Notes On Aqualisa Quartz Case Study

Preparation Questions:

1. What is the Quartz value proposition to plumbers? To Consumers?

To plumbers:

a. Very easy to install - 'push-fit-connect-you're done'

b. More profitable Ð'-

i. Ð'Ð... day work (25% of previous time), apprentices can do work also Ð'- opportunity to install more and capture some of historical 6-mo. wait list

ii. on average, plumbers do 40 to 50 a year (generally 2-day job), but generally without reducing profit, will be able to do many more

To consumers:

c. Efficient and reliable water pressure and temperature

d. One touch control with red light indicator

e. Much easier to install for DIY sector

2. Why is the Quartz shower not selling?

a. Reluctance of plumbers to switch; mostly due to stigma of other innovative options that failed or required repairs, affecting consumers

b. Possibly overpriced

c. Really only gaining traction in the showrooms, concern about cannibalism (and bringing down value) of other products

3. Aqualisa spent three years and 5.8 million developing the Quartz. Was the product worth the investment? Is Quartz a niche product or a mainstream product?

a. Yes, worth the investment, because technologically innovative. Early test results showed consumers loved the product. Consumers are currently relatively uninformed and there was little understanding of product options

b. Mainstream, superior product and resolves all issues:

i. Poor pressure

ii. Varying temperature

iii. Break after a while

4. Aqualisa currently has three brands: Aqualisa, Gainsborough, and ShowerMax. What is the rationale behind this multiple brand strategy. Does it make sense?

Yes, to allow brand to penetrate different specialized markets.

a. Aqualisa Ð'- higher end, range of different types of electric, mixer, and power showers; shown in show rooms and used my consumers/plumners, Aqualisa available in 40% of trade shops

b. Gainsborough Ð'- mainly for DIY market (sizeable) ; 70% of Gainsborough brand

c. Shower Max Ð'- for developers, only available through special contract outlets so consumers could not get cheaper option; high-pressure at lower cost. Good to be separate from Aqualisa because price would get diluted

5. What should Rawlinson do to generate sales momentum for the Quartz product? Should he change his target market segment, lower the price of the Quartz, or do something altogether? Why?

a. Need to penetrate plumber target market segment (affect 73% of mixer market share Ð'- exhibit 4)

i. Currently a barrier to entry, but once plumbers are in, have brand loyalty and help to market

ii. Educate on time it takes to install since plumbers can't keep up with current demands

iii. Offer incentives to allow plumbers to try it out, once they try Ð'- satisfied

1. Give first unit for free

2. Offer reduced price (rebate of $100, for the first year until market is penetrated)

3. Provide education of installation process (i.e. do more demonstrations)

4. Capture apprentice plumber market share, since it's so easy to install Ð'- drive competition and awareness for other plumbers.

iv. Offer guarantees for service since plumbers are worried about repairs and re-installs

1. Have Aqualisa take on more of the risk Ð'- provide repair service

2. Money-back if not satisfied

3. Offer warranties (i.e. one year, three year, etc.)

v. Have more