Purpose and Overview

Purpose and Overview

The new technological innovation with the quartz shower manufactured by Aqualisa in the United Kingdom has generated very little interest in the market place, although the new product offering performed well in market research and development conducted by the company. This new technology introduced has fulfilled a need in the market that addressed the commercial and residential consumers in the market place such as: ease of installation, ascetically pleasing, temperature control, and steady flow of water. The product performed well in market tests, but since the launch of the Aqualisa Quartz sales have remained well below expected results. This report will review external opportunities, threats, internal strengths, weaknesses, assumptions, and provide a recommendation for a marketing strategy generated from the SWOT analysis outlined in this paper. Briefly summarize the main thrust of your recommended strategies that appear at the end of the report. I need to come back to this section and include my recommendation.

Summary of Past and Current Situation

Sixty-percent of the homes in the United Kingdom were equipped with showers but were problematic due to antiquated plumbing that consisted of gravity fed systems. This type of system created low water pressure at times, and causing temperature fluctuations throughout the duration of a person's shower. These two concerns could be resolved by installing electric showers, mixer shower valves, or integral power showers which had some shortcomings.

The electrical showers provided the proper heating element to ensure the proper temperature was met instantly, but required an installation of a bulky box which was visible in the shower stall. The electric showers were unable to address the poor performance of water flow because of the limitations of energy to heat the water. The mixer shower valves provided two options a manual and thermostatic, which blended the hot and cold water to optimize temperature. The concern with installing a mixer shower valve was it required your bathroom wall to be remodel, which usually took two days to complete the installation. This system could be adapted with a booster pump to maximize flow rate for additional costs. The integral power shower was a combination of a thermostatic mixer valve with a booster pump which provided a good temperature along with good water flow. The negatives to this system were installation inside the shower, which was unappealing because it was bulk in size, and the quality of the product was perceived as less reliable. There was a need in the market place to provide a product that was easy to install, control water flow, maintain proper temperature, and eliminate the required need for bulky boxes installed in a person's shower.

Overview of the industry

The shower industry consisted of ten major brand names supplying the market with electric showers, mixer showers, and power showers, and other encapsulated the remainder of the market. The three different types of showers offered in the market sold a combination of 1,800,000 units. Of the top ten brands, there are only five brands that offer products in all three categories which are broken down in Table 1. The three industry leaders Triton owned 30.3 percent of the market, Mira 21.7 percent and Gainsborough/Aqualisa 18.1 percent combined owned 70 percent of the market.

The United Kingdom market for shower market has three types of pricing segments such as: premium, standard, and value. A consumer looking for high performance, service and style selection paid a premium because they purchase their products in showrooms. A consumer in the demographics of standard pricing focused on performance, service, and relied upon an independent plumber to recommend a product to complete the job. The value price category is a consumer requiring convenience, price, no renovation of their bathroom, and relied upon the independent plumber to select the proper product for them.

The distribution channel consisted of do-it-yourself stores, showrooms, trade shops and other electrical wholesalers. The trade shops controlled the majority of the market with 46.7 percent who serviced the independent plumber who was employed by developers, showrooms, contractors, or the consumer directly. The second largest distribution channel was the do-it-yourself stores reaching 36.1 percent of the market. This distribution channel offered a mass marketing along with discount prices for electric showers because of the ease of retrofitting and prices were less. The showrooms distribution channel serviced 8.1 percent of the market which consisted of higher end pricing. This outlet helped the consumer through the entire process of choosing a product along with creating a design solution for the customer's bathroom.

Overview of the firm

Aqualisa is the third largest company supplying the market with showers through their brand names Gainsborough and Aqualisa. The company has a good product mix covering all the necessary segments with a good distribution channel. Aqualisa/Gainsborough market share in each segment for the different shower is broken down as follows: electric showers 16.5 percent, mixed showers is 20.8 percent, and power showers is 16.7 percent of the market. The coverage through the various distribution channels for Aqualisa/Gainsborough brands was accessible in 40 percent of the trade shops, 25 percent were sold in showrooms, and 70 percent in DIY stores. The company has built a reputation for providing a good quality product along with service in the marketplace. Aqualisa served a mature market but managed to generate growth of 5 to 10 percent with base profitability at 25.5 percent.

Aqualisa Challenges

The market for showers was considered a mature market with very little completion entering the market, but Aqualisa perceived the competition was closing the gap on product quality. The second concern was the company was viewed as being overpriced in the market. The third challenge was service provided from Aqualisa; although the company was recognized as great service provider, the organization service had dropped over the last several years. The fourth challenge was showers still failed at a 10 percent rate which did not improve over a number of years. The final challenge was plumbers did not accept innovation because of the unknown performance problems, which a failure of an installation came out of the plumbers pocket; therefore the plumbers remained brand loyal.

The introduction of Aqualisa shower was considered a new innovation with a higher price tag in comparison to other products in the market, which has stalled sales for a superior product. The plumbers do