Soren Chemicals Essay

Words: 1149
Pages: 5

Soren Chemical: Why is the New Swimming Pool Product Sinking?
Case Study Analysis Submitted by Group

Introduction Soren Chemicals was founded in 1942 by Timothy Soren to sell industrial-strength cleaning solutions. Since then, the company had expanded its focus to include industrial chemicals for lubricants and fuels, as well as a range of chemical solutions for treating drinking water and wastewater. Historically, Soren Chemical had concentrated on business-to-business sales and placed little emphasis on creating consumer awareness of its products. Objective Jen Moritz, the protagonist of this case study, is a marketing manager in the Water Treatment Products group with responsibility for chemicals used in drinking and pool water
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Since the product was launched in September 2006 and the results collected in February 2007, we cannot estimate the impact that the off-season has on the sales of the product. Normally, the sales would be higher in the spring and summer months between March to July, since more people would be using the swimming pools when the weather is warmer. It is possible that this point escaped the attention of Moritz and was not taken into consideration while estimating demand.

Alternative strategies and recommendations  Since the current annual cost at retail price is $39.06, which is less than the annual average cost of clarifiers at retail prices ($50), there is scope to increase the gross profit margin of the retailer and distributor and thereby increase the retail price of Coracle by approximately $10 without drastically affecting sales. This way there is more incentive for the distributors and retailers to promote the sales of Coracle. Reduce the gross profit margin of Soren Chemicals from the current 35% and consequently increase the gross profit margin of the retailers and distributors. This way the retail price to the customer won’t be affected. However, the company will suffer from reduced profits at the expense of better sales revenue. This strategy is