Soren Chemical: Why is the new

swimming pool product sinking?

Gunjan Rai Madan

13P022

Dipesh Agarwal

13P073

Hitesh Garg

13P078

Pavneet Kaur

13P096

Gopesh Nakra

13P104

Is the Sales target reasonable:

Number of swimming pools = 2.25 Millions (9 * 0.25)
(Taking into account that just 25% of consumers use clarifiers regularly Exhibit 3)
Average annual price to final consumer

Purity
46.88

Hydropill
35

ClearBlu
56.25

Average
46.04

Average annual price of company

Average retail Price

Retailer gross margin
Retailer gross profit
Distributor price
Distributor gross margin
Distributor gross profit
Company Chemical price

46.04
15%
6.01
40.03
30%
9.24
30.80

Market Size
30.80* 2.25 million = 69.3 million dollar
Assumptions:
1. Average of 3 companies price represent average
price of all companies product
2. Retail margin and distributor margin for all
companies are same
Annual Sales Target = 1.5 million dollar which makes
2.1% of whole market of Residential pool clarifier, So It
is a reasonable target
At the same time, Sept. to feb. is Off-season time for
Pool users so Sales will be high in rest half of year.

Why is Soren Chemical struggling to

sell Coracle?
Retailers might not be interested in selling Coracle as they loss profits
due to the benefits that Coracle produces to the end consumer
Clarifiers
(average)
Other Chemicals
TOTAL

$
46.04
$
300.00
$
346.04

15%
20%

$
6.01
$
50.00
$
56.01

With Coracle:
Cost
$
Coracle
39.06
*1 (25% reduction on chemicals).
$
Other Chemicals*1
225.00

Margin
15%
20%

Profit
$
5.09
$
37.50

For each client retailers lose revenues

of about 13.42 $ a year if they sell
Coracle, due to reduced consumption
of other products. The channel is
discouraged to sell our product.
Also distributors have large range of
products. As there was no pull for
Coracle, For distributors It was just
another product. As per case also, 50%
of the respondents were not offered
Coracle by distributors.

Market Analysis
Among the customers who use clarifiers, approx. 50% maintained
their own pools, Rest of them were taking services of pool
contractors. No. of pool contractors = 40,000 to 50,000
Most of the players are selling through wholesalers and retailers;
some of them also bypassed these channels and sold through WalMart or DIY retailers directly
Concerns of the residential pool owners
Aesthetics and Perceived cleanliness as opposed to commercial market who
were more concerned about waterborne diseases and swimmers safety

Price analysis
As per table 1, Annual cost of Coracle is $39.06 which is less than
competitors providing clarifier in liquid form.
Per Gallon price of Coracle ($50) is lower than Purity ($60) and much
higher than ClearBlu ($15)
Yearly savings of customers will be $13.42 reducing effective annual
cost to 39.06 13.42 = $ 25.64.
If target marketing and promotional campaigns are done, Consumers
can perceive the additional value realized by Coracle; So pricing of
$25 is correct.

Recommendations
Distribution
Increase distributor margin to 35% but keep final price of $25 same.
As 50% of the market is served by Pool contractors, Identify pool contractors with large customer
base and supply them directly at lesser prices. Supply cost will increase but margin sharing with
distributors and retailers will get eliminated.

Packaging
Purity is available in .25 gallon container whereas Coracle is available in 0.5 gallon container.
Provide minimum size container of .25 gallon as well at $12.5.

Positioning/Promotion
Increase marketing and promotional effort as Market size for residential pool clarifiers is more
than double of commercial pool clarifiers.
Positioning should be focused on aesthetics and cleanliness as residential pool users are more
concerned about these aspects.
Free samples to try out product for pool service professionals

Thank you