Rohm & Haas Leadership Essay

Leadership Essay

From the Harvard Business School case revised May 25, 1993, Rohm and Haas was a leader in chemical technology. One of its four main business segments was Industrial Chemicals, where its strongest product is Kathon 886 MWX capturing 30% of the maintenance biocide market for large systems. Customers who were satisfied with the performance of this product asked for a "convenient, safe-to-use version for their smaller reservoirs" (p4). In December of 1983, Rohm and Haas launched a brand extension called Kathon MWX, designed to kill microorganisms in metalworking fluids for customers with small-capacity tanks. The new product was distributed by large industrial formulators along with the existing Kathon 886 MWX, but sales volume for the product was only 6% of what was expected.

Joan Macey, the marketing manager for Rohm and Haas explained the poor sales as low awareness of the brand and its usefulness along with the lack of competition to build demand. The real problem however, was that Kathon MWX was not positioned correctly. Rohm and Haas was an industrial supplier that was trying to sell a consumer product. Because of the pricing scheme, the customer had a very low perception of its value. Furthermore the distribution channel was not appropriate for this type of product. Just because Kathon MWX may have looked good on paper, it didn't mean the company should have hastily launched the brand.

In this situation, more effective leadership would have helped Rohm and Haas avoid such a negative outcome when implementing its new product marketing strategy. Branding of a new product is not easy, it must be thought through in great detail since there are many different strategies that can be adopted. Therefore, a leader had taken on a more analytical mind-set, it would have been able to position Kathon MWX more appropriately. The company saw a market demand, but did a shallow analysis and used easy techniques such as running the numbers. As Gosling and Mintzberg put it in The Five Minds of a Manager, they did nothing "beyond the superficialities of obvious analysis" (p. 4). Joan Macey needed to go deeper in to the analysis looking at data, assumption and limitations while inquiring into how others drew conclusions.

This analysis could have helped her to realize that making Kathon MWX a brand extension of Kathon 886 MWX added no value to the product because no brand awareness existed. This was mainly due to the fact that Kathon 886 MWX it was distributed through formulators, so the end user never saw the label containing the name. Consequently, since the new product was designed for consumers, it would have been much smarter for Rohm and Haas to market it with a name that would suggest something about the product's benefits and quality as well as be easy for customers to pronounce recognize and remember. Another way an analytical mindset would have benefited the new product's launch was in choosing its distribution channels. According to a survey in the case, while customers do purchase metalworking fluids from large national formulators, the majority shop at small, local tool or supply shops. Since this product was seen as a consumer packaged good and was not only competing with metalworking fluid biocides, but also household cleaners, Rohm and Haas should have positioned it that way by making it available in these local stores.

Aside from the lack of analysis from leaders in the organization, another cause of these 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. Joan

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