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Segments
a)
b)
c)
c)
d)
Product Variants
a)
Electric: No need for hot water supply. Bulky box. Low flat
rate.
b)
c)
Channels
a)
Trade Shops: Carried all brands Sold to plumbers who worked for
developer, showroom, contractors and end customers. Acqualisa
was stocked in 40% of outlets. Focus on selling brand/product asked
for by the customer
b) Showrooms: Distributors supplied to showroom. Stocked and sold
high-end thru a consultative process to end customers selling
solutions. Installation offered to customers thru plumbers. 2000
showrooms in UK 25% stocked Acqualisa
c) DIY sheds: Discount, mass market , DIY products Electric showers
preferred choice cheaper and easier to retrofit. Acqua lisa not
available thru this channel but Gainsborough was available in 70%
of outlets
d) Plumbers: 10000 master plumbers after several years of master
training and apprenticeship. Shortage of plumbers in UK.
Acqualisa
Differentiated products for different customer
segments
o Acqua- Premium
o Showermax Customised product for developer
o Gainsborough Price proposition for DIY buyers
Makes it easy for customer to identify relevant brand
and select.
Competitive pitching
Price to product value proposition clearly understood
e)
Birth of Quartz
Birth of Quartz
a)
Flexi-pressure
Flexi- temperature
Radically different
f)
The research effort thru a state of art facility had 9 patents,
Several products in pipeline and more ideas in early development stage
Birth of Quartz
g)
h)
I)
II)
Product that solved all the problems for a BETTER shower experience
Initial result
Acqualisa
1. How important a product is Quartz to Acqualisa? Importance to
Harry?
2. Is this product worth the investment of 5.8 million pounds
Acqualisa
1. How important a product is Quartz to Acqualisa? Importance to
Harry?
2. Is this product worth the investment of 5.8 million pounds
. Product innovation that promised to change the market
FOREVER
. Technologically miles ahead
Water pressure ( without gravity)
Easy to install
Easy to use
Outstanding design
Great value
. The R&D effort has created a good pipeline of
great products. The break thru product justifies
the investment on its own steam but it has also
paved the way for more exciting products to come
Acqualisa
Is quartz a niche product or a mainstream product?
Acqualisa
On the face of it appears niche Milk quartz for
margin
Sometimes the urge to protect existing brands/range
can blind us to the opportunity
Quartz has the potential to cut across segments by
offering VALUE with its break-thru product.
Making it niche will limit what the product can do the
brand and company
It can create a HUGE lead over competition if
positioned as mainstream.
Pitch at a higher price?
Create Value perception even if priced higher?
Acqualisa
1. How does it create value
For customer
o Looks and design
o Pressure and temperature
o Low TOTAL cost
o Low Maintenance cost
For Plumber?
o Quick installation
o Trouble free
Acqualisa
Why is it not selling?
Existing showers plagued with problems ( Pressure and
temperature)
Quartz Vastly Superior and yet not selling
Resistance from plumbers suspicious of innovation
Trade inertia
Upfront higher price value not understood
Acqualisa
1. How do the channels differ?
Which Channel is most likely to embrace Quartz
Which consumer shops from which channel?
Which customer segment is most likely to accept/prefer
quartz
Acqualisa
1. Who are the critical players in the shower market?
Acqualisa
1. Plumber influences about 75% of all sales and are involved in
54% of installs of mixer shower.
2. Loyal to product may be not to company
3. Does not want to experiment or take chances
Brand
Gainsboroug
h
Channel
DIY sheds
( 70%
presence)
Customer
Segment
DIY/value
buyerr
Premium
buyer
Acquaisa
Distributor
25%
presence
Trade shops
Showroom
20% mixer
installs
Master
plumber
Standard or
value buyer
Shower max
wo pump
Developer
20% of mixer
installs
New home
buyer
Acqualisa
1. Economic Value of Quartz
Acqualisa
1. Economic Value of Quartz
Without Quartz
Figs in Euros
Acqua valve 609
715
Acquaforce pump
520
Two days labour
charge
960
Total cost
2195
With Quartz
Figs in Euros
Quartz Pumped
1080
.5 days work
240
Total cost
1320
Acqualisa
1. Is it worth converting a plumber---- given his resistance to
innovation
2. What is the lifetime value of converting a plumber
Acqualisa
1. What is the life time value of converting a consumer
310
15500
77500
50
Acqualisa
What should Rawlinson do to generate sales
momentum for Quartz?
o Should he change his marketing strategy and
target customers directly or target the
developers or the DIY retail outlets?
o Should he lower the price?
o Or something different altogether?
Where to start
Option 1
)
Target customer. Spend another 3 to 4 million pounds and generate
customer pull
Option 2
)
Target DIY market pitching the easy to install proposition
Option 3
)
To target DevelopersHigh volume channel
Option 4
)
Position in the niche premium segment
Where to start
Option 1- Target customerSpend another 3 to 4 million pounds
)
Economically risky and inefficient .
Option 2- DIY market
)
pitching the easy to install proposition
)
But should a premium product be positioned for discount channel
)
Or can one sustain a higher price even in this segment with the
value offered?
Option 3- Target Developers
)
High volume channel and break-thru with a view developers can
provide volume break thru
)
Downside: Time lag in customers experiencing the product and this
will allow competition to catch up. Also sell premium product at
steep discount didnt seem right
Option 4
)
Sell niche as premium??
)
But niche implies LOW leveraging of product that transforms the
user experience !!
Where to start
So what to do?
Where to start
)
)
)
)
)
Where to start
a)
)
The only channel with the ability to showcase the end product to
customers and also exert pressure on plumbers is the SHOWROOM
channel
Showroom will help
o
Educate customers
o
WEAN/WIN early adopters
o
Convert plumbers
o
Extract maximum value for the product
o
Support the brand stand as an innovator
Acqualisa
1. Is this a good product?
Thank You