Aqualisa has always had a strong reputation in the U.K. shower market, with the company being generally recognized as having top quality showers, a premium brand and great service. It was a highly profitable company and sat quite comfortably with its niche in the market. Harry Rawlinson joined the company in 1998 and believed it was vulnerable for different reasons. In the year 2000, Aqualisa had 18.1% of the market share in the shower industry. Aqualisa sold electric showers mostly under a separate brand name “Gainsborough”, which was available in 70% of DIY stores. Three product ranges are available under this brand, which were value, standard and premium. The Gainsborough range accounts for 11.3% of the total market share within the shower industry. This brand is not available in trade shops or showrooms. Aqualisa’s product range has 9 styles and accounts for 6.8% of the entire shower industry market share. This figure does not include the additional shares acquired by the company through the introduction of the Quartz range. Aqualisa products were available through 25% of showrooms in the UK and 40% of trade shops.
Product- the Aqualisa Quartz shower was a one touch control shower that provided efficient and reliable water pressure and temperature. The Quartz shower coincided with the consumers’ needs and wants and created the wow factor amongst them. It took less than half a day to install rather than a two day installation with the conventional shower. Consumers can either but the standard Quartz or the Quartz pumped edition which comes with a pump which is easily installed anywhere near a hot and cold water connection.
Price- the Quartz standard shower costs €175 to make and is sold at a retail price of €850, bringing in a margin of €275 after the manufacturer selling price. The Quartz pumped edition costs €230 to make and sells at a retail price of €1080, bringing in a margin of €345 after the manufacturing selling price.
Place- Aqualisa had a 20 person sales force that sold to distributors, trade shops, showrooms, developers and plumbers. Their main priorities was to spend 90% of their time on maintaining existing accounts and 10 % of their time spent on developing new customers. Aqualisa’s sales force also had long standing direct relationships with a group of plumbers that were loyal to the Aqualisa brand. Aqualisa were relying just as much on these plumbers to make sales as they were on direct channels of distribution.
Promotion- when reading the material it was evident that Rawlinson was hesitant about running any advertising campaign as it was high risk so they ran a test campaign involving a one-time only print advertisement campaign which was scheduled to run inthe mail on Sunday magazine. Rawlinson noted that a large scale campaign would cost about €3 million to €4 million over a two year period which would be a very tough sell across the company with a net income of €17 million. Other options were to try and get its partners like B&Q to help push the product, avoiding the need for expensive consumer advertising. Aqualisa also offered developers a 50% discount to incorporate their product but were unable to make any sales. Despite efforts to push the product Aqualisa sold very few in the first 4 months of its release.
AQUALISA – SWOT ANALYSIS
* Company has been profitable for years
* Aqualisa’s market reputation for
* Hi quality products
* Great service
* Position as #3 in shower market
* Aqualisa’s “Showermax” (discounted price) brand selling very well to property developers for installation in new homes * Aqualisa has 40% market penetration in Trade Shops
* 20 person sales team selling to distributors, trade shops, showrooms, developers and plumbers * Plumbers loyalty to Aqualisa brand
* Actual service levels dropping
* Mature market - annual growth rates dropping...