Analysis Aqualisa Quartz Essay

Every company dreams that one day they can bring something unique and very competitive, and use it to dominate the market. But things might not be as easy as they thought. In Aqualisa case, Harry Rawlinson, managing director of Aqualisa, gives us an example that even with new significant shower product Quartz, which seems to be perfect in every aspect, they cannot make a relative progress in U.K. shower market. Quartz is designed to solve all the troubles that exist in U.K. showers. It provides efficient and reliable water pressure and temperature, needs less space in bathroom, has a stylish looking and is easy to use and install. Although Quartz leaps all other showers, the initial sales results turned to be gloomy, as Rawlinson said â€Å"For some reason, it simply wasn’t selling†. To reveal these â€Å"reasons†, we will first look at the general shower market status, and then we will analysis two main factors that cause Quart fail in initial Sales: Quart itself and Plumber. Finally, we will examine Aqualisa’s marketing strategy and find out what is the right thing to do. Shower market in U.K. The U.K. shower market has 3 distribution channels, 3 buyer segments, and 2 Special roles: Plumber and Developer. To give a brief summary, we will use some charts to demonstrate characteristics of these elements, and use it for latter discussions. As we can see, Quartz has 61% in Rate of return (manufacturer) and 47% in Rate of return (retailer), which is not the highest among other products. And we notice that Aquavalve Value, which is in value segment, and Aquaforce 1. 0/1. 5 Bar, which is in Standard segment, have higher Rate of return, but these product sold well in lower segments. Thus Quartz cannot be blamed for overprice, at least it was no more expensive than Aqualisa’s other product. Besides, if we consider the installation cost that saved by Quartz (2 days to half day, with 40-80/hour), Quartz is even cheaper. So either the price was not the reason, or the price was misunderstood. Consumer could be blinded by Quartz’s high retail price and ignore its relatively high produce cost. Besides, Aqualisa â€Å"was generally recognized as having top quality showers, a premium brand, and great service†, that reputation could make consumers form the idea that Quartz is just another premium product which is not cost-effective. This misjudgment of Quartz’s value is the true reason that Quartz was not accepted in lower market. Thus lower Quartz’s price would have less result if the misconception remains unchanged. To solve this problem, Aqualisa need more effort to spread the idea that Quartz is economical and practical. Quartz’s former advertisement plan shows most of its progressiveness, like the picture in Exhibit-9, they list all the priorities, make it even more like a premium product. They need to give some economy features such as the cost of installation, the durability of Quartz’s parts, Quartz’s life time budget etc, and compare Quartz’s features with traditional showers, to remind consumers that Quartz values for their money. Plumber, Friend or Foe? Plumber is an important role in shower market. Exhibit-4 shows that about 73% shower selection are influenced by Plumbers. Yet Plumbers are â€Å"wary of innovation, particularly any innovation involving electronics†, AKA Quartz. The negative impact of Plumber’s attitude is obvious, and even Aqualisa calling â€Å"face-to-face introduce and explain the new product† to their â€Å"very loyal† plumbers, nothing changed in short term. Rawlinson was so desperate to plumbers that he thought about abandon plumbers and target consumers directly. Considering the plumbers’ high clout in current market share, and Aqualisa already have high market share (70%) in Do-It-Yourself Sheds which target consumer directly, give up plumbers would be ineffective and useless. Rather than evade the issue, let’s face it straight: Why Plumbers oppose Quartz and how to change it. The main reason that plumbers reject innovation derived from risk aversion. Because â€Å"unfamiliar products could present unknown performance problems†, which will make plumbers pay money and time to adjust. Former failure case like â€Å"push-button† controls in 1980s had Strengthened plumbers’ stubborn. But Quartz has no substantive contradiction with plumbers, on the contrary, it’s easy to install and operate that could give plumbers substantial benefits. As a matter of fact, Plumbers who â€Å"puts one in†, becomes â€Å"convert†. Thus Plumbers’ prejudice will disappear by time. By saying â€Å"Adoption is a long, slow process† Pestell, Aqualisa national sales manager, did not realize that they do have some ways to speed up the process. In fact, it seems that Aqualisa did not consider plumbers as a distinct important part in their sales. They barely treat plumbers like consumers or retailers, told plumbers how excellent or advanced Quartz is. But what they should do is telling how good Quartz will do to the plumbers themselves. They could show plumbers the contradistinctions in installing Quartz and traditional showers, and emphasize that Quartz will make their daily two days work to half day, reduce both their work intensity and work time. With this advantage, plumbers can do more jobs and be better off in more income. Aqualisa can also give more samples to plumbers or pay non-loyal plumbers to install Quartz to clear former haze of electronics. With focused promotion plan, Aqualisa will make plumbers realize Quartz is favorable, and turn them into steady alliance. Strategy, Breakthrough or Mark time? Aqualisa’s former strategy is Steady and comprehensive. They joined every segments of market and provided their products in all distribution channels. Their current core product is Aquavalve 609, and they had been in the upper level in the market share (â€Å"number two in mixing valves and number three in the overall UK shower market†), only surpass by Triton and Mira (Exhibit-2). When Quartz joins the family, it did not have a clear position among other siblings. Actually, Aqualisa showed no clear expectations in Quartz’s performance. They just spread it to whole market and hope it can dominate. This pointless strategy makes them unconscious to the market response thus they make no effective action when sales encountered difficulties. Even if their final target is the whole market, they could build milestones and interim objectives like enter the high-end market then extend to lower market or simplify the product to catch the lower market with low price then release advance model to premium user. Either way, the company should have a more specific positioning and targeting plan to meet the company’s expectation. Despite the former marketing strategy, Aqualisa now need to decide their next move. Rawlinson showed his trepidation that Aqualisa, which is profitable with its current products, may not be willing to take the risk of promoting Quartz. The risk comes from two sides: first, the development of Quartz has already spent 5. 8 million and three years times, further promotion could cost 3-4 million more. It’s hard to stay profitable with this huge investment. Second, the Quartz has competition effect with company’s Cash Cow product: Aquavalve, which also put company’s stable market share and benefit in uncertainty. The risk of launching new products is inevitable, but is it possible that Aqualisa can sit back, relax and enjoy its current benefit? As we learn from Exhibit-2 (U. K. Market Share Data 2000), Aqualisa, had 18. 1% market share in total units sold, while Triton and Mira were 30. 3% and 21. 7%. In the Electric Showers category, which Aqualisa sold most, the market share was 16. 9% while Triton had 43. 5%. And in Mixer showers category, where core product Aquavalve 609 rest, the market share was 20. 8% while Mira had 36. 4%. With these figure, we cannot say Aqualisa is in a safe place. They did not have domination in any part of the market, and there were significant gap between Aqualisa and market leader. With more than one competitor, Aqualisa could easily be replaced and fall into masses. At this situation, even promoting new product could cost a fortune, Aqualisa still need a breakthrough and Quartz is just what the company need. On the other hand, the existing market structure gives Quartz sufficient space to outspread. If Quartz is good enough to assault Aquavalve 609’s sale, it could also shake the leader position of Triton and Mira’s products. If Quartz is, as Rawlinson said, â€Å"first significant product innovation in the U. K. shower market since forever†, it will beat down others company’s products and increase Aqualisa’s market share, and not only in U. K. market, it can move forward to European markets or global markets, then the current promotion cost would be unremarkable. But if Aqualisa give up Quartz, the opportunity cost would be too big to accept. Rawlinson’s worry will become true: â€Å"In five years’ time, someone else will have got the world market for this technology†. Then the Aqualisa’s experiences would be competitors’ field test and its former investment would contribute to other’s benefit. Conclusion People usually consider that finding the goose is the hard part, but in fact, make the goose laid golden eggs is also not easy. Aqualisa holds its goose named Quartz, and shows us such an example. This case also told us it’s not only about what we have, it’s more about how to connect everything together, including product (Quartz), customer, collaborator (plumber), market, make right decisions and build relationships.