Case study Aqualisa Quartz: Simply a better shower

Q1. What is the Quartz value proposition to a) consumers b) plumbers? Ans. Aqualisa, a U.K. based shower manufacturing Company had launched its premium brand Quartz in May 2001. The Company has been very reputed in the U.K. market for its top quality showers, reliability and great service. The basic purpose behind launching this brand was to address the concerns of the consumers and the plumbers which perhaps were not satisfied with the existing products in the market. Stated below are the issues faced by the consumers and the plumbers and the value proposition offered by Quartz:
a) Consumers: Consumers were typically not happy with the kind of showers that were available in the market as revealed by the market research conducted by the Research and Development team of Aqualisa. The consumers wanted a shower that looked elegant, delivered water flow at good pressure, had a stable temperature, was easy to use, do not break down easily, have valves that do not become stiff and hard to turn after a period of time and dont require servicing very often. Also, they did not want the big bulky boxes installed for the mechanical control right over their shower wall. Inorder to address these concerns, Aqualisa launched its new product Quartz for providing a solution to the problems faced by the consumers apart from having certain added features. The Quartz, being elegantly designed was easy to use. It gave an option to consumers to run at two-third speeds so that water flowed under the desired level of pressure. It provided the user to take shower at the optimal water temperature which is comfortably hot as the temperature control is automatic. The easy-to-use push button was an added advantage. The button had a light which flashed red until the desired temperature is reached. Also, no excavation of the shower wall would be required as the mechanism for mixing the hot and cold water can be installed remotely. The fitting could be done in half a day, hence the consumers wont have to wait for a longer time for the plumbers to come and install it. Thus for the consumer, the Quartz shower provided efficient and reliable water pressure and temperature control, had neat fittings and was safe for use.

b) Plumbers (Installers): The plumbers distrusted innovation and were comfortable with the shower they had been installing all these years. They had a notion that unfamiliar products result into unknown performance problems and would often require a second visit to fix up the problem whose expenses were to be borne by the plumber himself. This made them extremely reluctant to switch brands and they became experts at doing their routine work of fixing one particular brand of shower.
Hence, the R & D team of Aqualisa developed the Quartz brand which is not only end user friendly but pleases the plumbers too. They addressed the issues faced by plumbers by making a shower that could be installed simply by drilling a single hole into the ceiling above the shower. The task required only half a day and could be accomplished by even the novice plumbers. It helped to avoid excavating the walls. Also, the Aqualisa sales force took efforts in demonstrating to the plumbers to make their job easy. Thus, the push-fit-connect kind of shower was acceptable to the plumbe

Q2. Why is the Quartz shower not selling? Ans. The Quartz brand launched by Aqualisa was proposed to appeal the consumers as well as the plumbers as it had features that could suit both the groups. However, the euphoria surrounding the products initial launch had quickly faded. In the first four months itself very few units of the product had been sold despite being available in all of Aqualisas normal distribution channels. The reasons as to why the brand could not carve a niche for itself in its initial stages of being launched could be enumerated as follows: 1) Being a premium product, the Quartz shower was priced between 850 Euros to 1080 Euros which was very high compared to other brands of Aqualisa. Thus it was not affordable to consumers other than those in the premium segment. Also, the developers who thought Aqualisa core products to be expensive were sceptical about buying the new product despite being offered heavy discounts. The developers would have been a better market for the product as they would force the plumbers to install a product of their choice. 2) At the launch of a new product, generally Companies lower their price for better market penetration. However, this aspect was not liked by the Managing Director of Aqualisa as he was of the opinion that Quartz is a premium product. This could have barred the Company from marketing their product through Do-It-Yourselfers who are their discount channel. 3) The plumbers are usually wary of innovations and perhaps did not favour the idea of installing an electronically devised shower. Reluctance on their part to install the Quartz shower even on the insistence of a consumer did not help in pushing the sales of the product. 4) The Quartz shower had better features which could be exemplified after being compared to any other existing brand. However, adopting this strategy would have hurt the sales of the existing products. 5) The sales force of Aqualisa concentrated more on servicing the existing customers rather than developing new ones. As the product is well designed and does not have much issues after being installed, the sales force could have focussed on extending their customer base by explaining the features and benefits of the product to potential customers 6) Also, the product was sold through tradeshops which did not have time to learn and explain the advantages of such a valuable product to the end consumers. This would have hampered the sales as the consumers were probably unaware of the features that Quartz shower has in comparison to other brands 7) The Aqualisa brand was sold only in about 500 showrooms out of the 2,000 showrooms in U.K. This reflects poor market penetration as showrooms are the place where the premium segment usually shops. Thus a high end product such as Quartz should be made available at locations where there are more chances of it being purchased.

Q3. Aqualisa spent 3 years and 5.8 million Euros developing the Quartz. Was the product worth the investment? Ans. Innovations are primarily cosmetic and dont lead to real breakthroughs. Any Company may generally relaunch its product every three to five years with certain changes and keep its brand awareness among customers. However, the investments made in incremental technological improvements are worth investment if the product is able to achieve the expected sales during the initial period of the launch as it creates an impact in the minds of the consumers and is able to break even within a short period of time. Going with the current sales of Quartz shower of 15 units a day, the Company could probably recover the amount spent on its research and development with a time period of 3-4 years. If the Company could promote the sales of the product to atleast 50 units a day it will be able to achieve a break even within the next two years. The product developed has features which are still unique in the market. The product could not make it to the expected level of sales due to lack of proper marketing strategies. However, this does not make the product not worth investing. As opined by the Managing Director of the Company, the Company has two years of time within which it has an competive edge over other brands in the market after which competitors would come with similar products at lower prices. It can promote the product in suitable manner and obtain the desired level of sales. It the products picks up again within a few months, the Company will build up higher reputation in the market and enjoy a better market share. Going by the sound financial position of the Company so far, a little burden on the income in the initial stages of a new product launch does not make the product unyielding.

Q4. What should the Company do with Aqualisa? Ans. Since the launch of the new product Quartz, the sales have not been up to the desired level. However, an analyses of the situation has revealed that the problem lies in the marketing strategy of the Company and not in the product itself. The Company has a competitive advantage in the market and should use it optimally to create and enhance brand awareness. Following are the ways in which the marketing strategy can be improved. 1) As the product is easy to use and install, the Company should market it to the end consumers directly. The sales people can make the consumers aware the products unique features and benefits. They can be made to understand that buying such a better product at a little high price can reduce the after sales servicing costs. 2) As far as the plumbers are concerned, there should be more free trials and demonstrations to help them understand the easy method of installation required for the quartz shower. The plumbers once positive about the product would always prefer it. Approximately 73% of the consumers are influenced by the plumbers for installation of a shower. Thus, promotion with the plumbers would help in better market penetration. 3) The developers who are of the opinion that the Aqualisa brands are usually high end products should also be made to realise the performance and flexibility of the product. If they can be influenced, more number of plumbers will have to install the Quartz shower. 4) Since the product is priced at a relatively higher end and is targeted mostly to premium segment, it should be displayed on the shelves of more number of showrooms. Because of the working displays in showrooms, people generally become aware of the products usefulness and instantaneously make a decision to buy the product. 5) Thus, the Company should promote the new product in an effective manner and at the same time also concentrate on its existing products so that their sales do not get hampered.