Analyse the UK shower industry, value proposition of Quartz-Aqualisa’s revolutionary shower, marketing strategies employed by Aqualisa

This document analyses the UK shower industry, value proposition of crystal-Aqualisas revolutionary shower, tradeing strategies employed by Aqualisa and suggests ways to make them more effective.The UK squander merchandise place place Product Offers and the Customer BehaviourThe current food market size of all contrastive kinds of showers protracted in UK was more than 1.8 million units valuing more than 5 Billion.1 Only 60% of the bathrooms in UK had a shower whereas all bathrooms had a bathtub.Prevalent problems in plumbing systems and showersThe plumbing in UK was predominantly of the Victorian era. These systems were gravity fed which resulted in non uniform pressure and flow resulting in temperature fluctuations. The flow rates were around 3-4 litres per minute against the standard flow rates of 18 litres per minute in the USA. excessively the showers broke crush frequently and were difficult to repair as the seals utilize to get jammed and needed replacement. The r eplacement of the broken/worn down showers accounted for intimately 50% market.2The users were having poor knowledge about the showers, on hand(predicate) brands and options. These problems influenced the UK shower market and therefore shaped the consumer behaviour and the products available in the market.Market SegmentsThe shower market can be broadly segmented in two categories User and Non-Users. Refer App blockix testify 1.USERSPremium users looked for style, performance, receipts and life.Standard users looked for performance, life and service of the shower.Value users looked for price, convenience and models that did non require major excavation and modifications in their bathrooms.NON-USERSPlumbers Plumbers interacted through variety of ways with the end users- selectly or indirectly. They maintained besotted relationships with the manufacturers of the showers. They played a key role in the sale of the showers.3Developers They were the property developers in the UK. They preferred reliable showers which could work under multiple settings. They were price sensitive. They had direct contacts with the manufacturers or depended on the independent plumbers.DIY These are large retail outlets which targeted customers who are primarily looking for ease of installation and inexpensive models. thither were substantial gross gross sales taking place through this channel.4Different Models and the Product OffersBased on the problems that existed, the market segmentation and the factors influencing decision making, three main types of showers were available in the market Electric exhibitioners, social Showers and the world-beater Showers. They were targeted at different market segments under different brand names by manufactures.Quartz Value PropositionThere give be two Value Propositions Statements5 based on the market segmentation one for Users and the other one for Non Users. Refer Appendix discover 3It is considered that the Quartz Showers will be chosen over the competitive Mixer and the Power Showers. This is because of-Superior Design Quartz range was designed to overcome the limitations of the Mixer and Power Showers, therefore in long term they will replace them completely.Current market share6 Aqualisa has only 20 % and 16.7% of the current market share in the mixer showers and the power showers category. It is ranked 2nd and 5th respectively in these two categories. These two sectors offer the maximum growth electric potential and possibility of capturing new market share.Total costs7 The initial cost of the Quartz showers are higher than both the Mixer Shower and the Power Showers, however installation of Mixer Showers require additional expenditure. It needs 2 man-days of the plumber which costs atleast 640 (considering 40 per hour and 8 hours per day). Additionally, the plumbers charge the cost of excavation- savvy and materials extra. Therefore the total costs of ownership of Quartz Standard showers turn out t o be cheaper.Multiple Brand schema Gainsborough, Aqualisa and ShowerMaxBased on the market segmentation shown above, Aqualisa uses three different brands to position and serve its target markets optimally.The use of different brands is a positioning policy so that Aqualisa can determine its trade Mix8 for each target market segment in order to occupy a calorie-free, distinctive and attractive position in the minds of the consumers relative to the competing brands and products.9 It is made clear from the figure below that the three different brands (shown by different colours) have three different products, price range, promotional impart and distribution channels.The selling Framework10 stance Strategy and 4PsQuartz Mainstream or NicheAqualisa spent nearly 5.8 Million over a period of 3 years to develop Quartz. This is close to 10% of the total revenue generated by the firm in the year 2000.11 Additional modules could be built upon the existent Quartz installations to provide sophisticated features with customised benefits e.g. horizontal automobile trunk Jet. The heavy expense, scalable plug-ins and the raze total costs of ownership suggest that Quartz was designed to be a mainstream product.Quartz Why are they not contending?The sales of Quartz are not picking up for number of reasons1. Rogers Five Factors12 determine the rate of acceptance of an innovation in a market place. These Five Factors are relative advantage, compatibility, complexity, trialability and observability. Quartz scored low on the compatibility because the plumbers who were selling and influencing the buying decisions of the consumers, were vary of use of electronics in the showers. Also, Aqualisa was not effectively go trials/demonstrations to its users (except through showrooms) and plumbers in its market outline and therefore loosing sales. Whenever, the plumber or the consumer was getting a demonstration it was resulting in a sale.2. Associated Cost Savings The lower tot al costs of ownerships were not clearly communicated to the plumbers and the end users to mitigate indisposition due to the higher initial price of Quartz.3. Plumber mindset and long credence times No explicit efforts were taken to educate the plumbers. They were only communicated verbally about the additional benefits of the Quartz, however no workshops or trainings were carried out to overcome the reluctance of the plumbers.4. Lack of clarity in the sales team and conflicting brands resulting in lower sales. The sales team lacked clarity on which product it had to promote- Quartz or the mainstream products-Aquavalve and Aquastream. Infact, Rawlinson and the national sales manager Tim Pestell had different views on Quartz mainstream or niche nature. This resulted in lower push from sales team.5. Only 10% of their time was use by gross sales team on new prospects. This meant that they were limiting themselves to a smaller group of potential buyers.6. knowingness There were littl e actions taken to circle the benefits and the wow factor of the Quartz shower to the end consumers apart from a weekly advertisement in The Mail.What should Rawlinson do?To ontogenesis sales, it is necessary to understand the termination Making Process (DMP)13 of the target market segments. The DMP of the users and the plumbers are different. For DIY and Developers, we would need to establish a separate strategy.Mapping the DMPPlumbers Users Premium, StandardUnaware UnawareAwareness AwarenessReluctance DemonstrationTrial Knowledge of benefitsPurchase PurchasePositive Attitude/ReferenceRepeatBased on the DMP, our Marketing and communications Strategy should be to increase awareness and trial/demonstrations. Further, the strategy should be based on the 6Ms model14 to consider all the aspects and maximize the output.6Ms Model1. Market We have not targeting the user-value segment since it is not suitable for Quartz.2. Mission To achieve a sale of at least 100 units per day in the next 3-4 months to bring Quartz in the mainstream segment. The maximum time available till another competitor catches up with the innovation is estimated to be 2 years.3. Message The message has to be different for the Plumbers and the Users. The different messages will be the statement of benefits that are spelled out in the Value Proposition of Quartz. Refer Appendix Exhibit 2.4. Media4.1 Advertising Full fledge advertisement campaign have high costs15. Therefore advertisement expenditure will be limited. However, a new and cost effective media can be the back of the Shower Gel Bottles. This way Aqualisa will be able to reach the users and even the non-user market very effectively. A small pilot assay can be carried out immediately to determine its possible impact and its cost. Internet advertisement is also an effective and a cheaper way to reach the end users. The Pay per click concept will help keep the advertising costs down.4.2 Sales Team A change in the marketing mental s ynthesis of Aqualisa is needed so that greater focus can be given on each channel. The suggested marketing structure is shown in Appendix Exhibit 4.4.3 direct Management & Sales Promotion This is based on giving incentives and forming stronger commercial relationships with the channel partners to push16 the Quartz through different channels available.Plumbers Launch Event aim a launch cum training event for one full day where plumbers from different locations can be brought together and explained about the product. This should include a hands on training program so that they realise the ease and get rid of any misconceptions. This can be repeated if required. Plumber homage Program & Commissions Plumbers association with Aqualisa can be made official. Plumbers can be given commission for every sale of Quartz. This will immediately get their management and help eliminate any doubts. While advertising Quartz directly to the users, their names can appear as the list of authorised p lumbers to fit/sell Quartz in the specific territory. In return, a small fee can be charged to them for their official partnership. References Aqualisa can use references from respected plumbers to approve the credibility of Quartz. Going beyond the existing associated plumbers To look and expand beyond the already known plumbers. calling Shops Videos showing the entire installation process in a step wise manner and the associated cost savings to plumbers. Early discounts In-order to keep their commitment towards Quartz, certain Early Discounts schemes may be offered. Training the Trade Shop staff to sell on Associated Cost Savings for the plumbers. The trade shop staff should be able to explain Quartz benefits and how it is different from the earlier failed showers which used electronics. Expand to other Trade Shops Increase coverage to newer trade shops and territories.Showrooms & Distributors Expand to untapped Showrooms & Distributors in new geographies without conflicting the existing ones. Early discounts4.4 Integrated MarketingAqualisas direct communication with end user should not result in direct business. The sales to the end users must be routed through authorised channels of showrooms and plumbers. Also the retail pricing for the plumbers and the showrooms will have to be same and fixed to avoid under-cutting. The idea is to create customer awareness and to use the displume Strategy through either of the two channels. This will keep the current relationship with the channel partners intact.5. Money The entire Marketing communication and promotion strategy has been designed such that the initial cash outflow is less. Refer Appendix Exhibit 56. Measurement It is extremely important to monitor closely how sales are picking up after taking all the initiatives. The restructuring of the marketing department suggested will help. Daily reports with key facts and figures will be made available to the Rawlinson who can then take suitable actions.Stripped d own version for the Developers & DIYAqualisa should develop a stripped down version of the Quartz for the DIY and Developers market(brand it under their existing Gainsborough & ShowerMax brands). Branding it under a different name will keep their Aqualisa brand intact. The fact that Quartz will become a platform on for subsequent hi-end solutions, it is recommended to concentrate on higher volumes than margins initially.ConclusionClose monitoring and implementations of the suggested schemes will help Aqualisa increase sales of Quartz to achieve its mainstream status.AppendixExhibit 1 Market SegmentExhibit 2 Various shower categories, Aqualisas Offerings and the Channels used by them.Exhibit 3 Value Proposition of Quartz.Exhibit 4 New Sales & Marketing Department Structure.Exhibit 5 Marketing Communication and Promotion Expenditure.Exhibit 1 Market SegmentUK Shower Market SegmentExhibit 3 Value Proposition of QuartzValue Proposition Statement17 for USERSPremium and Standard catego ry Users who need bathroom showers will buy Quartz Standard Shower and Quartz wield Shower because it delivers water at good and stable pressures and temperatures, it is easy to use, it does not break down and has stunning looks. They will choose this over the Mixer and the Power Showers of other players such as Mira, Masco, high-minded Standard and Triton because we can uniquely offer remotely located water mixing mechanism that is electronically controlled and superior design from our focus on innovation, state art of testing facilities and engineering emergence team.Value Proposition Statement for NON USERSPlumbers who sell and influence buying decisions of bathroom showers will buy and recommend Quartz Standard Shower and Quartz Pumped Shower because it is easy to install, can be installed four times faster, does not need any excavation, offer a 5 year parts warranty, does not go wrong and need a second free visit. They will choose this over theMixer and the Power Showers of other players such as Mira, Masco, Ideal Standard and Triton because we can uniquely offer remotely located water mixing mechanism that is electronically controlled and superior design from our focus on innovation, state art of testing facilities and engineering development team.Exhibit 4 New Sales & Marketing Department Structure.Exhibit 5 Marketing Communication and Promotion Expenditure.Less focus is given on advertisement and more focus is given on the push strategies. This way the maximum proportion of the marketing promotion expenditure occurs after the actual sales occur.Marketing Communications Media Expenditure type Before / subsequently Sale1. Advertising on Shower Gels Before2. Advertising on Internet (pay per click) Before the sale, but charged only on click not for placements3. Advertising in Newspapers Before4. Sales Restructuring Extra Mktg. executives Before, however they will be used for closer monitoring of the implementation schemes and to push other products also.5. Channels Plumbers Commission AfterPlumber inscription Program BeforeLaunch Event BeforeTrade Shops Early Discounts AfterTrade shops staff training costs BeforeShowrooms Early Discounts AfterOnly in cases of Launch event and training programs there can be a substantial outflow earlier, however this is absolutely necessary to increase awareness in the Plumbers.