Aqualisa Case Analysis

Aqualisa Case Analysis

Nature of the Situation

Aqualisa, a U.K. shower manufacturer is having trouble selling their newly developed, technologically innovated Quartz shower product. The Quartz model addresses most, if not all, of the problems regarding U.K. showers. Aqualisa has not only improved the important issues of water pressure and temperature with their Quartz model, but they have also improved upon cosmetics, ease of use, and product quality. The Quartz is also easy to install compared to other models on the market. Aqualisa has come up with a very good product, but the shower is not selling at the rate that Aqualisa had hoped. Plumbers do not want to install it because it is electric, and consumers have not heard enough about it to tell the plumber that is what they want. Aqualisa is in a tough situation - they have a great product, but they have no one to sell it to.

Decision to be Made

Aqualisa must decide how to generate more sales momentum for their Quartz product. Their current sales tactic of selling to distributors, trade shops, showrooms, developers, and plumbers is not working, as they are not seeing the sales volume they expected with such an innovative product. Aqualisa must come up with a better sales strategy quickly, as their patents will expire and competition will catch up with them within just a few years.

Alternatives

There are many alternatives that Rawlinson and Aqualisa can consider in order to improve sales momentum for their product. Several considerations should be:

1) Change marketing strategy to target consumers directly.

2) Change marketing strategy to target the Do-It-Yourself crowds.

3) Change marketing strategy to target developers.

4) Lower the price.

5) Let Quarts become a niche product, and concentrate sales on other products.

6) Change marketing strategy to target the plumbers/installers.

Analysis

There are pros and cons to each alternative; Aqualisa must decide on the method that will generate the most sales in the shortest time period.

Target Consumers Directly - Only one shower manufacturer, Triton, has been able to build a consumer brand in the U.K. shower market. Building a consumer brand would be a strategic competitive advantage for Aqualisa in that their only competitor would be Triton. Unfortunately, building a customer brand is very expensive, and Aqualisa is a healthy company that does not need to take on the extra risk to survive. Also, only 27% of the market is consumer driven - where the consumer selects the type and brand of the shower with no advice from the plumber. By targeting the consumer directly, Aqualisa may loose out on the other 73% of the market that is plumber driven.

Target Do-It-Yourselfers - Since the Quartz product is so easy to install, this seems like a wise alternative. Also, this strategy would probably get extra push and advertising from the actual DIY stores such as B&Q, which would help to lower consumer advertising expenses. The problem with this strategy is that Aqualisa could begin to associate their premium brand, Quartz, with their discount brand, Gainsborough. This can lead to negative quality perceptions by consumers as well as the possibility of not being able to charge a premium price for the Quartz model. Also, only approximately 36% of showers were sold at DIY sheds in 2000. Although this is a fairly healthy percentage, this is probably not the ideal sales number that Aqualisa is looking for.

Target Developers - By targeting developers, Aqualisa could see the large sales numbers they are hoping for. Developers are a large volume channel that Aqualisa could target. This strategy allows plumbers to become familiar with the Quartz model, as they would be installing it in the new homes. Once the plumbers became familiar with the product, it is possible that they would then start selling it to individuals in need of a replacement shower. The downside to this strategy is there is a tremendous time lag before consumers starting seeing the Quartz. Also, developers are tough to sell premium brands to in that they want the highest margin on a home sale, and the shower is not the prime incentive behind purchasing a house. A third downside to this is that developer installation only accounts for 20% of the total UK shower market.

Lower the Price - By lowering the price of the Quartz model, Aqualisa may start to see higher sales volume in all of the channels that they currently sale to: distributors, trade shops, showrooms, developers, and plumbers. Unfortunately, this takes away from the Quartz model as being a premium product of high quality. Also, by lowering the price of the Quartz, Aqualisa may also have to lower their other product's prices - no one is going to buy the low-end model when they can purchase a high-end model at a comparative price.

Let Quartz Become a Niche Product - Since the only place that the Quartz is showing any sales growth is in the showrooms, Aqualisa could allow the Quartz model to become a niche