Rohm and Hass
Essay title: Rohm and Hass
Rohm and Haas!!
First year target- 1350 boxes of 144 packets = 194,400 packets
5 month target – 562 boxes of 144 packets = 80,928 packets
Current 5 month sales – 74 of 144 packets = 10,656 packets
Approximately 13.17% of target sales
Net sales for industrial chemicals, has risen 21% over last 5 years
Starting salaries 20-27 k for sales people.
14 salespersons for specialty chemicals
6 have majority of biocide customers in there area
approx 30% of time spend on biocide products
10% on formulators
20% visiting (large?) end users sometimes with formulator salespeople
Concentrate Biocide market est. 30mil
Maintenance biocide market est. 38mil but in 10 years would replace concentrate market
Avg. metalworking fluid life of 3-4 weeks
Biocide use extends life 1-2 weeks
Range of 25% to 75% longer
Biocide Treatment every 2weeks extends life forever with only maintenance fluid being needed
Kathon 886W is the number 1 maintenance biocide on the market
1,000+ gallons system size.
30% Share of 18mil large system market (5.94mil)
Distributed by 12 major metalworking fluid formulators as maintenance packages and branded under formulator name
Repackage Kathon 886W into Kathon MWX
Good for 25-75 gallon tanks
Lasted 2-4 weeks
Potential for 20mil in sales
Estimated 150,000 customers for MWX as compared to 325 for 886W
Market
Nonferrious need absolute bacteria free fluid, all large plants
886 held 70-80 percent of market of the 3-5mil market so (2.1mil to 4mil)
Ferrous
Accepted a certain level of bacteria in fluid 50,000 units/ml
15-20% of central system market of 12-16mil so (1.8mil – 3.2mil)
Closest competitors
Tris Nitro 1 tablet treated 25 gallons for 3 days and only partially effective
$0.96 tablet * 10tablets for 4 weeks*2 tablets for 50gallons = $19.20 for ineffective coverage.
Dowicil 75 treated 500 gallons with packages that work but produce formaldehyde and fumes. Not the same class
Distributors
Target of small machining houses, current distributors of formulators is incorrect need to distribute to machine tool shops and industrial supply houses.
Marketing Strategy
Est Cost of $0.50 a packet
1-2 boxes $180/144packets – $1.25 a pack
3-4 boxes $165/144packets – $1.15 a pack
5+ boxes $145/144 packets – $1.01 a pack
Formulators sold at $2/pack
Formulators with industrial supply houses sold at 10% margin. So $1.11 to $1.37
Formulators with commission sellers sold at up to $6/pack
Press release in 40 metalworking journals
Ads ran in American Machinist at $3,800 per each of 5 adds totaling $19k
200 responses so $95 per response at 74 boxes sold in five months, assuming 1 box per customer only 37% sales.
Market Research
Customers got rid of fluid every three weeks on average. Reasons were rancidity, odor, and dermatitis, rashes and skin problems, Yuck?!?!