Super8!

• Cyrus Feyz• Uthman Khawaja• Xinyu (Olivia) Li• Justin Potts

• Ideen Razzaghi• Dianhong Wang• Yang Zhang• Liang Zhu

Company Profile“Shower Solutions” company, in 2nd placeCurrently involved in different consumer market

segmentsValueStandardPremium consumers

Different Channels of Distribution: Trade Shops Showrooms DIY

Plumbers!

Core Products

GainsboroughRetail: €95-155

AquavalveRetail: €390-715

AquastreamRetail: €480-670

AquastyleRetail: €230

Aqualisa Quartz• Digital

Technology• Competes in

Mixer and Power market segments

Key Issues

Slow Sales

Time Sensitivity Problem

Segments & Channels

Channels

Middleman

Customer

Reaching Customers

Trade Shops

Plumbers

Standard Value

DIY Sheds

DIY

Showrooms

Premium Developers

Shower Selection Process

Consumer selects type & brand of shower alone

27%

Plumber selects type & brand alone

25%

Consumer takes plumber's advice on

type & brand28%

Plumber influences type of shower, not

brand20%

Mixer Showers

Quartz AttributesCustomer segments

Differentiation factors

Price match

Hi-end product

Easy to install

Looks Great Reliable

Value customers

Total Cost üConvenience ü

Standard customers

Performance ü ü üService ü

Premium customers Style ü ü ü

DIY customers

Low priceEasy to install ü

Developers

Reliable üNice Looking üFlexibilityPrice Sensitivity

Quartz Product Analysis

€1,995

€1,670

€1,355

€1,080

€990€830€800€640€550€285

€2,590 €2,440

€1,950 €1,800

€1,440

€1,240

€1,170

€1,010

€390

€155€95

Premium Mixer/Boosted

Quartz Power

Quartz Standard

DIY Mixer

DIY Electric

Standard Mixer

Value Mixer

Standard Power

Value Power

Standard Mixer/Boosted

Developers

Suggested Alternatives1) Market as a DIY

Brand

Partner with B&Q and focus on ease of

installation2) Market

as a Developer

brand

For new home builds.

3) Market as

consumer brand

Develop consumer awareness via

advertising4) Market

to plumbers

Market push to influence consumer

demand

Pros and Cons of AlternativesPros Cons

1) Market as DIY

•Ease of install appeals•Channel partners

•Price mismatch•Damage brand

2) Market to Developers

•Few developers•High volume

•Long lead times•Price mismatch

3) Consumer Awareness

•Builds brand•Wide coverage

•Awareness fades•Not decision makers•Costly

4) Target Plumbers

•Key influencer •For large segments•That values Quartz•Price match

•Risk aversion•Resistance to change

Market AnalysisSegment

Market Potential

High Quartz Target

Low Quartz Target

(By Installation) Sales

% Market Sales

% Market

Consumer Chosen Value 24,786 18,000 73% 9,000 36%Consumer Chosen Std 43,740 32,000 73% 16,000 37% Total Consumer 68,526 50,000 73% 25,000 36%Plumber Influenced Value 67,014 18,000 27% 9,000 13%Plumber Influenced Std 118,260 32,000 27% 16,000 14% Total Plumber 185,274 50,000 27% 25,000 13% Total Value & Std 253,800 50,000 20% 25,000 10%Developer 94,000 50,000 53% 25,000 27%Commercial 28,200 50,000 177% 25,000 89%Showroom Premium 94,000 50,000 53% 25,000 27%DIY 80,000 50,000 63% 25,000 31% Grand Total 550,000

Decision Matrix

Issue WeightTarget Consumers

Plumbers DeveloperShowroom DIY Media

Campaign

Sales Volume 0.6 3 2 4 5 1

ROI 0.4 4 3 1 5 2

Total 1 3.4 2.4 2.8 5.0 1.4

JustificationValue/Standard segments can support goals.

100 to 200 units / dayQuartz total price fits these segments.Quartz features fit these segments

Convenience, performance, servicePlumbers influence Value & Standard segments.Plumber concerns can be over-come.

Electronics, reluctance to change, risk aversionA relationship with a plumber lasts.

Consumer awareness declines over time. Previous campaign didn’t follow AIDA model.

AIDA Model

Awareness

•Direct Mail Campaign

Interest

•Product Warranty

•Installation Warranty

Desire

•Profit potential

Action

•Free-trial

•Follow -up

Phase 1: Preparation phaseCampaign Management Team

Initialize the launch phaseFollow up on results , report to Rawlinson

Hire new sales force (three)Acquire plumber database (Mail,

Phone, Brand,…)Brochure Development and design

Phase 2: Campaign launchLoyal Plumbers:

Contact the plumber, send the brochure and free trial.

Follow up with them about the installation process and their opinions.

Regular PlumbersSend the brochure, call the ensure it’s delivered .Periodic follow ups.

Two phases:

I. Phase 1: Preparation phaseII. Phase 2: Campaign launch

Implementation Plan

Implementation Timeline2001 2002

Actions Oct Nov

Dec Jan Feb Mar

Apr May

Jun Jul Aug

Sep

Phase I

Management Team

Hire Sales Force

Acquire database

Developing Brochure

Phase II

Sending Brochures

Follow ups

Calculations OptimisticPessimisti

cMost Likely

# of plumbers offered 4000 4000 4000% of plumbers accepting 70% 30% 50%

# of plumbers to accept 2800 1200 2000Plumber installs/year (avg) 50 40 45% Plumbers working for customers 54% 54% 54%

Number of customer plumbing install/year 27 22 24

% where plumber influences choice 73% 73% 73%

Influenced Customers per plumber 20 16 18

New Quartz installations 55,188 9,461 35,478

ROI Analysis

ROI Analysis cont.

Financial Impact: OptimisticPessimisti

cMost Likely

Profit generated by additional sales € 17,108,280

€ 2,932,848

€ 10,998,180

Fixed Costs € 110,000 € 210,000 € 160,000

Variable Costs € 751,800 € 427,800 € 557,000

Total Costs € 861,800 € 637,800 € 717,000 Gross Profit from program € 16,246,480

€ 2,295,048

€ 10,281,180

Contingency PlanContinuous and real-time monitoring – will

help to evaluate degree of successIncrease rate of follow up contact to

plumbersIncrease the number of plumbers targetedRevise materials and/or offering

…simply a better shower

THANK YOU

Cost AllocationVariable Costs: Optimistic Pessimistic Most LikelyDirect Mail program (database & mailout) € 20 € 60 € 30 Cost of One free shower unit € 203 € 203 € 203 Probability of Installation Warranty 5% 20% 5%Redemption of Installation Warranty € 16 € 64 € 16 Shipping € 30 € 30 € 30 Cost of program per plumber € 269 € 357 € 279

Fixed Costs:Internal Sales (follow ups): € 40,000 € 80,000 € 60,000 Internal Sales (lead generation): € 40,000 € 80,000 € 60,000 Materials design: € 30,000 € 50,000 € 40,000 Fixed Costs of Program: € 110,000 € 210,000 € 160,000

Customer SegmentationHow it was done ... 470,000 installs (Exhibit 6, less DIY of

80,000)54% of installs by indy plumber = 253,800

(Exhibit 5)73% influenced by plumbers = 185,274

(Exhibit 4)Ratio of Aqualisa Value : Standard product

sales36% Value : 64% Standard (Sales from Exhibit

2)67,014 plumber influenced “Value” showers118,260 plumber influenced “Standard”

showers

Campaign MonitoringFollow-up contact is made with plumbers to monitor the

effectiveness of the program. Are plumbers aware of the program? Are the materials anticipating and answering plumber’s questions? Are plumbers indicating interest? If not, what factors are inhibiting plumbers? Do plumbers indicate a desire to try Quartz? If not, what factors are inhibiting desire? Are plumbers planning on or have taken action to acquire Quartz and install

it? What factors are holding them back? Do they have interested customers? Would they like their Quartz product shipped now?

Program effectiveness is evaluated and changes made, if required Are additional contacts resulting in improved uptake and conversion? Do materials need revision? Should additional plumbers be enrolled in the program to achieve goals? Is the program in need of radical revision?