Aqualisa Quartz simply a better shower

Lukman Kresno O. 29110394Yohanes De Deo Tedo 29110399Anggi Fitrining Tyas 29110400Ronaldo Bagus Putra 29110404Wisnumurti Rahardjo 29110412

Background

Aqualisa innovate a breakthrough product (Quartz) to the market but it was unsuccessful in the market because of Plumber’s Electronic Syndrome.

INDUSTRIAL OVERVIEW

The U.K. Shower Market

Electric Showers• heating elements instantaneously heated the water to the required

temperature, eliminating the need for a boiler to store hot water. • convenient for small bathrooms, the electrical components were

usually mounted in a bulky white box that was visible in the shower stall.

• did nothing to address the poor water flow of many showers in U.K. homes,

• sold mostly under a separate brand name, the ‘Gainsborough’ brand.

Mixer Shower Valves

•Valves came in two types : •thermostatic controlled temperature automatically•manual manually find the right temperature

• Installing a mixer valve meant excavating the bathroom wall. •Add booster pump to boost water pressure (cost € 350 to € 600)•Core Product: Aquavalve609 (thermostatic); Cost : €155 Price : €675 to €750• Sales: 60,000 units per year; Image : high-quality and reliable

•Combine a thermostatic mixer valve and booster pump•Bulky box on the wall •Core Product: Aquastream (thermostatic); Cost : €175 Price : €670• Sales: 20,000 units per year•Aqualisa’s strongest selling shower in the power shower technology

Integral Power Showers

Premium Segment Consumer :- Shopped in showrooms- Granted high performance and service- Style determined selection

Do-it-yourselfers Segment :- Shopped at large retail outlets- Interested in inexpensive models that were easy

to install, even though bulky and unattractive- Overwhelming choice : Electric showers- Popular among landlords & apartment dwellers

Standard price Segment :- Emphasize performance and service- Product selection rely on plumber

Pricing Segment

Value Segment :- Concern with convenience and price- Avoid solutions that required any excavation- Product selection rely on plumber- Concerned with convenience and price

Product & Price

Distribution

Gainsborough DIY sheds DIY / Value

buyers

609, Quartz

Distributor

Trade shops

Showrooms

Plumbers

Premium Buyers

Standard / Value buyers

Shower Max Developers New Home Buyers

U.K. Market Share Data

30%

22%11%

7%

7%

3%

2%

1% 1%1%

15%

Chart TitleTriton Mira Gainsborough Aqualisa

Masco Ideal Standard Heatrae Sadia Bristan

Grohe Hansgrohe Others

U.K. Shower Sales by Reason for Installation

44%

25%

6%

15%

10%

Sales

Replacement Shower

New penetration

commercial

New Build

Second Sgower

The principle reason for consumer to install a shower is to replace the old shower into new ones (44% of customers)

There are only 6% of consumer who has a commercial purpose in installing a shower

The Quartz Shower Valve

The are 2 versions: The Quartz Standard Shower

The Quartz Pumped Shower

With Quartz technology: – Installation time of a half-day– Plumbers were finding that the install

was so straightforward– The Quartz shower provided efficient

and reliable water pressure and temperature – “one touch” control

– the temperature control is automatic

To install the Quartz shower:– the plumber had to identify a physical

space to accommodate the remote processor

– The processor contained the thermostatic mixing valve and pump

– The device could be mounted horizontally, vertically, or on its side, depending on space constraints

VALUE

PLUMBERS

Easy to installMore profitable – able to do more installationTake 0.5 day to install which is only 25% of previous times

Even apprentice can do the installation

CONSUMERS

Efficient and reliable water pressure and temperature

Safe to use for kids and elder peopleOne touch control with red light indicatorMuch easier to install for DIY sector

Excellent design and aesthetics, which increases ownership pride

Quartz Value Proposition

Individual Developers Plumbers

Premium &Standard

DIY Price Sensitive Don’t like innovation

Low brand awareness

Change premium brand perception

Small market Costly to convert

Independent of plumber influence

Large market

Influence plumber

Largest market share

Premium brand recognition

Cheaper Strong influence to

customer

COST

BENEFIT

Cost and Benefit

PROBLEM HIGH INNOVATION & TECHNOLOGY butLOW IN SALES

Rawlinson should choose appropriate marketing strategy to overcome the problem. The choice are : - Targeting customer directly - Targeting developers- Targeting DIY

MARKET ANALYSIS

5C

Company

Customer

CollaboratorContext

Competitor

• UK shower manufacture• Have breakthrough in shower

technology by producing “The Quartz”• Have strong reputation in UK

shower market.• Producing premium product in

shower market.

COMPANY

Aqualisa using the working divisions/department based. Consist of: Marketing & Sales, Finance, Technical, and Operations.

Organizational Chart

Customer

• Individuals• DIY• Developers• Plumbers

Collaborator

• Outlet• Developers• Trade shops• Showrooms• Distributors

Context

• In UK, everyone had a bathtub, only 60% had showers.

• It is rare an innovation in shower production.

30%

22%11%

7%

7%

3%

2%

1%

1%

1%15%

UK Market Share Data : Units Sold (2000)Total Unit Sold by Brand

Triton Mira Gainsborough AqualisaMasco Ideal Standard Heatrae Sadia BristanGrohe Hansgrohe Others

COMPETITOR

Triton has the biggest market share (30%).

Aqualisa and Gainsborough market share is the 3rd largest (18%).

For the Electric Showers product, Aqualisa and Gainsborough has 2nd biggest market share (16.9%) .

Product Price Place / Distribution PromotionShowers with Various categories.Type of Shower :- Electric Shower- Mixer Shower- Power Shower

PremiumStandardMiddle-Low

Trade ShopDistributorShowroomsDIY Outlets

Advertisement (ex. Brochure)Web

4P Analysis

Segmenting

• UK Niche Market Shower

Targeting• Direct consumer• DIY market• Developers

Positioning • Leading in shower technology that have top quality

shower in premium brand and also give great services

S T P

Strength• Strong reputation in the UK • shower market.• High Market share• High Quality Product • Easy to install• High innovation in technology

Weakness• Low sale in Trade shop and

Showrooms. • Expensive brands image• 10% of Aqualisa is defected.• Lacked the ability to relate to end

users.

Opportunity• Typically low pressure and • fluctuations in temperature of UK

shower valves.• High demand of UK market• Rare real breakthrough in the

shower market.

Threat• Plumbers loyal to single brand and

distrusted innovation.• Other companies were catching up to

Aqualisa product quality.• Dependency of Consumer to the

plumbers.

SWOT

Products and Price Points

•Quartz stand for Premium segment with price €850 and €1,080.

• Quartz standard and pump provide the biggest margin than other models.

Behavioral Analysis

Consumers

Consumer doesn’t like!•Poor Pressure

•Varying Temperature

•Shower broke down or “went wrong” hard-to-turn valves, leaky seals, and worn-out showers. Because of that, almost half the U.K. shower market consisted of sales of replacement showers.

•Consumers were generally uninformed about showers.

•little understanding of product options

•Brand awareness was low;

•Prices to consumers usually lump sums and unaware how costs broke down (labor, material, excavation, etc).

• Most developers did not worry about pressure problems because new homes were almost have high-pressure systems.

• faced a different set of issues, preferring reliable, nice-looking products that could work in multiple settings.

• price-sensitive except of luxury builders• Developers usually had relationships with independent plumbers.• Aqualisa sold to developers under its ShowerMax brand, which was

available only through specialist contract outlets. • technology had been redesigned, rebranded, and optimized for

developers specific needs. • ShowerMax could deliver a high-pressure shower withAquavalve

technology at a significantly lower cost.

Developer

Plumbers

•Had high technical expertise.

•Strong influence toward consumers.

•Consumers often had to with six months

•Charge about € 40 to € 80 per hour.

•Loyal to single brand

•Distrusted innovation → cause Quartz failure in the

market.

• The most installation method of mixer shower is by independent plumber which is 54% of all.

• While the installation by showroom and developer is 20% each.

• The smallest percentage is the commercial installation which is only 6%.

U.K. Mixer Shower Market, by Installation Method

Type of Influence

Consumer must know the advantages of Aqualista so they could directly buy the product or ask the plumber to use Aqualista on their wash room

Plumbers must understand the way Aqualista work so they have no uncertainty on using Aqualista’s products

Informational

Most consumer, selects Mixer Shower by taking plumber’s advice on type and brand of shower which is 28%.

While 20% of consumer are selecting only type of shower – (not the brand), that influenced by the plumber.

Shower Selection for Mixer Showers

28%

27%25%

20%

takes plumber's advice on type and brand

consumer se-lect type and brand alone

plumber select type and brand alone

plumber in-fluences type of shower, not brand

Consumer Motivation & Value

Needs(Shower)

Consumer Wants(lookes great, delivery good

preassure, stable temperature, easy to use,

didn’t break down)

Plumber Wants(easy to install, with a

guarantee not break down or requiring service)

Latent & Manifest Motive

Purchase a SHOWER

Premium brand makes

me more prestiges

The plumber suggest me to buy

that brand and that type

It’s look great , easy to use, good

pressure, stable temperature,

didn’t break down

AQUALISA STRATEGIC ANALYSIS

Cons• ‘bet the company’

kind of product• Cost about €3 to

€4 million over 2 years

• Tough to justify a high-risk, high-reward strategy when company results were already healthy

Pro• Quartz’s superior

value proposition so possible to charge a premium for this product.

• The Quartz is so easy to install.

• Currently selling its Gainsborough in this market

• Push the product, avoiding the need for expensive consumer advertising Cons

• Associating premium brand with discount channel

Pro• Large-volume

channel.• Force plumbers

to get familiar with our product

Cons• Time lag before showers

reach consumers through this route.

• Developers perceived products to be premium brands.

• Quartz under price was a breakthrough innovation.

Pro• Triton Has Proven that it can be

done• Many Problems reaching the

plumbers

• The cause of quartz failure is the resistance from plumbers. With the analysis of circumference, they should :

- Plumbers shoot the trade shop

product presentation (installation, warranty) to the plumber community incentives

- Consumers Bring the Brand experience to customer through its marketing activities, so that customer can feel the simplicity of Quartz shower.

- Developers make a contract incentives

Recommendation