S

S

S The Quartz sales have not met expectations.
S To generate a sales momentum, Aqualisa is
considering a shift in marketing strategy.
S Strengths

S The Aqualisa Quartz is a new and innovative product, and has a two-year lead on the
competition.

S The Quartz shower system takes less time and less costly to install, and can be installed
by an apprentice

S Aqualisa has a strong reputation regarding its service and the quality of its showers (won
the top prize at Bathroom Expo, featured on the covers of several prominent trade
journals)

S Aqualisa invests in R&D, has nine patents, and a large sized engineering team.

S The companys sister brand Gainsborough has had some significant success in the
electric shower market.
S Weaknesses

S Aqualisa is poorly distributed. The companys products are available in only 40% of
trade shops, 25% of showrooms and is non-existent in the DIY category.

S 90% of the sales force focuses on maintaining existing accounts. Only 10% focuses
on developing new customers.

S Sales are low and channels partners may write off the product as a failure.

S Brand awareness at the consumer level is low.

S Net profit of 17 million signifies that this is still a relatively small company; therefore it
can be assumed that its marketing budget is small compared to competitors like Triton.

S 10% of all Aqualisa showers malfunction.



S Opportunities

S The Quartz will interest plumbers since its installation only takes half a day and
is easy enough for apprentices to install.

S More than 50% of end consumers depend on plumbers to choose their shower.

S Most homes throughout the UK have poor water pressure and varying
temperature controls.

S Most consumers are generally uninformed about showers.

S 40% of UK homes do not have showers.



S Threats

S The competition is expected to match the Quartz advanced technology within a
couple of years.

S Triton is the only company with an established brand awareness.

S Plumbers distrust innovation.

S Plumbers are brand loyal.

S Viewed and perceived as overpriced
S Target Do-It-
Yourselfers
S Target Trade Shops
and Plumbers
S Target Consumers
Directly
S Target Developers
Pros
S Target consumers directly, essentially a pull strategy, and build a
consumer brand.
S Will be able to better compete against Triton, the market leader.
Cons
S A costly strategy for Aqualisa.
S Must be consistent to be effective (out of sight, out of mind).
Pros
S Gainsborough already successful in this category and Aqualisa could take
advantage of its channels of distributions.
S DIY may be willing to pay a premium because of its ease of installation.
Cons
S Expensive consumer advertising.
S Must be consistent to be effective (out of sight, out of mind).
S Potential cannibalization.
Pros
S Could sell in large volume.
S Dealing with developers could simplify sales and make it less costly for
Aqualisa.
S Will force plumbers to familiarize themselves with the product.
Cons
S It could take time for the product to get to consumers.
S Could be a tough sell due to premium price.
S Only represents 15% of the market.
Pros
S Plumbers have direct contact with final consumer.
S 54% of mixer showers installations are done by plumbers, and trade
shops represent 46.7% of the UK shower market
S Plumbers have big influence on decision making process.

Cons
S Plumbers distrust innovation.
S Plumbers may be difficult to sway and could take time to change their
perception.
S Trade shops carry other brands.

CRITERIA
WEIGHT OF CRITERIA
30% 20% 20% 15% 15% 100%
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ALTERNATIVES

Target Trade Shops and Plumbers 8 9 7 8 3 7.25
Target DIY 6 3 5 7 3 4.90
Target Consumers Directly 6 3 5 7 2 4.75
Target Developers 3 4 2 4 6 3.60
S
S
S Quartz sales are expected to reach 184,500,000 (most likely scenario), which is 4
times Aqualisas current sales.
S Plumbers will become interested because they can become 4 times more productive
and 2 times more profitable.
S Consumers will become interested because they can get a better product for their
money: a premium product with more benefits for less, and will experience less
discomfort.
S Aqualisa will develop and strengthen its relationship within the distribution channels
and establish long-term bonds.
S Product awareness and knowledge of its benefits will increase.






Outcome Gross Revenues
Pessimistic 92,000,000
Most Likely 184,500,000
Optimistic 276,750,000
Market
Segment
MSP
Retail
Price
Plumber's
Profit
Labor
60/hour
Total Profit
(2 days)
Quartz 575 1,080 506
240
(4 hrs)
2,984
Premium 310 595 285
960
(16 hrs)
1,245
Standard 380 715 335
960
(16 hrs)

1,295
Value 250 480 230
960
(16 hrs)
1,190
Market
Segment
Labor
60/hour
Shower
Total Cost
(L + S)
Cost
Difference
with
Quartz
Quartz 240 1,080 1,320 N/A
Premium 960 595 1,555 ( 235)
Standard 960 715 1,675 ( 355)
Value 960 480 1,440 ( 120)
S
S Give plumbers a free Quartz System to try.
S Change sales team strategy focus form 10% prospecting to 50%.
S Hire 20 additional sales persons with plumbing experience.
S Introduce sales pitch (benefits package) for plumbers and end consumers.
S Create promotional material for sales team.
S Send regular newsletters and surveys to plumbers.
S Donate Quartz Systems to trade schools to practice on.
S Advertise in Trade and Lifestyle Magazines.






Plumbers Promotion (5000 units) * 1,150,000
Trade Schools Promotion (500 units) ** 115,000
Magazine Advertising (Industry and Lifestyle) 800,000
Promotional Tools 135,000
Additional Sales Force (20 S.P., 40K each) 800,000
TOTAL 3,000,000
Schedule
TIMELINE
RESPONSIBLE ACTIVITY One Month 2 Months 6 Months 12 months 18 Months
Sales Team Development
H.R. Director Place Ad for 20 new sales persons with plumbing experience
H.R. Director Conduct the screening interviews
H.R. and Sales Mgr. Conduct the 2nd interviews
Sales Manager Hire the 20 additional sales persons
Sales Manager Train new sales team
Prospecting and Relationship Maintenance Strategy
Sales Manager Change sales strategy focus from 10% prospecting to 25%
Sales Manager Send newsletters and surveys to plumbers and trade shops in database
Sales Team Cold Calls (Continuous effort)
Sales Team Visit trade shops (Continuous effort)
Sales Team Visit trade schools (Continuous effort)
Marketing Tools
IT Director Create database for plumbers and trade shop communications
IT Director Create online free Quartz system reimbursement form for plumbers
Marketing Manager Create, print out and distribute reimbursement form to trade shops
Marketing Manager Develop and print pamphlets for plumbers (Printed sales pitch)
Marketing Manager Develop and print pamphlets for consumers (Printed sales pitch)
Marketing Manager Advertise in trade magazines Phase 1
Marketing Manager Advertise in trade magazines Phase 2
Marketing Manager Advertise in leisure magazines Phase 1
Marketing Manager Advertise in leisure magazines Phase 2
Marketing Manager Advertise in leisure magazines Phase 3
Marketing Strategy Review
Executive Mngmnt. Quarterly Meetings
Trade Schools Promotion **

230 per unit X 500 Trade Schools =
115, 000
Plumbers Promotion * 1
5000 Plumbers X 230 Free
Shower System = 1,150,000
Pessimistic Most Likely Optimistic
Total # of UK Plumbers 10,000 10,000 10,000
Forecasted Market Penetration 10% 20% 30%
# of target plumbers 1,000 2,000 3,000
Average # of shower installed / year by plumber 180 180 180
# units / year 180,000 360,000 540,000
Avg. MSP (Quartz Pumped & standard) 513 513 513
Total Sales 92,250,000 184,500,000 276,750,000
Avg. Unit cost (Quartz Pumped & standard) 203 203 203
Total cost 36,450,000 72,900,000 109,350,000
Gross Margin 55,800,000 111,600,000 167,400,000
36%
8%
47%
9%
UK Shower Market
(Total Units Sold, 2000)
Do-It-Yourself Sheds Showrooms
Trade Shops Other (Electrical wholesalers)