Since the conception of its new product Kathon MWX, Rohm and Haas has been largely unsuccessful in putting it to the market and achieving target sales. Being accustomed to a marketing strategy appropriate for large industrial buyers, the company has tried to push its new product through this same marketing model, even though its target consumer is much different and has smaller-scale of operations. Banking on the four P's of marketing as a starting point (product, price, place, and promotion), we have analyzed their strengths and weaknesses in the Rohm and Haas case. Concluding that the product itself is the best on the market, the following observations and suggestions for improvement lie in the areas of pricing, distribution channel (place) and promotional efforts.
[...] Kathon MWX was already featured in an industrial publication and could increase its awareness by appearing in publications geared towards smaller enterprises. In these articles, all the issues of misinformation can be addressed much more effectively than by previous methods, wherein a potential customer would have to request more information upon seeing the advertisement (of which only 20% of respondents remembered seeing). In addition, Rohm and Haas has not been accustomed to marketing to retailers. This activity is a key to getting a new product into consumers' hands. [...]
[...] Rohm and Haas has no idea about the exact number of small shops where Kathon MWX is sold and at what price. The potential market for Kathon MWX is very fragmented which causes big problems of distribution. The first solution we thought of was to sell directly to the local shops. However, this solution is not viable as there are more than small shops (about industrial supply houses in the United States and machine tools shops). A better solution consists of two major changes. [...]
[...] This 48% additional savings means that Rohm and Haas has the flexibility to increase the price charged for Kathon MWX without significantly increasing the existing cost structure of end users. Here is a possible pricing strategy that Rohm and Haas can adopt for Kathon MWX to increase profitability and sales revenue: Rohm and Haas can adopt a premium pricing strategy, tripling its current price per packet charged to the end user from to $6. This price increase can have the following implications: a. [...]
[...] This increase in margin would be a significant motivation for distributors to promote Kathon MWX to retailers on the behalf of Rohm and Haas. Besides simply tripling the price of Kathon MWX to $6/packet, a price penetration strategy could be employed by providing discounts (e.g off the price) in the initial months to attract customers. Such a strategy would take advantage of both the quality associated with premium pricing and the increased sales that come with discounted prices. Promotion The promotional efforts put forth by Rohm and Haas have generated few measurable results but have not been maintained with diligence. [...]
[...] Conclusion Upon analysis of the Rohm and Haas Kathon MWX case, we have found that some adjustments are needed in the areas of pricing, promotion and distribution channel. The company must have more control over the pricing of its product and not hesitate to triple the price. This will position the product as one of quality and free up funds to promote it more intensely. A change of the name is in order, as well as an informational campaign stressing the importance of using biocides for healthy maintenance of metalworking fluid tanks. [...]
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