Issue identification
The issues presented in the ‘Aqualisa Quartz’ case study include the products that the company offered for sale to its customers, the channels of distributions, the sales and marketing strategy. The UK market had three types of electric showers that the customers could acquire to solve the problem of temperature fluctuation and low pressures. It had a challenge in developing the best product that would solve the exisiting problems in relation to the electric showers available for the clients. The alternative showers include integral power showers, mixer shower valves and he electric showers (Moon 2016).
Recognized for its top quality showers, great service, and premium, Aqualisa had an issue with its product portfolio, with the first issue being with the level of competition (Moon 2016). It was feared that other companies were soon catching up with the business. The other issue was with the pricing of the company’s products which were being perceived to be high relative to the market offering. Moreover, there was a decline in the company’s actual customer service with some of the products being reported as going wrong. Finally, Aqualisa was faced with a challenge of developing and locating a mechanism that had the ability to mix water randomly. The issue would lead to an improvement in the services that the company had on offer for its customers.
Factors to be considered
Therefore, to address the issue related to the product overpricing, the company should consider its costs of production due to its impact on the product prices. When there is a higher cost of production, the prices will be high while a lower cost of production results into low prices. According to the case study, Aqualisa had already spent €5.8 million after the product development. Product manufacturing would cost €175 and €230 per unit to manufacture (Moon 7). Thirdly, concerning the channel of distribution, Aqualisa should consider the costs that are involved in the distribution and the effect on prices. Currently, the Aqualisa brand is not available through the DIY sheds which makes a target. Approximately 70% of the 3,000 DIY outlets is dominated by the Gainsborough brand. Therefore, Aqualisa can introduce the product brand in the UK market through the channel to realize a large share of the market. The longer the channel of distribution, the higher the product prices due to the additional costs that are incurred by the middlemen. Finally, the marketing strategy that would be adopted for the new product should consider the related costs.
Options Available
For the marketing strategy, Aqualisa has three options to undertake. First, the company has an option of direct target of the customers (Moon 2016). Under this option, the company would target the customers with the products as it builds a consumer brand since it had challenges in accessing the plumbers. It achieves this through the showrooms, trade shops and electrical wholesalers who are the major market players. Through the show rooms, the expected unit sales is 55,000 units for the electric showers, 70,000 units for the mixer showers, and 20,000 units for the power showers. Trade shops, on the other hand, have relatively high units of sales for the three types of showers as provided from the available information. The unit of sales for the electric showers is expected to be 330,000 units while that of the mixer showers 70,000 units and 110,000 units for the power showers. Based on this approach, the Do-It-Yourself Sheds is the most appropriate since it results into high unit sales over a period. Secondly, the company has an option of targeting the Do-It-Yourselfers (Moon 2016). Under this option, the risk which is involved is the failure to climb out of the shades once it presents itself. This is, however, considered as risky for the business and would have an effect on the marketing of the product. Currently, the units sold for the electric showers under this approach are 550,000 units which the highest compared to the other options. The mixer showers have unit sales of 80,000 units while the power showers have the least unit sales of 20,000. Thirdly, Aqualisa has an option of targeting the developers. This has an effect of a large-volume channel and an increased volume of sales (Moon 2016).
Recommendation
Based on the available options regarding the marketing strategy, it is recommended that the company should have a direct target to the customers which is achieved through the use of sales representatives. The direct market provides Aqualisa with the opportunity to sell more units of the three products. It will sell 550,000 units of the electric showers which has a higher demand compared to the other products as mixer showers and power showers. High units of sales translate to high sales. With the direct customer approach, Aqualisa has the ability to access a large market with the products and increase its volume of sales. The effect of this on the business performance would be an increase in the unit sales and sales revenue over the period. Similarly, under the option, the company will ensure that there is a reduction in the advertising costs which would have an effect on the performance of the business. As of 2000, the total marketing cost was reported at €2,724. This is expected to decline with the direct customer approach increase the base profit further from the current €17,355. Direct customer approach requires a direct communication and contact with the customers. Therefore, it reduces the need for advertisement and other promotion techniques that can be used by the business to promote its products. Aqualisa should adopt a direct distribution channel for the product. This has an effect of reducing the cost of operations hence an improvement in the performance. Additional, when using the direct channel it will enhance its contacts with the customers which as a result improves its customer base and sales revenue.
Reference
Moon, Youngme. (2016). Aqualisa Quartz: Simply a Better Shower. UK Case Study. 2006.
