BUAD 880
Rohm and Haas Case Study
1. Purpose of the Report:
Joan Macey, the Rohm and Haas market manager for Metalworking Fluid Biocides, was reviewing the marketing approach for the recently introduced Kathon MWX maintenance biocide. Rohm and Haas is one of several manufacturers that develop liquid biocide chemicals for eliminating microorganisms in metalworking fluids. The company currently manufactures the Kathon 886 MW concentrate biocide, the leading biocide in the concentrate biocide market. Kathon 886 MW is a very powerful concentrate used for large-capacity reservoir systems (above 1,000 gallons) and is too powerful for small fluid reservoirs. As a result, the company developed the Kathon MWX maintenance biocide for use in
Rohm and Haas have also not defined their marketing and financial goals very well other than to say they seek to gain 1% of the estimated $20 million market for Kathon MWX. This equates to a financial goal of $200,000 in sales in the first year however at a bulk price of $145 per box of 144 packets, this sales volume could serve nearly 15% of the estimated 150,000 consumer market over 1 year. A 15% market penetration for the first year of a product is very aggressive and difficult to realize. This is a very optimistic target for the company and one that should be reevaluated. The opportunities are available for the company to meet this target however with the threats in the market and the lack of brand recognition it will be very difficult for the company to meet their first year objectives.
Evaluation of Marketing Strategy (4Ps):
Product:
Strength
• Customer requested – desired by customers satisfied with the performance of Kathon 886 MW but required a solution for small (50 – 100 gallon) reservoirs
• No maintenance required
• Safe to handle and easy to dispose of
• Compatible with ~70% of the metalworking fluids as compared to 45% for the competition
• Always in demand considering evaporative losses must be replenished in systems
• Extends fluid life an additional one to two weeks for annual savings up to $54,000
• Extends fluid life indefinitely when