Rohm and Haas HBR case analysis

Group 4A

Sabarinath U

H13041 Shaadab Zafar

H13048

Santu Paul

H13045 Shubhang Aggarwal

H13050

Satyartha Srivastava

H13046 Sourik Syed

H13053

Case Summary Rohm and Haas is a diversified chemical company operating in four distinct business segments of which the focus of the case is on biocide products division of the specialty chemicals group. The biocide products catered to the needs of the metal working industry. Its two major products- Kathon 886 MW and MWX were maintenance biocides and Rohm and Haas controlled about a 15-20% share in the maintenance biocide market. The Kathon 886 MW operated in the central systems market while the Kathon MWX was targeted at smaller users in the relatively new individual users market (Table B). In the latter, current products are inferior and require substitutes like deodorants or disinfectants which have little positive effect. The challenge lay in the fact that despite producing a superior product with obvious benefits, Kathon MWX was unknown to a large fraction of the target population population and thus less than 6% of the initial target was achieved. Rohm and Haas wishes to revamp its marketing strategy to improve the MX’s prospects in this huge untapped market. Analysis Based on our analysis of case facts we found the following problems and suggest corresponding remedies for the product: Problems

Price

Promotion

Place

Product

1. Multiple distribution channels cause major price fluctuation 2. Lower price may lead to bad perception about the product quality. 1. The advertisements did not focus on cost savings and additional benefits. 2. The free sampling was not monitored as very few customers remembered about the free sample in the survey

1. Formulators focus mostly on the central system customers. The MWX had lower margins 2. Low brand awareness as distributors brand privately 3. Individual systems mainly buy from industrial supply houses 4. Kathon MWX increases fluid life reducing service requirement for formulators. formulators. 1. Privately branded by formulators

Recommendations

1. The price of the product needs to be fixed for the end user. 2. Until the market matures, the price should be kept at par with the competitors. 1. The following benefits must be highlighted in the advertisements to increase awareness. a. 1% concentration required for treatment compared to an industry average of 15%. b. Reduction in maintenance cost to longer life of the biocide. c. Safety benefits of using Kathon MWX. d. Cost effectiveness vs competitors 2. An incentive system for sample in the distribution channel must be introduced 1. Remove formulators from the channel and distribute directly to the industry supply houses. This will : a. Open up $40 bn distribution channel b. Primary selling to industrial supply houses leading to more potential earnings and increased marketing efforts from the latter 2. Vertical integration where company opens own distribution channel has high potential benefits. 1.

Removal for formulators leads to more brand awareness