CASE ANALYSIS OF AQUALISA QUARTZ

By Kunal Chakrabarti

Roll No: ePGP-03-042, Batch - A

Facts of the case:

• In UK, people were fascinated about using showers in their bathrooms but
only 60% of UK homes had showers.

• There was couple of players in the shower market in UK.

• Three types of showers were installed in UK bathrooms.

o First one is Electric Showers that used water from cold water supply.
Electrical heating elements in the shower were used to raise the
temperature of the water. This type of shower did not address the flow
problem.

o The second type was Mixer Shower valves that had two subtypes:
Manual and Thermostatic. Both of the types blended hot and cold
water to create a desired temperature of the water. But it involved a
lot of excavation of the wall during the installation. To enhance the
water pressure additional booster pump was used.

o The last of its kind was the integral power showers which was a
compact one with thermostatic mixer valve and a booster pump. They
also required mounting of a huge box in the wall though they provided
a pressure of 18 liters per minute.

• The major two problems with most of them were low pressures and
fluctuations in temperature.

• About 10000 master plumbers were in UK. They had to undergo several years
of training and 3 years of apprenticeship before they become Master
Plumber. A standard shower installation was a 2 day job and involved
significant excavation. Plumbers generally preferred to install a single shower
brand and were extremely reluctant to switch brands.

• Aqualisa was mainly sold to distributors, trade shops, showrooms, developers

and plumbers.

Aqualisa’s new product offering:

• Aqualisa introduced its newest shower brand named as Quartz.

• It came in 2 versions – Standard shower and pumped shower version.

• It consists of a processor which was about the size of shoe box.

 • The location of the processor could be anywhere within reasonable proximity
to the shower.

Benefits of the new product “Quartz”:

• The installation of a traditional shower took 2 days whereas the installation of

Quartz only took half a day.

• Plumbers were finding it very easy to install and straightforward.

• The Quartz shower also created a great value for the customers. It provided
an efficient and reliable water pressure and temperature.

• It provided One- Touch control and easy-to-go push button. The shower also
intimates the user by flashing a red light when the desired temperature is
reached. The consumers now don’t have to wait for long after the shower is
started to get through the desired temperature. Everything is done
automatically by the processor of the shower.

• The parents also loved it as it was safe for their kids. The elderly also loved it
as they don’t have to struggle with hard and stiff valves.

Problem:

The sale of this new product by Aqualisa was not up to the mark and the sales were
not picking up.

Problem Analysis:

o One of the cause was Plumbers were wary of innovation. They were very much
reluctant on innovations that include electronics. Plumbers were very much
conservative on this and adoption rate to this new product was really low.

o The other cause of its poor selling performance was due to high cost of the
product.

o The sales people were also not sure how to position this product in the market,
whether to name it as a niche product or to place it in the mainstream. The
problem of placing this product in the mainstream area is that the sales people
have to tell about the defects of the existing mainstream products.

o A big amount of money was invested for the creation of Quartz. Now if it was
placed in the mainstream area, then the value for money will be enough less.

o As mentioned earlier, there were 3 types of showers in the UK market (Electric

Showers, Mixer Shower Valve and Integral Power Showers) and Aqualisa did no
mistake in catering all the three types of showers with different Brand Names
(Aqualisa, GainsBorough and ShowerMax).

o Aqualisa was placed as a high end shower wherein ShowerMax was offered at a
lower price.
o For the developers ShowerMax was advantageous as it was low cost.

o The new homes were built which did not use gravity system and ShowerMax
could deliver a high pressure with Aqua Valve technology.

o By making different brand strategy Aqualisa could target different set of

consumers separately without mixing the needs. This brand strategy also helped
Aqualisa to abandon any brand at any point of time with technological
advancement.

Strategy Options thought by management:

o The sales momentum was not growing too much. Management was thinking
whether a discounted price might generate more market enthusiasm for this
innovation.

o One of the strategies that were taken was to target the consumers directly. As
there was a problem in reaching to the Plumbers directly (mentioned earlier),
the steps taken were to make Aqualisa the brand of the consumers. But it could
involve a huge cost for advertising to reach out the consumers, making them
understand the details of the innovated shower technology.

o The second strategy was to target the DIY (Do-It-Yourself) markets. But generally
this DIY market is a discounted Market. The risk was to attach a premium
product to a discounted channel because it could create a wrong perception of
the premium offerings of the product.

Solution:

Aqualisa was a new technological innovation in the market of shower in UK. The UK
market had distinguished users (stylish, antique, economical, New User etc).
Aqualisa would have created a detailed matrix for the Shower Users in the UK with
taste of the users, price they are interested to invest, ease of installation preferred
etc as parameters. Based on the user matrix, management would have created a
product line catering to specific set of users grouped by the matrix. The branding of
the products would have done by targeting different set of consumers.

The Aqualisa Quartz has to be placed in the premium segment and should have
scaled down version for catering to different set of customers. Management also
have to invest creating specific sales professional those can understand customer
needs more effectively and can reach to the corresponding set of customers more
accurately. All these steps taken together would augment sales for the Aqualisa
Quartz Shower.