Aqualiza

Memo

To: Harry Rawlinson

From: The A+ Marketing Team, Inc.

CC: Chris Allen

Date: February 20, 2006

Re: Aqualisa Quartz

Mr Rawlinson, following our study of the Quartz case we release the following recommendation: Focus efforts on finding new customers through the channels, recommendation vary depending on the channel.

Independent Plumbers

Recommendation: For the plumbers loyal to another brand, focus on those with Apprentice. We can do this by emphasizing the ease of installing the Quartz. It is only a half-day process, and it can easily be done by the apprentice and without supervision.

For the plumbers loyal to our brand, argue the simplicity and emphasize time saving as this means money for them. (Appendix 1)

Rationale: Plumbers are very reluctant to switching brand, therefore the benefits have to be very high (more money and autonomy of the apprentice). Apprentices are the plumbers of the future. We want to establish brand identity and brand loyalty for Aqualisa. Customers have few influence on the choice of the shower so we focus on plumbers (appendix 2)

Showrooms Channel

Recommendation: In this channel, Aqualiza should focus its efforts on penetration. No particular sales efforts have to be made and a premium price can be set. Two people from the sale force will focus on new customer retention to reach 75% of penetration within two years. (20,250 showers/year)

Rationale: The Quartz is a big success in the showrooms but Aqualiza has currently only 25% of penetration. This channel is of huge interest to because it fits the premium appearance of the brand, and the time to reach customer is very short.

Customers are from the Premium segment, looking for high performance and ready to pay a high price. The market of the mixer and the power showers is 90,000 a year. (Appendix 3)

Developers

Recommendation:

Utilize the sales person to go to the developers at their construction sites to present the Quartz model and explain the time and cost savings, 75% reduction in labor costs and a 75% reduction in installation time. This will be more effective and time efficient for the developer as they will not have to waste time traveling since their construction is very time sensitive.

Rationale

Developers represent a large portion of the market, bringing just a couple of developers on board will increase sales significantly. New builds represent 15% of installation of showers and developers are responsible for 20% of mixer shower installations. Marketing to developers is directly marketing to independent plumbers also since the plumbers install whatever the developers choose. Developers want to offer a reliable, nice looking product that could work in multiple settings but also want to minimize costs and time. Having one sales person to facilitate the developer is sufficient. The sales person will focus on the reduction in installation time resulting in decreased costs and decreased time. The Quartz model only requires 25% of the installation of currently models used by developers. This also means 25% of the labor cost and installing two showers a day as opposed to half a shower per day. (Appendix 4)

The Do-It-Yourselfers

Recommendation: Since we have chosen to situate the Quartz shower as a premium product, entrance into the Do-It-Yourself market is not planned for the next 2 years. Over the next 2 years we suggest developing a new product that utilizes the same remote control technology in a more low-cost and value oriented packaging. If the Quartz Shower is successful in the other market segments then a marketing strategy that situates the Quartz Do-It-Yourself Shower as a premium brand will be successful as well. When the competition catches on to our trend, we can deploy our ideas of the Quartz shower in this market that has an approximate volume capacity of 100'000 showers a year.

Rationale: The easy installation of the Quartz shower will appeal to the consumers in the Do-It-Yourself segment. Although electric showers currently dominate this segment the superiority of the Quartz product will allow Aqualiza to command a premium price even in this value oriented consumer segment. The Do-It-Yourself channel will rely heavily on word of mouth advertising based on the past two years success, and will necessitate a strong reliance on partners such as B&Q to help push the product into the market.

Sales Effort

We plan to recruit 5 salespersons and to get the best 5 of the sale force to focus on particular effort: 2 will retain new plumbers (whereas the current sale force will introduce Quartz to ou loyal plumbers). Some marketing efforts could be done (first shower for free, formation...)

2 will retain new showrooms.

The remaining will focus