Student Name/ID: Nadya Safarina/29119063

Class: MBA MM 5003 YP61C

Date: 02/10/2019

AQUALISA QUARTZ: SIMPLY A BETTER SHOWER

BASIC RELEVANT FACTS

Aqualisa’s market splits into three products:

1. Electric Shower: Does not require hot water supply, results in bulky box on the wall, low flow rate.
Sold under ‘Gainsborough’ brand.
2. Mixer Shower: Requires both hot and cold water supply, requires additional pump to address
pressure problems, requires excavation. ‘Aquavalve 609’ is Aqualisa’s top selling shower in this
category (60,000 units per year). Cost about €155 and sold at retail for €675 to €750.
3. Power Shower: Requires both hot and cold water supply, result in bulky box on the wall, less reliable
than a mixer shower and pump combination. ‘Aquastream Thermostatic’ was the strongest-selling
power in this category (20,000 units per year). Cost about €175 and sold at retail for about €670.

Problems with either electric showers or special U.K. shower valves are low pressure and fluctuation
in temperature. On the other hand, consumers were generally uninformed about showers and there
was little understanding of product options that was why some consumers usually relied on plumber
recommendation.

Shower buyers in U.K. fall into several pricing segments:

1. Premium: Prefer high performance, service, and style (shopped in showrooms).
2. Standard: Emphasize performance and service (relied on independent plumber).
3. Value: Concerned convenience and price, avoid excavation (relied on independent plumber).
4. Do-It-Yourself: Prefer inexpensive models that were easy to install even though products were bulky
and unattractive.

Channels of Distribution in the UK:

1. Trade shops (plumber’s merchants) carried products across all available brands.
2. Showrooms (high-end).
3. DIY Sheds (offered discount, mass market, do-it-yourself products).

Aqualisa’s reputation had always been strong in the U.K. shower market recognized as having top
quality showers, a premium brand, and great service. Aqualisa’s market share ranked number two in
mixing valves and number three in the overall U.K. shower market.

Rawlinson’s (Managing Director of Aqualisa) first priority was to build a research and development
(R&D). As a result of their market research, Rawlinson realized that the consumer wanted a shower that
looked great, delivered good pressure at stable temperatures, was easy to use, and didn’t break down.
Plumbers wanted a shower that was easy to install, with a guarantee to not break down or require
servicing. After three years of development (the company spent €5.8 million), Aqualisa creating a water
mixing processor that can be stored away from the shower. The result was technologically innovative
shower called ‘Quartz’.

The Quartz came in two versions. The Quartz Standard Shower was designed for installations that
already had, or did not need, a pump; the Quartz Pumped Shower included a pump. The benefits of
Quartz for the plumber is the easy installation because it just take a half-day to install the Quartz. For
the consumer, the Quartz shower provided efficient, reliable water pressure and temperature, it had
neat fittings and push-button controls that lit up. During field trials, consumers loved it and at the
Bathroom Expo in London (May, 2001) the Quartz had been awarded the top prize.

Despite all the early excitement over the product, and despite being made available in all of
Aqualisa’s normal channels, very few units had sold in the first four months on the market. Part of the
problem was that plumbers were wary of innovation, particularly any innovation involving electronics.
The only place Quartz seemed to be gaining any traction was in the showrooms.

KEY ISSUES

The key issue is the low sales number in Quartz. Despite of its features such as quality, safety, cost of
installation and ease of installation and usage, the early sales in the first four month were disappointing.
The number of units sold (15 units a day—still down at 30 or 40 units a day) was way below what
Aqualisa expected to break through the mainstream (100 or 200 units a day).

Aqualisa difficulty in reaching the plumbers also an issue because the plumbers are the key players in
terms of being a reliable source for consumers when choosing the product. Consumers in U.K. were
generally uninformed about showers and had low brand awareness, that were the reason why some
consumers mostly relied on plumber recommendation to find the best fit for them. On the other side,
the plumbers were wary of innovation, and they were not fond of electronic showers because the
showers usually did not work and took longer time to install. These caused plumbers did not
recommend Quartz to consumer even though they had not tried it yet.

RECOMMENDATIONS

Rawlinson suggesting some alternatives marketing options to cope with Quartz problem, the options
were: Targeting consumer directly, targeting Do-It-Yourselfers, and targeting developers. Targeting the
consumers with cheaper advertisements such as brochure, newspaper and magazine advertisement
could be used to make consumers aware about the product but it was not the best idea if they targeted
large-scale consumer campaign. They could use different method by target consumers directly, but it
contained higher risk and more costly so it was not the most effective choice either.

A second alternative was to target the do-it-yourselfers market. There were risks, as Rawlinson
pointed out, “once you show up in the DIY sheds, you can’t climb back out. You have to be careful about
associating your premium brand with your discount channel.” But seeing the value proposition of the
Quartz, it was superior to other electric showers that dominated the market. This could increase the
possibility to charge a premium for this product through this channel and Quartz was easy to install too
which met DIY market preference. Additional point, if Aqualisa could get its partners like B&Q to help
push the product for expensive consumer they could avoid the need for advertising completely. I think
this strategy can work to increase sales of the Quartz product.

The third alternatives was to target developers more aggressively so they could sell a lot of showers
and it would force plumbers to get familiar with the product since they would have to install whatever
the developers told them to install. This alternative would be hard to implement because given that
Quartz was such a breakthrough innovation, Aqualisa was reluctant to discount the price but developers
tended to look for inexpensive products and demanded high discount rates. I recommend that this
strategy may not works.

Beside those stated alternatives, I recommend them to sell Quartz in the showrooms because Quartz
product had the most success in this sector. Additional point, they don’t need to discount the price if
they are selling in the showrooms. They can try to get in more showrooms and showing its benefits
through demonstration to the consumers. This way the product will attract the consumer and it can
increase the sales of the Quartz products.

The next alternative will be related to marketing plumbers. Based on data on Exhibit 4, we could see
that the percentage of consumer takes plumber’s advice on type and brand of shower was higher than
the consumer that selects type and brand of shower alone. So it is important to target the plumbers and
make them aware about the product. Not only the plumbers who were very loyal to Aqualisa but to new
or other plumbers, the demonstration should be given on the fitting of Quartz. The Quartz’s fitting does
not take too much time and does not require as much labor as in other showers. This feature will attract
the plumbers once they learn about it. If the plumbers are interested in this product, it will increase the
probability of them recommend the product to customers and this strategy will affect the increasing
sales of Quartz product.