Boots – Hair Care Sales Promotion

Abhishek Saha

Arnab Chowdhury

Jeevitha P R

Solomon Dheeraj

Kalyan VBH

Manish Anand

Saurabh S Yadav

Background

• Boots – A well known, retail name in the UK

• Into Health, Beauty products, Personal Care

• 75,000 employees in 130 countries (2004)

• Brands – Strepsils, Clearasil, Nurofen

• New Services – Boots Opticians (1987)

• Boots Healthcare International (1991)

• Product – Retail products of Premium Hair Specialists

Sales Promotion Objectives

• Timeframe – Christmas Season

• Drive Sales Volumes

• ‘Trade-up’ customers from lower value brands

• Retaining and Building brand equity

UK Hair Care Market

• Highly fragmented – 60 major hair care brands

• No brand had more than 9% market share

• Severe price competition

• Volume growth higher than value growth

• Medium – High involvement product

• Significant price discounting via Promotional activity

foreseeable

Major Competitors

P&G

8.4% Market Share

Leading Brand: Pantene

High Consumer Awareness

Alberto-Culver

Revolutionized Ad-slots

Increased product base by Global acquisitions

Wide product-range

L’Oreal

5% Market Share

Portfolio of over 500 brands and 2000 prod.

Pioneer in promotions

Product Retailers

Tesco, Sainsbury’s, Morrisons – Traditional

Supermarket

Superdrug – Value Retail

Consumer Trends

70’s - Gentle Shampoos

80’s - Detangling

90’s – Shiny Hair

• Main purchasers – Fashion Conscious Women

(25-30 Age Group)

• Most Boost customers bought Basic and

Premium brands

• Gender/ Occasion based usage

Promotion Alternatives

Christmas Promotional Activities

3 for 2

The item with the minimum price

would be the free one (competitors didn’t have POS

tech.)

Gift with Purchase

An existing sample would be

bundled along with the regular purchase

On-Pack Coupon

50p off on products which the

customer would be able to redeem

immediately

3 for the price of 2

Consumers could combine any items of their choice

Boots had the Point-of-Sales technology to implement it

Estimated Sales increase is 300% of Pre-promotions

Incentive for Bulk-buying customers

ProsChoice of free item limited to the same brand and not the Brand House

Skeptical customers would think that Boots is trying to ‘push’ its stocks

Price Sensitive consumers would prefer a price discount instead of ‘in kind’

Cons

Gift with Purchase

No additional designing, packaging cost

Estimated 40% sales to Boots shoppers who would not have otherwise purchased a hair-care product

Creates excitement among customers regarding the ‘gift’

Incentive for Bulk-buying customers

ProsNo actual ‘monetary’ savings

Discerning buyers would not be able to choose their gifts

Skeptical customers would think that Boots is trying to ‘push’ its stocks

Cons

On Pack Coupon

Actual savings in monetary terms for the price sensitive consumer

Estimated high usage of coupons as customers would indulge in holiday season shopping anyway

Time-tested and easy to implement – no ‘hi-tech’ implementation reqd.

Pros

No differentiation with competitors

Consumers need to remember to carry the coupons with them for purchase

Cons

Post sales promotion (for premium products)

Impact on variables 3 for 2 GWP On pack coupon

% Increase in Revenues 100% 70% 50%

% Increase in Profits -50% -29% 3%

% of new customer acquisition 60% 40% 50%

Impact on Brand Equity Highly Negative Partially Negative Highly Negative

Post sales promotion (for mass market products)

Impact on variables 3 for 2 GWP On pack coupon

% Increase in Revenues 100% 70% 100%

% Increase in Profits -200% -236% -100%

% of new customer accquisition 60% 40% 50%

Impact on Brand Equity Little/No effect No effect Little/No effect

Open to Questions