Rohm and Hass

Monday, October 30: Rohm and Haas (A)

1. What is Kathon MWX really worth to users? What is the economic value of the product to users? Or IN other words, how much money net would they save if they used Kathon MWX instead of their current product?

· Without Kathon MWX– Usage 4weeks
Each machine uses about 2g. (50/24) of Met. Fluid Conc. with price 5.68$/gal during 4 weeks
Cost of 1gal diluted fluid = 2 x 5.68$ = 11.4$
Disposal cost = 50gal x 1.36$ = 68$
Total costs = 11.4 + 68 = 79.4$
Total costs per week = 79.4$ / 4 = 20$
For small shop = 22 x 20$ = 440$/week
· With Kathon MWX– Usage 7weeks
Cost of 1gal diluted fluid = 11.4$ + 2pack x 2$ = 15.4$
Disposal cost = 50gal x 1.36$ = 68$
Total costs = 15.4 + 68 = 83.4$
Total costs per week = 83.4$ / 7 = 12$
For small shop = 22 x 12$ = 264$/week

2. Why isn't MWX selling?

Lack of positioning due to

· Difference in perceptions between end users and company. Company see themselves as industrial suppliers while consumers viewed their products as consumer package good

· mistakes was the lack of fit between product and company's culture. Rohm and Haas had traditionally been an industrial supplier, distributing products in large quantities. As a result, the culture was not consumer product oriented and employees were not accustomed to designing and marketing a product for consumer use.(page 8)

3. How would you describe the user environment? Who makes the purchase decision? How?

4. What marketing strategy – in particular pricing and channel - might possibly work for MWX?

· There is no brand awareness for the product therefore would have been much smarter for Rohm and Haas to market it with a name (rebranding) that would suggest something about the product's benefits and quality as well as be easy for customers to pronounce recognize and remember

· According to a survey in the case, while customers do purchase metalworking fluids from large national formulators, the majority shop