The sticky sales promotion strategy
-
Upload
akhil-sule -
Category
Marketing
-
view
116 -
download
0
Transcript of The sticky sales promotion strategy
![Page 1: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/1.jpg)
The sticky Sales Promotion Strategy
By Akhil SuleBITS Pilani Goa
![Page 2: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/2.jpg)
What is Boots ?
![Page 3: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/3.jpg)
Best known and respected brand in UK for making beauty and health
products
![Page 4: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/4.jpg)
These are the products that Boots makes
![Page 5: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/5.jpg)
Started by John Boot in 1849 in Nottingham
![Page 6: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/6.jpg)
Jesse Boot, son of John Boot established it as “Boot and Company Limited” in 1883
![Page 7: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/7.jpg)
The Expansion
New store in Sheffiel
d in 1884
Cosmetic manufact
uring factory
opened in Scotland in 1949
New powerhouse and printing
works in 1953
New pharmace
utical research
building in 1959
![Page 8: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/8.jpg)
These are the globally differentiated brands that Boots owned
![Page 9: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/9.jpg)
They have also expanded in areas like
![Page 10: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/10.jpg)
![Page 11: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/11.jpg)
Boots for men
![Page 12: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/12.jpg)
Boots internet services
![Page 13: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/13.jpg)
Now in Boots we have somewhat of a
![Page 14: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/14.jpg)
This guy is Dave Robinson. He is the one who decides what sales promotion strategies to implement
![Page 15: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/15.jpg)
He has options
![Page 16: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/16.jpg)
Of which he has to chose
![Page 17: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/17.jpg)
![Page 18: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/18.jpg)
![Page 19: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/19.jpg)
![Page 20: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/20.jpg)
With the aim of securing the position of
![Page 21: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/21.jpg)
![Page 22: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/22.jpg)
And
![Page 23: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/23.jpg)
And
![Page 24: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/24.jpg)
Lets take a look at the hair care market in UK.
![Page 25: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/25.jpg)
UK market was dominated by brands like
![Page 26: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/26.jpg)
In 2000 there were more than 60 brands with none more than 9 percent market share
![Page 27: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/27.jpg)
But Boots saw the opportunity to be retail hair care expert and entered the market with celebrity hairdresser endorsed products
![Page 28: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/28.jpg)
Hairdressers got access to customers through 1300 Boots stores
![Page 29: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/29.jpg)
Yet Boots had a lot of
![Page 30: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/30.jpg)
Procter and Gamble
100+ products 8.4 percent market share
![Page 31: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/31.jpg)
Alberto Culver
2000+ store locations
Hair care, skin care, home care
![Page 32: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/32.jpg)
L'Oréal
500+ brands 2000+ products
![Page 33: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/33.jpg)
Superdrug
700 stores 10,000 products
![Page 34: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/34.jpg)
The major retailors in market are
![Page 35: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/35.jpg)
1800+ stores
![Page 36: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/36.jpg)
700 stores
![Page 37: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/37.jpg)
400 stores
![Page 38: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/38.jpg)
Consumers
• Mostly women aged 20 -35
• Not very brand loyal
• Choice depends upon brand name, but also
packaging, advertising, price,
ingredients, consistency and
fragrance
![Page 39: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/39.jpg)
Now for the situation we have, there arise two questions
![Page 40: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/40.jpg)
Which strategy is best to increase volume of sales ?How will the brand equity be maintained or increased?
![Page 41: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/41.jpg)
Evaluating the options
![Page 42: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/42.jpg)
3 for 2
• Advantages1. Customers can buy any 3 items with the least expensive
item free2. Most competitors didn’t have technology to imitate this offer3. Sales estimation during the promotional period was 300
percent.4. 60 percent of the sales would come from new customers
![Page 43: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/43.jpg)
3 for 2• Disadvantages
1. This strategy totally looks like a stock clearing strategy which might repel some customers.
2. The company will have to bear the cost of the free product3. Premium products may lose their brand value
![Page 44: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/44.jpg)
Gift with purchase• Advantages
1. Customers will get a product sample with a purchase2. Estimated sales during promotion will be 170 percent of the
pre promotion sales3. 40 percent of the sales would come from new customers
![Page 45: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/45.jpg)
Gift with purchase• Disadvantages
1. The additional cost of the gift will be bared by the company2. Competitors can imitate the strategy
![Page 46: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/46.jpg)
50p coupon• Advantages
1. Customers would be able to redeem the coupon during their current store visit
2. Robinson estimated that sales would increase to 150 per cent of non-promotion sales
3. 50 percent of sales would come from new customers
![Page 47: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/47.jpg)
50p coupon• Disadvantages
1. This is a very common strategy2. It might result in decrease in brand equity3. Least sales from this option4. Very conservative approach
![Page 48: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/48.jpg)
Lets look at it quantitatively • For “3 for 2”:• Lets consider average promotional price of 3.99 pounds• Without promotion revenue per day is 399 pounds• Estimated sale for a day is 300 bottles which gives revenue of 1197
pounds minus cost of 100 free bottles which gives actual revenue 798pounds• Profit is 399 pounds
![Page 49: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/49.jpg)
For gift with purchase• Without promotion revenue per day is 399 pounds• With this offer extra cost of 0.93 pound is incurred but 170 bottles are
sold• Therefore with new cost of 3.06 total revenue is 520.2• Profit is 121.2 pounds
![Page 50: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/50.jpg)
For 50p coupon• Revenue of 100 bottles without promotion is 399 pounds• New cost of bottle becomes 3.49 and sales become 150• Therefore net revenue is 523.5 pounds• Profit is 124
![Page 51: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/51.jpg)
Hence best strategy would be to chose the option “3 for 2”
![Page 52: The sticky sales promotion strategy](https://reader036.fdocuments.net/reader036/viewer/2022062503/5874441c1a28ab0e6c8b7ca9/html5/thumbnails/52.jpg)