Subject of the Case: Target marking strategy to build consumer brand, while selecting the best distribution channels. Define the Problem: Quartz, a new product, is far below sales targets and needs to meet them quickly. Background of the Situation
Everyone had a bathtub, only about 60% of U.K. had showers. Most of U.K.’s pluming dated back to the Victorian era, which have gravity fed plumping, meaning poor-to-low water pressure about 3 to 4 liters per minute. The low pressure and fluctuating temperatures were typically addressed with the use of electric showers, Mixer shower and Integral power showers. Shower buyers in the U.K. tend to fall into three pricing segments: Premium (e.g. Quartz standard Quartz pump), Standard ( Aquavalve 609 and aquaforce 1.0/1.5bar) and Value ( Aqua stream manual and Aquavalve Value). Aqualisa sold electric showers mostly under a separate name, the “Gainsborough” brand, which sold 180,000 units and retails for €95-€230. The most overwhelming choice amongst DIY market. The Aquavalve 609 was the company’s core product for the mixer shower valve category and by far the top selling shower with about 60,000 units sold per year. It cost about €155 to manufacture and retailed for €675 to €750. The Aquastream Thermostatic was Aqualisa’s primary product and the most selling in the integral power shower category, which cost about €175 to manufacture and retails for about €670 and about 20,000 units are sold per year. ShowerMax brand was sold to developers who didn’t have pressure issuses, but were very price sensitive. Showers in the U.K. were sold through a variety of distribution channels; Aqualisa brand is available in 40% Trade shop, 25% Showrooms and 0 DIY Sheds. 10,000 plumbers in the U.K., who installed 40-50 showers per year and charge about €40-€80 per hour. Plumbers distrust innovation and 0%-73% influence type of shower selection. Aqualisa also had long standing relationships with a group of plumbers, who were called...
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