Q1. What is the addressable market size for Coracle? Is the first-year goal of $1.

5 million
sales reasonable?
Ans: According to Exhibit 3 there are 25% pool owners who understand the importance of
clean pool and use clarifiers regularly and annual average cost of clarifiers at retails are $50.
Also, it is mentioned in the case that according to the industry reports there are nearly 9
million residential swimming pools in the United States, all of which require regular cleaning
and maintenance by their owners.
Now this led us to the market size of the clarifiers which is around $112,500,000 as per the
following calculation 9000000 * 25% * 50.
Moritz identified three leading competitors for residential pool-use clarifiers: Keystone
Chemicals, Kymera, and Jackson Laboratories. She estimated that each of the companies
had a 15% to 20% share of the residential pool clarifier market. So, taking the maximum
case into consideration 60% of the market is already covered which leaves us with
remaining 40% and if Soren is able to tap this the amount of revenue they could generate is
$45,000,000 which is $112,500,000 * 40%. And their target was $1,500,000 which is around
3.3% of the target market. Therefore, their goal seems reasonable.

Q2. Why is Soren Chemical struggling to sell Coracle? What are the implications of the
channel structure for pool chemicals? How would you describe the selling process for
Kailan MW versus Coracle?
Ans:

 Inefficient channel structure as of now: No support from the distributors/retailers.

Soren Chemical sold pool chemicals like Kailan MW to water park and commercial
pools primarily through formulators. While they sold pool chemicals like Coracle to
residential pool owners through a two-step process to wholesale distributors, which
supplied specialty retailers and service professionals. And may be because of less
margin Pool service professionals and specialty retailers had made inquiries about
Coracle but only 30% recalled receiving the Coracle material. Also 70% of them
stated that Coracle had not been offered by their distributors
 No Awareness in the consumers - Since Coracle sold mainly through wholesale in
order to reach specialty retailers and service professionals which is an indirect sales
channel, the consumers were possibly aware of the safety and cost-saving benefits
for them. Wholesale distributors want to hold a higher gross margin of 30% and
retailers hold a gross margin of 15%, resulting in a retail price of $25 which is higher
than its competitive products. In the residential pool market, as a new product with
such high price, consumers are not likely to buy it. Still, Coracle’s consumers do not
realize the value of Coracle relative to other clarifiers (only 25% of the consumers
understand clarifiers).
  Inefficient Marketing: Rather than other advantages (prices and all), the product
launch rather emphasized on the performance advantage of trapping dangerous
waterborne pathogens such as E. coli and cryptosporidium.
Marketing Strategy of Kailan MW:

 Strong partnership with formulators.

 Sold under ‘Private Label Brand’.
 Product USP include- Attack organic debris which can pass through filters, effective
for long period, low quantity needed.

Q3. What is the highest price Soren Chemical can set for Coracle? What is Coracle really
worth to end-users? Given its superior performance, how can Coracle be priced relative to
the competition? What are the constraints? What is the impact of a higher retail price on
distributors? Retailers?
Ans: 80% of the Americans pool owners did not know about Coracle same as other
professionals in the area then how can they know what is Coracle worthy of. Distributors
had the influence on the customers and they could influence residential pool owners and
suggest them products. Thus, Soren Chemical have to invest in advertisements and get more
customers. The Distributors profit margin has to be considered while deciding the pricing.
Selling price of retailers was $25.00 for 0.5 gallon.
Case 1:
Begin cost = $9.67
Add in Soren’s margin = $14.88 (35%)
Competitors enter= $15.00
ClearBlu & Purity adds 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. Now let us also try to consider by reducing
Soren’s margin:
Case 2:
Begin cost = $9.67
Add in Soren’s margin (reduce to 30%) = $12.57
Competitors enter= $15.00
ClearBlu & Purity adds in distributors margin (30%) = $16.34 adds in retailer/service
professional margin (15%) = $18.79 consider increasing to $19.99 (again, consider giving
retailers the additional incentive for better shelf space)
Q4. What action plan do you recommend for Coracle? Should Soren Chemical adopt a
“push” or a “pull” strategy?
Ans: Coracle is relatively a new brand in the market with less brand awareness thus it should
first adopt push strategy. Push strategy is a good way to promote the product as many
customers do not understand the use of clarifies regularly. However, as consumers do not
understand the product benefits so Soren chemicals can also adopt pull strategy. Consumers
need to be made aware of the annual returns from Coracle than considering only its price. If
directly customers are aware of product than it will surely increase the sale.
For Short Term: Create Pull Demand by aggressive marketing campaign targeting 40-50K
Pool Service Professionals and independent contractors:

 Aggressive Mailing campaign.

 Huge advertising in trade journals.
 prominent display counter in trade-shows.
 Message should be centred around 20-30% savings of pool chemicals by use of
Coracle resulting in higher profits for professionals and contractors.
 Focus on Lower annual cost compared to ClearBlu ($39.06 vs $56.25).
Marketing Strategy:

 In order to reach wide and fragmented market, adopted 2-level Distributor channel
with margins as per industry norms.
 No private- labelling, focus on building Soren as consumer brand.
 Packaging highlights product benefits and potential savings.
 New website formed during product launch
 Press release in three trade journals targeting professionals and retailers.
 Good enquiry system adopted- receiving queries, sharing technical data with them
and passing on the interested customers information to appropriate wholesale
distributors.
 Aggressive pricing vis-à-vis competitors.
 Realistic target of $1.5 Million (2.2% market share)
 Survey conducted in 6 months after product launch to gauge customer feedback