Aqualisa Quartz: Simply a Better Shower

Aqualisa Quartz: Simply a Better Shower

PROBLEM STATEMENT:

Aqualisa has invested three years developing a breakthrough product, Quartz, during which the company has spent €5.8 million. The innovative product solves the problem of plumbers as well as customers, yet sales are low. A) How to generate sales momentum? B) Was this a niche product?

SITUATION ANALYSIS:

Aqualisa plays in a high rivalry environment with high bargaining power of buyers. Aqualisa is a successful company with return on (Shower) Sales of 37% (Exhibit 7); together with Gainsoborough, Aqualisa makes up 17% of market share being the third most purchased product by volume.

Despite having an appropriate marketing mix for the existing product lines, Quartz’ lack of success could be due to the potential factors:

1. Internal misalignments: the misalignment starts with one party wanting to sell the product 100-200 per day to make it a mainstream while the other believing the product is a niche, targeting elderly, children, and handicapped. One party believes plumbers would get hooked while the others think adoption would take time. Align on Segmentation, Targeting, & Positioning (STP). 
2. Lack of effort to educate and provide benefits to plumbers: plumbers are reluctant to change brands and distrust innovation; simply having high switching costs. Yet, plumbers are the key influencers as 73% (Exhibit 4) of shower purchases in the UK is by the plumbers, directly and indirectly. Also, 53% (Exhibit 5) of installations are done by independent plumbers. In short, plumbers make the revenue chunk from the two-day work and choosing Quartz means slashing the hourly rate. Do not mess with them, instead, give them an exclusive benefit so that they switch to Quartz. Educate them that Quartz would save the cost that they bear out of their own pocket on bungled installations. Plumbers have high influence on standard and value segments; educate them, benefit them, incentive them, make them brand ambassadors!
3. No communication or advertisement to customers: consumers are unaware and uninformed of brands and options, yet, they have the potential of being the decision maker in selecting the brand at 47% (Exhibit 4). At the end of the day, customer will never say no to lesser price. Customer are not aware that Quartz could save them one-fourth of their time in addition to a saving of €527.5 per job (Table1). Customers have a high influence in premium and DIY segments and customer do have a current pain-point – Quartz is the cure!
4. Problem in Quartz’ Marketing mix (4Ps):

1. Product: superior product to electronic showers – OK!
2. Price: premium at the highest retail price in the product line – OK!
3. Promotion: one-time-only print ad, bathroom expo, face-to-face introduction to plumbers – needs more efforts!
4. Place: all Acqualisa’s existing channels – distributors, trade shops, contractors, showrooms, and developers + direct relationship with plumbers – Needs to be revised!

The main problem has to do with place then promotion. Salesforce is targeting 90% in existing and all channels; DIYers and developers are price driven. 40% of UK homes do not have installed showers; market is in demand as 44% (Exhibit 3) of showers need replacement. The penetration to distribution channels need to be re-looked at.

ALTERNATIVE OPTIONS:

There are six segments in place: customers (standard, value, and premium), Do-It-Yourselfers, Plumbers, and property developers.