Aqualisa Quartz Case Analysis - Assignment Example

Aqualisa Quartz Case Analysis Aquilisa is in a unique situation. The UK Shower market differs strongly from that of the U.S. Insofar as only 60% of homes actually have showers installed, much of the plumbing infrastructure is antiquated with poor water flow and the existing shower market has been dominated by three types of shower products Electric Showers: Which requires a bulky electric box in the physical showerMixer Shower Valves: The top selling shower for Aqualisa which physically blends hot & cold water, but would require an additional pump to increase shower pressure.

Integral Power Showers: Which combines the mixer valve and booster pump (Yet still requires a bulky electric box in the shower).The physical purchasing of shower valves is dominated by trade shops, showrooms and do-it-yourself shops.The main drawback of the Aquilisa brand as highlighted by Rawlson is that it has been regarded as a premium brand. However other brands are catching up in quality and many consumers perceive the company as being overpriced. The new Quartz product has a significant technological improvement over other models yet is arguably more easy to install than other models (Although many plumbers are reluctant to adopt new technologies).

Initial sales results were mixed so a new marketing approach was devised. The first solution was to target consumers, target do-it-yourselfers, or target developers. The data indicates that in the U.K the reasoning installing a new shower is based on10%-Installing a second shower15% New build projects.6% Commercial properties.44% Replacement Showers 25% New penetration.In order to connect with customers, the company must produce products that are reliable, not perceived as being over-priced, be easy to install, have a positive brand recognition, and perform well compared to alternatives.

From this perspective, the company must strike a balance between brand management (Through having positive name association), value chain management (Through continually incorporating improvements that helps company profitability), innovation management (Through introducing new products such as the Quartz system), and relationship management (Through establishing long term ties with plumbers, do-it-yourselfers etc).When using the Formula PI = (SP – VC) Vol – FC the effect of PI as a result of any changes on an individual component of the formula is highlighted below.

Marketing Activities Unintended Consequence (identify if positive or negative)Selling Price:If the selling price were to be decreased from €450 to say €380 (A price which would compete with the Aquavalve 609. The overall PI would have a positive effect although an unintended consequence would be that people may associate the product as being cheap. This would cut into the €275 margin and reduce it to €205.Variable Costs:If the firm were to devote efforts to decreasing variable costs (The current overall cost is €175 per unit) The overall profitability of selling each shower would increased which would have a positive effect on the PINumber of customers:When focusing on increasing the number of customers.

(As it stands the total market per year is 1.8 million units per year and Aqualisa controls approx 6.7% of that market..The company may acquire new market-share and assuming they are satisfied with the quality of product may create lifelong loyalty. Which would have a positive effect on PI.Amount of purchase:If the company were to theoretically increase the overall amount of purchaseThe effect on the PI would be positive. Frequency of purchase:If the company were to pursue a policy of increasing the overall frequency of purchase.

The effect on the PI would be positive. Perhaps this could be achieved by approaching plumbers to purchase their quartz productFixed Costs – Operations:By reducing the overall fixed cost operations. (Currently the total overall spend is €14,469,000)The effect on the PI would be positive because the company would have to sink fewer costs into overall operation.Fixed Costs – Marketing:By reducing the fixed costs of marketing.(Currently at € 2,724,000)The effect on PI could go in two directions.

This could improve the PI through reducing overalls costs, however over long periods of time this could cost the firm sales from associated poor brand awareness.