AQUALISA QUARTZ

Introduction• Founded in 1977• Head office in Westerham, Kent• Aqualisa was ranked at #2 in mixing

valves and #3 in the overall UK shower market

• Had 25% net returns on sales• 5% to 10% growth rate

-Strong Reputation in UK-Outstanding Quality Product-Breakthrough Technology(QUARTZ)-Premium brand image- Strong emphasis on R&D

-Expensive product Image-Low brand awareness of Quartz product

- 40% of UK homes don’t have showers installed - Continuous demand on shower products

-Market perceived Aqualisa’s products as being overpriced -Declining in service quality- Competitors catching up in product quality-Eroding in customer amount

SWOT Analysis

AQUALISA

Introduction to UK Shower Market

U.K. Shower market in late 1990s was plagued with problems

Only 60% of U.K. homes had showers whereas 100% of the homes had bathtubs

Archaic plumbing was used most commonly which had a cold water tank on the roof, a separate boiler and cylinder to store hot water

Types of Showers

Electric Showers

• Electrical components mounted in bulky box.

• Introduced under the name ‘Gainsborough’.

• Used cold water.

Mixer Shower valves

• Manual and Thermostatic

• Blended both hot and cold water to set temperature.

• Additional booster pump required to enhance the flow rate.

Integral power showers

• Single compact unit.

• Less reliable than Mixer Shower valves.

• Results in a bulky box on the wall.

Trade Shops

• Stocked for demand

• Aqualisa was available in 40% of trade shops

• Primary Customer- Plumber relationship

Plumblers

• Huge influence on the individual market segment

• Major concern is reliability, performance and ease-of-installation

• Familiar product brand to avoid repeat plumbing

• Highly loyal to a product

• Distrust Innovation

• Installers have to go several years of training

DIY Shed

• Cheaper and easier to retrofit

• Launch an intense Marketing Campaign

• Brand awareness • Promotional low

prices temporarily for the new buyers

• Mass Market• Offered Discounts• Electric showers

were the primary showering

• Gainsborough was available in 40% of them

Showroom

• High End Product• Multiple brands.• Primary

customers were plumbers.

• Available in 40% of the trade shops.

• No inventory held• Offered

installation services by subcontracting

• Aqualisa brand was sold in 25% of showroom

Channels of Distribution

Why People Disliked Showers

Poor Pressure

Varying Temperature

Shower Brake Down

Low Brand Awareness

Unattractive Design

Poor Ease of Installation

Quartz – A Breakthrough in Shower Technology

Remote Processor

A single hole drilling

Efficient & Reliable Water Pressure

“One Touch” Control

Electronically controlled valve

Aqualisa Quartz

Ease of use

Easy to install

Good water pressure

Stable temperature

Great looks

Value Proposition to Consumers

-Safer & Easier for users-Better water pressure and temperature control-One touch control with light indicator-High quality product: strong engineering- Easy to install- Day and half installation time saving per install

-Unfamiliar product to plumbers-Poor distribution channel- Stigma of past failures with electronic showers- Sales force focused on servicing existing account

- Current shower systems are bulky- Bad water pressure in showers- Fluctuating temperature in current shower model- Much manual adjustment required

- Competition catching up on quality and technology- Quartz was perceived too expensive - Cannibalization of existing shower product models

SWOT AnalysisQUARTZ

Product Map of Quartz

Potential Product

Augmented Product

Expected Product

Basic Product

Core Product

• Body Jet

• One Touch Control• Automatic temperature control• Slave remote control

• Easy Installation• Efficient & Reliable Water Pressure• No temperature fluctuations

• Electronic Shower

• Shower

Why is Quartz not selling…

High Price

Plumbers wary of innovation

No aggressive marketing due to fear of cannibalization

Concentrated more on servicing old customers rather than developing new ones

Trade shops did not have the time to learn and explain the features to customers

Poor distribution channel

PROS AND CONS OF TARGETING DIFFERENT DISTRIBUTION CHANNELS

Pros• Know what to expect• Easier to get to• Know what it will cost• Easier to convince

because less educated market

• If convinced, will request that plumbers install

TARGETING CONSUMERS DIRECTLY

Cons• Not getting directly to

the problem• Lifetime value is much

lower; one-time to two-time purchase

• High risk/High reward when the company is already healthy

Pros• Easy to install• Value much higher than

current electric showers that dominated the market

• Possibly charge a premium

• Differentiated from previous electric showers

TARGETING DO-IT-YOURSELF SHEDS

Cons• Get stuck in that market• Small market for type of

shower• Low profitability – Low

total sales

Pros• Large-volume channel• Force plumbers to get

familiar with product• Dependable

TARGETING DEVELOPERS

Cons• Lead time – Long lag

before sales• Tough sell to developers

– Don’t usually buy premium products

• Don’t want to discount price for developers

• Higher cost of failure

TARGETING PLUMBERS

Pros• Most influence in the

market• More impactful word-of-

mouth• Lifetime potential for

sales

Cons• Difficult and expensive

to market to• Already biased against

electric showers• Resistant to change

SolutionOUR SUGGESTION……

TARGET PLUMBERS!!!

Reasons:

Primary customers of Trade Shops that have the most sales volume (8,80,000 units in 2000)

Plumbers also work for developers, showrooms, contractors and direct customers

Plumbers word of mouth will help in increasing sales as 73% of the sales are based on the choice of the plumber

Other Suggestions for Improving Sales of Quartz

Arrange a conference for plumbers and developers

Free products to try

Provide unconditional guarantee to plumbers and customers

Include plumbers in the workforce

Thank You

Presented By:GROUP 3