Aqualisa Quartz Simply a Better Shower Strategic Marketing Case 2 Javier Ortiz Ella Leppänen Saara Sulonen Stheffany Godoy G.

Agenda Current situation and problems Identification of the problem Possible solutions Our recommendation Reasoning Actions

The current situation 60% houses in UK has a shower, 100% has a bathtub. Showers don’t work well, users are dissatisfied Director of Aqualisa, launched the Quartz Shower Features: Quality, safety, low cost, ease of installation and usage Solves the problem of the plumber and end customer Early sales were disappointing

General problems Low sales; Why sales weren’t as expected? Advertisement Plumbers Company Not focused on the biggest part of the market. (Price to users and innovation to plumbers) A bungled installation requires a second visit and the plumber needs to pay it him/herself Plumbers distrust new ways of working and products, specially if they involve electronics There are already more type of showers that Aqualisa offers

Why hasn’t the sales of Quartz shower gone as well as planned? THE MAIN REASON Unclear targeting, they don’t know who to sell End users? DIYs? Plumbers? Developers?

Unclear targeting leads to several other issues Only one drilling Nice looking Communicating value Simple installation No bulky boxes Premium product How? To whom? Everybody can do the installation Good pressure Reliable temperature Safe to use What to sell Turbo charged option 5 years warranty Climate control New innovative product but old marketing strategy Product? Benefits? 0-18 liters / min Touchtronic operation

The innovativeness and newness of Quartz causes its own obstacles How to raise consumers’ awareness? Consumers are not aware of Quartz showers and only few asks the plumber to install it Plumbers have typically huge prejudices toward electronic showers & they are reluctant to recommend that type of a shower to their customers How to get past the plumbers’ prejudices? How to raise consumers’ awareness of the product and how to get plumbers love it How to get past the plumbers prejudices

Different targets value different things End users DIYs Plumbers Developers Easy-to-use shower that doesn’t “go wrong” Good pressure Stable temperatures Easy-to-install Inexpensive Don’t mind bulkiness & unattractiveness Easy & fast installation Push-fit-connect-you’re done No second visits Guarantee to not break down Reliable & nice looking products Must work in multiple settings Inexpensive

Different targets have their own pros and cons End users DIYs Plumbers Developers Build consumer brand Better position against Triton Utilizing Gainsborough’s channels DIYs may pay premium because of easiness Direct contact with end-users Have a big influence on decision making process Selling in volumes Forcing plumbers to familiarize themselves with Quartz Costly ad-campaigns Costly ad-campaigns Potential cannibalization May need to go downmarket Don’t like innovation Difficult to change their minds Time lag Problems with premium price Only 15% of market share How to solve the main reason causing bad sales? Who to target?

We suggest targeting the plumbers!

Plumbers have a notable influence on shower purchasing decisions 54%* 73%* of showers installed by independent plumbers of shower purchases are either made by the plumber or the plumber is consulted *mixer showers only

Plumbers’ brand loyalty is more important to shower manufacturers than end-users’ loyalty 84 & 613,200 When shower purchase is not typical, customers pay little attention to shower ads Plumbers are very brand-loyal so once brand loyalty is achieved, long-term cooperation can be expected Master plumbers install or supervise over 84 shower installations per year and have an impact on over 600,000 shower purchases

The actual cost of a shower doesn’t play so significant role Consumers are unaware of the cost breakdown → the cost of the shower is not so important Overall costs can be driven down with no need for excavation and shorter installation times €€? There’s no need to lower prices, which can lead to brand dilution and going downmarket - climbing up is extremely hard!

Value proposition for plumbers Easy and simple installation More profitable → plumbers are able to do more installations per day Only ½ day to install → 75% less compared to other shower installations Even apprentices can do it “The customers love it - you should, too!”

Tangible actions to do STEP 1 STEP 2 STEP 3 Increase awareness by focalized advertising content Create and reinforce plumbers’ loyalty to the brand Emphasize value and benefits in few words Promote aggressive selling through direct, personal contacts Avoid misleading advertisement → not like this ad

Tangible actions to do STEP 1 STEP 2 STEP 3 Facilitate spaces for plumber-product interaction Training Certifications Exhibitions Offer incentives Show tangible benefits for the plumbers to increase sales

Tangible actions to do Offer after sales service benefits and security STEP 1 STEP 2 STEP 3 Offer after sales service benefits and security Provide extended warranty for electricity issues Aqualisa will take care of the plumber’s costs in case the shower doesn’t work as intended and another visit must be paid Aqualisa should inform if there is a problem with the product, then a technician from Aqualisa will fix the problem at the customer location and not the plumbers, or Aqualisa will pay for the whole fixing process of the shower.

APPENDIX Plumbers have an influence on two pricing segments Premium segment customers: Shop in showrooms Take for granted high performance & service Style matters a lot Standard price segment customers: Value performance & service Buy what plumbers recommend Value segment customers: Concern primarily convenience & price Dislike excavation Rely on plumbers’ recommendations