TO: Harry Rawlinson, Aqualisa Managing Director FROM: Vivek Durairaj, Marianna Feldmansky (Hecht), Danielle Fontaine, Chris Henshaw,Vanessa Landry, and Scott WatsonSUBJECT: Aqualisa Quartz Marketing Mix – Product, Place, Promotion, and PriceDATE: March 11, 2009
Statement of the Problem
Aqualisa has not established the proper mix of product, place, promotion, and pricing for itsrevolutionary Quartz shower valve. The company has relied on the same marketing mix approach for theQuartz as its other products and this has resulted in disappointing initial sales numbers. Also, Aqualisahas not devoted the necessary time and effort to soothe the fears of consumers who are wary of electronicshowers. Finally, the sales force has not spent adequate time recruiting new customers and securingdistribution through the existing network of plumbers. The existing network of plumbers has not adoptedthe product as readily as expected, which indicates that there is not a strong trust in the brand.
Issues and Analysis
The marketing mix is the combination of product, place, promotion and pricing and it is subject to both the internal and external constraints of the marketing environment. Aqualisa has developed anappropriate marketing mix for its existing products and has operated successfully and profitably.Unfortunately, the same marketing mix cannot be applied to a product as radically different andrevolutionary as the Quartz.Before we can consider the right mix of product, place, promotion, and pricing (the four Ps) for the Quartz, we must first analyze our target customers so we know how to create the right mix for thatcustomer. We performed a market segmentation analysis (Exhibits 1-7 and 1-11) which identified six potential target customers: Standard Customers, Value Customers, Premium Customers, Plumbers,Property Developers, and Do-It-Yourselfers. The analysis revealed that the three direct customers(standard, value, and premium) can be reached through the influence of the plumbers and showrooms. Per Exhibit 1-1, plumbers are responsible for selecting the type of shower for more than 75% of shower purchases in the U.K and Aqualisa could capitalize significantly by focusing on plumbers. The propertydevelopers could generate large guaranteed sales volumes, but this would not materialize for a few yearsdue to lengthy construction timelines. The Do-It-Yourselfers would require direct consumer advertisingand Aqualisa does not have strong brand recognition in the market among consumers at this time.
– Our analysis of the Five Cs, Five Forces, and SWOT at Exhibits 1-1, 1-2, and 1-4respectively, demonstrate the innovative qualities of the Quartz and the impact it could have on the U.K.
Targeting Developers: The second option is to target developers, so that they can request that plumbers install the Quartz system in their buildings, whether commercial or residential.
Developers can force plumbers to install the Quartz, no matter how wary plumbers are of electronic technology
May be able to generate more sales than targeting consumers (large-volume channel)
Slower results than targeting consumers
Developers resistant to Aqualisa products because they see it as a
“premium” brand, even with 50%
Rawlinson does not want to discount the Quartz because it is a revolutionary product
Targeting Plumbers: The next option is to target plumbers and help them overcome their wariness of electronic technology in shower products.
73% of consumers buying showers are influenced by their plumbers
Once a plumber installs the Quartz,
he/she “is a convert”
54% of shower installations are done by independent plumbers, and some developer installations and showroom installations may be done by independent plumbers as well
Aqualisa already has a loyal group of plumbers; they could use word-of-mouth to help sales
Plumbers are very wary of electronic technology in plumbing, because it seems complicated and easier to mess up the installation
Plumbers often became “experts” at
installing certain types of showers and do not want to switch
Lowering the Price: The last option is to lower the price of the Quartz, in hopes of attracting a wider market.
Lower price would mean more people from Standard, Value, and DIY market segments would consider Quartz as a viable shower option
Lower price would also encourage more developers and landlords to consider putting the Quartz in their buildings
Lower price would mean lower profit margins
Lowering the price may lower the perceived value of the product, which Rawlinson does not want
Quartz is already cheaper in terms of price and labor compared to similar Aqualisa models (Exhibit 1)