1. What is Quartz’ current marketing strategy?
Company conducted market research, spent EU5.8 million in development, invested in a new state-of-the-art testing facility, acquired 9 patents, grew engineering team from 6 to 20 and established stages of new product development pipeline. Company spent 90% of their sale efforts on maintaining existing accounts and 10% on developing new customers. Company had longstanding direct relationship with a group of plumbers. Sale force contacted its network of plumbers, calling face-to-face to introduce and explain the new product.
2. What are the wants/needs of plumbers? Of consumers?
Consumers wants a shower that looked great, delivered good pressure at a suitable temperature, was easy to use and doesn’t break down. (Consumers in the premium segment emphasizes on style. Consumers in the standard price range tended to emphasize on performance and service. Consumers in vale segment were primarily concerned with convenience and price and they liked to avoid solutions that required any excavation).
Plumbers wanted a shower that was easy to install, with a guarantee to not break down or require servicing. (Plumbers generally preferred to install a single shower brand and extremely reluctant to switch brands. They liked to familiarize with the service they could expect from a manufacturer. They distrusted innovation).
3. What is the Quartz value proposition to plumbers? To consumers? Plumbers are able to shorten the installation time from 2 days to half-day. The installation is straightforward that plumbers could even send their young apprentices to complete entire job. For the consumers, the Quartz shower provides efficient and reliable water pressure and temperature with an easy-to-use “one-touch” control mounted on shower wall for target temperature setting and indication.
4. Describe the competitive situation. Who are the major competitors? What are their relative strengths and weaknesses? The major competitors include Triton, Mira and Masco.
-Strength: good reputation, top-quality shower, premium brand, great
service, market share: number 2 in mixing valves and number 3 in overall UK market. -Weakness: market is beginning to perceive Aqualisa products as being overpriced.
-Strength: Dominant in electric showers and it is the only company in the market established brand awareness at the consumer level. Although it is not major in mixing valve market, it may expand its business scope and influence market with its highly reputable brand name. -Weakness: not well known in mixing valve
Masco, Ideal Standard, etc:
-Strength: They are catching up to Aqualisa in terms of product quality. -Weakness: They have not developed core technologies in showers yet.
5. Why is the Quartz shower not selling?
– One of the reasons is that the company sales force spends only 10% of their efforts in developing new customers and they reply on their long-standing relationships with plumbers. – Plumbers were wary of innovation, particularly innovation involving electronics. – Salesmen tend to gloss over other company’s product if Quartz is mentioned.
6. 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? Yes, the product is worth the investment of EU5.8 million. It is a good strategy to invest around 11% of its “base profit” for developing a radically different kind of shower with testing facility, patent position product roadmap, etc. For 60% of families had shower with lot of mechanical problems and inconvenient use experiences, Quartz with it’s significant advantages were designed to fit their customer’s needs.
The conventional shower can no longer satisfy the market demand, innovation and customer value delivery is the market trend since forever. As the result, the development of Quartz proved Aqualisa’s brand value in marketing base aspect by delivering “cleverness” of the product and its “elegant design”. As for finance aspect, Quartz provides higher customer value products with considerable margin which even higher than core products-Aquavalve 609. Based on these factor, Quartz is worth the investment in the long run.
Quartz is a niche product, good for homes with children, or for elderly and the handicapped.
7. Aqualisa currently has three brands: Aqualisa, Gainsborough and ShowerMax. What is the rationale behind this multiple brand strategy? Does it make sense? Gainsborough and ShowerMax are designed and branded for specific markets. It is a good strategy to develop different products based on the company core technologies for specific target customers. ShowerMax is banded specifically for developers.
Elements of the Aquavalve technology are redesigned and re-branded for the ShowerMax production line and optimized for developers’ specific needs. It is a low-cost solution of high pressure shower with Aquavavle technology. Gainsborough is branded for DIY market and it is available in 70% of the approximately 3000 DIY outlets in the U.K. It is designed for associating Aqualisa’s premium brand with its discounted DIY channel.