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Eduardo Valero Cabeza EvelineMoortgat Andr Haasbroek Olivia Verheye Francine Carron

Summary
Problems in UK showers:

Only 60% of UK homes had showers Obsolete plumbing (Victorian era) Gravity fed water systems
Cold water tank Separate boiler Poor pressure Changeable temperature of water

Shower solutions for low pressure & fluctuating temperature:


Electric Showers
No hot water supply needed (electrical heating elements) Bulky white box visible in the shower Poor water flow

Mixed Shower Valves


2 types: manual or thermostatic Hot & cold water supply required Thermostatic needed excavation for valve installation Additional booster pump

Integral Power Showers


Hot & cold water supply required Bulky box visible in the shower Low reliability

UK Market Share Data: Units Sold 2000


Hansgrohe 0.8% Grohe 1.1% Bristan 1.1% Heatrea Sadia 2.2% Ideal Standard Masco 6.7% 3.3% Others 14.7% Triton 30.3%

Gainsborough 11.3% Aqualisa 6.8%

Mira 21.7%

Channels of Distribution
Trade Shops

Products across all brands available Primary customer: plumber Stock depending on demand Aqualisa available in 40% of the trade shops High-end products No inventory held on location Display of the product in a pleasant environment Installation service by contractors or independent plumbers Discounts Mass-market & do-it-yourself Electric shower leader in this channel Gainsborough brand available in 70% of outlets

Showrooms

DIY Sheds

Quartz Shower
2 Models:
Quartz Standard Shower Quartz Pumped Shower

Installation:
Physical space for small processor required Processor could be mounted horizontally, vertically or on the side Processor contains: mixing valve and pump

Advantages of Quartz:
Installation reduced to a half-day Straightforward installation Efficient and reliable water pressure and temperature One touch control

Marketing Strategies
Targeting Consumers Directly
Pros: - Build consumer brand - Great value proposition for customers -Immediate results

Targeting Do-It-Yourself
Pros: - Easy installation - Less need for expensive advertisement

Targeting Developers
Pros: - Possibility of high-sales channel - Force plumbers to get familiar with Quartz

Cons: - Tough to justify high-risk & high reward strategy - Cost: 3M to 4M in 2 years

Cons: - Enter DIY sheds difficult way out - Association of premium brand with discount channel

Cons: - Long time to reach consumers - Reluctance of Developers to spend money on premium brands

Recommendations
Change management & sales team approach Invest in targeting plumbers Offer extended warranty Highlight only 1 hole required for Quartz installation vs huge excavation for competition Invest in consumers Invest in up-market Invest in showrooms & trade-shops Invest in mid & premium segment consumers via recreation centers Target luxury hotels, spas, gyms Highlight the aesthetic & functional benefits while maintaining the price of the premium product Don t target developers

Recommendations
No price reduction Bring the Brand experience to customer through its marketing activities, so that customer can feel the simplicity of Quartz shower.

Questions ?
1.What is the Aqualisa Quartz value proposition to plumbers; to consumers? For which segments of the shower market is the Quartz most valuable? 2.Why is the Quartz shower not selling? To identify potential stumbling blocks which are negatively affecting sales of the Quartz shower, consider using the following frameworks:a. Outline the buying process for showers. How do consumers purchase and use a shower? b. Consider the market dynamics and competitive landscape of the shower market. How does Aqualisa stack up versus its competition to be successful in this market? c. Consider the Quartz go-to-market plan. Is it the right product at the right price sold in the right location via the right marketing message delivered to the right target audience? 3.What is a loyal Quartz consumer worth to Aqualisa? What is a loyal Quartz plumber worth to Aqualisa? 4. Aqualisa currently has three brands: Aqualisa, Gainsborough and ShowerMax. What is the rationale behind this multiple-brand strategy? Does it make sense? 5.What should Rawlinson do to generate sales momentum for the Quartz product? Should he change his marketing strategy to 1.) target consumers directly, 2.) target the DIY market, or 3.) target developers? Should he lower the price of the Quartz? Are there other strategic or tactical options he has not considered that would increase sales and profitability for Aqualisa? When evaluating Rawlinson s options, be sure to evaluate the incremental cost of implementing each option and calculate how many units of the Quartz shower must be sold to recover these incremental costs. How feasible is it that Aqualisa will achieve these breakeven unit estimates for each option? 6.Aqualisa spent three years and 5.8 million developing the Quartz. Was the product worth the investment? Is Quartz a niche product or a mainstream product? Is Aqualisa ready to be a company which breaks out of the pack because they ve got the right product and they ve got the right vision, as Rawlinson claims in the case?

Quartz Value Proposition


Customers Premium and standard market

Reliable water pressure up to 18 litre/minute Perfect temperature control Easy to use Safe for children and elderly Good looks Durable

Plumbers
Fast installation time (half-day vs. standard of two days)
Increased business opportunities

Simple installation, little skills required Durable and low service requirement