AQUALISA QUARTZ: SIMPLY THE BEST SHOWER CASE STUDY ANALYSIS Assignment issues discussion Question-1: What is the Quartz value proposition to the plumber? To consumers? Answer: Value proposition to customer: • Efficient the reliable water pressure • Efficient and reliable temperature control. • Easy to use. This can be used by children, elder person as they don’t need to worry about valve adjustment. Value proposition to Plumber as follows: • Installation time is ? th of the previous one. Installation does not require master plumber. This can be done by apprentice plumber or inexperienced one also. Question-2: Why is the Quartz Shower not selling? Answer: Following factors influence the sales of Quartz: 1. Plumber:EXIBIT-4 clearly shows the brand that chosen by plumber has significant impact on brand sales. ? 28% takes plumber advice ? 25% takes Plumber selected choice ? 20% plumber influences type of showers This shows plumber has 73% influences on brand and shower choice. 2.
Channel distribution ? Do-It-Yourself: Aqualisa presence in DIY is very low. Only Gainsbarough brand is available in 70% of outlet. ? Showrooms: Aqualisa is present in 25% of showrooms. Currently there are 2000 showrooms and out of this only 500 has aqalisa presence. Quartz is premium segment brand as of price perspective, most of the premium of brand sales happen through this channel. ? Trade shop: Aqualisa brand is available in 40% of trade shop. this is the channel through which plumber trade the shower.
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The main reason why Quartz is not a first choice because ? Bad experience with previous electronics push switch in 80’s. ? If problem happen in existing fixing then second visit cost comes on plumber. 3. Sales person from Aqualisa The sales team priority ? 90% time maintaining in existing account. ? 10% time on developing new customer As per Mr. Pestell Aqualisa’s national sales manager “Adaptation is a long, slow process. It takes time”. Since sale of Aqavalve is our bread and butter and it can go away if no one’s watching.
The Director of Marketing Martyn Denny says ” How do we pitch our other products alongside Quartz? Right now, if Quartz is mentioned , our salesman tend to gloss over our other product. In fact , to sell the Quartz, they have to point out difficencies in our existing products. That really makes any sense, does it? ” Now we can conclude following points: 1. Plumber influence 73% of sales but does not have confidence in this product. 2. The Aqualisa has limited presence in various distribution channel, due towhich the sales is not picking-up. . Company’s staff is somehow reluctant to sale of this product. Since it is new invention and the fact can not be denied that anything new happens to overcome previous problem and have new facility. Question-3: Aqualisa spent three years and € 8. 5 MM developing the Quartz product. Was the product worth the investment? Is Quartz a niche product or mainstream product? Answer: The investments will worth it if the demand of this product is much higher then the product development cost. To check the market potential following facts will be taken EXIBIT-2 | | | | |Brand |Electric Shower |Mixer Shower |Power Shower | |Aqalisa |186000 |114500 |25000 | |Others |914000 |435500 |125000 | |Total |1100000 |550000 |150000 | |%share |16. 0% |20. 80% |16. 67% | |Price/unit |95 |390 to 715 |480 to 670 | Total Market Value = No. of unit sold in each category X Price Per unit = € 1435. 12 Million Average investment made in developing this product:= € 2. 833 Million Value proposition which was not available before ? 1/4th installation time ? anyone can install it ? Efficient and reliable temperature control ? Efficient and reliable pressure control ? Easy to use.
That means value proposition has been done for both customer and plumber. Company financial heath: € 17. 3 Million % of profit used in innovation = 16. 325 % From above statement it is clear that investment is worth it because market potential is much higher then the investment made to develop this product. The Quartz is niche product because the capability wise it is superior then any other product available in market. Its sale is 15unit/day and to enter in mainstream, it should be 100-200 unit/day. Question-4:Acqualisa currently has three brands Aqualisa, Gainsborough and ShowerMax.
What is the rational behind this multiple brand strategy? Does it make sense? Answer: The Aqalisa and Gainsborough, both brands come in all three categories of electrical showers, Mixer Showers, and power showers. Technically they are same in different categories. The pricing done in different segment based upon cosmetic change. As of technical purpose, it is useless to keep different brand , but from marketing point of view, we can see in EXIBIT-2 , the sales of different brand in each category has significant presence in each category.
So they should keep these brands. As of ShowerMAX , it is specially design for property developer as per there needs.. this is also having same technology of Aqualisa but it is meeting developer requirement , so it is worth keeping it. Question-5: What should Rawlinson do to generate sales momentum for the Quartz product? Should he change his marketing strategy to target consumer directly, target the DIY market or target developers? Should he lower the price of Quartz? or should he do something different altogether.
Answer: To increase the sales we need to analyze the reason of low sales rate. In-spite of superior product which satisfy needs of both consumer and plumber but sales in not picking-up. If we see the vision of Mr. Rawlinson, it is very clear that he believes in The Product Concept of marketing where any product success in market depends upon quality , performance or innovation features. A new or improved product will not necessarily be successful unless its priced, distribution, advertised and sold properly.
He needs to make strategies in such a way that “everything matters” in marketing—and that a brand, integrated perspective is often necessary. He should concentrate on delivering the value to customer, rather then product. Winning companies satisfy customer needs and surpass their expectations economically and conveniently and with effective communication. Following action will address the above issue: 1. External Marketing Activity: Distinguish the class of customer: ? Premium: This class of customer is sensitive toward style, high performance and service. ince they put the price for Quartz € 175 to € 250 is not an issue, but this class of people buy the product from showroom, and Aqalisa presence in showroom is 25 % , so they need to target more showroom, which will directly increase their sale. ? Standard: In this segment customer look for performance and service, but they depend upon plumbers. Plumber mainly but the shower from trade shop. Aqalisa has 40% presence over there, so increasing presence over here will boost the sales. As of price in this category, it will be not an issue. Value: This segment is price sensitive and at the same time they look for performance and does not want excavation. Since Quartz does not require excavation, so this is not an issue, but as of price, it is concerning issue in this segment. There is substitute product available in this rage,so they need to think about price cut in this segment. In fact the price cut in this segment and price increase in Premium segment might help them promote Quartz in both of the segment. The Value customer buy the product from DIY market and here Quartz should be available with high level of presence.
There is other market where property developer buys this product. This product carries all the features that developer looks for, so only thing is that they buy the product from independent plumbers. We have seen, plumber plays import role in shower selling. 73% of selling is influenced by plumber, so we need to target plumber, so that they should recommend this product. The main problem with plumber is that, they does not have faith on any product that uses electronics. This fear can be reduced by Mass training/demo program for plumber in various region.
In group plumber should be facilitated for visting the manufacturing plant , R & D department , which will increase their confidence in this product. The other problem with plumber is that , they do not get any money, if they need to go for second visit to consumer. Since company has 10% fault rate, so they should make plan to afford the cost in case of second visit by plumber. We have also seen consumer has very less brand awareness , so it is a good opportunity to advertise in all possible medium about this new product, so that consumer will be aware of this product only.
By using this medium, they can easily convey the advantage of this product and ease of installation. The company person and R & D team person should participate in public discussion/forum related to this new invention which will air the positive message about this product in market. 2. Internal Marketing Activity: Their marketing head and team sales team should be trained enough, so that they should understand the potential of new invention, future advantage with this product and why they should emphasis on this product.
Since this is niche product so, some incentive passed to sales person for this product. From EXIBIT-3, it is clear that 44% market us replacement. Since Aqualisa has already presence in these customer, so the sales person can easily convince about this product. Company should also setup the feedback mechanism, so that any issue can be responded in this. Product Manager should be involved in marketing initiative, so that he will understand the customer issue more efficiently.
Quartz is proved as niche product during testing, so main issue is awareness, which can be done by proper communication by means of TV, print media, seminars,web etc. Since UK market has 60% shower in UK homes , so this will open new market for remaining 40% of houses. Recommendations: *Direct sales to focus on Plumber Market/Trade shops * Promotional Campaign for Quartz * Loyal Plumbers-can be given one Quartz unit free. *For New Plumbers-We can organize training seminars that show cases product functionality and benefits for trade shops. Focus on making it a mainstream product from Niche product. | |Total Units sold(Mkt) |Market% |Aqualisa Sold |% Mrk share | |DIYERS |650000 |36% |19606 |3% | |Showroom |145000 |8% |15197 |10% | |Trade shops |840000 |47% |86297 |10% | |Other |165000 |9% |900 |1% | Market is plumber(approx 10000 nos) driven 73% Plumber select type and brand 25% Plumber influence the type not brand 20% Customer select brand and type 27% Customer take advice from plumber 28% | |Low Loyality |Mod Loyality |High Loyality | |Aualisa Plumber |Medium |High |Highest | |Non Aqualisa Plum |Low to medium |High |Lowest | • Giveaway one free Aqualisa Plumbers to 480 Loyal Plumbers 480 loyal plumbers under 20 member sales reps • 24 units give away per sales rep • 1 unit per week deliver 480 units with in 24 weeks • Total cost 480 x 202. 50=97,200 General plumber market • Distribute product detailed brochure to shops and plumbers • Cost 15000 nos =15000 • Roadshows and technical seminars • 3 per week for 24 weeks to cover max plumbers Target Nov 09 to April 2010 –Launch quartz product campaign to plumbers Oct 2010-Goal 100-200 nos/day to target customer/alternate distribution channel Results expected one example (REF: EXHIBIT 6,7 AND 8) |Total Units sold(Mkt) |Market% |Aqualisa Sold |% Mrk share | |DIYERS |650000 |36% |19606 |3% | |Showroom |145000 |8% |15197 |10% | |Trade shops |840000 |47% |86297 |10% | |Other |165000 |9% |900 |1% | |1st year |480 plumbers-loyal | | | | |50% 1st year Influence | | | | |240 influenced loyal plumbers | | | | |9600=240×40 quartz sold by them | | | | | | | |4512 |450 |2030400 |std | |5088 |575 |2925600 |pumped | | |Rev 1st year |4956000 | | | |logs |1982400 | | | |GM |2973600 | | |2nd year |480 plumbers-loyal | | | | |75% 1st year Influence | | | | |360 influenced lyal plumbers | | | | |14400=360×40 quartz sold by them | | | | | | | | |6768 |450 |3045600 |std | |7632 |575 |4388400 |pumped | | |Rev 2nd year |7434000 | | | |logs |2973600 | | | |GM |4460400 | | | | | | | | | | | | | | | | | | | | | | |3rd year |480 plumbers-loyal | | | | |100% 1st year Influence | | | | |480 influenced lyal plumbers | | | | |19200=480×40 quartz sold by them | | | | | | | |9024 |450 |4060800 |std | |10176 |575 |5851200 |pumped | | |Rev 3rd year |9912000 | | | |logs |3964800 | | | |GM |5947200 | |