Although Soren Chemical has had success in the recreational pool clarifier market, the new Coracle consumer brand that targets the small recreational and household swimming pools has suffered a very disappointing sale of merely 3,725 gallons at $110,000 through the first half of the selling season when Soren has predicted a $1.5 million in sales and 100,000 unit in volume for Coracle. The issue currently faced by Soren is that Coracle’s sales is heavily dependent on the wholesale distributors’ willingness to promote or even carry Coracle. The business-to-consumers marketing strategy for Coracle is not meeting the sales target because distributors lack the economic incentives to sell Coracle.

We recommend Soren to increase retail price to offer economic incentives for wholesale distributors to carry and promote Coracle. Currently, distributors are the key obstacle in Coracle’s distribution because even though the marketing initiative targeting service professionals and specialty retailers are well-received, many respondents have stated that Coracle is not offered by their distributors. Offering distributors higher profit margins will allow them to start carrying and promoting Coracle to retailers who have already demonstrated interest in the product, thereby translating the demand into increase in sales volume. Doing so will also continue to build Coracle’s brand awareness among retailers and consumers when the distributors are motivated to promote the new product and achieve a platform where Soren’s pool-related products can all be sold through the Coracle name directly to consumers.

The financial implication involved in the price increase is determined by the margin by which Soren can raise Coracle’s price to give distributors the economic incentives to carry Coracle yet still beat the industry average of annual cost savings that it can promote to end users.