The Marketing of ECo Shower - Case Study Example

The case of E-Co Shower Table of Contents 1. The impact of showers on environment 2. E-Co Shower 3. Product attributes and showers 4. Concept evaluation results 5. Implications for E-Co Shower This is the study of the marketing strategy to be adopted for the marketing of E-Co Shower, a small five years old business based in New South Wales, owned by Richard West, who manages his business with the help of his wife. The strength of the E-Co Shower lies in the fact that with rising awareness of the harmful secondary effects of excessive water consumption by way of excessive energy usage, and harmful emission of greenhouse gas, there is a strong case for the use of this product since its usage reduces water consumption thus resulting in saving precious energy as also in reduction of greenhouse gas emissions. The study evolves and leads us towards building the encouragement and motivation towards its marketing efforts by way of data collected during three significant studies involving a wide cross section of respondents from different backgrounds and age groups. The conclusive findings of the survey were clearly indicative of the fact that consumers while buying showers primarily consider its utility value in terms of water pressure and price thus supporting the preference for Richard’s product. Table of Contents 6. The impact of showers on environment 7. E-Co Shower 8. Product attributes and showers 9. Concept evaluation results 10. Implications for E-Co Shower While examining the study of the lifestyle of the people of Australia and of the world in general we are well aware that taking daily showers at least once a day is a part of the daily routine of most citizens. Taking shower or bathing certainly involves the use of water to quite an extent and since in Australia, people bathe usually with warm or hot water it implies that energy is used which needs to be produced. Energy usage entails a cost factor to the household and its production results in the emission of greenhouse gases, which not only harm the atmosphere but also creates long term damages in the ecological balance for future generations to suffer from. In this context the most logical, feasible and immediate solution is to first reduce the quantum of water consumption which will automatically reduce energy consumption thus requiring lesser of its production and hence lesser emission of greenhouse gases. This means that people ought to use lesser water for their daily showers, which presently accounts for over 20% of the total water used for human consumption and needs. Lesser use of water for shower will mean that the pleasure of showering may be reduced and to avoid this the E-Co Shower has come out with variants that let your bathing pleasure remain the same, while the amount of water consumed is reduced considerably by way of the technique used in showers which mixes air with water and lets the bathing experience remain the same, yet requiring lesser amount of water for the same experience. In view of the problems created due to excessive water consumption and in an attempt to reduce its extent, Richard’s company has ventured to first study the data collected from various studies and surveys, and to come out with a product which perfectly matches the need of the time as also offsets the harmful effects of the prevailing issues of excessive energy consumption and emission of greenhouse gases. All the studies conducted to evaluate consumer interest in their product revealed that the E-Co Shower has been welcomed by the consumers in view of their preferences for products giving more utility value. Its use would lessen the quantity of water used, which means lesser water required to be heated resulting in reduced energy cost thus making way for lesser power bills. Sure, the product would be welcomed and patronized by the consumers. In the light of results of consumer behavior emanating from the consumer studies, Richard West will have to adopt the appropriate marketing strategy to make a success of his products as prior to the study he was selling on an adhoc basis to different consumer segments. In the case of Richard’s products, a detailed study was conducted by students and staff of the University of Newcastle to ascertain the potential of his products in retail sales. Studies were conducted by identifying similar products of his competitors as also the unique features of E-Co Showers. It was found that people based their preferences for showers on six attributes which were water pressure, water conservation, price, color/style, brand and Australian made. Of these the most important proved to be water pressure and price thus implying that Richard West had every reason to rejoice as his product had the potential to capture a large market segment. There was strong consumer intention to purchase the low cost ($ 39) water efficient showerhead adaptor and to some extent the expensive ($ 120) water efficient showerhead manufactured by Richard West. We know that Richard’s is a small business and has limited cash flows and hence unable to launch on a massive scale. It is also known from the three studies conducted that a majority would prefer the cheaper version of showers costing $ 39, as they prefer to go for utility attributes such as price and water pressure, which are provided by this version of the product. Hence Mr. West would prefer to launch this version first. The second version of the product costing $ 120 does have demand and a market amongst those who prefer to go for non performance based attributes such as color/style, brand and Australian made, but the extent of this segment is not sizable. The market segment here is not large to such an extent that Richard ought to make big investments. Moreover he is not capable to make such large investments in view of his limited cash flows. Segmentation of the markets is an important issue to be dealt with by Mr. West especially in view of the results of the three studies conducted by the University of Newcastle on consumer behavior for showers. Rather than offer the same marketing mix to all consumers, market segmentation makes it possible for companies to create a marketing mix targeting specific markets thus resulting in better satisfaction of consumer needs. Those who prefer the cheaper $ 39 version of the shower make a big market for Mr. West in terms of size and market share as compared to the costlier $ 120 version for which there is a limited market. The study conducted by the University is clear in its conclusion that overall there is a preference for the cheaper shower adaptor and there is a strong case for Mr. West to work on volumes and not on higher price. Segments and consumer types who would be interested in the cheaper version are those who did not own there house, and those who are household decision makers. It is logical to conclude that these segments form the vast majority of people thus creating a vast market and opportunity for Mr. West to launch the cheaper version of the shower. Management practices demand that a product is positioned in the market in a way that its attributes are identified and perceived by the consumer so that he connects with it as a part of his needs and desires in view of his status and standing in society. The desired perception has to be created in the target market. It is known from the study that non performance based attributes such as color/style, brand and Australian made had greater importance amongst those who owned their house and also amongst those who belong to the higher strata of society who attach a greater value to brand and style. It is in the interest of Mr. West to collect data about the concentration of such groups, to identify them and target them with a marketing strategy so that this segment is well tapped to yield the desired results in terms of sale and ultimately for the betterment of his company’s profitability. In other words the market must be well defined and understood in which the product will compete and the customer must derive value from the services that the product offers. However it will be sensible for Mr. West to position his products and concentrate more in segments that prefer performance related attributes because this is the larger chunk of the market. In addition, an activity like shower has to be judged from the utility that it offers to the consumer and not merely the status that it may signify or the style that it may convey. These are irrelevant and hardly of any significance and utility while taking a shower. It is quite natural to believe that the current market for Mr. West’s products will comprise mainly of construction companies, contractors, builders and government agencies engaged in the development of commercial and residential projects. Meaning that his present customers are mainly those who use his products for adding on to their own products or services in pursuance of their productivity goals. For example a builder who sells houses will need Mr. West’s showers to install in the bathrooms of those houses. Hence this is essentially a business to business activity where the product is a means to create another end product. In this activity Mr. West is already well established and has a considerable market share and does not need to make extra efforts to maintain his market share as also to expand gradually. His credibility and that of his products appreciates by word of mouth as also by some marketing activities and efforts. However when he wants to sell to retail stores he will have to adopt an entirely different strategy which will entail lot of efforts and a financial drain on him in terms of marketing expenses and manpower requirements. He will have to venture in a new area where his efforts will have to be directed to individual retailers who may not have big requirements as those of his B2B clients. He will have to engage his efforts and strategy towards more hectic marketing by way of advertisements, direct selling and personal sale calls to retailers and individuals. He will need to have lot of patience, as his efforts may not bear fruit immediately. The business plan will now have to adopt means conducive to a business to consumer strategy, which is altogether different since this is not a high traffic area of business activity. 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