Aqualisa QuartzGroup No. 1

Agenda

1) Situational Analysis

2) Problem Statement

3) Strategic Options

4) Recommendations

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Situation Analysis5 C’s Analysis

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Company

• High reputation (Top Quality & Great Service)• Had a Premium Brand Image (in minds of

Plumbers/ Developers)• Ranked #3 in overall UK shower market & #2

in mixing valves• Launched Quartz - 1st Significant Product

Innovation in years

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Channels

• DMU- Plumbers • Aqualisa in 40% of the shops• Staff want reliable products over technical advice• Responsible for 47% Sales

Tradeshops

• Premium Channel – Bathroom Solutions• DMU- Consumers in Consultation with Showroom Staff• Aqualisa in 25% of the showrooms• Responsible for 8% Sales

Showrooms

• Discount Channel• DMU- Consumers • Aqualisa present through Gainsborough (70% of the sheds)• Responsible for 36% Sales

DIY Sheds

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Customers

Consumers

• Low pressure, Temperature fluctuations & Shower breakdown• Low brand awareness• Standard & Value followed Plumbers recommendations• DIY Segment shopped in DIY Sheds; inexpensive products

Developers

• Not Worried - Pressure problems ; • Aesthetic Appeal - Reliable, Stylish products• Price sensitive; except for Luxury Builders • Relationship -independent plumbers• Separate Branding (ShowerMax) – Lower cost & Optimized

Plumbers

•High switching costs•Highly influential; Primary customer of trade shops•Scarcity of Plumbers•Innovation skeptics

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Competition

•Triton •Highest market share – 30%•Consumer Brand•Mainly focused in Electric Showers (88% of sales)

•Mira•2nd Highest Market•Mainly focused in Mixer Showers (51% of sales)•#1 in mixer shower: the main target

market for Aqualisa

Triton30%

Mira22%

Gainsborough11%

Aqualisa7%

Masco7%

Ideal Standard3%

Others20%

UK Market Share

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Context• In UK, almost everyone had a bathtub, only 60% had showers

•Archaic Plumbing

•2 Problems-• Low Pressure• Fluctuations in Temperatures

• Innovation is rare in shower production

•Product Segments competed in•Electric Shower Valve (61%)

•Mixer Shower Valve (31%)

•Power Shower Valve (8%)8

Aqualisa Product PortfolioBrands Segment Type of shower Retail Price

(€)Margin

(€)

Gainsborough Value Electric 95

Aquavalve Value Mixer 390 130Aquastream Manual

Value Power 480 110

Gainsborough Standard Electric 165

Aquavalve 609 Standard Mixer 715 225Aquatsream Thermostatic

Standard Power 670 175

Aquaforce 1.0/1.5 Bar

Standard Booster Pump 445 105

Aquaforce 2.0/3.0 Bar

Premium Booster Pump 595 305

Aquatsyle Premium Electric 230 60Quartz Standard Premium Innovation 850 275Quartz Pumped Premium Innovation 1080 345

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Customer Insights

End Consumer

Great looks

Good pressure delivery at stable temperatures

Easy to use

Breakdown proof

Plumber

Easy to install

Breakdown proof

No servicing requirements

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Pres

sure

Co

ntro

l

Tem

pera

ture

flu

ctua

tion

cont

rol

Safe

ty

Ease

of

Mai

nten

ance

Ease

of

Inst

alla

tion

Low

Average

High

Strategy Canvas: Quartz Vs Current Shower Valves

Nee

d of

ex

cava

tion

Pric

e

Ease

of U

se

Aes

thet

ics

Tem

pera

tur

e m

eter

Current Shower Valves

Quartz

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SWOT

Weaknessa. Low sales of Quartzb. Service Standards

going downc. 10% of product went wrong (Not improving )

Opportunitya. Higher growth prospects (40%

household do not have showers)

Threatsa. Customer

Perception of being Over Priced

b. Competitors catching up

Strengtha. Well known in UK

b. Top Quality Showers

c. Premium Brande. Great Service

f. Superior technology (Quartz)

Internal analysis

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Problem Statement

Lack of brand awareness among the customers (plumbers and end consumers).

• This has resulted in non materialization of the sales

• Showroom channel accounts for only 20%.

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Value Generation

Cost of Aqua valve 609 € 715

Cost of Aqua force pump € 445 (average)

2 days work expense € 800 (assumed)

Total cost € 1960

Aquavalve 609

Cost of Quartz € 1080

Cost of Aqua force pump -

Half days work expense € 200 (assumed)

Total cost € 1280

Quartz• Easy to use, • Stylish, • Overall saving

of €680.

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Existing Marketing Strategy

Targeting Consumers

Directly

• Pros:• Can build consumer brand

• Cons:• High advertising budget (€3-4m over

2yrs)

Targeting DIY

• Pros:• Easy to install

• Cons:• Risk of losing premium brand tag

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Existing Marketing Strategy

Targeting Developers

• Pros:• Increase in customer volume• Will force plumbers to get familiar with

Quartz• Cons:• Reluctant to buy, as Aqualisa products

are perceived as a high priced products

Targeting Plumbers

• Pros:• Plumbers Influences 20% of decisions• 28% customer takes advice• 25% selects type and brand

• Cons:• Reluctant to use electronic showers 16

Recommendations

• To follow differentiation strategy with a focus on short term and long term

• Short term:– Educate plumbers: • Identify and educate opinion leaders

– Showrooms: • Quartz will appeal to customers who requires

high end product

– Developers: • Quartz will help to high end customers

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• Long term:– Plumbers:• Develop the plumber community

– Invest in large scale consumer campaign• To build the brand.

Recommendations

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Questions

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