Aqualisa Quartz Is Case Study Of Harvard Business School.

1527 words - 6 pages

Aqualisa QuartzIn an industry where gaining a competitive advantage through product innovation was deemed impossible, Aqualisa developed a breakthrough product, launching the Quartz in the U.K. shower market in May 2001 with great optimism. Four months after the initial launch of Quartz, Aqualisa has only managed to sell the product at a rate of 15 units a day. Managing Director Harry Rawlinson set a goal of selling 100 to 200 units of Quartz showers a day to break through to the mainstream. This translates into an annual minimum goal of approximately 36,500 units. To generate this sales momentum, Aqualisa must rethink its marketing strategy for the Quartz.Market Potential of Aqualisa Quartz U.K. shower unit consumers' main complaints- poor pressure, varying temperatures, and frequent breakdowns - are traditionally addressed through the use of electrical showers, mixer shower valves, or integral power showers (Moon, 2). The quantity and pricing information for the three shower categories are provided in Figure 1.The main channels for showers in the U.K. are showrooms which typically sell to customers in the premium price segment, trade shops which primarily sell to plumbers, and do-it-yourself sheds (DIYs). With retail prices for the Quartz of €850 for the standard model and €1,080 for the pumped model it can compete with and be feasibly marketed towards the 145,000 shower units sold annually in showrooms (Exhibit 2). This segment assumes high quality and service with products differentiated through style. According to Rawlinson, once the Quartz goes on working display in a showroom, it rapidly becomes the leading product (Moon, 10).Due to price differences between available value and standard brands of electric shower units and the Quartz, it is not clear if the Quartz could compete with the 330,000 electric shower units sold through trade shops. The 400,000 mixer showers and 110,000 power showers sold annually through trade shops have smaller price differences, giving the Quartz the potential to compete in this market segment. Although consumers in the value segment are highly concerned with price, they are also concerned with convenience and avoiding excavation. The reduced time of installation- a half day versus up to two days- should be considered in evaluating the buyers needs and behavior due to the €40 to €80 charged per hour by U.K. plumbers as well as the opportunity cost for the buyer of that day and a half and the opportunity cost of not excavating. The value and standard consumers are unaware of the cost breakdown of installation and will be less price sensitive to the retail shower price if they are saving €320 to €960 on installation.The Quartz does not have clear market potential with the 550,000 electric shower units sold annually through DIY sheds. Not only is the price significantly greater for the Quartz than for a value brand electric shower unit, there are also no plumber cost savings. Further,...

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