BOOTS: HAIR-CARE SALES PROMOTION-

CASE STUDY ANALYSIS

- Kaustav Roy Choudhury

It all started when Jesse Boot took sole control of his father’s shop in 1877 and established it as a private company in 1883.

Today, it is one of the best-

known and respected retail names

in UK. They provide health an

beauty products. They also

developed and manufactured its

own products in collaboration with

top hair-stylists like Trevor Sorbie,

Charles Worthington etc.

What Are The Mass Market Products it sells?

Pantene is the major product, with 8.4% market

share. The line-up includes shampoos, conditioners and styling products suited to different hair types. The brand is heavily marketed and distributed.

Alberto Culver begun in 1955 and

expanded its business to own 2000 store locations. It changed the way commercials are broadcasted. It also caters to men’s needs.

L’OREAL held 5% market share in

the UK. The group marketed over 500 brands and more than 2000 products. They were found in all distribution channels.

So Was That It?

Boots also had a range of premium hair care products developed in collaboration of top hair stylists of UK.

Who were the competitors?

The main competitors were:• Tesco• Sainsbury’s• Superdrug• Morrisons

How Are The Customers?

The consumers are not at all brand loyal. Boots customers buy both premium and mass

market products.

About the Case:

Hi!!! I’m Dave Robinson from

Boot and Company Limited and I’m thinking about the new sales promotion strategy for the

Christmas.

I want to drive the sales volumeand trade-up customers from

lower value brands. I also want to retain and build brand equity.

So, What are your Options?

What are you thinking about?

I’m thinking of :1. Get 3 for the price of two2. Receive a gift with purchase, or3. An on-pack coupon worth 50p

No, Problem at all. I can solve this very easily.

Let’s do a detailed analysis of Pros and cons analysis of each and every option.

3 For the Price of 2:Pros: Consumers can combine any item of their choice Sales will be thrice of pre-promotion sale Can’t be readily copied by the competitors

Cons: This might signal the customer that Boots is clearing its stock It might hurt the brand image.

Gift with purchase:Pros: Sales will increase by 70% of pre-promotion sale Increase in the customer base by 40%

Cons: Customers won’t have the ability to choose their gifts and

might not like the product at all. Can be easily copied by the competitors.

On pack coupon of 50p:Pros: Actual savings in monetary terms for price sensitive customers. Sales will be 1.5times that of pre-promotion sale Simple implementation

Cons: Can be easily copied by the competitors.

Okay!!! But what about money?? I need to see it

as well.

Well I’m Not done yet!!

Lets look at few calculations:

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

Premium Products Mass Market Products

Costs for production and margins

Manufacturing cost Manufacturer margin Retailer margin

On further calculation for Premium Products, it comes:

Option % changein revenue

%increase in new customers

Impact on brand equity

3 for 2 200 60% Negative

GWP 70 40% Neutral

On-pack discount

50 50% Negative

So we should opt for GWP as

it has least effect on brand equity.

What about Mass Market Products?

Using similar techniques, it came that for mass market

products 3 for 2 should be

selected. The profits were highest for that and the effect on brand equity was positive.

Yaaaay!! Now I can enjoy my Christmas!!!

MERRY CHRISTMAS

MERRY CHRISTMAS to YOU too!!!!

Recap:• Boot and company limited is one of the best known and respected retail names

in UK.• They sell mass market hair care products as well as they are associated with

production of their own line of hair care products in collaboration with various hair stylists.

• The main hair care brands in UK are Pantene, Alberto Culver and L’OREAL.• The customers are fickle minded and change their brand preference frequently.• The main competitors of Boots are Tesco, Morrisons, Sainsbury’s and

Superdrug.• For the mass market products the option with highest profits was selected as

they don’t create a significant effect on brand equity. Thus 3 for the price of 2 is chosen.

• For premium products, the option with least negative effect on Brand equity is selected. Thus GWP is chosen.

DISCLAIMER Created by Kaustav Roy Choudhury,

Jadavpur University during a marketing internship by Prof. Sameer Mathur, IIM Lucknow.