Rohm and Hass

Rohm and Haas!!

First year target- 1350 boxes of 144 packets = 194,400 packets

5 month target вЂ" 562 boxes of 144 packets = 80,928 packets

Current 5 month sales вЂ" 74 of 144 packets = 10,656 packets

Approximately 13.17% of target sales

Net sales for industrial chemicals, has risen 21% over last 5 years

Starting salaries 20-27 k for sales people.

14 salespersons for specialty chemicals

6 have majority of biocide customers in there area

approx 30% of time spend on biocide products

10% on formulators

20% visiting (large?) end users sometimes with formulator salespeople

Concentrate Biocide market est. 30mil

Maintenance biocide market est. 38mil but in 10 years would replace concentrate market

Avg. metalworking fluid life of 3-4 weeks

Biocide use extends life 1-2 weeks

Range of 25% to 75% longer

Biocide Treatment every 2weeks extends life forever with only maintenance fluid being needed

Kathon 886W is the number 1 maintenance biocide on the market

1,000+ gallons system size.

30% Share of 18mil large system market (5.94mil)

Distributed by 12 major metalworking fluid formulators as maintenance packages and branded under formulator name

Repackage Kathon 886W into Kathon MWX

Good for 25-75 gallon tanks

Lasted 2-4 weeks

Potential for 20mil in sales

Estimated 150,000 customers for MWX as compared to 325 for 886W

Market

Nonferrious need absolute bacteria free fluid, all large plants

886 held 70-80 percent of market of the 3-5mil market so (2.1mil to 4mil)

Ferrous

Accepted a certain level of bacteria in fluid 50,000 units/ml

15-20% of central system market of 12-16mil so (1.8mil вЂ" 3.2mil)

Closest competitors

Tris Nitro 1 tablet treated 25 gallons for 3 days and only partially effective

$0.96 tablet * 10tablets for 4 weeks*2 tablets for 50gallons = $19.20 for ineffective coverage.

Dowicil 75 treated 500 gallons with packages that work but produce formaldehyde and fumes. Not the same class

Distributors

Target of small machining houses, current distributors of formulators is incorrect need to distribute to machine tool shops and industrial supply houses.

Marketing Strategy

Est Cost of $0.50 a packet

1-2 boxes $180/144packets вЂ" $1.25 a pack

3-4 boxes $165/144packets - $1.15 a pack

5+ boxes $145/144 packets - $1.01 a pack

Formulators sold at $2/pack

Formulators with industrial supply houses sold at 10% margin. So $1.11 to $1.37

Formulators with commission sellers sold at up to $6/pack

Press release in 40 metalworking journals

Ads ran in American Machinist at $3,800 per each of 5 adds totaling $19k

200 responses so $95 per response at 74 boxes sold in five months, assuming 1 box per customer only 37% sales.

Market Research

1. Customers got rid of fluid every three weeks on average. Reasons were rancidity, odor, and dermatitis, rashes and skin problems, Yuck?!?!

2. Had used fluids disposed of at $0.29/gallon to $2.00/gallon

Costs ranged from 0.29*25gallons to 2.00*75gallons = $7.25 to $150

3. 20% remembered sent information, worried about safety but information removed fear

4. Majority obtained fluid from 2 local shops and one formulator

5. 50% used bleach and such

Metalworking Fluid Concentrate $5.68/gallon Dilution ratio of 1:24 assumed

Waste Disposal $1.36/gallon

Kathon MWX $2/packet

Typical small shop had 22 machines each with 50gallon capacity, discarded every 4weeks, assume