GROUP 10

Aqualisa Quartz: Simply a Better Shower

Pratishta Sharma; Priya Ranjan; Rachit Kaushal; Ramji Binnani
Aqualisa is a company which works in the bathing solutions industry and after 3 years of
research and development has recently launched an innovative product ‘Quartz’. Quartz
shower entered the market as a breakthrough product with unique features and stylish design,
targeting the premium customers.

Problem: Despite an innovative product, sales have not been as per expectations. The
market does not have any product matching the features possessed by Quartz but still the
sales are stagnant. Rawlinson, the CEO of Aqualisa, is confused about how to increase the
brand awareness and also the market share of Quartz brand. He needs to decide his target
audience and marketing strategy now.

Root Causes:

✓ Low brand awareness among consumers

✓ Plumbers are reluctant to use electronic and innovative product. The failure of the
electronic product released in 1980 is the major reason behind this.
✓ Less no. of showrooms and trade shops sell Aqualisa products
✓ The small sales force of 20 people spends only 10% time in making new customers
✓ Developers are reluctant to use Aqualisa products and consider it as premium brand

SWOT Analysis:
Strengths

✓ Aqualisa is an already established brand and has a positive brand image

✓ Quartz is a breakthrough product with innovative features
✓ Installation of Quartz is very easy and takes 1/4th the time taken for normal shower
✓ Quartz has an elegant design and appeals to the premium customers
✓ Quartz has a very good temperature and pressure control
✓ It is technologically superior to all other alternatives present in the market

Weakness

✓ 10% of the total marketed products turn out to be defective

✓ Very low penetration in the trade shops (40%) and showrooms (25%)
✓ Only 20 people in sales force who devote just 10% of their time on developing new
customer

Opportunity

✓ Increase the sales of Quartz and thus improve the revenues generated
 ✓ Increase market penetration by tapping the 40% market which doesn’t use showers
✓ Increase the market share by devoting the sales force in developing new customers

Threats

✓ The competitors may soon catch up thus eliminating the point of difference
✓ The customer may perceive it as an overpriced product
✓ The plumbers might remain reluctant to accept and install Quartz products due to bad
past experience

4P Analysis

Product: Quartz Shower was a technologically advanced shower relative to any other shower
in U.K. The Quartz shower had a remote processor in it, which contained a thermostatic
mixing valve and in particular cases, the pump. The processor should be located within
reasonable proximity to the shower, where cold and hot water could be directed into it. A
standard power outlet was required. Excavation of the bathroom could be completely avoided
due to its flexibility and only half a day was required for installation of the Quartz shower, as
compared to others, which generally took two days. The shower provided automatic and “one
touch” controls system, which made it extremely convenient to control temperature and
pressure of the water. It provided efficient and reliable water pressure and temperature and
had neat fittings and push-buttons. It was also ergonomically beneficial for elders because it
didn’t have stiff valves.

Price: The shower buyers in the U.K. market were segmented into premium, standard and
value segments in order of their purchasing power. Since, the Quartz shower was a
“breakthrough product” in the eyes of the company, it was aimed at the premium segment
and was priced accordingly. The retail prices for the Quartz Standard and Quartz Pumped
were €850 Euros and €1080.

Promotion: The product was launched in major shows like the Bathroom Expo in London in
May 2001, where it was awarded the top price. Various press events were held with the
demonstration of the product. Field trials were also conducted, which received appreciation
and great reviews from the customers. It featured on the covers of several leading trade
journals. According to the case, “The trade press had raved about the “cleverness” of the
product and its “elegant design”. They had run a “one-time-only print advertisement
campaign” in The Mail on Sunday magazine.

Place: The product was available in the following places

• Showrooms- 25% showrooms out of 2000 in UK

• Trade Shops-Available only at 40% of the shops
• DIY Sheds- Aqualisa sold its products under the Gainsborough brand here
Value Proposition:

Plumbers: The installation of the Quartz shower took only half a day, as compared to the
other products, which nearly took two days. Because of the flexibility of the remote processor
used, excavation could be completely avoided. The plumber only needed to drill a single
hole. Since, the product was of high quality and had very few mechanical parts; the chances
of breakdown were minimal. The installation was very simple too. This would make it a
highly convenient and attractive option for the plumber.

Consumers: The consumers now had a good range of pressures and temperatures to choose
from. The controls were automatic, which made it extremely convenient for the consumers to
use it. It had neat fittings, with push button controls and delivered great power. It was
ergonomically beneficial, which made it safe and convenient for the kids and elderly to use it.
The shower was also stylish and reliable.

STP Analysis

Segmentation: The Company has divided the market into three segments- Value, Standard
and Premium.

Value • Concerned about convenience and price

• Avoid solutions requiring excavation
• Relied on plumbers for choosing the brand of shower
Standard • Emphasised on service
• Relied on plumber for choosing the brand of shower
Premium • Shopped in showrooms where they could get live demonstration
• More interested in style and elegance than service

Targeting: The target for the company is premium customers who have the capability to
create a demand for the offering. These customers are value sensitive rather than price
sensitive (unlike the value and standard customers). The company is targeting a niche market
of consumers who are interested in elegant, stylish and easy to use products.

Positioning: The company has positioned itself as a premium brandwith unique and
innovative features and has developed a point of difference with the competitors.
Alternatives available:

✓ Target the plumbers as they are involved in the decision making of 73% of the
consumers.
✓ Target the consumers directly as Triton did. This would require a very large sales
force.
✓ Reposition the product as a standard product meant for the mass consumers. This
would lead to a drastic increase in the no. of units sold as the developers as well as the
DIY market would be willing to buy the product(which is now available at a lower
cost). Although as the masses will use it, the premium buyer won’t be willing to buy it
due to Snob effect.
✓ Include some of the features of Quartz in a new product and launch it under the
Showermax (for developers) and Gainsborough (for DIY) brands. The price of these
two products should be kept lower than the premium version.

Analysis of the different alternatives:

✓ Target Consumers directly:

Targeting the consumers directly will be very expensive for Aqualisa. The company
currently has a small sales force of 20 people and will have to increase to at least 50
people for directly reaching to the consumers effectively. Also, only 27% of the
consumers selected the type and brand of shower themselves, rest 73% were
dependent on the plumbers for making the final decision. Thus even targeting the
consumers directly is not going to help much. Triton was able to do it because they
used this strategy since the beginning.

✓ Reposition the product:

In order to reposition it, company will have to reduce the price of the product and
launch it under standard and value category.Repositioning the product will lead to an
increase in the total sales of the Quartz brand. Although, repositioning will discourage
the premium consumers from buying it and also first mover advantage that Aqualisa
could capitalise on by charging high rates to the premium buyers, would get nullified.

✓ Launching new products:

This will consist of using some of the features of the present Quartz brand and
including them in new products launched under Gainsborough and Showermax brand.
Using this, Aqualisa can generate more revenue and also increase its market share in
the DIY and Developer market. But the biggest problem with this is that it will require
a lot of time to develop, promote and launch the new product. The company till then
will not only lose the expected revenues, but also will lose the competitive edge that
they have over the competitors (as competitors will catch up by then).

✓ Target the plumbers:

 73% of the consumers are dependent on the plumbers for choosing the type and brand
of the showers. Thus, focusing on plumbers can indirectly increase the no. of
consumers.

Recommendation and Action Plan:

Targeting the plumber will be the best option among all the alternatives available as
this would help Aqualisa Quartz remain a premium brand and still increase the sales.
The huge influence that plumbers have on consumers can help Aqualisa meet their
sales targets (Break even analysis is attached in the appendix).The company can
take the following actions to make the plumbers believe in their product:
1. Visit the training schools of the plumbers and promote the new offering there. The
company can organise events in these schools and centre the events on Quartz.
2. Above the Line promotion: The company should use print and electronic media to
promote the innovative product. The print advertisements and television
commercials should be made more effective by using less text and focusing on
features like ease of installation and 5 year warranty offered by the company.
These advertisements should be designed targeting the plumbers specifically.
3. Below the Line promotion: The company should organise workshops for the
plumbers in which they should be informed about the features of the shower
focusing on the ease of installation.
4. Free Sampling: The company should provide free samples to the 1100 master
plumbers in the country. These plumbers can prove to be opinion leaders and their
positive response towards the product can help drive sales.
5. Penetration in shops: The company should also increase its penetration in the trade
shops and showrooms. Via the showrooms they can show the demonstration of
their product to the target premium consumers which will certainly attract them,
considering our innovative product. Increased penetration in trade shops will
make the product easily available for the plumbers(who do maximum purchase
from these outlets).

APPENDIX: Break Even Analysis

Research and Development (3 years) 60948333

Campaign (2 years) 4200000
Finance, administration and 12097050
depreciation
Customer service 1322000
Miscellaneous Cost 2000000
Total Cost 25713883
 Margin per unit of Quartz Standard 275
Margin per unit of Quartz Pumped 345

In the cost analysis done above, the following points are worth noting:

• It has been assumed that the no. of engineer and the size of sales team remains fixed.
• Opportunity Cost: The Research and Development costs are calculated by taking into
consideration the interest that 5.8 Million would have generated had it been invested
in some other fund. The interest rate is taken to be 5%
• Future Value: The cost of campaign is taken as the value of the 4 Million after 2 years
considering an inflation rate of 5%
• The number of units sold of Quartz Standard and Pumped versions has been assumed
to be equal.
• For break even in two years of operation the company has to sell 113 units of Quartz
brand every day for two continuous years
(25713883=620x where x is the no. of units of each quartz offering sold
Thus, total sales have to be 2*x=83000 units in 2 years which is 113 units per day)

Reference: Harvard Business School, 9-502-030, Aqualisa Quartz: Simply a better

Shower