Aqualisa And Quartz

Market Segmentation

We have identified five key market segments, which are the standard consumer segment, the premium consumer segment, luxury property developers, mid range luxury developers, as well as value and DIY consumers. Our strategy is focused on the first four categories as we feel that Aqualisa is a premium provider of quality shower systems, and we do not wish to dilute its brand equity. The characteristics of each segment are as follows:

Standard consumers - Price sensitive, with an emphasis on performance and after sales service . Most rely on the recommendations of their plumbers and have their installations done by them.

Premium consumers - less price sensitive, with a focus on design and style. They take service and performance for granted and typically shop in showrooms.

Luxury property developers - high-volume purchasers who want products with stylish designs, are reliable, and can work in multiple settings. They employ independent plumbers to install the showers for them.

Mid-segment property developers Ð'- price sensitive, with an emphasis on performance. They purchase in bulk

Marketing Strategy

Our main strategy consists of marketing Quartz as two distinct products. Theoretically, the product will be identical in terms of technology. However, we will use packaging and cosmetic differences to employ our pricing differential. We adapted this strategy from the marketing of Toyota's bestselling SUV, which is the RX300 under its Lexus brand, and the Harrier under the Toyota brand. Essentially, both these models are technologically identical, apart from minor differences such as engine capacity, aesthetic features, and logo affixation. However, Toyota is able to introduce a large pricing difference between both these products without compromising on the sales of either model, and this is what we hope to mimic.

We will thus introduce our two products Ð'- Quartz Diamond and Waterfall. They will be differentiated in terms of cosmetic details, and most importantly, the perceived value of each product. Quartz Diamond as the most premium and exclusive product in the whole market, and Waterfall as the less luxurious, but nonetheless high performance shower system. Both these products will be targeted at very specific market segments and the price differential will very clearly define these separate markets. Quartz Diamond will retail at Ð'Ђ850, whilst Waterfall will retail at Ð'Ђ715. This prevents market overlap.

For our existing products, we will be lowering our prices and adding new features to our existing Aquastyle and Aquavalve 609 products, making them more appealing to customers and property developers. To further augment our product, we will be placing greater emphasis on our after-sales service to reduce cognitive dissonance. This will encompass a toll-free customer hotline service as well as an extended warranty.

Marketing Plan for Plumbers

With plumbers affecting 73% of decisions for mixer showers (Exhibit 4) and 54% of the installations done by independent plumbers, we feel that plumbers are our best avenue for targeting standard consumers. We will promote Waterfall to plumbers as it fulfils the standard consumer's requirement of price sensitivity and performance. However, with regards the plumbers, there are certain mentalities we have to expel. Firstly, plumbers fear unfamiliar products as they present unknown performance problems, and a bungled installation means that they have to bear the cost of after-sales service and parts. Next, they are very wary towards new electronic innovation, which stems from failure of electronic goods in the 80's . This again could increase the plumbers' burden of after-sales costs. Our team intends to use a two-prong approach to address these issues.

First approach: Previously, our sales force contacted our network of plumbers and arranged to meet them in person to explain Waterfall's ease of installation as well as new features. This did not translate into sales as plumbers were still wary of installing the new system. We will conduct workshops to capture plumbers' attention and give them a chance to have hands-on experience of installation, since the risks of incorrect installation are lowered once they have developed expertise on the brands . We propose to tap on existing employees of the Customer Service team (Exhibit 1), using them to provide such training. To further entice plumbers to come down for our workshops, we will also provide food, refreshments, and goodie bags with product brochures. The ease of installation of our product, coupled with training, will reduce the event of incorrect installation and help plumbers save on after-sales costs and be more receptive to Waterfall.

Second approach: The fact that Waterfall has a five-year parts and labour warranty will be intensely promoted and touted as the solution to plumbers' woes on after-sales costs. This guarantee ensures that plumbers will not have to bear any costs of defective products. Furthermore, they can also make use of our toll-free customer hotline service should they have queries of our products. Coupled with the above-mentioned workshop, where the new features of Waterfall will be explained, plumbers'