Rohm and Haas Essay

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Rohm & Haas Marketing plan for Kathon MWX (1984) 1. EXECUTIVE SUMMARY Rohm & Haas is a diversified chemicals company. Its industrial chemicals division manufactures maintenance biocide products to the metal working industry. The company enjoys a healthy 30% market share with its Kathon 886 MW in the Central Systems segment. Rohm & Haas has recently launched Kathon MWX to target 150,000 customers in the Individual systems segment where the market for biocides is underdeveloped and has little competition. A large part of the customers use substitute products such as deodorants and bleaches with little effect on microorganisms. The company estimates the market size for the individual segment to be at $20 million and aims to…show more content…
• Rohm & Haas has disallowed private branding of Kathon MWX and that can be disincentive for the formulators to promote the product. • Kathon MWX potentially increases the life of metalworking fluid by 2-4 weeks; this resultantly reduces the revenues of the formulators as the individual systems customers would have otherwise purchased more of the metalworking fluid in the absence of Kathon MWX (refer Table 3.3). • The formulators lack the incentive to sell Kathon MWX due to lower dealer margins as compared to the margins earned from competitors. (This space has been left blank intentionally) Table 3.3 Loss to formulators by selling Kathon MWX Particulars Without Kathon MWX With Kathon MWX For a typical small machine shop for a year No of gallons of metalworking fluid used in a year [22 machines * 50 gallons * 12 times a year] 13,200 [22 machines * 50 gallons * 6 times a year] 6,600 No of gallon of metalworking fluid concentrate sold by formulators 528 264 [Dilution ratio = 1:24] Sales of metalworking fluid concentrate by formulators @ $5.68/gallon $2,999 $1,500 Loss to formulators (in terms of sales) $1,500 (50 percent of sales approx) 3.4. Competitors Rohm & Haas has

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