1. Analyze the UK shower market.
Shower industry analysis
Rivalry (High): competition is fierce in the industry because new design could be copied quickly. Lead-time of a new technical invention is about 2 years.
Distributor (Buyer) bargain power (High)
- Product differentiation (Low): The shower industry has been stagnant in term of technical breakthrough. The products in the market are probably very similar in their inner mechanism with little difference in appearance.
- Distributors’ influence to customer (High): Most customers make decisions fully/partially based on distributors’ recommendation.
Distribution channels & market share
DIY & Trade shops occupy the two ...view middle of the document...
This particular purchase behavior makes it hard to dismiss the need of distributors and plumbers, especially when their KBF are significantly different from the customers. Satisfying their needs becomes one of the KSF for the industry.
Customer segments | Characteristics | KBF |
(Value & Standard) | Know product to a certain degree by research or consulting store staffs.Install and repair shower themselves. | Easy installment
Easy repairmen/After-sell service from the producer
(Premium) | Certain knowledge about product by trying & showroom staff explanationLess sensitive about price | Appearance
(Value & Standard) | Know little about different product type
Purchase plumber service & product in a bundle
Unaware of cost breakdown | Recommendation from Plumber (see Plumber analysis below) |
(Continue from Trade Shop) | Busy & enough business
Skeptical about new technology that they are familiar with. | Expertise in the product
Service from manufacturer
Easy install |
Developer (Standard & Premium) | Highest bargain power
-Buy in large volume
-Total value added to their project is low | Reliable, nice-looking products that could work in multiple settings
Recommendation from plumbers |
2. Examine the product value of Quartz and identify the cause of its sluggish sales
Value = benefit – cost
Value is high for customer especially in standard & premium segments as there is significant functional improvement with reasonable increase in cost.
However the value for plumber sand developers is lower as the incentive for them to change product is low.
Value | Benefit | Cost (compared to Aquavalve 609) |
End user [High] | Best experience & appearance.
Most advanced technology & reliable
Improved safetyLess installment time | 19% increase in price (715 to 850) |
Plumber [Medium] | Easy install | Need to learn the new mechanismUncertain how much trouble the new shower may have |
Developer [Low] | Little value added as regard to the whole house project | Higher price |
The product provides great value to customer, then what caused of sluggish sales?
Company accessibility to market through the channels
As the company’s product are available in 70% of DIY shops and 40% of Trade shops, it could ideally reach 25% and 19% market customers respectively.
| Market share | Company footprint | Accessible market |
DIY | 36% | 70% | 25% |
Showroom | 8% | 20% | 2% |
Trade shops | 47% | 40% | 19% |
How does the current marketing strategy make use of those channels?
| Accessible market | Decision making influence | Value perceived | Company strategy | Result |
DIY | 25% | Customer & DIY shop staff | High | Not targeting | Unsuccessful |
Showroom | 2% | Customer & Showroom staff | High | Make use of existing connection | Successful |
Trade shops | 19% | Plumber | Medium | Call...