Section: C Roll No: 1811197 Name: Yash Parekh

SOREN CHEMICAL
PROPOSAL FOR CORACLE
For Retailer

OVERVIEW
Soren Chemical is pleased to submit this proposal to the retailers outlining our brand-new product
offering – Coracle. Our company has a rich legacy of 65 years of providing tailored solutions in
the industrial chemicals and chemical solutions business. With a product portfolio of 350 products,
we ensure that we are a one stop solution for all business-business chemical cleaners’
requirement. We have leveraged our expertise in this segment to develop a new product targeted
to the retail consumer – Coracle. The estimated size of the residential pool clarifiers market is $90
million & our idea is simple - to provide a class leading product at an affordable price. The
consumer today is informed and smart enough to make the choice which is best for him. We
believe this choice is Coracle and this effort represents our commitment to ensuring that the both
of us can encash on this blooming opportunity.

The Objective
The retailers’ needs for residential pool clarifiers can be distilled into three specific sentences:

• Need #1: Fast moving inventory (4 cycles a month, average buying time – 7.5 days)
• Need #2: Easy to store (Current Products - 0.25 to 1 Gallon bottles OR tablets)
• Need #3: Generate adequate profit margin (Current Margin - 15%)

The Opportunity
• Goal #1: Keep cycle time constant
• Goal #2: Provide a product that can fill the gap at 0.50 gallon-sized bottle.
• Goal #3: Improve profit margin to 20%

The market for residential pool clarifiers is in a nascent stage and is yet to see a boom cycle. We
plan to induce this boom cycle in the coming year. A strong partnership between Soren Chemicals
and you, the face of our company to the customer will be mutually beneficial. With multiple
products in the pipeline, we urge you to make the best of this golden opportunity and be
recognized as a part of our Golden Retailer program. It will enable you to ensure faster deliveries,
promotional testers for new products, extended credit period and annual bonus on sales.

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 Section: C Roll No: 1811197 Name: Yash Parekh

The Solution
• Recommendation #1: Improve awareness among consumers for the need for clarifiers
(Current acceptance 25%)
• Recommendation #2: Restructure margins in the distribution chain to create brand availability
• Recommendation #3: Create a go-to brand for all residential swimming pool-based cleaning
needs

OUR PROPOSAL

Retailers have a very specific set of needs. They must stock and supply goods of daily usage and
as per the ever-changing demands and desires of the consumers. It is well established that they
service demands which follow not only national trends (like in case of clothing or consumer
durables) but also regional specific trends. A rise in the affluence in our country in the years after
the dot-com bubble has converted the concept of a swimming pool in a residential house from a
luxury to a common place occurrence. Increasing number of Hollywood movies, celebrities pop
culture, and the real estate market have endorsed this concept.

Although the idea has received mass acceptance, the knowledge about the swimming pool and
its maintenance has had a slower rate of diffusion. Hence awareness about regular maintenance
is low and has a dismal acceptance rate of 25%. It, however, represents an untapped opportunity
for our partnership moving forward.

Rationale
• Size of the Market – There are over 9 million residential pools in the country and are expected
to show a positive growth trend.
• Market opportunities – Low consumer awareness regarding not only the need but also the
benefits of using a pool clarifier.
• Seasonal Nature – Summers is the only period for pool usage and five months in a year
represent a dedicated opportunity to make profits without any additional fixed costs
• Bigger basket size – the Higher unit price of Coracle means a lower number of Stock Keeping
Units and larger average basket size of the customer.

Execution Strategy
Our execution strategy incorporates a mix of scientific approach and intuitive decision making.
We have conducted a detailed survey of the existing payers in the market and arrived at the
following comparison -

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 Section: C Roll No: 1811197 Name: Yash Parekh

Keystone
Company Soren Chemical Chemical Jackson Labs

Product Coracle Purity ClearBlu

Cost Per Container $25 $15 $15

Ounces per 30K gallons 10 5 32

Cost per treatment $3.91 $2.34 $3.75

Number of Treatments (per 2 4 4

Annual Cost (5 months usage) $39.06 $46.88 $75

Explicit Cost Savings – It is evident from the above table that the customer incurs the least
amount of cost by using our product. We have ensured that our expertise in providing industrial
solutions in this segment have been optimally incorporated to arrive at the lowest-cost solution.

Implicit Cost Savings – The consumer fails to realize that tailor made products like Coracle and
Clearblu have added benefits which provide significant cost savings. Our product reduces the
need for shock treatments and the annual consumption of chlorine, which is expected to lead to
a cost savings of 20-30% for the consumer. These costs are by their very nature hidden and
hence need an external expert like a retailer to bring them into the consumer's decision making
model.

It has been observed that 80% of the consumers maintained the pool themselves and purchased
their requirements from local retailers and supermarkets. We have also observed that there is no
specific awareness of the brand and the consumer simply demands a clarifier. Essentially what
these means that the purchase decision, in the absence of a price differential, relies entirely on
the retailer. Hence the retailer for us is the face of our company.

EXPECTED RESULTS
A product for a niche but growing segment must ensure it is financially viable. At the same time,
the weight of the expectations leads to the desire for non-monetary parameters of success. We
outline the financial benefits along with the road ahead so that you as a retailer support us in this
endeavor

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 Section: C Roll No: 1811197 Name: Yash Parekh

Financial Benefits
We, at Soren Chemical, instill a culture where we do not see the retailer or even a whole-seller
as a buyer of a product but as a collaborator. Moreover, collaboration can only work if the value
is created for all members. We, therefore, propose to restructure the Margin Structure as follows:

Current Proposed

Ex-Factory Price $14.88 $13

Distributors Margin 30% 35%

Distributors Price $21.25 $20

Retailer Margin 15% 20%

Retail Price $25 $25

We have decided that a radical approach is required to jumpstart this latent demand for clarifiers
and it can be achieved with extended cooperation from all the retailers. The margin we propose
is well above the regular industry level and ensures that all our collaborators recognise the value
we see in this market.

Future Expansion
We have a robust Research and Development Department which is actively pursuing multiple
pipelines for future consumer products. These include algae and phosphate removal agents. We
are committed to our goal of establishing our success in the consumer sector and are fully
invested in its future. This by extension means that we are personally invested in your future as
a retailer with a more extensive product portfolio

Golden Retailer Program

• Faster deliveries – Guaranteed single day delivery of product

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 Section: C Roll No: 1811197 Name: Yash Parekh

CONCLUSION
Soren Chemical is committed to building a long-term partnership with all its retailers. We have a
class leading product in our portfolio which shows great potential. Lower price, better margin, and
added benefits, it is easy to understand that any rational consumer will buy this product. We are
confident that with the help of your intrinsic marketing skills we hope to convince the customer to
see the value in our product.

If you have questions on this proposal, feel free to contact us at your convenience by email at
jen.moritz@soren.com or by phone at +1 2560 8852. We will be in touch with you next week to
arrange a follow-up conversation on the proposal.

Thank you for your consideration.

Name : Jen Moritz

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 Section: C Roll No: 1811197 Name: Yash Parekh

Other Details:

Word Count: 1334 words

Assumptions:

1. There are 9 million pools, with 25% consumers who follow normal clarifiers usage, that
translates at $40 per year to a $90 million market size.
2. The company can start a new program for creating retail partners under the name of
Golden Retailer. This is to ensure future loyalty.
3. The retailer in this segment controls the final purchase decision, and the word usage in
this proposal is to in a gratuitous tone to entice the retailer by praising him and his work.
4. It is assumed the there is no brand loyalty for pool clarifier among the consumers. As low
percentage are even aware of their regular usage, they will not demand specific brand of
clarifier from the retailer
5. The company currently makes a gross profit of 23% on its products. This has been
increased to 35% for the pool clarifier. I have reduced the same to ~25.6% which is still
above the general level of the company.