ROHM AND HAAS Case Solution
The reason behind the success of Kathon 886 MW is mainly the increase in investment of the promotion of the product, which resulted in the smooth running of the New Product Development process. However, the company did not provide proper incentives to distributors and it is they who control the distribution of the product to the end users. This was a mistake on the company’s part. (Bhuiyan, 2011)
The free samples issued were a good idea but the customers did not even remember the attributes attached with that product. Therefore, the company should adopt a feedback strategy that would help them in help them understand their customer base. Moreover, from the breakeven point it can be seen that the company should sell at least 96000 products to cover up the cost of free samples.
The quantitative analysis of the given case reveal that by looking at the advantages of the product, the customers would pay more money willingly for it.
Exhibits
Exhibit 1
| Sales Goals Calculations | |
| Sales goal | $200,000 |
| Cost per box | $145 |
| Number of boxes required to reach sales goal | 1379 |
| Packets per box | 144 |
| Number of packets | Â Â Â Â Â Â 198,621 |
| Weeks in year | 52 |
| Number of weeks before a new packet is required | 4 |
| Number of packets per year per customer | 13 |
| Number of customers | Â Â Â Â Â Â Â Â 15,279 |
| Size of market | 150,000 |
| Percentage of market | 10.19% |
Exhibit 2
| Comparative cost of treating a 10,000 gallon system with Biocide (for one cycle) | ||
| Name  | Cost | % Markup vs. Kathon 886 |
| Dowicil 75 | $269.64 | 278% |
| Grotan | $151.20 | 112% |
| Kathon 886 | $71.40 | |
Exhibit 3
| Savings Calculations | |
| Metalworking fluid concentrate (per gallon) | $5.68 |
| Waste disposal (per gallon) | $1.36 |
| Kathon MWX (per packet) | $2.00 |
| Gallons of fluid treated per packet of Kathon MWX | 50 |
| Weeks per year | 52 |
| Typical machine shop size (machines) | 22 |
| Typical fluid reservoir Capacity Per Machine (gallons) | 50 |
| Typical lifespan of fluid (weeks) | 4 |
| Typical machine shop annual fluid usage w/o Kathon MWX (gallons) | 14300 |
| Typical machine shop annual fluid usage cost | $100,672 |
| Minimum extended lifespan of fluid w/ Kathon MWX (weeks) | 2 |
| Typical machine shop annual fluid usage w/ minimum extended lifespan using Kathon MWX (gallons, rounded up) | 9900 |
| Typical machine shop annual fluid cost w/ minimum extended lifespan using Kathon MWX | $69,696 |
| Minimum savings w/ Kathon MWX | $30,976 |
| Savings as a percentage of typical annual fluid cost w/ minimum extended lifespan using Kathon MWX | 30.77% |
Exhibit 4
| Maximum extended lifespan of fluid w/ Kathon MWX (weeks) | 5 |
| Typical machine shop annual fluid usage w/ maximum extended lifespan using Kathon MWX (gallons, rounded up) | 6600 |
| Typical machine shop annual fluid cost w/ maximum extended lifespan using Kathon MWX | $46,464.00 |
| Maximum savings w/ Kathon MWX | $54,208.00 |
| Savings as a percentage of typical annual fluid cost w/ maximum extended lifespan using Kathon MWX | 53.85% |
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