Team MavenCristian. Jason. Michelle. Paul.
Terence.
2
Timeline
Pre 199
8
• Market split into three products: Mixer Showers, Power Showers, and Electric Showers
3
Shower Types
Mixer Shower
Power Shower
Electric Shower
4
Timeline
Pre 1998
• Market split into three products: Mixer Showers, Power Showers, and Electric Showers
May
1998
• Rawlinson enters the company
5
Timeline
Pre 1998
• Market split into three products: Mixer Showers, Power Showers, and Electric Showers
May
1998
• Rawlinson enters the company
1998 -
2001
• Substantial R&D is conducted
6
Aqualisa Quartz
7
Aqualisa Quartz
• 3 years of Research and Development
• Invested 5.6 million Euros
• Conducted numerous surveys and tests
• Innovative Breakthrough
8
Timeline
Pre 1998
• Market split into three products: Mixer Showers, Power Showers, and Electric Showers
May
1998
• Rawlinson enters the company
1998 -
2001
• Substantial R&D is conducted• Developed remote pressure/temperature control
May
2001
• Launch of Aqualisa Quartz
9
Timeline
Pre 1998
• Market split into three products: Mixer Showers, Power Showers, and Electric Showers
May
1998
• Rawlinson enters the company
1998 -
2001
• Substantial R&D is conducted• Developed remote pressure/temperature control
May
2001
• Launch of Aqualisa Quartz
September 2001
• Disappointing Sales
Key Issues
11
Small Sales Force
40% of the UK shower market was still untapped
Plumbers
Resistant to Change
Cautious of Electronic Showers
Wanted Assurance of Reliability
Is greater efficiency better?
Distribution
12
Internal Misalignment
“We’ve got to sell 100-200 [per day] to
break into the mainstream”
“To sell it, we have to point out
[deficiencies] in other products.”
“It’s a really niche product…for homes
with children, elderly, and the
handicapped.”
Henry Rawlinson
Tim PestellNational Sales
Manager
Martyn DennyMarketing/Sales Director
Industry Analysis
14
Industry Analysis
Rivalry Among Existing
Competitors
Threat of New
Entrants
Bargaining Power of
Suppliers
Bargaining Power of Buyers
Threat of Substitutes
MODERATE
LOW
HIGH
LOW
HIGH
Competitor Analysis
16
Competitor Analysis
Triton30%
Mira22%
Gains-borough
11%
Aqualisa 7%
Masco 7%
Ideal Standard
3%
Heatrae Sadia2%
Bristan 1%
Grohe 1%
Hansgrohe 1%
Others 15%
Company Analysis
18
Company Analysis - SWOT
Strengths1. Relationships with
plumbers2. Strong emphasis on
R&D3. Premium brand with
top quality showers
Opportunities1. 40% of UK homes do
not have showers installed
2. Consumers not fully satisfied with current showers
Weaknesses1. Brand awareness low
among consumers2. Plumbers distrust
innovation (Quartz)
Threats1. Competitors catching
up in product quality2. Market starting to see
brand as overpriced3. Service levels
deteriorating
Customer Analysis
20
The UK Shower Market
Developer market also present outside of retail market Generally price sensitive
Relationships with plumbers
21
Aqualisa’s Customers
Exhibit A.
22
Aqualisa’s Customers
Aqualisa’s main target market were those from the standard & value segments
Formed approximately 64.42% of the company’s sales
24
Importance of Plumbers
25
Importance of Plumbers
Plumber Preferences
Preferred to install a single shower brand
Familiarity with brand, products’ problems and service from manufacturer
Generally distrust innovation of showers
Switching costs between brands were high
26
Implicit Effects of Quartz
Plumbers earn through no. of hours worked plus markup from excavation, materials and shower Forgone revenue from excavation
Experience for master plumbers served as a barrier to entry for new plumbers Plumbers with little or no experience
can now compete with them for jobs
Importance of Plumbers
Objectives
28
Objectives
Increase adoption rates of Quartz
Convince plumbers about the benefits of Quartz
Increase penetration to distribution channels
Maintain market share of current products
Strategic Options
30
Strategic Options
1. Target the DIY segment
2. Target the developers
3. Target consumers directly
4. Target premium segment
4. Target standard & value segments
6. Target non-shower users
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Rawlinson’s Recommendati
ons
Our Recommendati
ons
Quartz’s Characteristics
32
Product Characteristic
Definition and influence on rate of adoption Quartz
Complexity
• The degree of difficulty involved in understanding and using a new product.
• Slows diffusion.
Easy
Compatibility
• The degree to which the new product is consistent with existing values and product knowledge, past experiences, and current needs.
• Incompatibility slows diffusion.
Incompatible
Relative advantage
• The degree to which a product is perceived to be superior to existing substitutes.
• Speeds diffusion
Not superior
Observability
• The degree to which the benefits and other results of using a new product can be observed by others and communicated to target customers.
• Speeds diffusion
Hard to communic
ate
Trialability • is the degree to which a product can be tried on a limited basis.
• Speeds diffusion
Not trialable
Diffusion of Innovation
Quartz’s product characteristics makes it an inherently slow-adoption product
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Basis of short term and long term strategy
34
Basis of short term and long term strategy
1. Target the DIY segment
2. Target the developers
3. Target consumers directly
4. Target premium segment
5. Target standard & value segments
6. Target non-shower users
ST LT
x
x
O
O
O
• Cannibalisation
• High switching
costs
• Deeply-rooted
culture and
acceptance of
flaws in existing
shower technology
• More time and
cost involved
• Payoffs
uncertained
Short Term Strategy
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1. Product-market fit
Premium Segment
Style
Premium segment
37
1. Product-market fit
Purchase at
Premium segment
Premium Segment
38
2. Helps to overcome resistance from Plumbers
Installed by
Independent Plumbers
Premium Segment
39
3. Recover R&D investment more quickly
Premium Segment
40
Downside
Reduce no. of other channels carrying Quartz
Assuming all premium purchases are made in
showrooms
Showrooms only account for 8.06% of total units
of showers sold in the U.K.
Premium Segment
41
Short-term Marketing Mix
• Retain high retail price
• As a new brand entering the market, a high price can signal quality and premium standard
• Ensure that showrooms fully showcase the attractive design
• Associate the Quartz brand closely with Aqualisa
Aqualisa: “Premium brand” with “top quality showers”
• Only 25% of showrooms carried the Aqualisa brand
• Expand sales force to develop new customers
• Incentivise showroom “consultants” to promote Quartz
Long term strategy
43
Basis of short term and long term strategy
1. Target the DIY segment
2. Target the developers
3. Target consumers directly
4. Target premium segment
5. Target standard & value segments
6. Target non-shower users
ST LT
x
x
O
O
O
Non-shower usersStandard & value segments
Market
readine
ss
Plumbers
• Better understanding of
Quartz’ ease of installation
Opportunity in the standard, value and non-users segment in the long run
End consumers
• Perceived value
• Cost
End consumers
• Solves previous
problems of using a
shower
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• 840,000 units
• 47% of UK Shower Market
• 40% of UK homes do not
have showers
Market
size
Long term strategy – Marketing Mix
46
• Gradually reduce retail price (market skimming)
• Publicize installation cost savings
• Introduce product line extension
• Reach out to more trade shops
Target plumbers:• Give them the
Quartz as a gift• Give them a product
guarantee
Long-term Marketing Mix
Standard & value
segmentsNon-shower
users
Long term strategy:
47
• Gradually reduce retail price (market skimming)
• Publicize installation cost savings
• Introduce product line extension
• Reach out to more trade shops
Target plumbers:• Give them the
Quartz as a gift• Give them a product
guarantee
Long-term Marketing Mix
Standard & value
segmentsNon-shower
users
Long term strategy:
48
• Gradually reduce retail price (market skimming)
• Publicize installation cost savings
• Introduce product line extension
• Reach out to more trade shops
Target plumbers:• Give them the
Quartz as a gift• Give them a product
guarantee
Long-term Marketing Mix
Standard & value
segmentsNon-shower
users
Long term strategy:
49
• Introduce production extension line, “Quartz
Basic”
Product
Save costs on non-crucial aspects to lower price
Reduce channel conflict
Leverage on brand awareness and familiarity among plumbers
Key considerations Course of action
• Manufacture more basic version
• Launch new product line
50
• Gradually reduce retail price (market skimming)
• Publicize installation cost savings
• Introduce product line extension
• Reach out to more trade shops
Target plumbers:• Give them the
Quartz as a gift• Give them a product
guarantee
Long-term Marketing Mix
Standard & value
segmentsNon-shower
users
Long term strategy:
51
Target the plumbers
• Free Quartz shower
1. Educational value* Easy installation* Superior shower experience
2. Emotional value
• Provide product guarantee for plumbers
Promotion
52
• Gradually reduce retail price (market skimming)
• Publicize installation cost savings
• Introduce product line extension
• Reach out to more trade shops
Target plumbers:• Give them the
Quartz as a gift• Give them a product
guarantee
Long-term Marketing Mix
Standard & value
segmentsNon-shower
users
Long term strategy:
Conclusion
54
Recommended sta
Increase adoption rates Convince plumbers about the benefits of Quartz Increase penetration to distribution channels Maintain market share of current products
Objectives
Problem identificatio
n
Industry analysis
Competitor analysis
Recommended strategy
Short term strategyTarget premium segment
Long term strategyTarget standard, value,
non-users segment
Case analysis
Customer analysis
Company analysis
Thank you :DPlease don’t shower us with
too many questions.