Aqualisa Quartz: Simply a Better Shower - Case Study Example

Why do s and plumbers apparently not recognize the benefits of the Quartz? The launching of the premium brand, Quartz, did not bring about much success for the company Aqualisa which was a UK based shower manufacturing company, known for reliability, quality and innovation. Quartz was launched in the market so that the plumbers and the existing customers can be offered a different product altogether, especially if they were not satisfied with the existing shower products of the market. The product had the value proposition offering which can appeal to both, the customers as well as the plumbers; however the product did not prove to be a success despite the innovative features that had been introduced and that catered to the problems which were being faced by both the customers and the plumbers. The launching stage of the product brought with itself a lot of excitement and anticipation but although there were thousand showers distributed to the other channels, these were able to sell about eight showers in total. The reason behind the poor sales was firstly, the plumbers did not welcome innovation of any in the field of electronics since they are late adopters and do not welcome the new technology at first. It takes time for the plumbers to adopt new technology of any sort at any stage; therefore they did not spread the word of mouth that the electronic showers were useful and they even stopped the customers from purchasing these showers at the same time. On other hand, Aqualisa’s Quartz was placed as a premium product which was penetrating in to the market and the product was priced at premium rates and the product which was already penetrating in to the market priced at high prices barred the product from a better market penetration. Since Quartz was in direct competition with the core products of the company, therefore company stopped it from comparing it with other products which they offered since it could have hurt the sales of Aqualisa indirectly. 2. What factors will determine the profits that Aqualisa will earn from the Quartz? There a numerous factors which will affect the profitability of Aqualisa, starting from the price of the showers which is available at the market at a premium price. The pricing strategy decides if the product will be profitable in the market, or will be able to breakeven, whereas on the other hand, wrong pricing strategy can affect the profitability as well. In the case of Aqualisa, the price is kept at a premium although the product is penetrating in to the market; therefore due to this the company is facing problems in selling the showers in to the market which has affected the revenues earned by Aqualisa. Moreover the channel of distribution is another aspect which influences the profitability of Quartz, since Aqualisa has offered the product at different channels of distribution, from the showrooms to the independent sales stores. The promotional strategies used by Aqualisa will also reflect the profitability of the company since the marketing strategy of promotion is the underlining way which portrays that how much revenue will be earned by the entity. 3. If the product is successful, will Aqualisa be able to create barriers to entry to prevent other firms From entering the market with a similar product? Aqualisa is primarily focusing on the innovation and technology, the concept of electronic showers is new to the market which steps away from the concept conventional and conservative showers which were already being produced by Aqualisa. However the concept of electronic powers is unique and hence the risks exposed to the entity are immense as well because the parent company is facing difficulties in selling such an invention because this is not easy to get adopted by the consumers. Therefore the cost of research and development of the electronic showers is very high and apart from this initial cost, convincing the customers to purchase the new innovation means using the pricing and promotional strategies as well as using new channels of distribution as well which increase the cost even further more. Therefore a niche market has although a lot of opportunities associated with it but at the same time, the threats exposed are high too due to rising costs. However, if Aqualisa proves to be successful, then the company has high potentials of creating the barriers to entry for other companies who will have to invest high in the research and development costs, distribution costs, promotion costs and face cut throat competition from Aqualisa at the same time which can make its survival very difficult. 4. Would Aqualisa prefer that the showroom industry is? • Dominated by one large firm that owns all of the 2,000 showrooms. • Comprised of 2,000 independent showrooms that compete with each other. For the product category in which Aqualisa is operating is a very complicated one since it has introduced a very innovative product in the market which has a very strong competitive edge. The way the product is marketed will play a vital role in the profitability of the company and the sales turnover as well but the company is suffering low sales turnover due to the poor sales distribution channels. Since the product has a high price tag attached to it, with the target market as the premium segment, therefore the wide availability of the product has to be ensured making sure that it available at a large number of shelves in numerous display centers. The product has to be made available at the working displays of the showroom because the consumers become aware of the product and make the decision to make the purchase in an instant. Aqualisa should focus more on giving the preference to the showroom industry which is dominated by one large firm, owning the 2,000 showrooms because the competition amongst the showrooms can hamper the sales of the product because individual showrooms will be serving their own interests individually rather than serving the interest of Aqualisa as a company. Moreover, one showroom will have employees who can gain training from Aqualisa on the product and the availability of the product at a large number of showrooms will ensure that the product is available to a large number of customers. 5. Assume that one firm dominates the showroom industry. • What determines the relative profit margins that Aqualisa and the showroom firm will earn from the Quartz? • Would this firm want Aqualisa to use advertising to convince customers that the Quartz is a better shower? The consumers buying the product and the number of showers sold everyday, weekly, monthly or annually will help in the determination of the relative profits which will be earned by the Aqualisa and the independent showroom. The advertising has to be used in order to sell the product since the low sales turnover is directly associated with the product’s marketing strategies and not the product. Therefore the firm needs to make sure that the product is communicated to the end consumer directly so that they become aware of the innovative and unique features of the electronic showers altogether. The showroom also needs to demonstrate the easy use and installation of the showers to the plumbers who are the influencers in the buying decision of the customers; therefore market penetration can be made easier if the product is promoted amongst the plumbers. Therefore advertising strategies used by the showrooms can influence the overall sales of the Quartz showers. Read More