Aqualisa Quartz

Problem: Aqualisa has invested Ђ5.8 million to develop a breakthrough product, the Quartz shower that positions itself superiorly in terms of quality, technology, design and ease of installation. Since it is not selling well, Aqualisa is now looking for a marketing strategy to generate sales momentum for Aqualisa Quartz.

Possible alternatives: Targeting the correct market is crucial to solve the problem. With this in mind, there are 4 alternative marketing strategies.

The first option is to target the consumers directly. This is a high risk option. Firstly, it requires a high advertising budget (Ђ3-4 millions). Secondly, even though we can convince the consumers, they might still be influenced by the plumbers in making their decisions. Therefore, we put the option of targeting the consumers directly as a long term goal that will be achieved after the implementation of the second option.

The second option is to target the plumbers. Currently, they influence 73% of all shower purchases. The challenge here is that they are always skeptical about electronic showers and fear that unfamiliar products may cause unknown performance problems. Aqualisa needs to implement a marketing strategy that can make them believe in the Quartz's capabilities. The ease of installation feature should generate much enthusiasm in the plumbers because it can help them increase their productivity (half-a-day installation, instead of the usual two days and their apprentices could also do the job for them), which would translate into more installations and higher income for them.

The third option is to target the DIY group. The Quartz's easy installation benefit would certainly make it a hit among the DIYers. However, it might be detrimental to Quartz's image as a premium brand and once we are in the DIY sheds, it would be difficult to climb out.

The last option is to target the developers. Since developers work independently with plumbers to install whatever products they select, it allows the plumbers to experience Quartz's ease of installation. The problem is this group is very price sensitive; even a 50% discount fails to attract them. Further, Aqualisa's ShowerMax brand is already doing well in this market, making them reluctant to switch to adopting Quartz.

After analyzing the 4 options, we should target the plumbers in the short run. However, in long run, we need to ensure that our distribution channel expands.

Marketing strategy

Product (refer to appendix): For now, we sell Quartz as it is. However, we need to remember that competitors are catching up in 2 years time. Hence, we need strategies that will help us increase or maintain our market share when we lose our 2 year lead. When the Quartz reaches growth stage, we can start introducing additional features that Aqualisa has researched on to complement it, such as chrome finish style, body jet sprays and remote on/off dual switch option. We can introduce a new generation Quartz with all the additional features built-in or to sell these additional features as add-on. This will allow us to further penetrate the market. On top of that, in two years time, when we lose our lead, we can offer a new product that has simpler features and design than the current Quartz to the DIY market. Quartz technology, with its ease of installation, will become a huge interest to the DIY consumers. Further, by introducing to the DIY market, Aqualisa can leverage on Gainsborough's distribution channel . However, to successfully launch the 2 products with similar technology and different prices to the 2 markets, we will need substantial differentiation to avoid product confusion. The first strategy is to make the new features developed by the R&D to be built-in with the new generation of Quartz. This will be the new Quartz that will replace the current one. Other than that, Aqualisa will also provide add-on accessories for consumers who have bought current Quartz. To prevent the old customers from cognitive dissonance, Aqualisa would provide free installation service of the purchased accessories. The second strategy is to position the new product differently. While the current Quartz is positioning itself on ease of installation, high performance, stylish design and advance technology, the new DIY product can focus only on ease of installation and high performance to address the main needs of the DIY consumers. The third strategy is to name the new DIY product differently as 'Gainsborough Premium'. So, it would not hurt Quartz's image.

Price: The disappointing initial sales relate more to an awareness challenge instead of the product being over-priced. The positive feedback and the 'WOW' factor underline the fact that the customers love the products. Hence, we should continue to position Quartz as a premium product, use market skimming pricing strategy, and continue to sell at premium price. However, the current salesmen are selling Quartz by pointing out flaws in current products. Thus, the company can teach it's salesmen on substantiating its high price to the fact that Quartz incorporates a totally new technology that delivers superior quality than the other existing products and not that there