Professional Documents
Culture Documents
PGPM GROUP A7
SPJIMR
2/18/2013
Product Overview
Coracle is a water clarifier for small recreational and personal pools. The product is priced little
higher than the competitive products, but the advantage of the Coracle clarifier is the quantity that
has to be used, thus bringing down the annual expenditure on the clarifier.
Company overview
Soren chemicals was basically a B2B concentrated business, which include more than 350 products,
basically serving the large recreational water bodies and drinking and waste water. Being a B-to-B
enterprise Soren never concentrated on branding of its products and creating the customer
awareness, however they tried developing brands for products that had potential in consumer
market, but had little success.
Option 1- Analysis
Mortizs target is to sell 100,000 units of container for the first year of sales. Considering $5.21 of
gross profit per container Soren would have 100000*$5.21=$521000 but this is not sufficient for
$600000 advertising budget.
Option 2- Analysis
In terms of quality Sorens Coracle is in direct competition only with Jackson Labs ClearBlu, although
the dosage required by ClearBlu is more than required by Coracle which reduces Annual cost for
Soren Chemical. Hence there is a considerable margin available for Soren to have retailer and
wholesaler increase their per container price
From the calculations shown in below exhibit1 and exhibit 2, we can see even if having retailers price
as $30 per container (example), Soren is at significant advantage on annual cost and e keeping its
own gross margin and thereby gross profit more or less the same.
Exhibit1*
Company
Soren
Keystone
Kymera
Jakson
Labs
Purity
Hydropil
Clearblu
Product
Coracle
25
50
30
60
15
60
3.5
NA
15
15
3.91
39.06
4.692
46.92
2.34
46.88
3.5
35
3.75
75
Marigin Structure
Retailer Selling Price
Retailer Gross Marigin
Retailer profit
Distributor Price
Distributor Gross marigin
Distributor Gross Profit
Soren Chemical's Selling Price
Soren Chemicals gross Mriagin
Soren Chemical Gross Profit in $
Soren Chemical Manufacturing Price
Cost Per
container_Exisiting
25
15%
3.75
21.25
30%
6.375
14.875
35%
5.21
9.665
Cost Per
container_Recommended
30
19%
5.7
24.3
38%
9.234
15.066
35%
5.2731
9.7929
Recommendation
We would recommend Soren to adopt option 2 in order to better the sales of Coracle in future.