Aqualisa Quartz Case Analysis free essay sample

Summary: Aqulisa’s newest and highly innovative product, the Quartz Shower, comes in two forms: Standard and Pumped. Despite the initial anticipation and buzz surrounding the product at its outset, early sales figures in the first four months were much lower than expected at an average of only 15 units/day. Management is interested in generating sales momentum, and is willing to rethink their marketing strategy but not their pricing. The three options they are facing are to target consumers, do-it-yourselfers, or developers directly. While each of these options have pros and cons, we are recommending that the Quartz product be marketed directly to premium consumers, as well as directly to the consultants they will be advised by while shopping various high-end showrooms. While Aqualisa is a relatively small company, it has invested a great deal of time (three years of development) and money (â‚ ¬5.8M) toward the creation of this product thus far, and the additional â‚ ¬3 â‚ ¬4 million for a large-scale consumer campaign is a nominal and necessary fee to drive the volume of growth that is necessary in order to â€Å"break out of the pack. We will write a custom essay sample on Aqualisa Quartz Case Analysis or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page † Company: Aqualisa is a U. K. shower manufacturer with a reputation for producing high-quality, premium products alongside excellent service. Market share is currently at 17% (second largest) in Mixer Showers and at 11% (third largest) overall1. However despite their reputation, consumers are beginning to perceive the brand as â€Å"overpriced,† actual service is slipping, and 10% of products still malfunction. The company has focused its efforts on innovation, sourcing a top-notch RD team, a new state-of-the-art testing facility, nine patents, and an engineering team that has grown from six to twenty. Customer: Only about 60% of homes in the U. K. have showers,2 and market research has shown that consumers are most concerned with style, good pressure, stable temperature, ease of use, and reliability when choosing a shower. However, consumers are broadly uninformed and possess little brand awareness, as the majority rely on individual plumbers to recommend a brand for them. Plumbers, on the other hand, are most concerned with ease of installment and functioning reliability. Competition: As Aqualisa (or one of its subsidiaries, ShowerMax and Gainsborough) offers products in every category (Electric Mixer, and Integral Power) as well as every price point (Value, Standard, and Premium) they face a wide variety of competition. Other  companies are beginning to catch up to Aqualisa’s technology innovations, and the Managing Director believes that at most Aqualisa has at most a two-year lead on competitors with the Quartz technology. Triton is the largest competitor with overall dominant market share at 30%,3 but in the high-end premium brands Hansgrohe (a German brand) is also a notable competitor that sells in showrooms. Segmenting: Due to the high price of the Quartz technology, customers should be segmented by purchasing behavior in relation to price-point. In this regard, there are three segments: value, standard, and premium. Value customers care most about convenience and price while avoiding products that require excavation costs, standard customers esteem performance and service as the most important (but typically rely on an independent plumber to choose for them), and premium customers typically shop in showrooms since they regard style as the most significant factor. There are two segments outside of these consumers: do-it-yourselfers and developers. While neither are similar to the typical consumer discussed above, both still offer sales potential. Do-it-yourselfers are typically landlords and apartment dwellers that value low cost and ease of installment. Because of this, they there is a strong preference for electric showers in this segment. Developers want reliable, nice-looking products, but are extremely price-sensitive since their ultimate goal is profits from the sale of the unit. Targeting: Because the Quartz technology is priced â‚ ¬346 â‚ ¬576 higher than the average retail price of Aqualisa’s other products,4 targeting a segment that is less price-sensitive is vital. As Quartz is a premium product, targeting the value and standard segments will result in heavy price-resistance and ultimately lower sales volume. Furthermore, standard customers typically rely on individual plumbers to select a brand for them, and Aqualisa has faced resistance among plumbers in adoption of their new technology because plumbers are skeptical of new technology and hesitant to work with products they are unfamiliar with. Premium customers, however, value style above all else and rely on showrooms as consultancies for stylish premium products which aligns with the value proposition of the Quartz technology. There is also a smaller volume of competition in this space, since the variety of brands within a showroom is limited (while the variety of brands available to an independent plumber or contractor are indefinite). Therefore, the marketing strategy for the Quartz brand should target premium consumers, as well as the showroom consultants they will be interacting with, directly. Positioning: For style and luxury-seeking consumers, the Aqualisa Quartz is the shower brand that will give your home a â€Å"wow† factor and your body a sense of renewal. With its sleek look, ultramodern technology, and reliably revitalizing water pressure and temperature, your bathroom will be transformed into a spa oasis. Product, Price, Promotion, Place: The Quartz product is innovative, speedy (with only a half-day average installation time), efficient, reliable, and impressive. While it is more expensive than the other product offerings in Aqualisa’s line, it is also based on advanced technology that high-end consumers will be willing to pay a premium for. Maintaining the current pricing per management’s request at â‚ ¬850 for the Quartz Standard and â‚ ¬1,080 for the Quartz Pumped, we will utilize our current 20 person sales force to redirect all new customer acquisitions toward high-end showrooms. With great success at the Bathroom Expo in London and a multitude of high-end products in the RD pipeline (Body Jet and â€Å"Slave† Remote), this is a distribution channel we will need to exploit. To cultivate these new relationships the sales team will need to shift from 10% of its time spent in new customer acquisitions to 20% (since Aqualisa is currently only in 25% of the 2,000 showrooms nationwide). Furthermore, these showrooms offer installation services to their customers through relationships with subcontractors and plumbers; if we can get the consultants in the showrooms to sell our high-end products to luxury-seeking consumers, the plumbers will be forced to install the product (and have historically responded very positively to it once familiarized). This will organically expand our network outside of showrooms when these plumbers complete jobs for other clients as well. Trade shops and DIY sheds are not optimal distribution channels for the product; plumbers that are resistant to change are the primary customer at trade shops, while the Gainsborough brand is already operating successfully in the DIY (and extremely price-sensitive) space. The promotional expenses associated with marketing directly to consumers is projected at â‚ ¬3 â‚ ¬4 million over the next two years, but with all of the time and money we have spent on RD, state-of-the-art test facilities, patents, and additional manpower this is a necessary bet for the company to make.