Aqualisa Case Analysis Sample

Aqualisa has ever had a strong repute in the U. K. shower market. with the company being by and large recognized as holding top quality showers. a premium trade name and great service. It was a extremely profitable company and sat rather comfortably with its niche in the market. Harry Rawlinson joined the company in 1998 and believed it was vulnerable for different grounds. In the twelvemonth 2000. Aqualisa had 18. 1 % of the market portion in the shower industry. Aqualisa sold electric showers largely under a separate trade name name “Gainsborough” . which was available in 70 % of DIY shops. Three merchandise scopes are available under this trade name. which were value. criterion and premium. The Gainsborough scope histories for 11. 3 % of the entire market portion within the shower industry. This trade name is non available in trade stores or salesrooms. Aqualisa’s merchandise scope has 9 manners and histories for 6. 8 % of the full shower industry market portion. This figure does non include the extra portions acquired by the company through the debut of the Quartz scope. Aqualisa merchandises were available through 25 % of salesrooms in the UK and 40 % of trade stores.

Product- the Aqualisa Quartz shower was a one touch control shower that provided efficient and dependable H2O force per unit area and temperature. The Quartz shower coincided with the consumers’ demands and wants and created the wow factor amongst them. It took less than half a twenty-four hours to put in instead than a two twenty-four hours installing with the conventional shower. Consumers can either but the standard Quartz or the Quartz pumped edition which comes with a pump which is easy installed anyplace near a hot and cold H2O connexion.

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Price- the Quartz criterion shower costs ˆ175 to do and is sold at a retail monetary value of ˆ850. delivery in a border of ˆ275 after the maker merchandising monetary value. The Quartz pumped edition costs ˆ230 to do and sells at a retail monetary value of ˆ1080. delivery in a border of ˆ345 after the fabrication merchandising monetary value.

Place- Aqualisa had a 20 individual gross revenues force that sold to distributers. trade stores. salesrooms. developers and pipe fitters. Their chief precedences was to pass 90 % of their clip on keeping bing histories and 10 % of their clip spent on developing new clients. Aqualisa’s gross revenues force besides had long standing direct relationships with a group of pipe fitters that were loyal to the Aqualisa trade name. Aqualisa were trusting merely every bit much on these pipe fitters to do gross revenues as they were on direct channels of distribution.

Promotion- when reading the stuff it was apparent that Rawlinson was hesitating about running any advertisement run as it was high hazard so they ran a trial run affecting a erstwhile merely print advertizement run which was scheduled to run inthe mail on Sunday magazine. Rawlinson noted that a big graduated table run would be about ˆ3 million to ˆ4 million over a two twelvemonth period which would be a really tough sell across the company with a net income of ˆ17 million. Other options were to seek and acquire its spouses like B & A ; Q to assist force the merchandise. avoiding the demand for expensive consumer advertisement. Aqualisa besides offered developers a 50 % price reduction to integrate their merchandise but were unable to do any gross revenues. Despite attempts to force the merchandise Aqualisa sold really few in the first 4 months of its release.



  1.  Company has been profitable for old ages* Aqualisa’s market repute for* Hi quality merchandises* Great service* Position as # 3 in shower market* Aqualisa’s “Showermax” ( discounted monetary value ) trade name selling really good to belongings developers for installing in new places * Aqualisa has 40 % market incursion in Trade Shops* 20 individual gross revenues squad merchandising to distributers. trade stores. salesrooms.developers and pipe fitters * Plumbers trueness to Aqualisa trade name


  1.  Actual service degrees dropping* Mature market – one-year growing rates dropping ( was between 5 % & A ; 10 % in 1998 ) * Net return on gross revenues dropping ( was 25 % in 1998 )* Market portion dropping* 90 % of Gross saless force focal point is on bing histories* 10 % merchandise failure after suiting


  1.  The DIY sector in UK which is 36 % of entire shower market by figure of units sold in 2000 ( Aqualisa had 650k of 1. 800k market ) * New discounted trade name named merchandises ( similar to Showermax ) * Highly skilled new R & A ; D squad
  2. Aqualisa’s “Gainsborough” trade name is available in 70 % of DIY shops


  1.  Poor trade name consciousness among consumers* Key determination shapers are independent pipe fitters with immense opposition to alter ( plumber advises/selects Shower Mixer 73 % of the clip ; consumers select in 27 % of the instances ) * Because of old bad experience with electronic invention. pipe fitters were really doubting about any new electronic invention ( e. g. Quartz ) * Other providers catching up on quality. monetary value
  2. Aqualisa’s service degrees are dropping* Aqualisa’s market portion is dropping



  1.  Quartz perceived to be a ‘break-through’ merchandise in the industry* Quartz benefits for consumers:* Hi force per unit area H2O flow* No re-adjustment for temperature control* Light to bespeak temperature rightness* Attractive. good looking merchandise* Quartz benefits for pipe fitters:* Heat/water ‘mixer’ located remotely ( non in shower itself )* More easy installed* Time saved at installing ( 1/2 twenty-four hours versus 2 yearss )* Doesn’t take digging work in bathroom for replacing* Tested with broad scope of consumers and that feedback incorporated in design* New suite of merchandises on watercourse ( e. g. Body Jet )* Product awarded top award at Bathroom Expo* Diaries really positive towards advanced. new merchandiseFailing
  2.  Quartz had associated development costs of ?5. 8m in R & A ; D in 3 old ages * Quartz had fabrication costs of ˆ175-ˆ230 per unit whereas the “Aquastream Thermostatic” Aqualisa nucleus merchandise had associated fabrication costs of merely ˆ175 * Pricing of the Quartz unit may be an inhibitor for gross revenues ; may necessitate to dismiss to acquire gross revenues momentum * Lack of take up among channel spouses


  1.  The US market is an chance ( Rawlinson is run intoing two cats from US )
  2.  Other non-UK markets* New R & A ; D proving installations that could back up new advanced merchandises
  3.  Once plumber installs a Quartz unit. he is converted to the merchandise
  4.  Once installed in salesrooms. merchandise becomes taking marketer THREATSPoor trade name consciousness among consumers
  5.  Key determination shapers are independent pipe fitters with immense opposition to alter
  6.  New merchandise acceptance is a long. slow procedure* Because of old bad experience with electronic invention. pipe fitters were really doubting about any new electronic invention ( e. g. Quartz )
  7.  Possible canabalization of “Aquastream Thermostatic” merchandises

Industry AnalysisThe UK Shower MarketAqualisa was runing with in the UK shower Market. a market where merely 60 % of the population had showers. This was due to the undependable nature of the merchandise and negative repute built up over old ages.

Hazard of entry Med/LowFor any company wishing to come in this industry they would incur some considerable costs. Turning adequate to be able to accomplish economic systems of graduated table would take a considerable volume of gross revenues. Patented Technological progresss would besides move as a barrier to entry. diminishing the hazard well. Brand Loyalty in this industry is considered rather low ; this is chiefly due to the fact that consumers aren’t needfully cognizant of the merchandises on offer. The lone company with any kind of a trade name presence was Triton. this was done so by holding a 30 % portion of the Market. This industry is germinating with advantages in engineering. Aqualisa are ( harmonizing to Rawlingson ) 2 old ages in front of the rivals with their latest Aqualisa Quartz scope. This might enable them absolute achieve absolute cost advantage. The Aqualisa vitreous silica by proxy creates efficiencies for the pipe fitter that can be seen through the decrease of installing times. It besides is proven to be more dependable to the consumer where as antecedently temperatures and force per unit area rate fluctuated on a regular basis. Intensity of Rivalry Medium

AmalgamateThis industry is considered absolutely competitory. the top five participants account for 76. 5 % of the UK shower market in 2000. Therefore we deem this market to be “Consolidated” . For this ground we deem the strength to be average Bargaining Powers of Buyers – medium/High

We have split purchasers into two sections. the Plumbers and the Consumers. Plumbers are non trade name loyal ; easiness to put in and dependability are the cardinal factors act uponing their purchase. The make/model would be capable to the budget of the consumer ; nevertheless 73 % of buying determinations were to a great extent influenced by the pipe fitter at manus. Consumers wanted aesthetically delighting showers that held good force per unit area. consistent temperature and were easy to utilize. Therefore this raises costs by demanding a boss quality. The Plumbers have considerable influence in the determination devising procedure here. they act as a gatekeeper to the terminal user.

The top 5 participants in the industry take up 76. 5 % of the market portion. with in this amalgamate industry there are many purchasers and Sellerss of homogeneous merchandises. In 2000 all merchandises being offered in the market were really similar ensuing in low trade name trueness. This indicated the importance of invention and USP in order to accomplish the maximal market portion and distinction.

Although we are seeing a positive tendency in Aqualisa’s gross revenues figures in the last 3 old ages. which is rather impressive sing this industry is in the mature phase of its lifecycle. We see Rawlinson point out some issues in the company. which could do a major prostration in the company’s gross revenues. if non addressed. This is what we are looking to better with our recommended schemes. In hope to speed up our growing of gross revenues twelvemonth on twelvemonth with the debut of the Quartz. Profitableness

Cost of Gross saless:Appears to be rather high at 53. 2 % . this is indicating out the cost of which we are bring forthing our merchandises as a per centum of the overall gross revenues. This is a figure we could look to cut down in the coming old ages by going more efficient in bring forthing goods. and as the company grows in footings of gross revenues volume. Perchance accomplishing superior economic systems of graduated table.


Our full disbursals are 21 % of our overall gross revenues. If we break this down into each single disbursal as a per centum of gross revenues we can hold a expression at were the company is leaking money.

  1.  We can see the Finance. Admin & A ; Depr. disbursal is the highest at 7 % of gross revenues. although this is integrating a figure of disbursals in one. we could look to better on this disbursal by turn toing the internal working of the company and perchance bettering the efficaciousness. This would in bend free up money for a larger selling budget which we believe will be needed to establish our new Quartz merchandise. without cut downing our net net income.
  2. Our 2nd biggest disbursal is our gross revenues disbursal ( 6 % ) . this would be comparative to our net gross revenues figure ( units ) and would be a figure which we would merely hold to factor into history as there is non much we could alter unless we hired or fired from our gross revenues squad.
  3.  Our Marketing disbursal is the following highest at 4 % and one we feel we need to higher if we are to establish a large selling run to truly improve consciousness of our trade name and new merchandise the vitreous silica. We could higher this disbursal by taking off from other disbursal to retain the same net net income. or higher the expense border intending a decrease in net net income.
  4.  Our R & A ; D disbursal is at 2. 6 % of gross revenues and it is an disbursal we believe could be reduced to do more money available for other disbursals such as marketing which we forecast to turn. we feel that with the R & A ; D we have at the minute we are already two old ages in front of the competition. but we aren’t selling the merchandises we’re planing. so it merely makes sense to put more into the selling of the merchandise and cut down the R & A ; D spend.
  5. Customer Service is another disbursal we should look to perchance higher somewhat it is the smallest disbursal at 2 % of gross revenues. but to keep the repute the company has we need to put in this country. as Rawlinson pointed out. despite the “great” repute. the company seems to be stealing in existent service. This being a alone merchandising point. as one of people’s biggest jobs is the issue over mistakes. we need to keep this great client service.

Gross Profit Margin:Is 46. 8 % . this in co ordination with the cost of gross revenues. and could be improved if we implement the some of the betterments to take down the cost of gross revenues. this would in bend increase our G. P border. Net Net income Margin:

This is moderately high at 25. 5 % and seems to hold improved from ’98 when it was at 25 % . this could indicate to the company going more efficient in its procedures. this could be improved much like the G. P border by farther bettering efficiencies and cut downing the cost of gross revenues. Although we may hold the cut down this border in the coming old ages to give more money to our advertisement budget to force gross revenues of our new merchandise in an effort to take the Quartz mainstream. as it states in the instance they are merely selling 15 units a twenty-four hours. and to travel mainstream they need to sell 100 – 200 units a twenty-four hours. Perceptual Map

Quality – High


  1.  Quartz Pumped* Quartz Standard
  2.  Aquavalve 609* Aquastream Thermostatic
  3.  Aquastream Manual* AquavalvePrice – Low

Quality – LowPrice – High




( Perceptual map doesn’t include the Gainsborough products. )

From the Perceptual Map. we can place the assorted market sections. and how our merchandise scope fits into each of the sections to run into the demands of each of the sections.

Quartz Pumped would be considered a premium merchandise. with the highest of quality but with a premium monetary value excessively.

Whereas The Aquavalve would be considered a lower quality with a lower monetary value to run into the demands of the value section. In stating this. all Aqualisa’s merchandises are considered rather extremely priced and this will be a topic we will turn to.

These assorted merchandises will appeal to different clients with different demands and budgets.

Nature of Purchase

  1.  Purchases made through different channels ( depending on different sections ) .
  2.  Showrooms.
  3.  Customer in the premium section showed here. they took high public presentation and service for granted and were concerned about the aesthetics.
  4.  Independent Plumbers.* Customers in the criterion and value sections used this channel to act upon their purchase. although the standard section demanded public presentation and service the value wanted convenience and a good monetary value.
  5.  Large Retail Outlets. ( DIY ) Customers here installed the merchandises themselves hence they valued inexpensive and easy to put in merchandises.
  6.  Property Developers.
  7.  Had independent pipe fitters install the merchandises but were concerned about aesthetics and besides were monetary value medium.
  8.  Reasonably high engagement purchase. although in most instances. reliant on 3rd party.
  9.  “Consumers were by and large uninformed about showers. and there was small apprehension of merchandise options. ”
  10.  44 % of shower purchases were replacement showers. go forthing clients angry. This is why we will offer a guarantee with our merchandise to turn out the quality over other trade names.
  11.  Merely 27 % of people select the type and trade name of shower alone ( without advice from pipe fitter )
  12.  This is why it is of import to aim the pipe fitters as our scheme suggests.
  13.  Plumbers frequently stuck with one trade name and were loath to exchange. intending they suggest the one trade name to all their clients.
  14. Important to hold pipe fitters utilizing our trade name.

Ansoff Matrix

We are utilizing the Ansoff matrix to demo our scheme for the merchandises we are presenting and how they will suit with the companies bing merchandises. As you can see we plan to go forth our original merchandises in the same market to go on the market incursion whilst updating them every four old ages has suggested in the instance. For the Quartz line we can see them in the merchandise development subdivision. as they are new merchandises being introduced in an bing market.

As a eventuality program. if the instance occurs where our new Quartz line fails. we would propose. implementing some of the engineering used in the Quartz line to better our bing merchandises. as we can see the advantages the new line has with many betterment. we could dribble these betterments down through the other merchandises we already offer. Recommendation 2: Target Consumers

We can see from the pie chart even without the pipe fitters influences we can see that over a one-fourth of installings are done without confer withing a pipe fitter. Traditional media should be used to aim these consumers. Television advertisement would be an first-class manner to make consciousness among consumers. By aiming belongings proprietors in this manner in clip slots in mid-late eventide. they can see the alone benefits of Quartz and will either travel to showrooms. contact pipe fitters about installing. or possibly associate them to a web site in the adverts so they could hold a expression online. Specific mention to the easiness of usage. convenience. efficiency and particularly the 5 twelvemonth guarantee will be important as 44 % of shower gross revenues by installing are replacement showers. A suggested 40-50 % of the advertisement spend should be allocated to this sector as it has the most expensive types of advertisement.

Targeting pipe fittersWhen looking at our scheme aiming pipe fitters would be one of our chief focal points. Plumbers have some signifier of influence when interacting with clients and we can see from the stats that they influence about 73 % of the market including developer’s belongings proprietors and consumers. We recommend aiming pipe fitters instead than developers as consumers tend to take the advice off pipe fitters when doing any determinations to make with plumbing and fixtures. In add-on. from the article we know that developers had already been offered a 50 % price reduction on the Quartz scope but they failed to react to this generous offer. therefor it is non ideal to aim this market section. In the instance survey we are told that many times people would hold to wait up to 6 months for a maestro pipe fitter to name out to transport out a occupation for the client. which by and large took yearss to finish. Installation of the Quartz merely takes half a twenty-four hours and pipe fitters could acquire legion occupations done in the clip that it use to take them to put in a normal shower. Besides it besides gave pipe fitters the chance to direct out immature learners to transport out the occupation as it was so easy to make. We believe this would promote pipe fitters ( if marketed suitably ) to buy a Quartz merchandise. Plumbers tend to be loath of new advanced merchandises. nevertheless from the instance it is obvious that if pipe fitters were targeted efficaciously to seek the Quartz merchandise. this will take to reiterate purchases as they will appreciate the alone merchandising points of the merchandise in relation to their line of work.

How are we traveling to aim the pipe fitters?To acquire pipe fitters on board with the merchandise we must first inform them about the merchandises benefits to them every bit good as to the consumer. They must be persuaded into the whole construct behind the Quartz scope. which is efficiency and likability for both the pipe fitter and the consumer. This can be achieved through presentations at trade shows and inducements for utilizing the merchandise. This will hopefully in bend diminish reluctance to utilizing advanced and technologically advanced merchandises. Integrating this along with an advertisement run to clients should work in sync to increase demand for the merchandise hence increasing trade name consciousness and net incomes. In order to acquire people to go to these trade shows a direct selling attack shall be undertaken. This will affect reaching pipe fitters straight and informing them of the price reductions on offer every bit good as presentations of the merchandise on offer.

At these trade shows inducements will be on offer to lure clients into buying the merchandise e. g. money off recommended retail monetary value such as the retail monetary value is ˆ850 for the standard Quartz merchandise and will be offered at the trade shows for ˆ700. Another illustration would be the premium merchandise. Here the recommended retail monetary value is ˆ1080 and will be offered at a discounted monetary value of 850 euro. At these shows presentations will be carried out demoing the pipe fitters the advantages and easiness of installing of the merchandise. From these trade shows we hope to garner a database in which inside informations of the pipe fitters will be held. If pipe fitters are recorded on this information base they will be offered Aqualisa merchandises at a discounted monetary value in the hereafter. In add-on to this selling attack. we besides suggest advertizements to be placed in trade magazines as 65 % of the entire advertisement spend should be allocated in aiming pipe fitters for the Marketing grounds given above.

Further RecommendationsAqualisa presently dedicates 90 % of the clip of its gross revenues force to bing patronages while merely utilizing 10 % seeking to get new concern. We believe that this is inefficient deputation of resources. We recommend staff should pass more clip and energy geting new and profitable clients. This can be done through direct selling. Digital Marketing advertisement and trade shows. Aqualisa could put in making a presence on line. Initially. Aqualisa should put up a web site exposing the alone merchandising points to their advanced merchandise scope. Using presentation pictures supported by popular societal networking sites they could let both the consumer and the pipe fitters experience their offering and finally take their trade name over their rivals. Although we to the full understand the services provided to current clients must be maintained. regional cleavage and Key Account Managers dedicated to parts can use resources in order to optimise gross revenues and growing. In relation to cannibalisation. we recommend that disused merchandises should be replaced with more advanced merchandises in order to maximize gross revenues. Merchandises may go disused due to technological progresss. Any unprofitable merchandises should be reviewed and perchance withdrawn from the market.

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