The company has relied on the same marketing mix approach for the Quartz as its other products and this has resulted in disappointing initial sales numbers. Also, Aqualisa has not devoted the necessary time and effort to soothe the fears of consumers who are wary of electronic showers. Finally, the sales force has not spent adequate time recruiting new customers and securing distribution through the existing network of plumbers. The existing network of plumbers has not adopted the product as readily as expected, which indicates that there is not a strong trust in the brand. Issues and Analysis The marketing mix is the combination of product, place, promotion and pricing and it is subject to both the internal and external constraints of the marketing environment.
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The company has relied on the same marketing mix approach for the Quartz as its other products and this has resulted in disappointing initial sales numbers. Also, Aqualisa has not devoted the necessary time and effort to soothe the fears of consumers who are wary of electronic showers. Finally, the sales force has not spent adequate time recruiting new customers and securing distribution through the existing network of plumbers. The existing network of plumbers has not adopted the product as readily as expected, which indicates that there is not a strong trust in the brand.
Issues and Analysis The marketing mix is the combination of product, place, promotion and pricing and it is subject to both the internal and external constraints of the marketing environment. Aqualisa has developed an appropriate marketing mix for its existing products and has operated successfully and profitably.
Unfortunately, the same marketing mix cannot be applied to a product as radically different and revolutionary as the Quartz.
Before we can consider the right mix of product, place, promotion, and pricing the four Ps for the Quartz, we must first analyze our target customers so we know how to create the right mix for that customer.
The analysis revealed that the three direct customers standard, value, and premium can be reached through the influence of the plumbers and showrooms.
K and Aqualisa could capitalize significantly by focusing on plumbers. The property developers could generate large guaranteed sales volumes, but this would not materialize for a few years due to lengthy construction timelines.
The Do-It-Yourselfers would require direct consumer advertising and Aqualisa does not have strong brand recognition in the market among consumers at this time. Page 1 shower market if properly marketed. There are currently no competitors in the market with a product that matches the potential of the Quartz and now is the time to be aggressive and penetrate the market. The strongest force working against the Quartz is the availability of less advanced substitutes in the market which lack the features of the Quartz; this is compounded by the fact that consumers are wary of showers that include electrical components due to prior failures in the market and other potential malfunctions.
We developed a sample conjoint analysis survey Exhibit which would help isolate the features most important to consumers when selecting a shower. Place — Aqualisa has a presence in two of the three main distribution channels in the market. With the exception of electric showers, trade shops are the dominant channel for all other shower types Exhibit The trade shops would have to be reached more pervasively by Aqualisa in order to capitalize on the attractiveness of the plumber segment.
The showrooms are the main outlet for premium customers because they utilize displays and demos to entice customers with style and design. The third channel is the DIY sheds which offer discount, mass market, and do-it-yourself products directly to consumers.
Promotion — As mentioned above, Aqualisa does not have brand name recognition in the consumer market and does not actively advertise to specific market segments. Most of the existing products are in the mature stage of their respective product lifecycles and as such, sales growth and innovation have not been key concerns.
The Quartz is in the introductory stage of the lifecycle, but it is being marketed in the same way as current Aqualisa products. Therefore its need for an aggressive promotion strategy to reach its target markets and drive sales has been overlooked.
The promotion strategies have not been customized for each segment and they do not demonstrate the benefits to be gained see Value Equation at Exhibit Pricing — To evaluate our pricing strategy, we have prepared a pro forma income statement Exhibit and a breakeven analysis Exhibit This equates to 36 units per day, which is not an unreasonable outcome given the current sales volume of approximately 15 units per day.
Our breakeven analysis maintained the introductory pricing of both versions of the Quartz standard and pumped in order to evaluate the current pricing strategy. Lowering the price would result in a higher breakeven quantity, which means it would take longer to see Page 2 profitability for this product line. Increasing the price would lower the breakeven quantity, but it could also price the product out of reach of certain customers.
Initial sales goal is to sell units per day and maintain profit margins as outlined in the Pro Forma Income Statement Exhibit Long-term recommendations include targeting additional markets such as the Do-It-Yourselfers and exploring discontinuation of low margin products to increase Quartz market share Exhibits and Plumbers will become our main target market to tap into several consumer segments and greatly increase our market share within the industry.
In order to appeal to plumbers, we need to demonstrate the value of utilizing our new electronic product Exhibit We will emphasize its installation time being one quarter of what they are used to, and how this will allow them to install more showers in less time.
Therefore, they will be able to take on more jobs and make more money per year Exhibit Due to its simple installation, they will also be able to train apprentices on how to use the product and focus their time and energy on more intensive and monetarily rewarding projects.
A specific brochure and advertisement will be released exploring the ease and innovation of our product Exhibit Our second target market will be the Premium Consumers who are mostly influenced by style and looks when deciding which shower to purchase Exhibit They are not price sensitive and take performance and quality for granted.
Since the Quartz has a higher price point and its aesthetics are unparalleled in the current market, we are confident that it will do well with the premium customers.
Page 3 The product will be positioned as high quality with innovation that makes life easy. Despite the fact that they are not price sensitive, we will find ways to emphasize its comparably reasonable pricing and how money saved on the shower will allow more money to be focused elsewhere for bathroom renovations.
In addition to focusing on new ways to target the main market segments, we intend to re-evaluate the methods used by our Sales Team. To motivate our employees to build these relationships, we suggest implementing a bonus plan. Each Sales Representative will have individual goals for a number of new accounts to contract each month, based on their experience and years in the industry.
We anticipate that this incentive plan will greatly assist in reaching the company goal of selling units per day as employees will be encouraged and motivated to sell. As mentioned previously, we aim to maintain current pricing on Quartz products.
However, to increase initial enthusiasm we will offer several monetary and informational promotions targeted to our different segments. For plumbers, we will offer a product guarantee and will cover repair costs. Since most plumbers pay repair costs out-of-pocket, this will make them less hesitant to try our product. We will also provide an informational brochure outlining cost and installation time comparisons between similar products on the market. In showrooms, we will have working demonstrations to pull customers to our booths.
We will educate consultants on Quartz as well, so that they are adequately prepared and willing to promote the product. In the long-term, we will also expand our target segments to include the Do-It-Yourselfers, a sizable group of consumers who install products on their own and generally shop at large retail outlets Exhibit They are interested in inexpensive models that are easy to install, without much emphasis on aesthetics.
Since this group is already attracted to electric showers, we will grasp their attention with more emphasis on effortless use with easy-to-read instructions and advertisements in weekly flyers and home improvement magazines. Additionally, once Quartz sales have proven to be more profitable than existing products, we will explore discontinuing less productive products that are no longer generating high sales numbers.
This will allow more time and resources to focus on promoting and producing the Quartz Exhibit Market research shows that consumers want a shower that looks great, delivers good pressure at stable temperatures, and is easy to use; Plumbers want a shower that is easy to install, with a guarantee Page 4 not to break down or require servicing.
Our product already embodies all these qualities and we are confident that the correct mix of product, place, promotion, and price along with targeted advertisements and sales strategies will help us to achieve our yearly sales goals.
Youngme Moon In , Uber is building what may be the largest point-to-point transportation network of its kind; it is literally changing the way the world moves. But unlike traditional transportation logistics companies like FedEx, Uber has an incredibly lightweight infrastructure: it owns no vehicles, employs no drivers, and pays no vehicle maintenance costs. Instead, its network relies on peer-to-peer coordination between drivers and passengers, enabled by sophisticated software and a clever reputation system. But despite its remarkable early success, Uber is an extremely polarizing company. Its business model is highly disruptive, and while disruptive innovation can be a good thing, it is also true that disruptive companies tend to break things. Keywords: marketing ; operations ; service ; strategy ; innovation ; disruption ; pricing ; customer loyalty ; customer satisfaction ; Uber ; taxi ; transportation ; sharing economy ; on-demand economy ; consumer behavior ; Marketing ; Operations ; Strategy ; Disruption ; Customer Satisfaction ; Transportation ; Consumer Behavior ; Citation:.
Aqualisa Case Study - Final 031009