Aqualisa Quartz - Simply a Better Shower

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The company should change the channel strategy which is called the distribution strategy. The company currently employs distribution though all of its channels, yet the sales number are not increasing. The current sales numbers are 15 units of quartz in a day and that does not even make one unit per sales force per day. On the other hand, the company is selling a lot of the products per sales force per day. It has been extracted from the case that the company is not able to reach out to its all potential channels of distribution. For example, it is reaching 500 showrooms out of the 2000 present in the country. There is huge gap between the current channel of distribution and the potential channels of distribution. If the company starts to target new channel of distribution for its newly launched Quartz shower as shown in Exhibit 3, it will be able to tap the new markets which are not served by the existing products of Aqualisa. This will help to prevent cannibalization effects on the existing products of the company.

The company should consider its promotional strategy. The company can bundle the existing products with the new product Quartz which will help to increase the sales of the new product. As the customers have the loyalty with the brands of the company, they will buy the new product of the company. This promotional offer will help to bring increase awareness in the customers about the innovative benefits of the new product. This will also persuade the un-served channel of distribution to launch the products of the company through their platform after seeing the increase demand of the new product.

Company cannot embark upon launching the full promotional campaign which costs around €3 to €4 million to aggressively advertise the product, as its net income is only €17 million in 2000. It cannot spare this large amount of money for promotional activity. It can help itself by launching its advertisement for the new product in the properly evaluated target markets which have larger potential for the new product like the tech savvy markets of customers. It cannot be launched in rural areas due to the sophistication of the technology, so urban tech savvy markets can be potential markets for the Quartz product and local media in the urban areas will be an effective medium to do promotion of the Quartz shower.

The company should consider changing the positioning strategy of the new product in context of the existing products of the company. But changing the positioning strategy should not cannibalize the existing products of the company. The company can market the new product as premium product but priced at suitable prices (not premium one, but normal) for the larger market segment which is urban and tech savvy. This would create a larger market for the Quartz shower which will acts as a niche but will not be a niche. The reason is that that the company will position in such a way that it will take time for the competitors to launch the similar products. The company will be undisputed leader of the new product market and it can continue to price the product at the existing rates or charge premium to the customers as they will be obliged to pay higher price for the innovative benefits of the product.

Conclusion:

The company can launch the new product if it is able to adopt the above stated recommendations for the product to get succeed. This will increase the upper line and the bottom line of the company.

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Exhibits

Exhibit 1 [pic 1]

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Source: VP of Strategy

Exhibit 2

Total Revenue 2000 =€ 67.95 Million

Current total Sales Force=20

Current total revenue per sales person=€ 3.4 Million

Total Revenue 2000 =€ 67.95 Million

Proposed total Sales Force=25

Proposed total revenue per sales person=€ 2.72 Million

Exhibit 3

Current Channel of Distribution for Aqualisa

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Proposed Channel of Distribution for Aqualisa Quartz

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