Boots: Hair Care Sales Presentation
-
Upload
rishab-dev-bhaskar -
Category
Education
-
view
80 -
download
2
Transcript of Boots: Hair Care Sales Presentation
HAIR CARE SALES PROMOTION
ACASESTUDY
?
?
• Founded in 1849 by Mr. JohnBoot
• In Nottingham• Mary Boot -> 1860 to 1877
• Jesse Boot -> 1877
• Established in 1883
• Goodbrandimage• “LargestBestCheapest”• Sales>2.5Million(By1913)• 75,000+Employees(By
2004)• 130Countries(By2004)• Largevarietyofproducts• PopularbrandslikeStrepsils,
Nurofen,Clearsil etc
“TOSELECTAPROMOTIONSCHEMEFORBOOSTINGCHRISTMASSALES”
THREESCHEMES:
• Get“3for2”
• GiftWithPurchase(GWP)
• OnPackCoupon
LET’SNOTFORGET!
MARKETRESEARCH!!!
GoodsCompetitors:• Pantene(Proctor&Gamble)• L’oreal• AlbertoCulver
RetailCompetitors:• TESCO• Sainsbury• Morrisons• Superdrug
COMPARINGCOMPETITORPRICING
(Source:HarvardCaseStudy:BOOTSHAIRCARESALESPROMOTION)
WHATNEXT?
ANALYZINGPROMOTIONOPTIONS
3FOR2:• Select3items,getthecheapestone
free• Increaseinsales:300%ofPre
promotion• 60%purchasefromcustomerswho
wouldnotpurchaseregularly.
• Disadvantage:Couldmakethebrandlookcheap,andcoulddilutebrandequity
GIFTWITHPURCHASE:• Attachingsamplesizeofotherproduct
fromsamebrand• Increaseinsales:170%ofPre
promotion• 40%purchasefromcustomerswho
wouldnotpurchaseregularly.
• Disadvantage:Additionalcostforsample
ONPACKCOUPON:• Givingasmallcouponworth50p
redeemableduringtheircurrentstorevisit
• Increaseinsales:150%ofPrepromotion
• 50%purchasefromcustomerswhowouldnotpurchaseregularly.
• Disadvantage:Conservativeapproach,andbrandswouldbeusingthisorGWPastheirmajorpurchase.
COSTvsPROFIT(ForEachoftheSchemes)
BASICANALYSIS:• PrePromotionalPrice(PPP):£3.99(Assume£4)• RetailMargin:40%
• ActualcosttoManufacturer:60%ofPPP:£2.4
• Manufacturer’sMargin:8%-12%(Assume10%)
• ActualProductionCost(x)• EquationfromData:(10%ofx)+x=£2.4
• Productioncost(x):£2.1818
Analysing“3for2”:• Boostinsales:300%(IncludingfreeItem)• CostPriceofallItems:300x2.18(No.XManufacturingCost)
£654• SellingPriceofallItems:200x4(£800)• ProfitGenerated:SellingPrice(SP)– CostPrice(CP)
:£800- £654:£146
• ProfitPerBottle:Profit/NoOfBottles:£146/300:£0.48666
Analysing“GiftWithPurchase”:• Boostinsales:170%(IncludingfreeItem)• CostPriceofallItems:170x(2.18+0.90+0.03)
£528.7(Costofmanufacturingandcostofattachingsample)
• SellingPriceofallItems:170x4(£680)• ProfitGenerated:SellingPrice(SP)– CostPrice(CP)
:£680- £528.7:£151.3
• ProfitPerBottle:Profit/NoOfBottles:£151.3/170:£0.89
Analysing“OnPackCoupon”:• Boostinsales:150%(IncludingfreeItem)• CostPriceofallItems:150x(2.18)
£327• SellingPriceofallItems:150x(4- 0.5)(£525)
(0.5reductiononSellingpriceforcouponcompensation)
• ProfitGenerated:SellingPrice(SP)– CostPrice(CP):£525- £327:£198
• ProfitPerBottle:Profit/NoOfBottles:£198/150:£1.32
Inferences:
• MaximumProfit/Bottle:“OnPackCoupon”(£1.32)
• MaximumNoofBottlesSold:“3for2”(300(200sold))
• MaximumNoofNewCustomers:“3for2”(60%)
BeforeWeDrawa
What
WASour
ACTUALGOAL?
MAJORGOALS:
1. SecureMarketLeadership
2. EnsurePromotionsarePROFITABLE
3. MaintainProfessionalHairCareBrandValue
Also,
DON’TFORGET
KEYPARAMETER:
(LowLevelsofStockpiling)
SO,
WINDINGUPOurPresentation,
BESTSOLUTION:“3for2”• Sincethecompany’smaingoalwastodrivesalesandgain
marketleadership• Itmaximizedtheamountofnonregularcustomerspurchase
(By60%)• Stockswouldgetoversoonaswell,aseachcustomerwould
buy3products,wherehe/shewouldusuallybuyone.• Thefactthatthewholesystemoflowestitemfreecouldnot
beimitatedbyothercustomerswasahugebonus• Thissolutionmaximizesbrandequityaswell,asitisdriving
moresalesaswell.
BUTREMEMBER:THEREISNOTHINGABSOLUTELYRIGHTINMARKETING
ALTERNATIVESOLUTION:“OnPackCoupon”• Onpackcouponhasaperfectmixofthetwogoalswewant• Itmaximizesprofit(Actually,Thebestoptionofthethree)• Increasesthepercentageofnonregularcustomers(By50%)
(Whichisbasicallythesecondbestoption)• DoesnotdiluteBrandImage,asthesamepromotionismost
likelybeingofferedbyotherbrandsaswell• IncaseofBOOTSproductsbeingofferedinothershops,the
schemecouldalsobeappliedthere(Unlikethe“3for2”option)
• Comparingthistothe“3for2”offer,thisisaconservativeapproach.
TheseslideswerecreatedbyRishab DevBhaskar,undertheguidanceofProf.SameerMathur,IIMLucknowasapartofaninternship.