boots hair care sales promotion

AGENDA:• About the company• Situation• Analysis of situation• Hypothesis• Proof • Conclusion• Recap• Disclaimer

THE COMPANY:• It is a UK based company dealing in health, beauty

and pharmacy.• Established in 1849 by JOHN BOOT• After his death the company was named as BOOT and

Co. ltd. in 1883 and then Boots Pure Drug Company ltd. in 1888.

• Later it was sold to American United Drug Company.• After economic crisis it was returned to British hands.

• Boots is a professional hair care retailer developed in collaboration with celebrity hair dressers of UK.

• Robinson has to select one of the three promotional strategies.• His primary objective was to drive sales volumes and trade up

consumers from lower value brands while retaining brand equity.

COMPETITOR ANALYSIS :• Most major retailers carried a

variety of professional and mass market hair care products.

• The major competitors are Tesco, Sainsbury’s and Morrison.

• The major players in drug retailers are Boots and Superdrug.

DECISION OPTIONSThe three decision options given in the case are:1. “3 FOR 2” : in this customers can buy 3 products at the

price of two.2. “GWP”: in this customers will be given a product sample

free along with purchase.3. On-pack Coupon(50p off) : 50p off any product during

the store visit.

POSSIBLE CRITERIA:• Driving SALES & VOLUME in the current season.• TRADE UP current consumers from low value

brands.• Secure Market Leadership in hair care segment

ultimately.

“3 for 2”

According to me this might be the best promotional strategy.

WHAT CAN BE INFERRED

From the previous table it can be inferred that :• If 100 bottles were being sold before the

promotional scheme then after the scheme 300 bottles were sold.

• Similar interpretations can be applied for GWP and On Coupon scheme.

• Hence overall profit can be increased.

PROOF OF HYPOTHESIS:• The profit per product is 0.81£ in 3for 2 promotion scheme.• Per day profit is 300* 0.81£ = 243£• For total December 31 * 243£ = 7533£ (considering consumers will go

for premium products)• Even if we consider there would be at least one mass product out of three,

the 300% increase in sales and 60% in consumer will offset this.• Moreover the firm has PIONEER TECHNOLOGY which stops the

competitors from copying the strategy and this proves to be advantageous for Boots.

Contd…• The profit per product is 0.67£ in GWP.• Per day profit 30*0.67£= 113.9£• Profit in total December 31*113.9£ =3531£• In this case if more customers go for mass market

products the company will suffer losses.• This strategy can easily be copied by competitors.

Contd.• Profit per product 1.10£ in 50p off on – coupon redeem

scheme.• Per day profit 300* 1.10£= 165£• Profit in total December 31*165£= 5115£• In this case even if customers go for mass product market, the

company will not suffer loss but the profits will be decreased.• This strategy can also be easily copied.

CONCLUSION• According to the hypothesis 3 for 2 is the best strategy in order to

increase market sales.• Hence after calculating estimated profits the schemes should be applied

in the following preference:1. 3 FOR 22. 50p Off Coupon3. GWPWith its technological expertise Boots should implement 3for 2 scheme in order to reap benefits and brand equity.

RECAP

• About the company

• Situation• Analysis of situation

• Hypothesis

• Proof

• Conclusion

DISCLAIMER

The presentation has been created by Narayani Pandey SRMSWCET Bareilly under the guidance of Prof. Sameer Mathur IIM, Lucknow.