Why is Coracle not selling:
No proper support from the Distributors
The USP of Coracle is that the usage of Coracle will reduce the further usage of other chemicals by 20% to 30%. The same is highlighted on Coracles packaging. This is clearly against the objectives of the Distributors and the Retailers. It would lead to a loss for the distributers on other chemicals and products. No distributor would want a loss of 30% on sales of other products due to another product selling unless the margins were much better. Hence Distributors did not give much shelf space to Coracle. Many distributors didn’t sell it either.
Thus Coracle should look on and check whether the margins ...view middle of the document...
Hence to overcome this traditional belief, Soren chemicals has to increase its current expenditure on advertisement as the number of Pool service professionals and Contractors have increased.
Inexperience in B2C:
The relative inexperience of Soren Chemicals in handling consumer oriented brands and dealing directly with wholesalers and retailers has resulted in a wide communication gap among the channels. 70% of the respondents stated that Coracle was not offered by their distributors though the contact information of interested customers was passed to the appropriate wholesaler distributors on time by the company.
Wrong Marketing Strategy and Positioning:
Customers emphasize the need for perceived cleanliness and Aesthetics. Since Soren Chemicals has entered into the residential pool market for the first time, they didn’t understand their customers fully. Their marketing strategy focused on creating a buzz among consumers through the proposition that “Coracle will reduce their annual chemical costs by 20% to 30%”. However, they failed to create awareness among the consumers about the various benefits of Coracle. Cheaper than others, Better cleansing power than others, Lesser treatments required, no shock treatments needed.
HOW SHOULD CORACLE PRICING STRATEGY BE CHANGED:
Current Price positioning makes it disadvantageous for Distributors and Retailers. They stand to lose $5 per customer per annum due to the fact that using coracle reduces the need for other chemicals.
| Soren | Jackson | KeyStone | | |
Retail Price | 39.06 | 75 | 46.88 | | Price Per Annum Per customer |
Retailer Margin | 5.859 | 11.25 | 7.032 | 15% | |
| 33.201 | 63.75 | 39.848 | | |
Dist Margin | 9.9603 | 19.125 | 11.9544 | 30% | |
| | | | | |
Reduction in other chemicals | $75 | $45 | 0 | | |
Retail Margin Reduction | 11.25 | 6.75 | 0 | 15% | |
| 63.75 | 38.25 | 0 | | |
Dist Margin Reduction | 12.75 | 7.65 | 0 | 20% | |
Retailer Net if Coracle Sold | -5.391 | | | | Retalier loses $5 per customer on other products per Annum if he sells coracle |
Distributor Net if Coracle Sold | -2.789 | | | | Dist loses $2 on other products per
Annum if he sells coracle |
| | | | | |
If the this loss can be neutralized by better price positioning, Soren can convince retailers and distributors to shelf more of coracle products and provide them good margins.
Increase Price positioning to 46$ per Annum per Customer
| Soren | |
Retail Price (ANNUAL ) | $46 | |
Retailer Margin | $10.58 | |
($46-$10.58) | 35.42 | |
Dist Margin | $12.397 | |
| | |
Reduction in other chemicals | $75 | |
Retail Margin Reduction | $11.25 | |
($75-$11.25) | $63.75 | |
Dist Margin Reduction | $12.75 | |
Retailer Net if Coracle Sold | $0.67 | Much more attractive to Retailers Now. No loss for retailer on other products as Pricing covers loss on other chemicals. |
Distributor Net if Coracle Sold |...