Soren Chemical: Why Is the New Swimming Pool Product Sinking - Case Study Example

Soren Chemical case Soren chemicals is a company that was established to sell industrial cleaning solutions in 1942 by Timothy Soren. The primary focus of the company was business to business sales and little emphasis was put in creating customer awareness. The company launched a water clarifier named Kailan MW in 2002 with the intention of using the water clarifier in large recreational water park facilities with a capacity of over one million. Kailan MW was unsuitable for small scale applications and as a result, the company launched Coracle in 2006 to target customers such as those with household swimming pools. The sales results have been dwindling and disappointing owing to several strategic and tactical problems (Kasturi & Yong, 2011). Strategic problem statement The company failed to make the consumers aware of their products and their benefits and Poor communication strategy by the company to retailers and distributors with enquiries. There is an extremely low sale of coracle which was launched for residential pool water clarification Tactical problem statement The price of Coracle as compared to other similar products by other companies is very high. Short term perspective In three years time, the company sales can be revived if solutions to curb low sales are properly adopted and implemented. If this is not the case then, it could lead to closure of the company as it has not made any significant sales to ensure its sustainability. If the recommended solutions are carefully implemented, the sales will go up and the company will make profits which could lead to expansion. Identification of Issues 1. The pool service professionals and contractors are not aware of the actual value of Coracle. Most of the service professionals believe that Clearblue, a product by a competitor company is more effective and solely reduces the need for other chemicals. Soren chemicals should therefore focus on advertisement to make the professionals aware of the benefits of Coracle. 2. Consumers are unaware of the benefits of coracle. Majority of pool owners maintain their pools by themselves. Since they do not know of the benefits Coracle presents, they settle for what the distributor gives them and mostly cheaper products. Soren chemicals should let the customers in on the positives of using Coracle if they are to increase their sales. 3. Lack of support by the distributors. Using Coracle reduces the need for other pool treatment chemicals by over 20%. This is not a favorite of the distributors and retailers as they are set to sell chemicals and make profits. They fail to mention this to the customers and pass it on as just another pool product (Kasturi & Yong, 2011). 4. Poor communication strategy. There exists a communication gap between the company and the distributors. There is little awareness on which the distributors rely on to make sales. Their enquiries are not properly met by the management, and as such create a communication gap. 5. High pricing of Coracle. The product is very expensive as compared to other pool treatment products meant to do the same work. As such, consumers tend to opt for the cheaper products. This contributes significantly to its low sales margins. 6. The distributors are not pool service professionals. They normally lack the knowledge of pool chemicals. As such, they will sell the chemicals customers ask for and fail to mention on the goodness of Coracle, since they themselves do not understand what is written on the pack. 7. Improper positioning of Coracle. The target market of residential pools products is mostly on aesthetics and perceived cleanliness. However, Coracle is positioned as a product for trapping e-coil and cryptosporidium. 8. A promising bright future for the company. Soren chemicals can improve on the sales strategy for both of their water purifying products if proper campaign is done to make the consumers and sellers aware of the superiority over other competitors. 9. Large potential market. Soren chemicals should take advantage of the existing large market for Coracle. There are millions of household pools with no established brands for pool cleaning. Proper marketing will lead to acquisition of this existing market. 10. Coracle is a sole performing agent. This product can reduce the amount of money used to buy a combination of chemicals that are used for pool cleaning. This can be used as a significant marketing strategy. Alternative solutions Proposal 1 Creating brand awareness to the consumers, professionals and distributors. This can be done through vigorous advertising to reach all the stakeholders involved. The company should not concentrate on one but all those who are involved in the long term success of the company. Understanding the psyche of the consumers. The buyers need to know about the full potential of coracle as most people harbor the idea that water that appears clear after using a sanitizer is safe. This is not the case as it may contain harmful pathogens that can be eliminated by coracle. Price reduction. It would be necessary for the company to reduce the price of the product as it is among the most expensive brands of pool cleaning products. In doing so, Coracle will match the market price of competing brands and attract a larger customer base. The distributors should be well motivated to sell coracle. The fact that coracle targets reducing the usage of other pool chemicals is against the distributors interest as their primary goal is to make as much sales as possible from all available chemicals. As such, Soren should motivate distributors by increasing their margin from the current 20% and as well convince them that they will make net positive revenue even after they lose other water cleaning products (Kasturi & Yong, 2011). Proposal 2 The company should solely focus on consumers only, as they are the primary revenue avenue. The customers should be made aware that unlike other chemicals, coracle can remove harmful substance that cannot be seen with a naked eye. Most customers are unaware of the products they use. The long term benefits of coracle and the reason it is highly priced. The fact that coracle use will reduce the amount of money spent buying other products as it is used solely. In the long run, the overall of amount of money used to buy coracle is less as compared to other cheaply low superior products. Home visits to demonstrate the benefits of coracle. This is aimed at acquiring the untapped market. Recommendations Both proposals are beneficial to the growth of Soren chemicals as they are focused on increasing sales. However, proposal two concentrates on the consumer alone. This is outweighed by the first proposal as it touches on all stakeholders. As such, I would advocate for the first set of alternative since there is an assurance that sales will improve. Working with the distributors who are mainly sales persons is an assurance that the product will be paid more attention to. Combining both strategies will be a better way of changing the overall trend of the company leading to better sales. Reference Kasturi, R., & Yong, S. (2011). Soren Chemical: Why Is the New Swimming Pool Product Sinking?. Harvard Business School. 4188. Read More