Major decision issues in the case
1. Aqualisa has to decide its channel strategy (which channel to choose from trade shops, showrooms, DIY sheds, or plumbers to increase sales), product promotion strategy (how to promote new product), and product positioning strategy (how to position products in a segment).
2. Most of the plumbers are conservative and historically hesitant to any electronic devices in showers. So how should Aqualisa convince and make these plumbers accept Quartz showers?
3. Whether it should target “do-it-yourself” market since installation of Quartz is very simple? Customers have to wait for 6 months often to get plumber services. So the simplicity in Quartz installation can be used as its selling point to target “do-it-yourself” market. But associating a premium product like Quartz with a channel which sells lower brand like Gainsborough is good for Quartz?
4. Should company target developers more aggressively to push Quartz since it could get some large-volume deal with developers? Whether Aqualisa should offer discounts in prices to promote Quartz to developers?
5. Should Aqualisa target customer directly and try to influence them since it is facing many problems reaching to plumbers and convincing them for superior quality and service of Quartz shower. But a large scale marketing campaign may cost around €3 to €4 million. Is this investment worth and good strategy?
6. The newly launched Quartz is in mixer segment in which Aqualisa already have their star product named Aquavalve. So the positioning of Quartz and Aquavalve has to be sorted out if both products have to coexist together in same segment. Otherwise sales team is confused and not sure about the future of Aquavalve. Also, when to target Quartz and when to target Aquavalve is not clear.
Recommendation/inferences on the major issues
1. Quartz is really innovative and path breaking product in terms of installation, reliability, and easy of use. It should be placed as premium product in the market to makes sure company gets its due for all the effort that went into making this product happen, which includes €5.8 million and 3 years of research and development to fix all customer and plumbers issues.
2. Aqualisa should not lower the prices of Quartz. One of its core products, Aquavalve 609, is already selling 60,000 units a year at retail price of €715. If Aquavalve can be sold at €715 with an installation cost around €1200 then a premium product like quartz must be sold at higher prices. If Aqualisa can highlights the substantial savings of around €900 (please refer point 1 in analysis supporting recommendation) for Quartz then customer will happily pay €200 extra premium for it. Instead of lowering the price of such an innovative and niche product, it should offer discounts to channel partners to in crease sales number. Once the market demand is generated, it can remove the discounts.
3. For the mixer shower segment, the 54 percent market is controlled by plumbers (please refer point 2 in analysis supporting recommendation), who buy the showers from trade shops. Presently Aqualisa brands are available in only 40 percent of trade shops. Aqualisa should increase its presence to 70 to 80 percent of trade shops or as much as possible so its products are available at more places and it is available to more plumbers who buy from these shops.
4. Apart from increasing presence in trade shops, Aqualisa should offer a €25 discounts (assuming this amount is good enough for encouraging) to trade shops who sells more than 200 Quartz in a month. This should help selling Quartz to other people also who buys from trade shops since it sells around 72 percent of all mixer showers (please refer point 3 in analysis supporting recommendation). This extra income should encourage trade shops to learn the Quartz innovative features and try to sell it by sharing its advantages to plumbers and their other customers. This will also help in...
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