Rohm and Haas

Rohm and Haas

Since its foundation in 1906, Rohm and Haas has been an industry leader in chemical technology. After much success in the metalworking biocide market, the company decided to expand its product line, by creating a high quality product developed for smaller capacity tanks. Joan Macey, the market manager for the new product, has implemented a marketing strategy that has not been successful initially. She will need to make some changes and focus on new strategies, in order to make the product more successful.

With respect to pricing, Joan Macey should consider raising the price of the Kathon MWX. The data she has produced based on the current pricing sounds quite appealing. When comparing their product to those of competitors based on price, ease of use, and quality, it should be selling quite successfully. However, this is not the case. The company knows that this is a quality product that works much better than the alternative, but it is a new product and the consumers are not familiar with it or the brand. The low price is defeating the consumer's perception of the product's value. Since the original strategy seems to be failing, it would be wise for Macey to increase the price initially so that consumers will view the product as higher quality and be more inclined to try it. After Kathon MWX begins to gain followers that spread the word that it is a good product worth buying, Macey may decide to lower prices and further increase the customer base.

With respect to distribution, Joan Macey should bring a more direct retail approach into the mix. Many of the customers looking for metalworking fluids look for their products at local hardware stores, small supply shops, and industrial supply houses, not large national formulators. By not selling through these types of stores, the Kathon MWX is missing a huge portion of the market. It is important to continue selling through industrial suppliers in order to compete with other brands in that arena. However, Macey does not realize that household cleaners and other brands of biocides sold through small stores are also significant competition. If the product were made available through these other outlets as well, it would likely become more successful.

The marketing message and thus the selling of the product has to start with the manufacturer, in this case, Rohm and Haas. Using the information provided in the case it is evident that Rohm and Haas has used the Five C's of market development (Customer needs, Company skills, Competition, Collaborators, and Context) in deciding to develop Kathon MWX. However, the effectiveness of their execution of each of the C's was not equivalent.

They identified the Customer need for a broad spectrum biocide that could be used in small (less than 100 gallon) cutting fluid reservoirs. They knew that their Kathon 886 MW product was the market leader and employed a unique solution to deliver a water soluble solution for the small reservoir market. This exemplifies the Company skill that Rohm and Haas has in terms of R&D and technical capability. They analyzed their Competition and discovered that their product did not offer the amount of broad spectrum coverage or cater specifically to the target tank size. In terms of Context, Rohm and Haas has the technological prowess to develop Kathon MWX and package it in such a way to fit their customers' needs.

However, the C for Collaborators is lacking. For example, there is no evidence that Macey in the initial marketing strategy ever sought to connect with or partner with the distributors on this new product, Rohm and Haas went it alone. They failed to understand their distributor's position on this product or to get their feedback earlier in the product development process. This failure carried over into a failure to adequately address the 4 P's of the marketing mix.

In regards to the first P, Product, Rohm and Haas had developed a superior product but did not convey the value of the product to the customer. They failed to educate the distributors, supply shops and the end user. First, the machine shops had little knowledge regarding the benefits of biocide chemicals. They had no knowledge of the true reason for why the cutting fluid became rancid or the true cause of dermatitis. Due to this lack of understanding the shops were using household chemicals to control odor, when in reality this made it worse for the machine operators. In the case of dermatitis, the cause was thought to be the cutting fluid; in response the machine shops would change the fluid sooner than necessary, if Kathon MWX was used. This increased disposal costs to the shop and did not address the true cause of the dermatitis, the metal shavings present in the fluid.

The second failure of Rohm and Haas regarding their Product was lack of brand recognition and lack of brand positioning. There was no evidence that Rohm and Haas published the results of their interior testing that showed the superiority of Kathon MWX over the Tris Nitro "Sump Saver" brand product. The lack of communication did nothing to position MWX as the market leader in biocides. In addition to this failure of positioning, they also failed to create any brand recognition with the Kathon name. The current Kathon 886 MW product has little to no brand recognition because of being repackaged by formulators as a private label brand. Therefore, the Kathon name is not known to stand for quality and superiority in the market. Rohm and Haas did not allow private labeling of the MWX product, which was well within their right to do. However, they did not undertake a campaign to create brand awareness or equity within the marketplace.

In regard to the second P, Place, or channels of distribution Rohm and Haas left something to be desired. As mentioned during Product, the lack of brand recognition and the decision not to privately brand the product carried over into its distribution channels. One intermediary chose not to carry the MWX line because of the lack of private branding. Rather than work with the supplier to understand the "Why?" behind the decision, a hardliner approach was taken and that distributor didn't carry the product. Rohm and Haas missed out on the opportunity to partner with their intermediaries, distributors and local supply shops, to understand the end user and how best to sell the product as an entire supply chain. In addition to the lack of partnership, they missed out on all the customers of that particular distributor. Also, the Rohm and Haas salesmen are currently compensated based on the number of pounds sold, this favors large scale buyers