Soren's Chemicals Essay

Words: 910
Pages: 4

Soren Chemicals Case Study

1. What is the addressable market size for Coracle? Is the first-year goal of $1.5 million sales reasonable?
Currently there are 3 major players in the residential pool clarifier market, Keystone chemicals, Kymera and Jackson Laboratories as well as several distributors who are diluting and private lebeling Soren’s Kailan MW for residential use. Soren’s Jen Moritz estimates that these players have between 15 and 20 percent (15-20%) of the residential pool market. Assuming that Soren stops the private labeling of Kailan MW, current participants hold anywhere from 45-60 Percent of the current market, leaving the addressable market some between 40-55 percent, or between 12-million to 16.5 million in
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(c). Kailan MW is sold to institutions and pool professionals, is formulated for large pools with a high volume of bathers, where cleanliness and safety are chief concerns. These users are aware of the product benefits and understand its proper use. Coracle is sold to residential users through discount stores, online and by pool supply centres.

3. What is the highest price Soren Chemical can set for Coracle?. What is Coracle really worth to end-users?
The price should be lower than the customer’s willingness to pay, but must be over cost

Soren needs to determine the optimal price (at perceived value)Things to remember about PRICE:-The market sets the price-Does it capture value?-What signal do you want to send to your competitors?-What are the barriers of entry?-What are the incentives for the distribution channels?-Can be used as a tool for positioning
Begin @ cost = $9.67
Add in Soren’s margin = $14.88 (35%) NOTE: Competitors enter @ $15.00

ClearBlu & Purity Add in retailer/service professional margin (15%) = $17.11- consider going up to $17.99 (gives retailers 20%-- incentive to stock Coracle over its competitors).

Also puts it in closer proximity to competitors on the shelf IS IT POSSIBLE TO BYPASS THE WHOLESALERS? If no, consider reducing So ren’s margin.

OPT 2 Begin @ cost = $9.67
Add in Soren’s margin (reduce to 30%) = $12.57 NOTE: Competitors enter @ $15.00

ClearBlu & Purity Add in