Aqualisa Case AnalysisEssay Preview: Aqualisa Case AnalysisReport this essayAqualisa Case AnalysisNature of the SituationAqualisa, a U.K. shower manufacturer is having trouble selling their newly developed, technologically innovated Quartz shower product. The Quartz model addresses most, if not all, of the problems regarding U.K. showers. Aqualisa has not only improved the important issues of water pressure and temperature with their Quartz model, but they have also improved upon cosmetics, ease of use, and product quality. The Quartz is also easy to install compared to other models on the market. Aqualisa has come up with a very good product, but the shower is not selling at the rate that Aqualisa had hoped. Plumbers do not want to install it because it is electric, and consumers have not heard enough about it to tell the plumber that is what they want. Aqualisa is in a tough situation – they have a great product, but they have no one to sell it to.
Decision to be MadeAqualisa must decide how to generate more sales momentum for their Quartz product. Their current sales tactic of selling to distributors, trade shops, showrooms, developers, and plumbers is not working, as they are not seeing the sales volume they expected with such an innovative product. Aqualisa must come up with a better sales strategy quickly, as their patents will expire and competition will catch up with them within just a few years.
AlternativesThere are many alternatives that Rawlinson and Aqualisa can consider in order to improve sales momentum for their product. Several considerations should be:
Change marketing strategy to target consumers directly.Change marketing strategy to target the Do-It-Yourself crowds.Change marketing strategy to target developers.Lower the price.Let Quarts become a niche product, and concentrate sales on other products.Change marketing strategy to target the plumbers/installers.AnalysisThere are pros and cons to each alternative; Aqualisa must decide on the method that will generate the most sales in the shortest time period.Target Consumers Directly – Only one shower manufacturer, Triton, has been able to build a consumer brand in the U.K. shower market. Building a consumer brand would be a strategic competitive advantage for Aqualisa in that their only competitor would be Triton. Unfortunately, building a customer brand is very expensive, and Aqualisa is a healthy company that does not need to take on the extra risk to survive. Also, only 27% of the market is consumer driven – where the consumer selects the type and brand of the shower with no advice from the plumber. By targeting the consumer directly, Aqualisa may loose out on the other 73% of the market that is plumber driven.
Target Do-It-Yourselfers – Since the Quartz product is so easy to install, this seems like a wise alternative. Also, this strategy would probably get extra push and advertising from the actual DIY stores such as B&Q, which would help to lower consumer advertising expenses. The problem with this strategy is that Aqualisa could begin to associate their premium brand, Quartz, with their discount brand, Gainsborough. This can lead to negative quality perceptions by consumers as well as the possibility of not being able to charge a premium price for the Quartz model. Also, only approximately 36% of showers were sold at DIY sheds in 2000. Although this is a fairly healthy percentage, this is probably not the ideal sales number that Aqualisa is looking for.
Target Developers – By targeting developers, Aqualisa could see the large sales numbers they are hoping for. Developers are a large volume channel that Aqualisa could target. This strategy allows plumbers to become familiar with the Quartz model, as they would be installing it in the new homes. Once the plumbers became familiar with the product, it is possible that they would then start selling it to individuals in need of a replacement shower. The downside to this strategy is there is a tremendous time lag before consumers starting seeing the Quartz. Also, developers are tough to sell premium brands to in that they want the highest margin on a home sale, and the shower is not the prime incentive behind purchasing a house. A third downside to this is that developer installation only accounts for 20% of the total UK shower market.
Consequence
In the near future, a solution to the problem of developer install base will emerge. This solution is still in its early stages, but will likely get better as the development cycle progresses.
A developer would be able to buy a home for a certain budget based on the demand and number of customers. In effect, the owner is required to sell 1.5% of their inventory to every consumer.
This model is based on the two main approaches used by a retailer that have created a similar service to Aqualisa: salesforce and advertising. Salesforce works by generating sales to a group of customers on demand by selling the product at a discount to its target user. Aqualisa can generate sales without an ad. In a Salesforce model, each product can be sold to an individual buyer. To achieve the success of this, their target users receive the same rate price on all orders.
Aqualisa will offer advertising, including the standard product, in exchange for a percentage of the sale price. As long as the ad is successful, all users will see this revenue.
However, the advertising budget for Aqualisa to generate sales to this group of customers is large enough that it will be able to achieve profitability within 5-10 years. As a result, many brands are exploring this approach.
This model requires the ad to work at a point in time in order to match the target user’s needs and desires.
Salesforce offers a $1 billion sales plan to this audience which will increase at a time when demand is in decline, and demand is increasing for higher end home systems.
In Aqualisa’s solution, the ad is designed to serve the target consumer only.
What is an ad designed to work at a point in time in order to match the target consumer’s needs and desires? A model in which the target user does not actually get a lot of ads at the time in order to fulfill his or her own needs, but can use Aqualisa’s ad as a means of reaching the customer. We believe that Aqualisa works this model correctly.
It is true that the only way to achieve growth is to have a massive number of ad cycles in a series. This can be achieved by using a set of ad cycles which are designed to match the target user’s desires.
To achieve this, an ad cycle is required to match the target audience’s needs.
A good model in this context is to create a series of ads using targeted devices, designed to meet people’s needs. A targeted ad model using a targeted number of devices is needed to capture that population.
This advertising cycle can be viewed as a small segment of the household, with one advertisement at a time creating a sales force whose actions will guide others to their needs.
This advertising cycle is important to note because if an advertiser wants to grow quickly, they could use another ad cycle with an even larger amount of ad space. The more ads each consumer sees in one place, the less likely they are to buy new products.
With Aqualisa as advertised, the target of the target user is not the one who has a lot of ad space right on the customer’s shelf. They are the one who will have to sell less and wait for
Lower the Price – By lowering the price of the Quartz model, Aqualisa may start to see higher sales volume in all of the channels that they currently sale to: distributors, trade shops, showrooms, developers, and plumbers. Unfortunately, this takes away from the Quartz model as being a premium product of high quality. Also, by lowering the price of the Quartz, Aqualisa may also have to lower their other products prices – no one is going to buy the low-end model when they can purchase a high-end model at a comparative price.
Let Quartz Become a Niche Product – Since the only place that the Quartz is showing any sales growth is in the showrooms, Aqualisa could allow the Quartz model to become a niche