1. Aqualisa Quartz: Simply a Better Shower
Chapter 1
Aqualisa Quartz: Simply a Better Shower
Case Discussion 3

2. Guidelines Action plan Analysis of value created
If you were Rawlinson, which action plan you adopt and why?
Analysis of value created
Is this a good product? Why?
How does it create value? For consumers? For plumbers
Consumer/Channel segmentation analysis
How do channels differ? Which channel is most likely to embrace Quartz?
Which consumers shop where? Which consumer segment is most likely to embrace Quartz?
Who are critical players in the market? Why?
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3. Guidelines Lifetime value analysis Big picture analysis
Is it worth converting plumbers? How much is it worth?
What about a consumer? How much is it worth to covert a consumer?
Big picture analysis
How important is Quartz for Aqualisa? Why is it so important to Harry?
Is this product worth the 5.8$ investment?
What other changes has Harry made to the company, in the process of developing Quartz?
How is the post-Harry Aqualisa different from pre-Harry Aqualisa?
Why multiple brand strategy?
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4. Industry Analysis Rare breakthrough innovations
“Face-lifts” are introduced every few years
High margins
Stable market shares
Plumbers tend to be satisfied and loyal to particular products
Microenvironment includes: the company itself, supplies, marketing channel firms, customer markets, competitors, and publics.
Macroenvironment includes: demographic, economic, natural, technological, political, and cultural forces.
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5. Company Analysis 47% gross margin
# 3 player in the industry for market share
Aqualisa sells three brands:
Aqualisa: premium brand, sold through trade shops and showrooms
Gainsborough: discount brand, sold through DIY
ShowerMax: older, downgraded product mainly sold to developers
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6. Consumer Analysis High customer dissastisfaction
Problems with installing a new shower:
Risk and uncertainty until new product trial
Lack of expertise in the category (relying on plumbers) (Exhibit 4)
New shower installation is inconvenient
New showers are expensive
Long waiting for a plumbers to install the new shower
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7. Consumer Analysis Premium Standard Value/DIY Likely type of purchase
Voluntary
Forced
Likely motivation for purchase
Renovation
Existing shower broke down
Shower criteria
Stylish design
Performance and service
Price/Convenience
Price point
Premium price
Fair price
Cheap price
Tolerance for inconvenience
High
Low
Zero
Preferred channel
Showroom
Independent plumber
Independent plumber or DIY shed
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8. Channel partners Plumbers Trade shops Showrooms (Exhibit 5) DIY
Account for 73% of shower purchases (Exhibit 4 and 5)
Skeptical about innovations, loyal to a product, not brand
Trade shops
Focus on having the right stock of products
Showrooms (Exhibit 5)
Consultative selling, top service, high-end image
Consumers do not have to rely on plumbers (Exhibit 4)
DIY
Low-end of the market, mass-marketed products
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9. Quartz Value Proposition
Value created for consumers
Quartz is superior to any other shower on the market
Outstanding performance, elegant design, easy to use
Cheaper and easier to install, no wall excavation due
Great economic benefit (Exhibit 8)
Value created for plumbers
Quartz can be installed 4 times more quickly
Installation is so simple to let them send apprentices to perform it, which would increase plumber business
No risk of after-sales problems
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10. Why Is Quartz not Selling?
Harry
Sales Force
Channel
Plumber
Consumer
Arrived few years ago
Passive mentality, unable to convert plumbers to Quartz
Skeptical of innovation
Unhappy but generally ignorant
Resentful of Harry’s strongly innovating mentality
Risk averse
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11. What Should Aqualisa Do?
None of the three options is attractive
Critical role of the plumbers as market “hubs”
Plumbers migrate across the various channels
Showroom retailers are the only ones who can put pressure on plumbers to adopt Quartz
Showroom retailers is the only channel in which plumbers do not influence the purchase decision-making process, but they are contracted to install whatever product selected
Showrooms are large enough to generate critical mass and stimulate adoption by plumbers
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12. The Showroom Option Aqualisa wants… The showrooms…
to stimulate the diffusion process
are the “early adopter” channel
to convert plumbers
outsource installation to independent plumbers, who must install whatever product the consumer has selected
to extract the maximum value for the product
charge a premium price to price-insensitive consumers
to educate the consumer about product benefits
offer consultative selling , point-of-sales service, and show-and-tell display to “wow” the consumer
to build a reputation as an innovator
tend to embrace innovation; it is a key point of differentiation for them
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13. What the Case Teachs US Mith # 1: It is easy to sell a great product
Consumers might not recognize the product’s value
Customer buying decisions are not always the result of rational cost-benefit analyses
Mith # 2: It is tough to sell a bad product
Some markets are characterized by inertia, complacency and customer dissatisfaction
Mith # 3: Brand equity equals brand power
Brand equity is not a currency that manufacturers can cash in when launching a new product
Aqualisa is unable to cash in on its brand equity because plumber loyalty is devoted to the product and not the brand
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