1. 0 Background and Issues
Aqualisa is an innovative shower manufacturer with the 3rd highest share in the UK shower market in 2000. In May 2001, Aqualisa launched Quartz, a technologically advanced product that was expected to greatly improve the shower experience and gain a large market share. Aqualisa Quartz provided a solution to several problems plaguing other showers in the market, and had a high potential for profitability with a gross margin of €275-345. However, a low sales volume of only 15-20 units/day opposed the growth of the Quartz brand. Although the product was perceived as high quality, with a small network of loyal plumbers who currently install, there was reluctance among plumbers to switch brands and to adopt high-tech products (due to failure of past products). Aqualisa also had difficulty converting consumers, who are very reliant on plumbers recommendation of type and brand of shower. Fears arose that within 2 years, Quartz would lose its competitive advantage, as other companies developed similar products. Aqualisa must determine a manner in which to quickly encourage users to try the Quartz shower. Findings suggest that once used or installed – the consumer or plumber becomes “converted”. For desired sales growth, Aqualisa must select an appropriate channel to target the market. See Appendix 1 for a comparison of channels and Appendix 2 for consideration of the importance and urgency of the major issues. 2.0 Selection of Target Market and Channels In the decision matrix shown in Appendix 3, options were evaluated on the basis of their ability to capture market share, ability to maintain the products’ perception in the market as a premium product and the speed of adoption, given the short time period involved before competitors enter the market. Developers already perceive Aqualisa products as premium products and the Quartz shower would be the most expensive product in the Aqualisa line. Even at a 50% price discount the company has...
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