BOOTS: HAIR CARE SALES PROMOTION

RICHARD IVEY SCHOOL OF BUSINESS

AGENDA

1.Sales promotion objective2.About the Company3.United Kingdom hair care

market4.Major Competitors5.Hair care product retailers6.Promotional Alternatives7.Promotions

Sales promotion objective

Sales volumes should increase for its hair care products.

Attract consumers from the lower value brands.

Build and retain the brand equity.

Consider the competitors both in hair care products and retail stores.

Boots was established in 1849, by John Boot.

The CompanyThe British and American Botanic Establishment in Nottingham.In 1883,

established as a private company “Boot and Company Limited” by Jesse Boot.

First Logo adapted in 1883

In 1884, Boots opened its first shop outside Nottingham in Sheffield.The company adopted a new Black and White logo.

Provides health and beauty products and various services.

Operates in 130 countries worldwide and about 1,300 stores.

Case Analysis

Some facts about associated celebrities and Brand

Brand Product Ranges Summary

Distribution and Introduction Dates Table

The united kingdom hair care market Over 60 national brands are

widely available in supermarkets and drug retailers.

No brand has more than 9% market share

(highly competitive market). Overall market expected to

grow 1-3% for the next 5 years.

The opportunity Boots wants to be the retail

hair-care expert. Build a new market using

celebrity endorsement. Currently no celebrity-

endorsed products were available in retail stores.

The relationship Mutual benefit for Boots and

hairdressers. Boots designed formulations. Manufactured products and

paid per-unit licensing fee for use of celebrity’s brand name.

Boots managed licensed brands.

Celebrities managed public relations.

The Major Competitors:

Procter & Gamble Alberto-Culver L’Oreal

Best-selling hair-care brand in world.

Shampoos, conditioners, and styling products.

Held 8.4% share of U.K. hair care market.

Additional hair-care brands.

Multibillion-dollar company.

Owner of Sally Beauty Company.

Over 2,000 store locations. Hair-care, skin-care and

home-care. Shampoos, conditioners

and styling agents.

Worldwide presence. Markets over 500 brands and

2,000 products in all distribution channels.

Advertising pioneer. Holds 5% share of U.K. hair

care market.

Hair-care Product Retailers

Major supermarket competitors: Tesco Sainsbury Morrisons

Largest super market chain in U.K.

Offers a wide product assortments.

Second largest super market chain in U.K.

Provides quality product at low price.

Major retailer competitor

One of the largest health and beauty retailers.

United Kingdom Consumers No brand loyalty. Buying behaviour led to

changing preferences. Difficulty differentiating brands. Most Boots customers bought

both basic and premium brands.

The Promotion The Target Market. Run for 1 month starting

December 1st. No media advertising

budget allocated. Advertisement in stores. Pricing and Margins.

Promotional AlternativesDave Robinson

needs to decide a promotion strategy for a line of professional hair-care products at Boots. Three promotional options “3 for 2” Gift with Purchase On-pack coupon

Competitors can’t compete with offer.

Sampling component. Introduce product to new

consumers.

3 products has to be of the same brand.

Free item is the least expensive.

Product sample with regular purchase.

Existing sample product used to reduce cost.

Packaging issues.

Time issue. Introduce new

products.

Gift with

Purchase

On-Pack Coupon Conservative approach-

cheapen brand. Redeem coupon during

current store visit.

50% of the customers would be just promotional buyers.

Coupons would enable multiple visits for a single customer.

Estimated sales would increase by 150% of the pre-promotional sales.

Competitors can’t compete.

Costly but effective.

Consumers don’t realize price reduction.

SolutionBy analysing the promotional alternatives, It would be better for Boots company to adopt the First strategy i.e “3 for 2”.

Solution: Get 3 for the Price of 2 Consumer would get 3 items for a

regular price buy of 2. Consumers could combine any 3

items as they like e.g. shampoo, conditioner and styling gel of same brand.

Most competitors did not have the technology at the point of sale to imitate this promotion.

Estimation was that sales would increase to 300%.

60% customers – promotional buyers.

Summary

1.Sales promotion objective

2.The Company3.United Kingdom hair

care market4.Major Competitors5.Hair care product

retailers6.Promotional

Alternatives7.Promotions

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These slides were created by Lakshmi Ayyappan (PSG TECH Coimbatore) as part of an internship under the guidance of Prof. Sameer Mathur (IIM Lucknow).

DISCLAIMER