Section A 1811006 Kunal Biyani

Proposal for sale of new product – Coracle in Residential Pool

Owners market

Soren Chemicals

Joe Moritz
Marketing Manager, Water treatments products group
Soren Chemicals
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1. Introduction
1.1. About Soren Chemicals
Soren Chemicals is one of the largest manufacturers of Industrial-Strength Cleaning Solutions
in the United States. Since its inception in 1946, the company has focused on manufacturing
of industrial chemicals for lubricants, fuels and chemical solutions for treatment of Drinking
water and waste water. In 2006, Soren Chemicals product lines included over 350 chemical
products applicable for a variety of uses.

Over the years, the company has expanded its focus to include a range of chemical products
for treatment of drinking water and waste water treatment. Soren Chemicals pioneered in the
Pool water treatment segment in 2002 with its product Kailan MW, a “clarifier” for Pool water,
targeted towards Water Parks and Commercial Pools.

The company senses a huge opportunity for usage of treatment chemicals in the largely
untapped segment of residential pools owners. With intense R&D efforts, we have developed
a perfect product targeted towards this segment of consumers. In this context, the Company
would like to liaison with chemical product retailers to tap this market opportunity with an aim
of deriving mutual benefits from the Market.

2. Background
2.1. About water Clarifiers Market
In 2007, Soren Chemicals estimated the market opportunity for specialty commercial-use
clarifiers to be approximately $300,000 with demand coming primarily from the Water parks
and commercial pools. The Pool cleaning requirements in this segment is largely being met
through Formulators who, in addition to delivering the products, also provide a range of value
added services to the end users. The primary product features that end users look for in this
protection from water-borne diseases are swimmer safety and cleanliness of the Pool water.

2.2. Residential Pool Clarifiers Market

While the market requirements for commercial water clarifiers has been addressed by
companies like Soren Chemicals, the market for non-commercial water clarifiers has largely
remained untapped. There are an estimated ~9 million residential swimming pools in the
United States which are largely maintained and cleaned by the owners or professional pool
service providers. This segment largely expects aesthetics and perceived cleanliness as the
key value additions from pool clarifiers.
There are 2 ways of selling chemicals in this segment – through wholesalers to retailers and
directly to retailers. It is understood through interactions with industry experts that
approximately 80% of the residential pool owners maintained their own pools with clarifiers
purchased from local specialty retailers or National retailers thereby making retailers as the
most important player in the overall value chain for sale of clarifiers.
This market for pool water treatment chemicals has been largely untapped and poses a huge
opportunity for Soren and its collaborators (Retailers) to enter. After intense R&D, Soren has
developed a customized Pool water treatment chemical for the residential pool clarifiers
market named “Coracle”
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3. About Coracle
After several months of research and product development, Soren Chemicals has developed
a perfect product for the users in the residential swimming pool market named Coracle. The
product has been developed keeping the requirements of the end consumers in mind and
additionally also has chemical properties like Soren’s premium offering – Kailan MW. It works
as a flocculant and removes microscopic particles and parasites that cannot be removed
through physical filtration alone and is being sold in liquid form in containers containing 0.50
gallons of the chemical.

Apart from the higher levels of cleanliness provided by Coracle, it is estimated that it reduces
the need for additional chlorine, shock treatments and enzymes thereby reducing the Pool
owners’ annual costs by ~20% – 30%.

4. Product Pricing and Competition in the segment

There are 3 major competitors in the residential pool use clarifiers segement – Keystone
Chemicals, Kymera and Jackson Laboratories. It is estimated that each company currently
has a market share of around 15 to 20%. Based on discussions with multiple distributors, it is
understood that while ClearBlu by Jackson Laboratories is the most effective chemical
flocculant relatively higher dosages of the chemical are required per week to ensure effective
treatment. This makes it less convenient for the end users.

The table below gives the retail pricing for Coracle and its competitors in the market

Soren Keystone
Kymera Jackson Labs
Chemicals Chemicals
Product Coracle Purity HydroPill Clearblu
Cost per
$25 $15 $3.50 $15
container
Cost per
$3.91 $2.34 $3.50 $3.75
treatment
Annual Cost $39.06 $46.88 $35 $75

5. Liaison with Retailers

As mentioned earlier, retailers are the key players for capturing the market in this segment
with 80% of the sales occurring through the retailers. In this regard, Soren would like to
capitalize on this opportunity by collaborating with the retailers in the segment. It must be
noted that Coracle provides the decently high margins to its retailers as compared to the
competitors. We further would like to inform you that we have come out with better payment
terms for your retailers with credit period extending up to 60 days from 45 days earlier.
Additionally, Soren has devised target specific incentives for its retailers based on the effective
sales per year. With sales that exceed the target set for the year, Soren will provide its retailers
with a higher margin 25%. A largely untapped market and growth provides Soren and its
retailers with a huge opportunity to capitalize on and reap the benefits.
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6. Mutual Responsibilities
Retailers can play a huge role in driving sales in this segment through point of sales
communications influencing consumer purchase decisions. Through increased point of sales
communications at the retailer level, both Soren Chemicals and the retailers stand to benefit.

On the part of the Company, we will make sure that the logistics of the entire sales are
streamlined, and retailers never fall short of any inventory when in need.

7. Conclusion
With huge growth in the market, retailers have a huge opportunity to capitalize on by partnering
with Soren Chemicals for the sale of its product Coracle. With improved benefits to the
consumers, Soren Chemicals expects a huge participation by retailers in increasing sale of
Coracle