Aqualisa Case Analysis

AQUALISA CASE ANALYSIS

1. Use the five forces to perform market environment analysis (e.g., the market dynamics, the driver of consumer demand, consumer preference and attitude, the channel structure) for the UK shower market. Then, given this market condition, suggest the direction of marketing strategy for Quartz (e.g., the issues Aqualisa must deal with, the opportunity Aqualisa must grasp, the things Aqualisa must avoid in designing marketing strategy for Quartz, and etc.)

* Market Dynamics, Driver of Consumer Demand, Consumer Preferences and Attitude

o Premium Customers - shopped in showrooms, style determined their selection

o Standard Customers - relied on PLUMBERS. Performance and service drove their selection.

o Value Customers - relied on PLUMBERS. Convenience, price, and no excavation drove their selection

o DIY - interested in inexpensive models that were easy to install, electric showers currently hold this market as they can be installed in a day. (new Acqualsa shower can be installed in half a day)

o Property Developers - wanted reliable, nice-looking products that can work in multiple settings, price sensitive. Usually relied on PLUMBERS.

* The Channel Structure

o Upstream

o Downstream

 Trade Shops - Sell to PLUMBERS. Warehouses which sell what the buyers want only. Not a specialty shop.

 Showrooms - High end. Acqualisa is dominating in showrooms due to the good style (pretty lights) which appeals to premium customers.

 DIY Sheds - Offer discount, mass-market, DIY products. Electric showers currently have market share as they are cheap and easy to install. (maybe a discount brand of the new Aqualisa can be sold here under the Gainsborough brand)

o PLUMBERS (Installers) - Hit them in the pocketbook

 Shortage of plumbers and consumers often had to wait six months before a plumber could take on a new job - perhaps a reason why DIY is high, these people don't want to wait 6 f'ing months.

 Standard shower installation was a 2 day job

* Half day with new Aqualisa shower - installation x4

 Plumbers installed 40-50 showers per year (but plumbers usually passed the entire cost of the shower installation on to the consumer as a lump sum and thus consumers were unaware of the cost breakdown - labor, materials, excavation, etc). With Aqualisa shower they could install 160-200 showers per year and make 4x as much money.

 Plumbers are typically very loyal to a single shower brand - need to grab this market in the 2 years before there are competitors in the market

 Plumbers are very distrustful of innovation due to the bad memories from the 1980s. Particularly distrustful of electronics

* Need to market the Ease and quickness of installation - $$$ to the plumbers

 Plumbers make the shower selection for 73% of the mid-range market

* The issues Aqualisa must deal with

o Distrust of innovation by plumbers

o Low tech showers and water supply previously

o Consumers were generally uninformed about showers and there was little understanding of their product options.

o Brand awareness was low - only one company (Triton) had brand awareness

o Real breakthroughs are pretty rare and "innovations" had been primarily cosmetic.

o Currently a 20-person sales force. 90% of the time spent on maintaining existing accounts, 10% of the time is spent on developing new customers

 I would greatly increase the size of the sales force and spend 75% of the time developing new customers...at least until we have market dominance

* The opportunity Aqualisa must grasp

o Get the Plumbers - Plumbers brand loyalty - grab this market before 2 years is up and plumbers probably won't quickly leave

o Brand naming - Dominate this market and then move towards other parts of the bathroom with your R&D teams

o Brand both Aqualisa and Greensborough

o Offer a discounted option through their discount Greensborough brand to DIYers

* The things Aqualisa must avoid in designing marketing strategy

o Electronics and its past poor performance

o If you look at their add, it's all about the electronic innovation which will immediately scare away the plumbers who account for deciding factor in the market

 Market ease of install, no bulky box - remote box

o Not supporting the other Aqualisa products that are selling currently. Supporting these and at the same time pushing this innovation. Thus BRAND IMAGE is important

* Steps to take

o Make Marketing its own division in line with Sales/Finance, etc

o Spend more money in Marketing - how much is the question

 New product launch - marketing always increases

Segmenting within the segmentations - retirement homes, easier for older individuals

2. Provide a list of market segmentation variables that Aqualisa can use to segment the B2C market and the B2B market (including channel members) respectively. Explain why these variables are chosen. Develop prototypical customer profile for all market segments you identify using your proposed segmentation variables.

- Price

- Ease of Installation

- Reason for Installation

- Attractiveness of Product

- Dependability

Should take both segmentation variable types

Q1: Low end - DIY