BOOTS:HAIR CARE SALES

PROMOTION

What is the case

study here??

Case Study of boots sales promotion

• This case study is all about the sales promotion of hair care products by boots stores in UK.

• It is analyzed by taking account into three criterions. they are hair care products market, retailer market competitors and three strategies to choose one for having profit.

• In this case we have to study those three strategies and decide which one is profitable to boots as per their objective.

Objective of boots company???

• Boots aim is to become market leader in hair care product market.

• The primary objective of boots company is to increase sales as a part of promotion and create brand equity and they want to be assured of better promotion.

ON THE EVE OF

What is boots company??

• Boots, one of the best-known and respected retail names in the United Kingdom.

• It also had a part in other fields such as Boots Opticians, dentistry, chiropody, ‘Boots for Men stores Internet Services.

• It employed around 75,000 people and operated in some 130 countries worldwide in 2004.

• Boots also had international sales and marketing operations

• Earlier in 1883, it is just boot and company limited.

• Later in 1949, there is a huge development in boots company.

Early Days of boots company

First logo adapted in 1883 Newly Adapted logo in 1949

Origin of boots company

• In the modern Era, Boots continued to develop product ranges, many of which became household names ‘17’ cosmetics, aimed at the teenage market.

• But the established company has customers who are not loyal.

• In order to create friendly relationship with customers, it has started celebrity endorsements and touch people emotionally.

What we have to analyze??

• Hair care products market

• Retailer market competitors

• Strategy to be undertaken among the three

Hair care products market

• The market which includes the products related to hair care is nothing but hair care products market.

• In this we have a lot of competitors like L’Oreal , Alberto-Culver, Procter and Gamble and some others.

• Of these no company holds more than nine percent of the market share.

Boots entry into this market

• Boots saw an opportunity to be the retail hair-care expert and to offer the latest ranges.

• No celebrity-endorsed products were available in retail stores.

• Boots began to cultivate relationships, beginning 1996, with well-established hairdressers in the United Kingdom.

• Using its superior technological capabilities and significant production capacity, Boots worked with the celebrities to design formulations that were

• Under the agreement, Boots manufactured the products and paid a per-unit licensing fee for use of the celebrity’s brand name.

• Boots felt that it had not been able to sufficiently link its name with these products and hence missed on maximizing profitability.

Types of BRANDS in Hair care products

Professional Brands

Mass market Brands

Very limited in number and available only in some

specific salons and developed by hairdressers.

It includes famous companies like

L’Oreal,Alberto-culver where, mass marketing is its main

aim

NAME Description Specifications Market Awareness

Toni & Guy

“At Toni & Guy we create wearable,catwalk-led hairstyles for people who want easy-care, trend-settinghairstyles

- 250 salons in the UnitedKingdom Strong

Trevor Sorbieshowman of all hairdressers. Hispioneering techniques and cuts —the Wedge, the Chop, and theScrunch are now part of everydaysalon parlance.

- Two salons in the UnitedKingdom

Medium

Lee Stafford

He is known for hairstyle and haircare.

-three salons in the UnitedKingdom

Low

Professional Hair care Products Brand descriptions

NAME Description Specifications Market Awareness

Charles Worthington

One of the most influential creative hairdressers and name is synonymous with style innovation and success

-Five prestigious salons tending to more-Celebrity following on both sides.

Medium

John Frieda

Entrepreneurial in spirit, global in impact fuels company with inside track on hot and new.

- Three salons in London,two in New York and onein Los Angeles.- The product range isTargeted

Strong

Nicky Clare A popular hairstylist to the stars from film fashion and music

-Salons in London andManchester Medium

Umberto Giannini

One of the most esteemed andinfluential names in Britishhairdressing. His company’sphilosophy is simple — creatingsexy, contemporary catwalk lookswithin its salons alongside a salonperformance range

- Eight salons in the UnitedKingdom

Low

BRAND INTRODUCED DISTRIBUTION

Charles Worthington

1996 Only Boots

John Frieda 1996 Widely available

Nicky Clarke 1998 Widely available

Umberto Giamini 1999 Widely available

Toni & Guy January 2001 Only boots

Trevor orble September 2001 Only boots

Lee Stanford September 2001 Only boots

Distribution and Introduction Dates

Major Competitors: Mass marketing brands

There are three major competitors in hair care products market they are

-Procter & Gamble

-ALBERTO-CULVER

-L’ORÉAL

Procter and GambleHoffman-La Roche developed Pantene as a shampoo and

launched it in Europe in 1947 which refers o panthenol

Procter & Gamble acquired Richardson-Vicks in 1985, and in 1991, the product

was reformulated as the Pantene Pro-V (Pro-Vitamin) line and rolled out as a

global brand

By 1995, it became the best-selling hair-care brand in the world with

a lineup that included shampoos, conditioners and styling products for all

Different hair types

It held a 8.4 per cent share of the U.K. hair care market in 2001

ALBERTO-CULVERAlberto-Culver’s acquisition of Sally Beauty Company in

1969 has grown from a handful of franchised stores to

over 2,000 store locations.Alberto-Culver offered a variety of products for hair-care, skin-care and

Homecare . Some of its top brands included: St. Ives, VO5, Consort hair care for

men and FDS etc.

The company’s most famous claim to fame was when, in 1971, its founder,

Leonard Lavin, forced television networks to abandon their 60-second

commercials with the introduction of 30-second ones.

In the recent past, the company, in order to increase its product base, has

globally acquired diverse firms.

L’Oreal

L’Oréal began in 1907 when a young French Chemist, Eugene Schueller,

developed an innovative hair-color formula. He called his new perfectly safe hair

dye “Auréole.”

A few years later, via agents and consignments, they were distributed

in the United States, South America, Russia and the Far East.

The group marketed over 500 brands and more than 2,000 products in all

Sectors of the beauty business: hair color, permanents, styling aids, body and

Skincare , cleansers, and fragrances

It held a five per cent share of the U.K. hair care market in 2001.

Hair Care Products Retailers

Retail involves the process of selling consumer goods or services to

customers through multiple channels of distribution to earn profit.

The organization or person who do retailing is called Retailer.

In UK ,there exists a competition between these retailers as a part of our

case study.

Even due to this also, we can get a change in our sales hence it is also

considered as a factor of our sales promotion

Hair Care Products Retailers

Tesco

Sainsbury’s

Morrisons

Superdrug

Boots

Brief Discussion about Retailers• Tesco is the first leading store having more than 1800 stores and 45,000

employees.

• Sainsbury’s is having 700 stores and ranked second next to tesco.

• Both tesco and sainsbury’s include traditional super market items and

online shopping as well as CD’s,books,DVD’s etc.,

• Morrisons is also having 400 stores providing the best quality with the

best rate.

• Superdrug is established in 1996.

• Superdrug had grown to become one of the largest health and

beauty retailers, with almost 700 stores in the United Kingdom.

• Superdrug is featured with 25% of the shop with pharmacy.

• Superdrug launched hundreds of private label products each

year.

Consumers perspective• First, there was a general belief by U.K. consumers that changing shampoo

brands produced better results than continually using a single brand.

• Second, trends in buying behavior led to changing preferences . They are:

-70s consumers wanted shampoos that were gentle -’80s saw a greater emphasis on detangling,

-’90s, shiny hair became more important

• Third , it was difficult for consumers to identify meaningful differences

between the various brands available in any given store.

Back to Boots situation….

• Current Boots consumers and existing purchasers of mass-market brands were the

primary target for the promotion.

• No media advertising budget was allocated for this promotion, although it would be

highlighted in flyers distributed by the store.

• There would also be signage within the store to promote the offer, and approximately

400 Boots stores would include signage visible on the exterior of the store.

• Average pre promotional price of professional brands is £3.99 with retail margins of

forty percent.

• Average pre promotional price of mass marketing brands is £3.99 with retail margins

of about twenty five percent.

What to do????

Let us analyze our alternatives to find out which gives the best

among the three???

“3 for 2”“GWP (Gift With Purchase)”“On-pack Coupon (50p off)”

“3 for 2”

Advantages:-Consumer can get 3 items for a regular price of two.Hence sales of unusual products also increases. Estimation was that sales would increase to 300% of pre-promotional sales.60% of the customers would be just promotional buyers.

DISADVANATGES:-This will have clear cut indication of sales clearance which could impact potential customers.Premium products would lose their brand equity and may sound as cheap promotionProduct partners may oppose this strategy for the dilution of their brand equity

“On-pack Coupon (50p off)”

Advantages:-Customers would be able to redeem their coupons during their current store visitSales are estimated to increase by 150% of their pre promotional sales.50% of the customers would be just promotional buyers.Coupons would enable multiple visits for a single customer.

DISADVANATGES:-This is very common used strategy used by most of retailers and can be easily imitated.Again this is one of the form of discounting which can dilute brand equity.This is more of a conservative approachThis option has less estimated sales growth as per market research.

“GWP (Gift With Purchase)”

Advantages:-Product sample would be given free long r=with regular purchase.Additional packaging is used to pack that sample along with existing.. Estimation was that sales would increase to 170% of pre-promotional sales.40% of the customers would be just promotional buyers.

DISADVANATGES:-Adding sample would cost approximately 90p per unit for the product plus 3p per unit extra to secure the sample to featured product.This is very common used strategy used by most of retailers and can be easily imitated.

Conclusion….

• Considering the advantages and disadvantages, it would be better for the boots company to adapt 1st strategy i.e., ‘3 for 2’ for the following reasons

It cannot be easily imitated by the competitors as it is more concentrated in the increase of sales as per market research. This also helps boots company to push its non selling brands Hence this offer increases or boosts sales volume and increase their brand consumption.

History of Boots company

Boots entry into Hair care products market

Professional Hair care products

Mass marketing Brands

Analyzing and pointing out advantages and disadvantages of 3 strategies

Details of Case study

Objectives of Boots Company

Hair care products market

Conclusion

Hair care product Retailers

CREATED BY :

KATIKI NIKHIL

ELECTRONICS DEPARTMENTN I T JAMSHEDPUR.

UNDER :

PROF. SAMEER MATHUR

IIM LUCKNOW