BOOTS : HAIR CARE SALES PROMOTION

WHAT IS BOOTS?

• BOOTS IS ONE OF THE BEST KNOWN AND RESPECTED RETAIL NAMES IN THE UNITED KINGDOM PROVIDING HEALTH AND BEAUTY RELATED PRODUCTS AND ADVICE THAT ENHANCE PERSONAL WELLBEING.

• IT ALSO OWNS GLOBAL BRANDS IN THE SELF-MEDICATION MARKET LIKE NUROFEN, STREPSILS AND CLEARASIL.

• IT HAS 75000 PEOPLE EMPLOYED UNDER THE COMPANY AND OPERATES IN 130 COUNTRIES AROUND THE WORLD AS IN 2004.

WHAT IS THIS CASE ALL ABOUT?

• BOOTS COMPANY IS PLANNING FOR A SALES PROMOTION STRATEGY FOR A LINE OF PROFESSIONAL HAIR CARE PRODUCTS IT HAS DEVELOPED IN COLLABORATION WITH UK’S TOP CELEBRITY HAIRDRESSERS.• THERE ARE THREE PROMOTIONAL

STRATEGIES THAT HAVE BEEN PROPOSED OUT OF WHICH ONE OF THEM IS TO BE EXECUTED.

PRIMARY OBJECTIVE

• DRIVE UP SALES VOLUMES OF THE PRODUCTS.• TRADE-UP CONSUMERS FROM LOWER-VALUE

BRANDS TO PREMIUM PRODUCTS.• RETAINING AND BUILDING BRAND EQUITY.

UNITED KINGDOM HAIR CARE MARKET

• MORE THAN 60 BRANDS OPERATE IN THE SEGMENT AND NONE OF THEM HAVE MARKET SHARE GREATER THAN 9 PERCENT.• SEVERE COMPETITION, LOW PROFIT MARGINS

ARE SOME OF THE ATTRIBUTES OF THE SEGMENT.

BOOTS’ VALUE PROPOSITION

• BUILD A NEW MARKET BY USING CELEBRITY ENDORSEMENTS TO CREATE AWARENESS AND EMOTIONAL ATTACHMENT BETWEEN CONSUMERS AND THE BRANDS.• THIS WILL ALSO BE A BOON FOR THE

CELEBRITY HAIRDRESSERS AS THEY GET TO REACH A LARGER AUDIENCE TO SELL THEIR PRODUCTS THROUGH THE 1300 BOOTS’ STORES ACROSS UK.

CONSUMER BEHAVIOR IN THE

HAIR CARE CATEGORY

• UK’S CONSUMERS BELIEVE IN CHANGING HAIR CARE BRANDS FOR BETTER RESULTS.• THERE IS ALMOST NO SENSE OF BRAND

LOYALTY IN THIS CATEGORY.• CONSUMER NEEDS AND PREFERENCES KEEP

ON CHANGING.• NO CLEAR DISTINCTION BETWEEN PRODUCTS

OF DIFFERENT BRANDS.

COMPARING THE 3 PROMOTIONAL ALTERNATIVES

1. “3 FOR 2”

• THIS PROMOTIONAL STRATEGY AIMS AT SELLING ANY 3 ITEMS FOR THE PRICE OF THE .• THE LEAST EXPENSIVE PRODUCT IS GIVEN

FOR FREE.• THE PRODUCTS CAN BE OF DIFFERENT

CATEGORIES BUT SHOULD BELONG TO THE SAME BRAND

PROS:• MOST OF THE OTHER COMPETITORS DO NOT HAVE THE

TECHNOLOGY FOR THIS KIND OF PROMOTIONAL STRATEGY SO IT WILL BE DIFFICULT TO IMITATE.

• SALES ARE EXPECTED TO INCREASE BY 300% DURING THE PROMOTIONAL PERIOD.

• 60% PERCENT OF THE SALES WOULD BE FROM THE CUSTOMERS WHO WOULD NOT BY ANY PRODUCT.

• THIS WILL HELP CREATE A TASTE FOR PREMIUM PRODUCTS AMONG THE CONSUMERS USING BASIC PRODUCTS AND WILL IN TURN RESULT IN MORE PEOPLE SHIFTING TO PREMIUM PRODUCTS.

CONS:• THIS COULD BACKFIRE IF PEOPLE TRY IT ONLY DURING THE

PROMOTIONAL EVENT’S TIME AND REFRAIN FROM USING IT IN THE FUTURE.

• THIS STRATEGY WOULD NOT LEAD TO MUCH PROFIT AS ALMOST 33% DISCOUNT WOULD BE GIVEN WHILE THE COMPANY WOULD EARN AROUND 40%.

• BUT THIS COULD INCREASE THE SALES IN THE FUTURE AFTER PROMOTIONS.

2. “GIFT WITH PURCHASE (GWP)”

• THIS PROMOTIONAL STRATEGY OFFERS CUSTOMERS SAMPLE PRODUCTS OF DIFFERENT PRODUCT CATEGORIES WITH A REGULAR PURCHASE .• THESE SAMPLE PRODUCTS CAN BE OF

DIFFERENT CATEGORIES BUT SHOULD BELONG TO THE SAME BRAND.

PROS:

• SALES ARE EXPECTED TO INCREASE BY 170% DURING THE PROMOTIONAL PERIOD.

• 40% PERCENT OF THE SALES WOULD BE FROM THE CUSTOMERS WHO WOULD NOT BY ANY PRODUCT.

• THIS WILL ALSO HELP CONSUMERS TRY DIFFERENT PRODUCTS AND THUS INCREASE SALES.

CONS:

• PACKAGING OF THE PROMOTIONAL PRODUCT WITH THE PURCHASED PRODUCT WILL INCREASE PRODUCTION COSTS.• PREDICTED SALES ARE MUCH LESS THAN IN

THE CASE OF THE 3 FOR 2 OFFER.

3. “ON-PACK COUPON (50 P OFF)”

• THIS PROMOTIONAL STRATEGY GIVES CUSTOMERS 50P OFF ON THE PURCHASES THEY MAKE.• THE PRODUCTS CAN BE OF DIFFERENT

CATEGORIES BUT SHOULD BELONG TO THE SAME BRAND.

PROS:

• SALES ARE EXPECTED TO INCREASE BY 150% DURING THE PROMOTIONAL PERIOD.• 50% PERCENT OF THE SALES WOULD BE

FROM THE CUSTOMERS WHO WOULD NOT BY ANY PRODUCT.

CONS:

• PREDICTED SALES ARE MUCH LESS THAN IN THE CASE OF THE 3 FOR 2 OFFER.• THIS STRATEGY COULD RESTRICT PEOPLE

FROM GETTING INTO DIFFERENT PRODUCT CATEGORIES AND TRYING OTHER PRODUCTS AND THUS INCREASING SALES OF A VARIETY OF PRODUCTS OF THE BRAND.

CONCLUSION• BASED ON THE PROS AND CONS OF THE ALTERNATIVES AND WEIGHING

ALL THE OPTIONS AVAILABLE I FEEL “3 FOR 2 ” OFFER WILL BE THE BEST CHOICE KEEPING MIND THE OBJECTIVES OF THIS PROMOTIONS.