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Aqualisa Quartz Simply a Better Shower Case Solution

Solution Id Length Case Author Case Publisher
1251 1963 Words (13 Pages) Youngme Moon, Kerry Herman Harvard Business School : 502030
This solution includes: A Word File A Word File

  • Convert the company’s key marketing and salespeople, Tim and Martyn, and get them on the same page as Harry. This would allow them to better sell the Quartz shower not only to the existing customers but also to new customers. They can also start recommending the product to their own plumbers.

  • Keep the premium customers and the plumbers as the main target audience, and flush out the rest. Of the said two, the plumbers should remain the company’s priority.

  • Out of 2000 showrooms existing in the U.K., the Quartz shower is present in only 25% of them, i.e. in 500 showrooms. This means that the distributors are not effective in their selling tactics. Thus, the company should reach out to them in a more effective manner. Another way is to incentivize the distributors on each successful sale of the Quartz shower. If the distributors receive commissions on each sale, they would be more effective in their communication.

  • The company can also increase its presence in the total number of showrooms by targeting them directly. Since Aqualisa needs to sell 200 units per week, that would be around 10,000 units per year. 10,000 units distributed over 2000 showrooms or even a 1000 showrooms would mean 10 units to be sold by each. This is not a huge amount and is certainly doable by the company.

Following questions are answered in this case study solution

  1. Recommendations

  2. Bases for Recommendations 

  3. Background

  4. Analysis

  5. Customer lifetime value

Case Analysis for Aqualisa Quartz Simply a Better Shower

Bases for Recommendations

  • Since Tim and Martyn are the leading personas in the sale and marketing side of the company, they have to believe what they are working for. In order for them to effectively communicate the benefits of the product leading to higher sales, both have to understand the significance of the breakthrough product themselves before presenting it to others.

  • The other options of sets of customers to be targeted are either not feasible or inefficient. The customer lifetime value computed in the analysis below is the reason why both of them have been chosen as the target audience.

  • The distributors are a key player in the entire ecology. Hence, their efficiency and effectiveness will help improve the sales of the new product.

  • Showrooms would be the most effective option in the long run. The plumbers, which are our core target audience, shop at the showrooms too. They are most likely to be engaged by a salesperson and be attracted by the features of the Quartz shower. In most cases, they might even be shown the benefits and ease of installation of the showers via a short demonstration. This is the only means by which the plumbers can be forced to install Quartz at no risk to themselves and their incomes. Their positive experience will generate some word-of-mouth to their plumber mates. Once the plumber tries the shower, he is sold for a lifetime!

Background  

Loopholes in Harry’s theory

Harry has proposed the idea of directly selling to customers. The problem with this is that this would not allow effective communication of the ‘WOW’ factor of the showers to the customers. They would be unable to the difference between their current showers and the Quartz showers and would be unable to see the point of paying extra for the Quartz showers. Also, what’s the likelihood that the print advertisement would actually catch the attention of somebody and that, too, the target market for the showers?

Another idea proposed by Harry is to target the developers. Developers, as we have discussed, are price conscious people. They buy from the trade shops where little or no buying takes place. Harry should take into account the time required to reach out to the developers and convert them, and compare it with the lead time he has at hand before one of the competitors copy his product costing him his job.

The last option, as suggested by Harry, is targeting the Do-It-Yourselfers. These people are again value and price-conscious, and they buy at Do-It-Yourself sheds. Hence, the same problem, as faced in the case of developers is faced in this case.

Analysis

Before we start proposing recommendations, let’s look at some of the key concerns posed in the case study. There are three basic segments of customers the company, Aqualisa, is catering to currently:

  • Premium Customers

  • Standard Customers

  • Valued Customers

  • Customer Analysis

Let’s look at the buying behavior and the shopping places preferred by each of these sets of customers before we delve deeper. Premium customers typically shop in showrooms and select products that determined style. They take for granted high performance and service. Standard customers desire products with superior performance and service, hence, rely on their personal independent plumbers to recommend or select a product for them. Consumers in the value segment look for convenient and inexpensive solutions. They, too, rely on their personal independent plumbers to recommend or select a product for them.

Other areas of the U.K. market which the Quartz shower can explore are large retail outlets or Do-It-Yourself sheds where DIYs customers look for inexpensive and easy-to-install models. Another market is that of property developers. They are indifferent to pressure problems at their newly built homes which had exclusively built with high-pressure systems. Instead, they are looking for reliable, nice-looking products that could work in multiple settings. These are another set of customers who have a trust relationship with their plumbers and their plumbers chose the products for them.

The Quartz value proposition to the various segments of its consumers is a breakthrough technology in showers which:

  • Delivered efficient and reliable pressure at stable temperatures

  • Didn’t break down or require frequent servicing

  • Had an installation time of half a day

  • Provided ease of installation, use, and design.

Even then, we see that the Quartz shower is not selling. While the required selling rate is 100 to 200 units to breakthrough, the Quartz shower is only 15 units. The main reasons behind the low sales are:  

  • Plumbers are loyal to the type of showers they are currently using. They are not innovators or even adopters; they are laggards

  • Developers are comfortable with the current shower system since they are not facing pressure or temperature problems

  • Developers, standard and value customers, all depend on the plumbers for their product choice. Only 27% of the total customers buying mixer showers select the type and brand of shower alone!

  • Most customers are unaware of the existence of a shower market

Market Analysis and Customers to be targeted

There is another problem that the company is facing which has become evident from the analysis above. The issue is that Aqualisa already has one product in each of the customer segments in the U.K. market. The salesperson has no choice but to downplay some of the features of the existing products of the company to demonstrate the unique selling points of the Quartz shower. This would eventually translate into lower sales for the company.

A holistic view of the entire state of affairs makes it clear that the plumbers are the key and they should be the ones targeted by Aqualisa. 73% of all shower installations are controlled by plumbers.

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