AQUALISA, a major U.K.

manufacturer of
showers, launched the most significant
shower innovation in recent history –
Quartz. However, early sales of the Quartz
have been disappointing. Rawlinson, the
managing director of Aqualisa, should
now make some key decisions about
whether to change his channel strategy,
promotional strategy, and the overall
positioning of the product in the context
of his existing product line.

AQUALISA
Case Analysis

SBR – 2

GROUP
7
Dhariwal Prateek
Joji Jibin
Kaur Puneet
Malhotra Vritti
Rathi Pranav
 CASE ANALYSIS
Before coming up with the right strategy for Aqualisa’s Quartz, evaluating the industry landscape and
customer segments is imperative. The key is to find out the sweet spot where the customers’ needs
and company’s offering are in line.

SITUATION ANALYSIS (3C Analysis)

Company Analysis:

Aqualisa is a shower manufacturing company and enjoys a market share of 18% in the UK shower
market (selling close to 325,000 units a year). Only 60% of the homes in UK have showers and
consumers are not really satisfied with the current shower systems, hence this is a huge
opportunity for the company to provide an offering that is less complex, with relative advantages
and observable benefits and is compatible with the needs of the consumers. This gives them a
chance to target the untapped market as well.

Aqualisa’s core product offerings are in the Electric, Mixer and Power Shower categories that cater to
three different segments in the UK. The company is driven by innovation as it puts strong emphasis
on Research & Development. It also has strong relationship with plumbers and is considered as a
premium brand with top quality showers. However, the brand awareness of Aqualisa is low among
consumers. The core-products are perceived to be over-priced and too high-end.

Quartz - The Company has come up with a new offering called Quartz that perfectly meets the needs
of consumers in terms of water pressure and temperature regulation. But, Quartz is currently selling
about only 30-40 units a day (against the target of 100-200 units per day) despite all marketing
efforts and initial positive reviews. With competitors catching up in product quality and
innovation, Rawlinson must plan a strategy to increase the sales of Quartz and to make it more
noticed.

Channel of Distribution - Aqualisa is available in 40% of trade shops, where the primary
customers are the plumbers. More high-end products from the company were available in 25% of
the showrooms of UK. While the electric shower product line is available in the 70% of the overall
DIY sheds such as the B&Q stores. Most of the showers (46%) are sold in Trade Shops, followed
by DIY Sheds, showrooms and Electrical wholesalers.

Competition Analysis:

The UK shower market have 4 major players – Triton (30%), Mira (22%), Gainsborough (11%)
and Aqualisa at 7%. For the ‘Mixed shower’ segment Aqualisa has the second highest market share
only next to Mira. Out of the competitors Triton is the only one that has significant brand awareness
and is most accessible at a customer level. Aqualisa is one of the first movers when it comes to a
product like Quartz.

Customer Analysis:

Consumers - The consumers of Aqualisa are classified into three price segments: premium, standard
and value. Each of the segments differ in terms of their needs and different factors influence their
decisions to buy the product. The premium and the standard segment customers need products which
provide high performance and service, while the value segment customers are focused on price and

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convenience. Analysing the purchasing pattern of the customers, the premium segment customers
prefer showrooms as their shopping platform and buy products which are stylish. But the customers in
the standard and value segment choose the products which are recommended by independent
plumbers.

Do-it-yourself – Unlike the premium segment customers who give importance to stylish products,
these customers focus on products which are inexpensive and easy to install. Most of the
customers in this segment are landlords and apartment dwellers. Analysing the purchasing pattern,
this segment prefers large retail outlets as their shopping platform. The customer trend of this
market is more towards electric showers as they could be adapted to different water systems.
Aqualisa sells its brand Gainsborough through the DIY sheds such as B&Q.

Developers – This market works in a B2B setup, and are highly price-sensitive. Therefore, Aqualisa
exclusively launched Shower Max brand to cater to their needs. They have more reliable products
and give importance to products which can work in multiple settings. Like the premium segment
customers, they also prefer stylish products. The shopping platform for these market segments were
specialist contract outlets. Also, they relied on independent plumbers for the installation of their
products.

Plumbers - This segment were reluctant to innovative products. They preferred one specific brand
and was very slow in changing brands. They were less adaptable to the changing technological
products used in the industry.

Key Insights:

% Units
Channel Electric Mixer Power Total Sold by
Channel
Trade Shops 3,30,000.00 4,00,000.00 1,10,000.00 8,40,000.00 46.7%
DIY Sheds 5,50,000.00 80,000.00 20,000.00 6,50,000.00 36.1%
Showrooms 55,000.00 70,000.00 20,000.00 1,45,000.00 8.1%
Others 1,65,000.00 1,65,000.00 9.2%
TOTAL 11,00,000.00 5,50,000.00 1,50,000.00 18,00,000.00

73% of the consumers were influenced by Plumbers recommendation for the shower purchase (all
three segments of customers) Most of the showers were sold through Trade shops (46.7%) where
Plumbers were primary customers – this gives a chance to tap the mainstream market. Aqualisa was
present in 40% of the total trade shops. Additionally, Aqualisa is present only in 25% of the
showrooms which contribute to only 8.1% of sales, hence more penetration in showrooms (premium
segment) could lead to more sales.

54% of the installations were done by independent plumbers. Plumbers preferred to stick on to one
brand so that they could avoid performance problems and future visits. Because of this reason, they
did not switch to other brands and distrusted innovation. Hence for Quartz, the plumbers were
Pragmatists (Early Majority). Crossing the chasm is a major challenge but it is one of the vital
options, in our opinion, to meet Aqualisa’s objectives.

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Key factors that has affected the business performance of Quartz -

 Low Brand Awareness because of lesser advertising among consumers

 Sales force consisted of just 20 people who spent 90% of time maintaining existing accounts
hence did not put much efforts to develop the market for Quartz
 Plumber Reluctance – They were not too keen to adopt new innovations and were mostly
loyal to a single brand.
 Perception about the Product – Highly Complicated, highly priced and just for the premium
market.
 Sold only though 500 Showrooms out of 2000 showrooms in UK - Too much of niche
product and not mainstream
 Most of the people bought showers as a replacement product (44%)

STRATEGY: THE GAME PLAN

Strategy is about who to target and how to implement it

“Focus on the one who can influence the others”

Objectives Scope Advantages

•Increase the sales of •UK Shower Market •VALUE PROPOSITION

Quartz in UK / Achieve
Sales Momentum
•To enter into the
mainstream market
•Increase Brand Awareness
•Convince plumbers about
benefits of Quartz
•Where we want to play: •Plumbers - Very Easy to
Install (in half day),
Trade Shops & - Push-Fit-Connect-Done
Showrooms model
- Shorter Installation Time
•Target Customers -
•Premium Segment -
PLUMBERS - Remote Control
- Reliable Water Pressure
& & Temperature Regulation
- Easy to Use & Stylish
The Premium Segment - Doesn't break down
Customers - Easy "Do-It-Yourself"
Installation
- Superior Shower
Experience

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IMPLEMENTATION (4Ps) – In line with the above strategy (How are we going to achieve):

PRODUCT: Training programs for plumbers by teaching them how to use Aqualisa Quartz by
giving them hands on training so that they are aware of the features, and can convey the benefits of
the innovation and features to the customers.

PRICE: Plumbers can act as influencers if incentivized, as there is a considerable market of ‘standard
price range consumers’ who rely on the plumbers’ opinion. Retailer price could be reduced as a part
of Push strategy. Currently huge margin earned on MSP for Quartz products.

PLACE: More Penetration in Trade shops (currently 40%) which cater to maximum shower sales
in UK and their primary customers are plumbers. More Penetration in showrooms (currently in just
25% of total showrooms) to tap a larger premium customer segment.
- Increase in Sales Force (currently - 20)

PROMOTION: Communicate value proposition (Points of differentiation) to the target segment

through banners, posters outside trade shops and showrooms and in newspaper ads.

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