This report has been written as part of the academic requirements of the Master of Business Administration.
A small part ($5.4 million) of Rohm and Haas' $1.9 billion sales (1983) is derived from the sale of metal working fluids. Currently these sales are realized through the product Kathon 886MW (886MW), which is mainly used as a maintenance biocide in central metal working systems fluid reservoirs.
Because of suggestions from the current end-users and the limitations of 886 MW in terms of minimum reservoir size, recently a new product was developed for use in smaller individual reservoir systems, namely Kathon MWX (MWX).
The main problem stated in the case is the disappointing amount of sales of Kathon MWX. Although sales revenue of $20 million per year was estimated and the estimated sales in the first year of launch had been predicted to be $0.2
million, the realized sales for the first 5 months have only amounted to 12 thousand dollars, thereby falling short of the envisaged target.
Although the product has some excellent features, there are some factors that seem to be at the basis of the current failure. First of all the distributors seem not to co-operate, evidence of this was that 20% of packets of MWX reached the end users as part of the launch promotion. Secondly, the targeted end-users have low level of experience with the use of biocides in their metal working machines. Finally, the targeted end-users do apparently not realize that MWX could solve current problems of odor and dermatitis.
These issues will be taken into account in the subsequent analysis of the case and proposed modification of the current marketing plan.
Based on our analysis of we recommend the following marketing strategy for the Kathon MWX:...