CASE STUDY ANALYSIS FOR

Rohm and Haas (A) 

Creating a New Product Marketing Strategy

Group no. 7
Sr. No Name Roll No.
1 Akshay Puntamberkar IGTCPG28MU006

2 Chinmay Rahate IGTCPG28MU024

3 Danesh Fatakia IGTCPG28MU026

4 Rajeev Master IGTCPG28MU061

5 Yashashree Borse IGTCPG28MU103

POST GRADUATE PROGRAM IN BUSINESS ADMINISTRATION

BATCH 2019-2021
1. Is Joan Macey’s dilemma valid? Justify this by doing a complete
market analysis – besides the information given in the case study
please make suitable assumptions where necessary
Joan Macey’s dilemma is quite valid regarding the pricing of the product called Kathon
MWX. Kathon MWX was a promising product from a well-established company in the sector.
Despite having a great idea and product, the product was not able to achieve desired sales
in the market. The market potential for Kathon MWX was considerably great but still it could
not achieve the desired sales figure.

Sales of first 5 months $ 12000

Boxes Sold 75 

Target Sales $0.2 million

Estimated Market Potential $ 20 million

Macey’s Target for 1st Capture 1% of the market

year 

To achieve this target,

 Sales were to be divided equally, then $16666.66 worth of product had to be sold
every month.
 Which means that, in 5 months the sales should have been around $83333.33. On
the contrary it was just $12000.
 $12000 is nearly equal to just 14% of the estimated sales in 5 months

Situation Analysis - Market Analysis

 Demand / market potential of liquid biocide of low-use level which can be used in
tanks with less than 1,000-gallon capacity in the market.
 Unaware of the need for maintenance of biocides in small capacity fluid reservoirs in
metalworking fluid treatment processes. Need for customer training and education
was usually required.
 No primary competition for biocide of low-level use in the market.
 Forecasting that the concentrate biocide market will be replaced by the maintenance
biocide market in ten years. On average, customers discarded used metalworking
fluid after three weeks.
 Customer perception of hauling away or discarding metalworking fluid because of the
primary reasons such as rancidity and dermatitis.
 Customer apprehension about the safety of the product.
 Users obtained metalworking fluids from tool shops, oil companies, formulators, and
industrial supply shops. Users occasionally had to write to a large national distributor
for supplies that were not locally available.
 About 50% of the users used products ranging from household disinfectants to
metalworking fluid biocides to kill odor-causing bacteria in their machine sumps. The
majority of these products did not seem to work, yet the end-user typically continued
to use the product. Only half of the participants who had tried a biocide could
remember its name. None had tried Kathon MWX.
  Compatibility with 70% of the metalworking fluids as compared to 45% for the
competition

SWOT Analysis
Strengths
 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 off
 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 used in conjunction with makeup fluid – does not
require a complete flush of the fluid reservoir
 Known for developing Kathon 886 MW, the primary maintenance biocide on the
market, generally 10 times more effective than competitive biocides 
 All salespeople have advanced technical degrees to support the customers 
 Positive return on net assets for the past five years

Weaknesses
 Cannot be used for all varieties of metalworking fluids (limited to 70%)
 Must be continually replaced every 2 – 4 weeks
 Some concerns within the industry regarding the safety of the product
 End users unaware of the value or need for their product

Opportunities 
 Maintenance biocide market estimated at $38 million and projected to continually
grow 
 50% of consumers that use products to eliminate microorganisms use household
disinfectants - many potential consumers unaware of the value or benefit of a
maintenance biocide

Threats 
 Competitors developing and introducing new products 
 Metalworking operators use makeshift efforts to control microorganisms, unaware of
the need for biocide chemicals 
 Safety concerns associated with product regardless of whether they are warranted or
not word of mouth panning the product for safety reasons

Conclusion
Kathon MWX is a superior product to its competitors by being an inexpensive, safe, and
easy to use package. The product is more compatible with existing fluid systems than any
competitor and when used properly can virtually eliminate the need for a full fluid system
flush. The product faces stiff   competition from a number of competitors though and a
misinformed market would rather waste time with household disinfectants than using a
proper chemical solution. Customers will always be concerned with safety and price and
household chemicals are seen as the easy solution, regardless of if they actually work or
not.

Prominent reasons why it was not selling:

  Lack of need recognition for biocides
 Lack of brand awareness among end consumers
 Lack of MWX awareness
 Lack of awareness of the benefits of MWX
 Lack of incentives for distributors to sell MWX

2. How will you re - segment the market to help create a more

focused product strategy?

Re-Segmentation

Based on reservoir capacity:

Individual system – reservoir capacity – 50 to 1000 gallons. It can be classified into:

 
Reservoir Capacity in gallons
50-100

100-300

300-500

500-750

750-1000
3. Develop a Product Strategy for Metalworking Fluid Biocides

Targeting 
 Our primary consumer target for the maintenance biocide (low-level usage) is ferrous
metal industries with individual systems having reservoir capacity of 50 – 1000
gallons. Approach Industrial Supply Houses & Machine tool shops and hire
Salespeople to sell Kathon MWX to the potential target Customer. 
 This segment consists of MSME companies with turnover of between 75 – 250 and
more than 100 employees.
 Our secondary consumer target is those 50% users who are using household
disinfectants to metalworking fluid biocides to kill odor-causing bacteria in their
machine sumps.
 A secondary target is entrepreneurs and small business owners (SME’s) with
turnover of less than 75 crore and employees between 20-50.

Positioning
 Positioning using product differentiation: We are positioning the Kathon MWX as:

 the most versatile

 convenient
 value-added product for professional use in metal industries 

Our marketing will focus on safety of the product and how easily it can be used,
effectiveness of Kathon MWX in smaller reservoir tank, eliminating odor, life duration of the
product (can be used extensively upto 2-4 weeks), effectiveness over wide PH range, the
most cost effective biocide which extends fluid life and provides better bacteria and fungi
control, thus, differentiating Kathon MWX over the other products of competitors in the
metalworking fluid biocide industry.

We recommend that the price of the product be retained as it is.

Positioning from price point of view

The economic value to the customer on usage of Kathon MWX is significantly higher than
those of its competitors Tris Nitro and Dowicil. This can be a strong point for increasing the
cost of Kathon MWX but since due to the lack of awareness of biocides in general and
Kathon MWX in particular, a significant price hike for the next 6-7 months is not
recommended.

However, we suggest that this should be considered as a long term strategy.

Economic value of Kathon MWX to the customer 

Biocide used in Individual Economic value Cost per packet

system

Kathon MWX  $40 $2

 Tris Nitro $33 $2

Dowicil 75 $20 $2

Our analysis indicates that the strategy of involving the formulators as the main distributors
is not appropriate and is the reason for the low sales levels of Kathon MWX. 

Thus our recommended strategy is to move away from the formulator channel and distribute
Kathon MWX through industrial supply houses and machine shops. Such a strategy would
increase awareness and focus on the product in the distribution channel and thus lead to
boosted sales levels. Also, such a ``formulator-free" distribution channel would prevent sales
from getting affected by the formulator’s disinclination to sell the product. 

Demand Analysis / Forecast

Assuming 10% growth annually

Year 1 2 3

Sales (Million 1,000,000 1,100,00 1,210,000

$) 0

Demand Drivers
 Safe and easy to use
 Treat smaller capacity tanks effectively
 Extends fluid life and does not release formaldehyde
 Readily disposable
 Eliminates odor and controls bacteria & fungus
 Effective over wide PH range

Industry & Competition Analysis

 The maintenance biocide industry is composed of four major manufacturers each
with a 15 – 20% market share with products that range in price and fluid capacity
treated.
 Equal market share signals the lack of a dominant player in this segment. 
 These manufactures provide biocide solutions in many different forms and it is up to
the end user to determine what is best for their application. 
 A lot of time and energy is spent developing biocide solutions therefore the barriers
to entry into the market are rather substantial. 
 The main competitors in this market utilize different marketing and sales approaches
with some manufactures choosing to sell directly to end-users and others choosing to
sell to formulators and distributors before passing the product on. 
 Competitors are Dow Chemical - Dowicil 75 and Angus Chemical – Tris Nitro.
 In the individual systems segment, Rohm & Haas faced direct competition from
competitors Angus and from Dow Chemicals. The competitors’ products have been
 proven inferior to Kathon MWX both in terms of their effectiveness in containing
micro-organisms and with respect to the cost effectiveness as shown below.

Features of Kathon MWX and competitor products

Products Product Compatibility Increases life by Effectiveness against

with concentrate metal working fluid bacteria and fungi
by

Kathon 70% 2-4 weeks Good

MWX

Tris Nitro 45% 3 days Poor

Dowicil 45% 2 weeks* Poor

*assumed 

Levels of Product
1. Core Product

Defined as key benefit or key functionality that the product is expected to deliver to the
customer. Key product metalworking fluid. Key factor: - lubrication

2. Basic Product

Metalworking Fluid Biocides are chemicals that kill the microorganisms in water-based
metalworking fluids without affecting fluid performance. So, the ingredients are the chemicals
which are not marketable to the customers

3. Expected Product

Kathon MWX SKUs control Bacteria and Fungi growth, Eliminates Odor, Easy to use and
handle, no Formaldehyde released. It can be easily marketable to customers
 4. Augmented Product

 It is packaged using 5.5 x 7.5-inch water-permeable plastic packets. Providing customer
support thus making the product more sellable to customers

5. Potential Product

It is a highly efficient and high shelf life product compared to its competitors. No
maintenance was required, and the packet was safe to handle and dispense. Future
requirements of the customer will be also taken into consideration so as to make it
differentiable among the competitors.

Product Category
Kathon MWX will be a daily consumable type of product. It will come under the category of
operating supplies. It will be used for a period 2-4 weeks and will be discarded safely. The
product is designed as per EPA (Environmental Protection Agency) standards. It will be
available in different SKU’s.

Product Objectives
 Revenue: Target of sales worth 6 million dollar by the end of third year
 Cost: Cost effective than the competitors as Cost of Production would be kept low
using efficient supply chain techniques.
  Market Share: With new strategy and SKUs we aim to achieve about 15-20% market
share in atleast first 3 years after relaunch of Kathon MWX.

Marketing Objective:

 First year objective: We are aiming for a 5% share of the maintenance biocide
market through sales worth 1 million dollar.
 Second year objective: We are aiming for a 10% share of the maintenance
biocide market through sales worth 2 million dollar.
 Third year objective:  We are aiming for 15% share of the maintenance
biocide market through sales worth 3 million dollar.

 Brand: Encouraging private labelling

 Positioning: Safe and easy to use, can treat smaller capacity tanks effectively which
extends fluid life and does not release formaldehyde. It is readily disposable,
eliminates odor and controls bacteria & fungus. Effectiveness over a wide PH range
 Go to market: Objective is to reach a particular target market i.e. metal industries
with individual systems having reservoir capacity of 50 – 1000 gallons. Secondly,
50% of users who use household disinfectants in metalworking fluid biocides to kill
odor-causing bacteria in their machine sumps.
 Distribution: Revised and efficient distribution network, removing formulators from
the network would elevate sales
 Quality: Well drafted and stringent SOPs maintenance, implementation of
continuous improving operations technique like Kaizen.
 Operations: Production targets set as per the demand analysis done.
 Product Knowledge: Training customer facing staff to support and sell the product,
information brochure with each packet containing product handling measures, and
disposal measures.
 Customer Experience: Collecting feedback from customers through Customer
feedback surveys, customer contact forms, usability tests, exploratory customer
interviews.

Brand Elements
The product Kathon MWX will go for private labelling and will be promoted by the private label
of the distributor. This is done because initially private labelling was not used for the
promotion of Kathon MWX, and the product was not making great sales. The effort here is to
let private labelling and provide incentives to distributors so that they sell more.
Initially, the distributors were lacking incentives and hence they were showing lack of interest
to promote this product. This was also one reason why the product was not popular and less
known.

Product Mix - (SKUs)

Assortment of Kathon MWX based on reservoir capacity: 

1 Packet = 2 Ounce (assuming)

1 packet of Kathon MWX treats 25-50 gallons of diluted metalworking fluid (assuming)

(*assuming upper limit)

Sr. Reservoir Capacity in Ounce per

SKU Name
No. gallons packet 
1 Kathon MWX < 50 2

2 Kathon MWX 100 50-100 4

3 Kathon MWX 300 100-300 9

4 Kathon MWX 500 300-500 17

5 Kathon MWX 750 500-750 26

Kathon MWX
6 750-1000 36
1000

*Basic SKUs available = 6

*Possible SKU’s using Permutation and Combination = 36

*For higher volume orders (more than 1000 packets), customized SKU’s according to requirements will be
accepted

No of Packets
Reservoir Capacity Ounce
*(no. of packets is calculated with reference of SKU-1)

50-100 2 4

100-150 3 6

150-200 4 8

200-250 5 10

250-300 6 12
 300-350 7 14

350-400 8 16

400-450 9 18

450-500 10 20

500-550 11 22

550-600 12 24

600-650 13 26

650-700 14 28

700-750 15 30

750-800 16 32

800-850 17 34

850-900 18 36

900-950 19 38

950-1000 20 40

(*This table is just used as a reference to conclude the number of SKUs)

Packaging
 Kathon MWX

1 packet = 2 ounces

Available in:

 1 single pack with a user instructions manual

 10 packs in one box with user instruction manual
 25 packs in one box with user instruction manual
 50 packs in one box with user instruction manual
 100 packs in one box with user instruction manual

Retailers will be allowed to sell singular packets to small scale manufacturing units as
per requirement

 Kathon MWX 100

1 packet = 4 ounces
Available in:

 1 single pack with a user instructions manual

 10 packs in one box with user instruction manual
 25 packs in one box with user instruction manual
 50 packs in one box with user instruction manual
 100 packs in one box with user instruction manual

Retailers will be allowed to sell singular packets to small scale manufacturing units as
per requirement

 Kathon MWX 300

1 packet = 9 ounces

Available in:

 1 single pack with a user instructions manual

 10 packs in one box with user instruction manual
 25 packs in one box with user instruction manual

Retailers will be allowed to sell singular packets to small scale manufacturing units as
per requirement

 Kathon MWX 500

1 packet = 17 ounces

 1 single pack with a user instructions manual

 10 packs in one box with user instruction manual
 25 packs in one box with user instruction manual

Retailers will be allowed to sell singular packets to small scale manufacturing units as
per requirement

 Kathon MWX 750

1 packet = 26 ounces

 1 single pack with a user instructions manual

 10 packs in one box with user instruction manual
 25 packs in one box with user instruction manual

Retailers will be allowed to sell singular packets to small scale manufacturing units as
per requirement

 Kathon MWX 1000

1 packet = 36 ounces

 1 single pack with a user instructions manual

 10 packs in one box with user instruction manual
 25 packs in one box with user instruction manual

Retailers will be allowed to sell singular packets to small scale manufacturing units as
per requirement
 For any higher order of meeting SKU or customised SKU, Rohm and Hass will
provide. The orders have to be in high volumes.

Help with possible combination and usage of the Kathon MWX will be assisted by
service engineers at all times.

Recommendations for Increased Sales

Allow private branding
 Can produce good results in the near future
 Does not have a long term perspective

Market cost effectiveness of Kathon MWX

 can be cost intensive

Emphasize safety features

 Removes a major barrier about the product

Increase incentive for distributors

 Can reduce unit profit but has potential for a sales volume upsurge
Advertisement Campaigns 
 Effectively backed advertising campaign specifically targeting the customers
using individual systems.
 Local Industrial tools & parts stores will be used for promotions

Warranty / Extended Service

 For first time customers, the company will provide direct assistance at
customers' sites.
 The Demo will include steps of safe handling of product and disposal
measures.
 Occasional but paid services from engineers can be scheduled on critical
occasions.