Aqualisa Case Analysis
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AQUALISA CASE ANALYSIS
Use the five forces to perform market environment analysis (e.g., the market dynamics, the driver of consumer demand, consumer preference and attitude, the channel structure) for the UK shower market. Then, given this market condition, suggest the direction of marketing strategy for Quartz (e.g., the issues Aqualisa must deal with, the opportunity Aqualisa must grasp, the things Aqualisa must avoid in designing marketing strategy for Quartz, and etc.)
Market Dynamics, Driver of Consumer Demand, Consumer Preferences and Attitude
Premium Customers – shopped in showrooms, style determined their selection
Standard Customers – relied on PLUMBERS. Performance and service drove their selection.
Value Customers – relied on PLUMBERS. Convenience, price, and no excavation drove their selection
DIY – interested in inexpensive models that were easy to install, electric showers currently hold this market as they can be installed in a day. (new Acqualsa shower can be installed in half a day)
Property Developers – wanted reliable, nice-looking products that can work in multiple settings, price sensitive. Usually relied on PLUMBERS.
The Channel Structure
Upstream
Downstream
Trade Shops – Sell to PLUMBERS. Warehouses which sell what the buyers want only. Not a specialty shop.
Showrooms – High end. Acqualisa is dominating in showrooms due to the good style (pretty lights) which appeals to premium customers.
DIY Sheds – Offer discount, mass-market, DIY products. Electric showers currently have market share as they are cheap and easy to install. (maybe a discount brand of the new Aqualisa can be sold here under the Gainsborough brand)
PLUMBERS (Installers) – Hit them in the pocketbook
Shortage of plumbers and consumers often had to wait six months before a plumber could take on a new job – perhaps a reason why DIY is high, these people dont want to wait 6 fing months.
Standard shower installation was a 2 day job
Half day with new Aqualisa shower – installation x4
Plumbers installed 40-50 showers per year (but plumbers usually passed the entire cost of the shower installation on to the consumer as a lump sum and thus consumers were unaware of the cost breakdown – labor, materials, excavation, etc). With Aqualisa shower they could install 160-200 showers per year and make 4x as much money.
Plumbers are typically very loyal to a single shower brand – need to grab this market in the 2 years before there are competitors in the market
Plumbers are very distrustful of innovation due to the bad memories from the 1980s. Particularly distrustful of electronics
Need to market the Ease and quickness of installation – $$$ to the plumbers
Plumbers make the shower selection for 73% of the mid-range market
The issues Aqualisa must deal with
Distrust of innovation by plumbers
Low tech showers and water supply previously
Consumers were generally uninformed about showers and there was little understanding of their product options.
Brand awareness was low – only one company (Triton) had brand awareness
Real breakthroughs are pretty rare and “innovations” had been primarily cosmetic.
Currently a 20-person sales force. 90% of the time spent on maintaining existing accounts, 10% of the time is spent on developing new customers
I would greatly increase the size of the sales force and spend 75% of the time developing new customersat least until we have market dominance
The opportunity Aqualisa must grasp
Get the Plumbers – Plumbers brand loyalty – grab this market before 2 years is up and plumbers probably wont quickly leave
Brand naming – Dominate this market and then move towards other parts of the bathroom with your R&D teams
Brand both Aqualisa and Greensborough
Offer a discounted option through their discount Greensborough brand to DIYers
The things Aqualisa must avoid in designing marketing strategy
Electronics and its past poor performance
If you look at their add, its all about the electronic innovation which will immediately scare away the plumbers who account for deciding factor in the market
Market ease of install, no bulky box – remote box
Not supporting the other Aqualisa products that are selling currently. Supporting these and at the same time pushing this innovation. Thus BRAND IMAGE is important
Steps to take
Make Marketing its own division in line with Sales/Finance, etc
Spend more money in Marketing – how much is the question
New product launch – marketing always increases
Segmenting within the segmentations – retirement homes, easier for older individuals
Provide a list of market segmentation variables that Aqualisa can use to segment the B2C market and the B2B market (including channel members) respectively. Explain why these variables are chosen. Develop prototypical customer profile for all market segments you identify using your proposed segmentation variables.
Price
Ease of Installation
Reason for Installation
Attractiveness of Product
Dependability
Should take both segmentation variable types
Q1: Low end – DIY