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REV: NOVEMBER 30, 2011

V. KASTURI RANGAN SUNRU YONG

Soren Chemical: Why Is the New Swimming Pool Product Sinking?
Jen Moritz grimaced as she reviewed the February 2007 sales report for her company’s new Coracle product. In September 2006, Soren Chemical had launched Coracle, a new water clarifier for use in small recreational and household swimming pools. Moritz was responsible for marketing the new clarifier, which she believed was a superior product, but the results so far were discouraging. The volume target was 50,000 gallons (100,000 units) for the first year of sales. However, through the first half of the selling season for pool chemicals, Soren had sold just 3,725 gallons, or 7,450 units. Moritz also had responsibility for marketing Kailan MW, a clarifier used primarily in large recreational water park facilities with typical capacities of one million gallons or higher. Very small quantities of Kailan MW were sufficient to treat large volumes of water, but it was unsuitable for smaller-scale applications such as residential pools. Thus Soren Chemical had developed Coracle, targeting smaller pools with a lower volume of swimmers (known in the industry as “bather loads”) and a less intense maintenance program. In 2006, Kailan MW revenues were $6.1 million and sales were on pace for a 7% increase in 2007; it was healthy growth in a relatively mature market. Coracle had been budgeted at $1.5 million in sales for the year, but so far Soren had sold a very disappointing $111,000. The company’s internal analysis estimated a $30 million market in the United States for large-scale, commercial-use clarifiers such as Kailan MW. Moritz was convinced that an even larger market existed for Coracle. She explained her challenge: How do we convince distributors to push Coracle and retailers to create shelf space for it? Is the product priced so that the economics

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