Aqualisa Quartz: Simply A Better Shower Case Executive Summary

Situation

Aqualisa Quartz, a significantly innovative product developed by Aqualisa, in terms of both cost and quality, has been facing challenges in the market since its launch four months ago. The product described by one of the customers (a plumber) is a 'push-fit-connect-you're done' shower and offers the customers 'what they (the plumbers) want'. Despite the above facts, Quartz has experienced poor sales and has not met the company's expectations.

Brand awareness was low in the industry, problems were frequent breakdowns, re-installations, and leaking/stiff valves, besides pressure and temperature inconsistencies, and nearly half the sales were from replacements. The new Quartz product line is experiencing a very slow adoption process probably mostly due to the stigma that has remained from other electronic showers that have failed. Consumers and plumbers do not have much faith in the current quality of existing shower products much less an electronic version.

The Market

Showers were affected by low pressure and varying temperature of water. Aqualisa sold the electric showers, one of the solutions, through their Gainsborough brand; electric showers were visible in the shower stalls and did not solve the pressure problem.

Mixer showers were the other solution. Manual mixers and Thermostatic Mixers were available. Aqualisa sold the Aquavalve in this segment, it was thermostatic, but could be supplemented by a booster for pressure. 94,000 units sold at a margin of Ђ225 if without a booster, total margin would then be at least Ђ21.1 million. Assuming all sales is without boosters. Installing a mixer valve meant excavating the bathroom wall, which was a 2 day job.

Integral power showers combined thermostatic mixer valves with booster pumps, but were considered less reliable than when installed together. Aqualisa sold Aquastream Thermostatic in this category. (22,000 units @ Ђ175, at least Ђ3.85 million margin, again assuming all sales are without boosters)

Segments of Buyers

Premium buyers bought in showrooms based on style, they assumed performance was assured. Standard buyers took the plumbers advice. Value customers wanted to "Do-It-Yourself", and disliked excavation. There were property developers, but they considered Aqualisa products as premium or pricey, unless they were premium developers. But the rest purchased the ShowerMax from Aqualisa, which was a no-frill shower at discounted price. It was the Aquavalve technology basically.

Product

The product Quartz needs no changing. It addresses the problems people cite with current showers. But they could consider replacing the Aquastream with the Quartz line, since the former is considered unreliable, and it is similar to the Quartz, and would give the salespersons a reason to market Quartz. They could sell Quartz as an improvement over the Aquastream. I suggest this because even if all the Aquastream products sold were with boosters, Aqualisa would only make Ђ3.85 million. But if they replaced this line, and even if all the Quartz sold were without boosters, Aqualisa can make Ђ275 on each sale, and if sales were to only match that of the Aquastream, Aqualisa would make Ђ6.05 million (22000 units @ Ђ275).

Price

Price doesn't have to be touched. It is not the price that is stopping sales. Instead, Aqualisa should emphasize the relatively high cost of Quartz is offset by lower plumbing costs.

Place

Trade shops, plumbers bought from here. 40% of them stocked Aqualisa products. Salespeople here have no time to do any marketing, customers are knowledgeable. Need to increase presence in trade shops.

Showrooms were another channel, and customers here were looking to design a bathroom. They were considering a life style decision here. Not just a utility shower. It would very beneficial to install demos in showrooms, and it would be justified because people were buying the Quartz like an impulse purchase in showrooms.

Plumbers were another important channel, their recommendation is very important (73% of the time), and 94% of jobs involve them. They dislike electrical showers due to their failure in the 80's, their