This is a case study on Boots Hair care.

2. How to choose the right strategy?
What is the math/calculation
involved?
Is the profit shown by math, the only
factor to select the right strategy?

3. THE PLAYER Dave Robinson
Category & Operations Manager
John Boot & Jesse Boot
Founders

4. • Get 3 for price of 2
• GWP – Gift with purchase
• Include a coupon worth 50p
Alternatives available:

5. What are the pros and cons of each of the
alternatives available?
Why should I select that alternative?

6. To select a sales promotion strategy, which will:
• Drive sales volumes
• Trade up consumers from lower-value brands
while retaining or building brand equity.
This strategy selected will have immediate effect on cost, sales and long term implications for
brands involved.

8. Boots company
• Jesse Boot established Boots in 1883
• Provides health and beauty products and
services.
• Aim: To be the LARGEST, BEST and
CHEAPEST

9. Boots Services
• Boots opticians
• Boots for Men
• Insurance services and initiatives in
Dentistry, Chiropody.
• Beauty and Healthcare products
Products are exported to more than 130 countries.
Boots stores are established in Ireland, Thailand and Taiwan

10. Boots Marketing Strategy
To create brand awareness and an emotional attachment
between consumer and the brand.
Use Celebrity endorsements:
Price per unit licensing fee for the use of celebrity‘s brand name.

11. Boots relation with
Hairdressers
• The relationship with boots was lucrative for
hairdressers.
• It gave them access to a large percentage of UK
consumers through Boots 1300 stores.

12. Boots Products or Brands
Boots worked with celebrities to design
formulations that were functionally better
than existing brands.

13. • Charles Worthington
Market awareness : Medium
Products:
 Styling Products: Shampoo, Conditioner, Spray, Balm, Mousse, Glosser, Serum, Gel,
Putty, Wax, Makeover kit
 Hair brush, Face wash, Face scrub
 Men’s Range: Shave foam, Shave Gel, After shave, Deodorant.

14. • John Frieda
Market awareness: Strong
Products:
 Styling Products: Shampoo, Conditioner, Spray, Mousse, Glosser, Hair cream,
Serum, Gel, Styling foam, Hair lotion

15. • Nicky Clarke
Market awareness: Medium
Products:
 Styling Products: Shampoo, Conditioner, Spray, Balm, Mousse
 Hair dryer

16. • Umberto Giannini
Market awareness: Low
Products:
 Styling Products: Shampoo, Conditioner, Spray, Mousse, Jelly, Glosser, Hair cream,
Serum, Wax
 Hair powder, Hair color

17. • Toni & Guy
Market awareness: Strong
Products:
 Styling Products: Shampoo, Conditioner, Spray, Balm, Mousse, Hair cream, Serum,
Putty
 Hair brush, Hair comb, Hair rollers

18. • Trevor Sorbie
Market awareness: Medium
Products:
 Styling Products: Shampoo, Conditioner, Spray, Balm, Mousse, Glosser, hair cream,
Serum, Gel
 Hair dryer, Hair brush, Hair comb, Barber’s clipper, Straightening iron, Heat rollers,
Face wash
 Men’s Range: Beard softener, Shave oil, Shave Gel, After shave, Shower Gel,
Deodorant, Eau de toilette, Hair wipe, Lip balm.

19. • Lee Stafford
Market awareness: Low
Products:
 Styling Products: Shampoo, Conditioner, Spray, Balm, Shaper, Mousse

20. UK Market
Competitors
Brand Loyalty
Consumer Behavior
Boots at present

21. UK Market
Sales of the brand was directly proportional to
amount of advertising expenditure.

22. UK Market
60 major hair care products brands with none of them
having more than 9% market share.

23. UK Market
Severe price competition => Volume would grow
more quickly than value!

24. Competitors
• Procter & Gamble

25. Competitors
• Alberto-Culver

26. Competitors
• L’OREAL

27. Competitors in super market
segment

28. Competitors in super market
segment

29. Competitors in super market
segment

30. Competitors in super market
segment

31. Brand Loyalty
Consumers were not very brand loyal because of
3 reasons
• Belief that changing shampoo brands produced better results than
continually using the same brand
• Changing preferences
• It was difficult for customers to identify meaningful difference between
the various brands

32. Consumer Behavior
• Consumers who purchased professional brands
were largely fashion conscious i.e. women
belonging to 20 to 35 age

33. Consumer Behavior
• Other consumers bought basic products for daily use
and premium products for special occasions.

34. Boots… at present
• Missed on maximizing
profits because it had not
been able to sufficiently link
its name with its products

35. Boots… at present
• Target market: Current Boots consumers and
existing purchasers of mass market brands.

36. Boots… at present
Marketing:
• No media advertising budget
• Highlighted in flyers
distributed by the store
• Signage within the store to
promote offer

38. Selling price of the product is ₤4
Average retail margin = 40%
Retail Price = ₤ 2.4
Cost to manufacturer assuming 10% margin
= ₤ 2.18

39. 3 for 2
This would enable buyers to buy 3 products at the
price of 2 products.
Estimated Sales increase: 300%
Manufacturing cost for 300 products = 300 x ₤ 2.81
= ₤ 654.54
Income for 300 products = income of 200 products because of
this offer = 200 x ₤ 4 = ₤ 800
Total Profit = ₤ 154.46 Profit per bottle = ₤ 0.485

40. GWP (Gift with
purchase)
A product sample will be given along with a regular
purchase
Estimated sales increase = 170%
Manufacturing cost for 170 products = 170 x ₤ 2.81
= ₤ 370.6
Overall cost for 170 products including packing cost of 93p
per unit = ₤ 528.7
Income for 170 products = 170 x ₤ 4 = ₤ 680
Total Profit = ₤ 151.3 Profit per bottle = ₤ 0.89

41. On pack
coupon (50p Off)
50p Off option for customers. They would be able to
redeem during current store visit.
Estimated sales increase = 150%
Manufacturing cost for 150 products = 150 x ₤ 2.81
= ₤ 327
Income for 150 products = 150 x ₤ 4 = ₤ 600
Total Profit = ₤ 273 Profit per bottle = ₤ 1.82

42. • Maximum sales is from 3 for 2 strategy
• Maximum profits are from 50p off strategy

43. To select a sales promotion strategy, which will:
• Drive sales volumes
• Trade up consumers from lower-value brands
while retaining or building brand equity.
Recall Dave Robinson’s target?
To increase sales and customer base

44. So profit is not the criteria to select the right
strategy..!

46. SummarySUMMARY