The possible customer base ranges from a minimum of 53,000 to a maximum of 840,000 units sold annually.
Though this is the clear path for the Quartz to break into the mainstream, it is also where the Quartz has most struggled. The primary customer of trade shops are plumbers. Despite the Quartz providing plumbers exactly what they want – a guarantee to not brake down and ease of Installation- plumbers are extremely brand loyal and are very reluctant to switch rand.
Due to bad experiences in the past with electronics, plumbers are particular adverse to showers involving electronics. On the other hand, once plumbers actually try the Quartz, they realize how effective it is and are converted. With each plumber installing 40-50 showers a year, a single instance of a plumber using the Quartz translates into 40-50 annual installations if not more due to fractional installation time and the potential of apprentices rather than Just master plumbers doing independent installations. The challenge is finding an incentive for plumbers to try the Quartz.
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Targeting consumers through an ad campaign may be the solution. Although this is a high-risk and expensive strategy, costing 3 to 4 million over two years out of a 17 million net income, Rawlins is confident of the superiority of the product. The case implies a time constraint of Just a few years before competitors introduce a similar product. Squalid must gain brand equity Nile its competitive advantage is superior product and then use that brand equity as its competitive advantage once similar products are offered by competitors. Many factors reduce the risk of this strategy. Twenty-seven percent of mixer shower consumers “select type and brand of shower alone” and for 20% of consumers, “plumber influences type of shower, not brand”.
This comes to 108,000 mixer shower consumers who select the shower without advice from their plumber and 80,000 consumers of mixer shower units who choose the brand. The case does not specify what percentage of electric shower and power shower consumers choose shower type independently.
Within this large number of potential consumers, the goal of the ad campaign would require that only a small argental of them get their plumbers to install the Quartz. Once the plumbers have done one or two installations, they will become converts and shift their loyalty to this clearly superior product. This means that the campaign only needs to get a few thousand customers to convince their plumbers and then plumber loyalty will cause sales of the Quartz to reach the 36,000 minimum sales per year goal through the market potential displayed in Exhibit 2.
Risk is diminished even further because the consumers who make their own decisions are part of the same general public as other shower unit consumers. This means that the advertising campaign will gain brand equity for the Quartz within the DID and premium shopper market segments even if the ad campaign only targets consumers who make their own decisions. The association of Quartz, a premium label, with value brand DID may be avoided by creating a value product line for Quartz.
DID shoppers place little emphasis on aesthetics so this could be easy point of differentiating the premium and value brands. The DID market potential of up to 100,000 units sold annually could be utilized through a deal with B&Q to promote the Quartz in return for a larger sales commission. Depending on price, this ‘alee product line may also attract developers. While waiting for the advertisement campaign to kick in, the Quartz can find a quick niche within the potential market of 127,000 to 145,000 units sold annually.