Aqualisa Marketing Case Analysis

Overview                                                                                                Sadaf Safari

Aqualisa, a shower manufacturer in the UK, was one of the top in the market. Before the innovation of a breakthrough product, Aqualisa offered 3 types of showers: electric, mixer, and power, which none of them were efficient in terms of pressure, temperature, or energy. Some had temperature problems and some required up to 2 days of heavy excavation which the result of the product installation tended to be bulky and unattractive.

The company was divided into 3 pricing segments: premium for those people who shopped from showrooms and emphasized style, performance, and service, standard for those people who relied on plumbers and emphasized only performance and service, and value for those people who wanted convenience and affordable price. This ultimately created 4 customer segmentations for shower products from Aqualisa: plumbers, household customers, developers, and do-it-yourself people. Plumbers were the ones who helped the customers to install their showers. Customers mostly relied on plumbers’ expertise in regards to type and brand of shower. Therefore, plumbers tended to stick to one brand recommendation and installation, making them an expert in it without being worried about failures which required revisit with out-of-pocket costs for the plumbers. This by default made plumbers distrusted from new innovations.

When Rawlinson started his career in Aqualisa, he knew changes were required to remain on top of the market in regards to quality, price, and service. Therefore, a new innovation was needed to satisfy the needs of different customer segments. After many research and development stages, Aqualisa introduced a shower with a stable pressure, small box which could be installed anywhere out of sight, an electronic remote controller where temperature could be determined based on customer’s preferences. Besides all these feature, the shower could be installed in less than half a day.

1. What are the Value propositions of the Quartz to Aqualisa's Customers? What is the current UCM and the estimated Lifetime Value of a Aqualisa Quartz customer to Aqualisa? What is the estimated lifetime value to Aqualisa of a plumber installing the Quartz?

The value propositions of the Quartz to household customers were efficient and reliable water pressure, desirable temperature controller which could be determined by themselves manually, nice small design with a great look shower, and not breaking down. These features made it easy and safe to use for kids and elderly people since a preferable temperature could be chosen before getting under the water and testing it by hand. Quartz also had value proposition for customers who preferred to install their shower by themselves; it was an easy and short installation process. The value propositions of Quartz to plumbers was installation easiness which took less than half a day without any heavy excavation, profitability since it did not require a revisit, and plumbers could take more jobs by being fast in the number of installations.

Based on exhibit 8 in the case, The UCM for Quartz standard was €275 and for Quartz pumped was €345, this gives a UCM average of €310 (275+345 divided by 2).

Aqualisa could have a longer lifetime value for Quartz if plumbers were targeted specifically. Targeting household customers directly requires more resources compared to plumbers while they may only buy one to two showers for their houses through their lifetime. However, shower installation is one of the plumbers’ jobs; therefore, they would need many showers, as many as 30 to 40 per year. This makes plumbers life time value longer and more profitable.

1. Evaluate the pros and cons of the various options being considered by Harry Rawlinson. Which alternative, if any, would you recommend? Would you recommend a different strategy? If so why? What overall STP and marketing mix would you recommend for the Quartz. Why?

Pros and Cons of…

Targeting Customers Directly:

Pros: They were easy to get to the market by a few pathos, appealing to emotions, advertisements. Once they were convinced, they could request a plumber to install the product for them. Once the plumber installed the product, his familiarity or practice could make him curious and interested in the product. This could also create a valued relationship between Aqualisa and household customers. They would feel valuable if they were targeted directly. This ultimately created loyalty to the brand.

Cons: It costs a lot of money over a long period of time, since these customers had to be targeted in cyclical forms. Each household customer will buy one to two showers through their life; therefore, attraction of new customers was needed at different intervals of time. This refers to short lifetime value of household customers. Also based on the case it was high risk and high reward while the company was already healthy.

Targeting Do-It-Yourselfers:

Pros: Quartz, being differentiated from the electronic one by having a nice look, stable pressure, and preferable temperature controller, was easier and more efficient than an electronic shower, which was dominated in this group of people. Therefore, it could grab their attention quickly. It could also bring more profit, since it had a higher price than electronic ones.

Cons: This segment of the market was a small number of people. Premium price could work against Aqualisa, since this group people preferred a shower which had a convenience in installation and price. Therefore, not much profit could be expected from this group of people.

Targeting Developers:

Pros: Targeting developers is a large channel which can result a high profit. Their connections with plumbers could also be useful in convincing plumbers and boosting product familiarity and profit. They were also dependable in order to put Quartz in luxurious buildings.

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