Soren Chemical: Why Is the New Swimming Pool Product Sinking Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Soren Chemical: Why Is the New Swimming Pool Product Sinking Case Solution

Weakness of brand image

The brand image is of paramount importance when intending to increase the market share. The company didn’t follow the right strategy to make the brand strong and well-known in the market with safe and unique product to make loyal customers. Additionally, the company was not creating awareness about the features of the unique products amongst the customers and not focused on effective advertisement techniques to introduce the brand and make the brand image. The weakness of the brand image is aligned with the company’s approval to other brands to use their products and sale the Soren Chemicals products with their brand name. Soren Chemicals allowed formulators to use private branding for Kailan MW and these products were also sold by formulators under the private brand name.

Price/distribution

The company sold Coracle through wholesale distributor in order to reach specialty retailers and service professionals. The wholesale distributors expected to maintain the 30% gross margin in selling Coracle which is greater than the competitors i.e. 20%. Due to the higher gross margin, the retail price also increased due to which there is a likelihood that the customers purchase low priced alternatives available in the market.

Additionally, the company provides growth opportunity to distributors on the ground that residential market size is 3.7 times the size of commercial market. The distributors are willing to sell the products under their own private labels to build their own brands, which in turn would tend to increase the reliance of the manufacturers on them.

List of questions

The list of key questions that must be answered are provided below;

How the sales of the Coracle is aligned with the buying behavior of the customers?

The question is of high significance due to the different buying behavior of customers is influenced by many factors such as marketing factors, environmental factors, perceived benefits of the products, situation, and psychological and personal factors.

What are perceived strategies for creating the brand awareness amongst customers related to economic and safety benefits of the product?

Given the low awareness of product amongst customers, the company would be able to facilitate the broader base of customers and drive performance marketing goals and increases the chances of dominating the market and generating conversions.

How a competitors’ offering could threaten the long term profitability and viability of the business?

Understanding the intensity of the competition in the market provides a solid foundation of determining the profitability potential of the company. With the robust and intense market competition, the company could be able to transfer added value to its clientele. Furthermore, having a closer look over the strategic moves of the competitors help adjust the strategy to suit the competitive environment & improving the potential profit.

Why Soren Chemicals needed to determines the attractiveness of the market and competitive intensity?

By knowing the market attractiveness and the competitive intensity, the company would be able to know whether investing in such industry would prove to be profitable or not. Additionally, the company must assess and evaluates the factors affecting the market attractiveness such as; pricing trends, market growth, and market size and competition intensity as it is the essential part of situation analysis in strategic planning.

Recommendations

The company is recommend to widen the channels of distribution through agent, pool service professionals, online, retailers, direct selling or wholesalers & mass retailers-pool owners to reach wider base of customers. The distribution channel must have in-depth knowledge and understanding of the product & its benefits to compel customers to purchase the products. Through creating brand awareness and educating customers & showing the increased benefits of using Coracle would lead to improved retail sales of the product. The active sales force working to educate both end users and distributors related to the benefits of using Coracle would lead to improved sales performance of the product. The company is recommended to use the customer oriented strategy and spend considerable amount of money on marketing campaign to change the customer perception that Coracle is expensive product and to highlighting the core advantages of using Coracle such as; require less treatment in one month, saves 20-30% of annual chemical cost, low chlorine usage, reduce maintenance work, protect against waterborne pathogens and provide clear water without cloudiness. The company could create the brand awareness by providing free water test, experiments or through event to emphasize on perceived cleanliness and aesthetics. The company could also visual media or physical demonstration i.e. setup booths in retail stores with core consideration of demonstrating the benefits and effectiveness of the product & ease of using it(Mark, 2015).

In addition to this, the company could bypass the wholesale distributor altogether, selling a limited range of pool products directly to do-it-yourself retailers and Walmart to increase sales of the product. Moreover, the company must re-negotiate with wholesale distributor about 20% gross margin in instead of 30% on the basis of their expectations. Furthermore, the company should offer higher profit margin to distributors that would allow them to start promoting & carrying Coracle to retailers.

Moreover, the must re-launch the product in the summer instead of during fall and must revise the product strategy and makes clear message on its competitive advantage. Soren Chemicals should also increase the marketing budget to conduct the mailing campaign and run advertising in industry publications. The company could use the email marketing to reach customers and it would allow the company to draw valuable information about their customers. Furthermore, the company could increase the confidence of customers on Coracle through press release in trade association journals targeted at specialty retailers and service professionals.

As indicated in the data that the customers are willing to pay $50 /monthly to clean their pools, the appropriate method to increase the gross margin is the price change, however in the initial stage, the company should not increase price as it would cause considerable amount of loss in product’s sales because of the low customers awareness about the economical and safety benefits of Coracle..........................

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