Soren Chemical

A. Market Size

What is the addressable market size for Coracle?

Currently there are 3 major players in the residential pool clarifier market, Keystone Chemicals, Kymera and Jackson Laboratories as well as several distributors who are diluting and private labeling Soren's Kailan MW for residential use. Soren's Jen Moritz estimates that these players have between 15 and 20-percent of the residential pool market. Assuming that Soren stops the private labeling of Kailan MW, current participants hold anywhere from 45 to 60-percent of the current market, leaving the addressable market somewhere between 40 to 55-percent, or between 12-million to 16.5-million in sales per year.

Is the first-year goal of $1.5 million sales reasonable?

Soren's Moritz estimates that the market for residential is larger than the $30-million market for commercial pool flocculants. Assuming that Soren will capture sales of 15-percent representing the low end of the current residential market, it should see sales of about $4,500,000 per year, making the $1,500,000 target more than achievable.

B. Channel Structure

Why is Soren Chemical struggling to sell Coracle?

Coracle was introduced at the end of the pool season in 2006, leaving little time for Soren to build brand awareness of the product. By this time of the year, retailers most users have purchased all of the chemicals needed and may have sufficient stock to carry them into next years pool season, for Soren this means sales are limited until consumers are made aware of the product and its benefits and need to resupply their chemicals.

What are the implications of the channel structure for pool chemicals?

Soren uses chemical formulators to distribute its products to pool Service Company's and institutional users. These formulators produce a full range of products including chlorine, cleansers, enzymes, shock treatments and algaecides.

How would you describe the selling process for Kailan MW vs. Coracle?

Kailan MW is sold to institutions and pool professionals, is formulated for large pools with a high volume of bathers, where cleanliness and safety are chief concerns. These users are aware of the product benefits and understand its proper use. Coracle is sold to residential users through discount stores, online and by pool supply centers.

C. Pricing Options

What is the highest price Soren chemical can set for Coracle? ClearBlu has the highest annual usage cost of $75.00. Coracle's annual cost is $39.06 at a cost per container of $25. Coracle is as good if not better than ClearBlu and could sell for 47.95 per