Case Analysis Aqualisa Quartz

Topics: Marketing, Plumbing, Price Pages: 7 (2054 words) Published: October 6, 2012
Every company dreams that one day they can bring something unique and very competitive, and use it to dominate the market. But things might not be as easy as they thought. In Aqualisa case, Harry Rawlinson, managing director of Aqualisa, gives us an example that even with new significant shower product Quartz, which seems to be perfect in every aspect, they cannot make a relative progress in U.K. shower market. Quartz is designed to solve all the troubles that exist in U.K. showers. It provides efficient and reliable water pressure and temperature, needs less space in bathroom, has a stylish looking and is easy to use and install. Although Quartz leaps all other showers, the initial sales results turned to be gloomy, as Rawlinson said “For some reason, it simply wasn’t selling”.

To reveal these “reasons”, we will first look at the general shower market status, and then we will analysis two main factors that cause Quart fail in initial Sales: Quart itself and Plumber. Finally, we will examine Aqualisa’s marketing strategy and find out what is the right thing to do.

Shower market in U.K.
The U.K. shower market has 3 distribution channels, 3 buyer segments, and 2 Special roles: Plumber and Developer. To give a brief summary, we will use some charts to demonstrate characteristics of these elements, and use it for latter discussions. Chart 1: Distribution channels in U.K. shower market

Distribution channels| Features|
Showrooms| Consulting and display|
| High end|
| Installation services|
| Aqualisa share 25%|
Trade Shops| Sell all available brands|
| Primary customer is plumber|
| Aqualisa share 40%|
Do-It-Yourself Sheds| Offer discount|
| Needs cheap and retrofit|
| Gainsborough brand share 70%|

Chart 2: Consumer Segments in U.K. shower market
ConsumerSegments| Features|
Premium| High performance & service|
| Shopped in showrooms|
Standard| Emphasize performance & service|
| Relied on plumber to choose product|
Value| Convenience & Price|
| Rely on plumber to choose product|

Chart 3: Special players in U.K. shower market
| Features|
Plumber| Short in master plumbers|
| Pay for bungled installation|
| Loyal to single brand reluctant to switch|
| |
Developer| Prefer reliable, nice-looking, flexible use|
| Price-sensitive|

Quartz, Overpriced?
As a breakthrough product, Quartz was placed great expectation because it seems to be perfect in aspects that former products have defects: Electric showers have pressure problem, Mix shower valves need to excavating bathroom, and Integral power showers add a bulky box in the wall. Theoretically, Quartz can replace any shower in the market without any regret. But the sales result is only good in showrooms, which was previously a place for premium consumers. The Aqualisa obviously did not only target premium users, they gave 20-person sales force to all distributors, and they did not want to be only in one segment. Rawlinson has lot more ambition for Quartz as he gives analogy of operating system to Microsoft, thus sales momentum in premium is not enough. Thus here comes our first issue: why Quartz failed in low-end market?

Take a look at the Chart 2, we could easily find out that the potential consumers, which include standard and value consumers, have two common attribute: they are all price-sensitive, and they rely on plumber to choose product.

We will analysis plumber factor in latter section, now let’s focus on price, and answer Rawlinson’s question: “Was the problem that the Quartz was priced too high?” We will make it clear by comparing Quartz with other products in Aqualisa using Exhibit-8, and we add two entries: Rate of return (by manufacturer) = Margin/ MSP

Rate of return (by retailer) = (Retail Price- MSP)/ Retail Price.

Model| Segment| Retail Price| MSP| Cost| Margin| ROR( manufacturer)| ROR(retailer)| Aquastyle|...
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