Rawlinson Case
Executive Summary: Rawlinson is considering whether to change marketing strategy for the Quartz in order to sell 100 or 200 a day to break through the mainstream. To generate sales momentum, most important, Rawlinson should come up with tactics to encourage product trial by plumbers; secondly, demonstrate product benefit to consumer, and build premium image and sales channel with luxury property developer.
Situation Analysis:
Company: Rawlinson believed Aqualisa’s profit advantage is vulnerable because of the vanishing product/quality difference. Therefore, Rawlinson initiated product research and development to come up with the Quartz shower - a breakthrough technology far preceded other U.K. showers, which satisfied all of the consumer’s …show more content…
unmet needs but was simply not selling. Rawlinson worried that Quartz would look likes a niche product so that a quick action needed to turn around sales performance.
Consumer and Collaborator: Triggers and Barriers to adopt Quartz Channel | Target | Needs | Quartz | Trigger/Strength | Barrier/ Opportunity | Retail | Consumer | * Nice looking * Deliver good pressure at stable temperature * Easy to use * Don’t break down | | * Use-friendly | * Low brand awareness * Uninformed about showers and heavily rely on plumber’s recommendation | Special | Do-It-Yourselfer | * Inexpensive model * Easy to install | | | * Too expensive | | Property developer | * Reliable * Nice looking * Work in multiple setting * Price sensitive (except for luxury property developer) | half half | * To luxury developer, Quartz’s premium image could justify paying high for luxury property.
| * Pricing too high to most property developers. |
Collaborator | Plumber | * A single brand to create expertise. * Like to familiarize with the service expected from a manufacture. | | * Quick and easy to install | * Reluctant to switch brand because of unknown performance. * Distrust innovation. | | Aualisa’s Sales team | * Avoid product cannibalization with current Aquavalve 609 | | | * To sell Quartz, sales have to point out deficiencies in existing products. …show more content…
|
According to Exhibit 4, only 27% of consumers select type and brand without advice from plumber.
In other words, plumbers are influencer and decision-maker when selecting for mixer showers. They liked to be loyal to a single brand and distrust innovation, one of the key factors contributed to unsatisfied sales performance in the first four months since Quartz launched in the market. Additionally, Quartz priced too high to be accepted by Do-It-Yourselfers and property developers (except for luxury property developers) in which price-sensitive weights in the decision making process. Moreover, Quartz wasn’t positioned clearly inside the company so that sales team’s reluctant to sell Quartz.
Competition: Triton and Mira are Aqualisa’s key competitors in terms of overall shares in the shower market. Triton was dominant in Electric Showers segment. Therefore, Aqualisa didn’t compete with Triton in the same product segment (Aqualisa’s market share ranked it No. 2 in mixer shower segment), while compete head to head with Mira in Special shower segment. According to Exhibit 2, Aqualisa’s market share in Mixer shower segment was only more than a half of Mira’s (20.8% vs. 36.4%). It’s possible to grab some shares from Mira with superior technology and advertising
investment.
Context: Market share didn’t really change without product innovation, a reason for Aqualisa to invest and launch Quartz so as to keep profit advantage and even grab more market shares from both competitors and new penetration (current market penetration is 60%) with this breakthrough technology. Rawlinson’s goal, sell 100 or 200 a day to break through the mainstream, is reasonable even under additional cost of advertising investment.
Alternatives: The question for Rawlinson was how to generate sales momentum. To solve the problem, Rawlinson should first decided whether or not to discount Quartz, then identify priority of target group and different-emphasized message, finally solve the problem of product cannibalization. Alternatives include: * Discount Quartz? I would not suggest doing so. First, discounting price can’t persuade plumbers to select Quartz. Second, if Rawlinson’d like to avoid plumbers in shower selection, he could position Quartz in Do-It-Yourselfer and Property developer market in which requires far low pricing and heavy advertising to compete with market leader Trion. Aqualisa would lose profit, contrary to the original intention, which was to keep profit advantage and grab more shares. * Target Do-It-Yourselfers? I would not suggest doing so. Most of Do-It-Yourselfers were satisfied with low-priced Electric Shower, which was not Aqualisa’s main market, not to speak of Quartz. * Target consumers directly? It would cost 3-4M to do a big advertising campaign, resulting in BEV = (3-4M+5.8M)/300 ≈ 9M/300 = 30,000 units, which represents 30,000/550,000 = 5.5% market share in mixer shower segment. There’s market potential, and consumers would be educated and consumer-select-segment would be increased. * Target the developer? There’s market potential in luxury property developers. They need superior product like Quartz to justify their high pricing. The luxury property developer should be our target but not the prioritized one considering both their contribution in future brand recognition and significant time lag effect laid down the way.
Recommendations: Plumbers are 1st prioritized target group and are key factor for Quartz to succeed, so encouraging product trial by promotion is important. Besides that, emphasis message of quick & easy to install and support plumbers with additional service to reassure plumbers with Quartz’s reliable quality and installation convenience, say Quartz assign installation consultant to go and assist plumbers doing installation in the first three months or played demo video of installation in Trade shops.
Luxury developers are 2nd prioritized target group, message to them should be emphasis on premium image associated with leap technology. Consumer would love the product because the benefits of Quartz were significant, therefore I recommend Consumer to be the 3rd prioritized target group. Once brand connection established, they will influence plumbers in turn and further increase the brand penetration. Advertising investment and product display in showroom are key communication vehicles.
In order to avoid product cannibalization, Aquavalve and Quartz need a clear price positioning and differentiation in distribution channel. Let’s position Aquavalve in value - standard price segment, and Quartz in premium price segment. We show Quartz in showrooms to attract high-end customers with high requirement of nice-looking shower. We place both Aquavalve and Quart in Trade shops and we might need to discount Aquavalve a little bit to grab shares from other Mixer Shower brands.
Situation Analysis:
Company: Rawlinson believed Aqualisa’s profit advantage is vulnerable because of the vanishing product/quality difference. Therefore, Rawlinson initiated product research and development to come up with the Quartz shower - a breakthrough technology far preceded other U.K. showers, which satisfied all of the consumer’s …show more content…
unmet needs but was simply not selling. Rawlinson worried that Quartz would look likes a niche product so that a quick action needed to turn around sales performance.
Consumer and Collaborator: Triggers and Barriers to adopt Quartz Channel | Target | Needs | Quartz | Trigger/Strength | Barrier/ Opportunity | Retail | Consumer | * Nice looking * Deliver good pressure at stable temperature * Easy to use * Don’t break down | | * Use-friendly | * Low brand awareness * Uninformed about showers and heavily rely on plumber’s recommendation | Special | Do-It-Yourselfer | * Inexpensive model * Easy to install | | | * Too expensive | | Property developer | * Reliable * Nice looking * Work in multiple setting * Price sensitive (except for luxury property developer) | half half | * To luxury developer, Quartz’s premium image could justify paying high for luxury property.
| * Pricing too high to most property developers. |
Collaborator | Plumber | * A single brand to create expertise. * Like to familiarize with the service expected from a manufacture. | | * Quick and easy to install | * Reluctant to switch brand because of unknown performance. * Distrust innovation. | | Aualisa’s Sales team | * Avoid product cannibalization with current Aquavalve 609 | | | * To sell Quartz, sales have to point out deficiencies in existing products. …show more content…
|
According to Exhibit 4, only 27% of consumers select type and brand without advice from plumber.
In other words, plumbers are influencer and decision-maker when selecting for mixer showers. They liked to be loyal to a single brand and distrust innovation, one of the key factors contributed to unsatisfied sales performance in the first four months since Quartz launched in the market. Additionally, Quartz priced too high to be accepted by Do-It-Yourselfers and property developers (except for luxury property developers) in which price-sensitive weights in the decision making process. Moreover, Quartz wasn’t positioned clearly inside the company so that sales team’s reluctant to sell Quartz.
Competition: Triton and Mira are Aqualisa’s key competitors in terms of overall shares in the shower market. Triton was dominant in Electric Showers segment. Therefore, Aqualisa didn’t compete with Triton in the same product segment (Aqualisa’s market share ranked it No. 2 in mixer shower segment), while compete head to head with Mira in Special shower segment. According to Exhibit 2, Aqualisa’s market share in Mixer shower segment was only more than a half of Mira’s (20.8% vs. 36.4%). It’s possible to grab some shares from Mira with superior technology and advertising
investment.
Context: Market share didn’t really change without product innovation, a reason for Aqualisa to invest and launch Quartz so as to keep profit advantage and even grab more market shares from both competitors and new penetration (current market penetration is 60%) with this breakthrough technology. Rawlinson’s goal, sell 100 or 200 a day to break through the mainstream, is reasonable even under additional cost of advertising investment.
Alternatives: The question for Rawlinson was how to generate sales momentum. To solve the problem, Rawlinson should first decided whether or not to discount Quartz, then identify priority of target group and different-emphasized message, finally solve the problem of product cannibalization. Alternatives include: * Discount Quartz? I would not suggest doing so. First, discounting price can’t persuade plumbers to select Quartz. Second, if Rawlinson’d like to avoid plumbers in shower selection, he could position Quartz in Do-It-Yourselfer and Property developer market in which requires far low pricing and heavy advertising to compete with market leader Trion. Aqualisa would lose profit, contrary to the original intention, which was to keep profit advantage and grab more shares. * Target Do-It-Yourselfers? I would not suggest doing so. Most of Do-It-Yourselfers were satisfied with low-priced Electric Shower, which was not Aqualisa’s main market, not to speak of Quartz. * Target consumers directly? It would cost 3-4M to do a big advertising campaign, resulting in BEV = (3-4M+5.8M)/300 ≈ 9M/300 = 30,000 units, which represents 30,000/550,000 = 5.5% market share in mixer shower segment. There’s market potential, and consumers would be educated and consumer-select-segment would be increased. * Target the developer? There’s market potential in luxury property developers. They need superior product like Quartz to justify their high pricing. The luxury property developer should be our target but not the prioritized one considering both their contribution in future brand recognition and significant time lag effect laid down the way.
Recommendations: Plumbers are 1st prioritized target group and are key factor for Quartz to succeed, so encouraging product trial by promotion is important. Besides that, emphasis message of quick & easy to install and support plumbers with additional service to reassure plumbers with Quartz’s reliable quality and installation convenience, say Quartz assign installation consultant to go and assist plumbers doing installation in the first three months or played demo video of installation in Trade shops.
Luxury developers are 2nd prioritized target group, message to them should be emphasis on premium image associated with leap technology. Consumer would love the product because the benefits of Quartz were significant, therefore I recommend Consumer to be the 3rd prioritized target group. Once brand connection established, they will influence plumbers in turn and further increase the brand penetration. Advertising investment and product display in showroom are key communication vehicles.
In order to avoid product cannibalization, Aquavalve and Quartz need a clear price positioning and differentiation in distribution channel. Let’s position Aquavalve in value - standard price segment, and Quartz in premium price segment. We show Quartz in showrooms to attract high-end customers with high requirement of nice-looking shower. We place both Aquavalve and Quart in Trade shops and we might need to discount Aquavalve a little bit to grab shares from other Mixer Shower brands.