product or either they don’t need biocides in their metalworking fluid treatment. They also believe that they do not have enough competition in the market so that they can build primary demand. If I would be at their place, I would not follow the same strategy. They did not promote their product. Their promotional strategy was not effective enough to sell the product. There were no budgeting plans for the business. Their product was for large reservoirs, but customers wanted to buy these for smaller reservoirs.
3-There were around 325 customers for Kathon 886 MW and approximately 150,000 customers for Kathon MWX. Kathon took 70%-80% of the market of workers using Non-ferrous metals (small scale industries). Though Kathon was cost-effective, it was only able to capture 15%-20% of market of ferrous metals. As customers, they usually got a maintenance package including delivery and maintenance of biocide treatments. Customers denied using metalworking fluid after three weeks of usage because it was spreading Rancidity and Dermatitis and most customers believed that the bacteria present in these fluids are causing dermatitis.
4- (i) Budget needs to be prepared before you start a business or expand your business. It will help to figure out, how much money we have and how much we need. This is also one way to minimize risk for your business. Company should keep an eye on the funds needs to expand the business, additional cost for operation and also an estimate of expected profits.
(ii) Human Resources are a vital part of any organization. Company will need to set up job profiles first. Create a hierarchy of the organization. Devise a salary structure for each level. They should also set up a performance measurement technique. HR Resources should be trained at par because the rest of the company's population will depend on human resource professionals.
(iii) The most approach appropriate approach here is expanding sales via a networker. Networking may prove a big help for any sales firm. Through a network, the business can be expanded to different groups of people, other companies, co-workers, friends, etc. An organization can expand its business via word-of-mouth. It is one of the highly effective technique to attend various business meetings, parties, meeting new people and expalining your business to them.
5- I would explain the way and reason I am going to plan everything and implement that plan as well in the sales of the product. Customers need to aware of the uses of the product and other positive points. I will assure Dr. X about the positive returns of the plan I had devised and successful implementation of that plan as well.
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