Part of marketing internship done under Prof.Sameer Mathur, IIM Lucknow

1. Boots: hair care sales
promotion case study
Pradnya Shah
140103123

2. Type Private limited company
Industry Pharmaceuticals
Healthcare
Beauty
Founded 1849, Nottingham, United Kingdom by
John Boot
Sector Retail and Lifestyle
Headquarters Nottingham, United Kingdom
Area served United Kingdom, Republic of Ireland
Key people Simon Roberts, managing director, Boots
UK and Ireland
Brands No. 7 and Seventeen – Makeup
Soltan – Sun cream
Almus – Generic drugs
Target Group Upper middle class and middle class,
focus on women.

3. What’s our AIM????

4. COMPETITIORS HAIR CARE SALES
BRAND EQUITY CUSTOMERS

5. DAVE ROBINSON

7. 3 for 2
ADVANTAGES DISADVANTAGES
Consumer would get 3 items for a regular
price buy of 2.
Would be perceived as a Stock clearing
strategy
Consumers could combine any 3 items as
they like e.g. shampoo, conditioner and
styling gel of same brand
Premium products would lose their brand
equity and may sound as some cheap
promotion
Most competitors did not have the
technology at the point of sale to imitate
this promotion
Product partners (Hair dressers) may
oppose this strategy for the dilution of their
brand equity
Estimation was that sales would increase to
300 %
60% customers – promotional buyers

8. Receive a gift
with purchase
(GWP)
ADVANTAGES DISADVANTAGES
Product sample would be given free along
with a regular purchase
Adding the sample would cost approx. 90p
per unit for the product plus 3p per unit extra
to secure the sample to the featured product
Estimated sales would increase by 170% of
the pre-promotional sales
This is a very common strategy used by most
of the retailers and can be easily imitated
40% of the customers would be just
promotional buyers.

9. ON PACK COUPON WORTH 50 %
Advantages Disadvantages
Customers would be able to
redeem their coupons during
their current store visit
This is a very common strategy
used by most of the retailers and
can be easily imitated
Estimated sales would increase by
150% of the pre-promotional
sales
Form of discounting which can
dilute the brand equity
50% of the customers would be
just promotional buyers
More of a conservative approach
Coupons would enable multiple
visits for a single customer
Less estimated sales growth as
per the market research

10. Alternatives 3 For 2 GWP On Pack Coupon
All calculations are done for 1 day
Cost per bottle
(Pounds) 1.4 1.4 1.4
Estimated Sales
for 1 Day 300 Units 170 Units 150 Units
Promoitonal Cost
per Unit
Production
cost
Production cost +
Sample cost
Production cost +
Discount cost
Promoitonal Cost
per Unit (Pounds) 1.4 2.33 1.9
Total Cost
(Pounds) 420 396.1 285
Total Revenue
(Pounds) 600 340 300
Net Profit
(Pounds) 180 -56.1 15
A Bit Of Math…

11. A model is to increase sales by focusing on low brand hair care products which
would increase sales of the company at the same time maintaining and enhancing
the professional hair care brands.
QUESTIONS
1. Which promotion strategy to incorporate keeping in
brand and cost in mind?
2. How to effectively differentiate the promotion strategy
from other major brands?
SITUATION

12. HYPOTHESIS :
I believe the best promotion
strategy would be “Get 3 for
price of 2”.

13. REASONS & PROOFS
:
Reason 1: It fulfills Boots primary objective of increasing
sales with lower value brands and to drive sales volume
without compromising on brand equity.

14. Reason 2: With this strategy there will be no increase in
cost, nothing from packaging to manufacturing new samples
as gifts.
Reason 3: Not only is Boots making a good sales of 300%,
but also capturing a steady market share. Also, 60 percent of
these sales are to customers who would have not purchased
them without the promotional deal.

15. Reason 4: Other strategies like GWP have huge over head costs. 93%
of product price would be spent in offering sample product as gift
along with the purchase. Thus a possibility of dilution.
Reason 5: The 50% off strategy , on the second product ,is good in a
sense that it makes consumer buy two product instead of one. Thus,
a customer buys 2 products at a cost 1.5 of 1 product. But it is very
common in market so wouldn’t differentiate the strategy.

16. But every coin has two
sides..
Although the strategy involves increase in cost , its
benefits are many. Above all of which there is no
extra cost for packaging .Thus it increasing sales
could compensate the cost per unit in the long run.

18. SO I GUESS
WINS THE RACE…

19. Sindhuja Nanduri
BITS Pilani, Hyderabad Campus

20. DISCLAMAIR
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Presentation does not constitute either advice or a recommendation
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