The case analysis of Boots and its sales promotion alternatives.

1. Boots : Hair care sales
promotion

2. ABOUT US
Type Private limited company
Industry Pharmaceuticals
Healthcare
Beauty
Photography
Founded 1849; 167 years ago,Nottingham, United
Kingdom
Founder John Boot
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
Number of employees 70,000 (UK)
1,900 (Ireland)

3. How we evolved ??
Early days
Post-War Regeneration and
New Development, 1945-1968
The
Modern
Era

4. PRESENT SITUATION
In order to secure market leadership in
face of severe competition, it needs
to adopt promotional strategy.

5. The Major Competitors

6. BRANDS
• Pantene, Clairol, Head and Shoulder,
PER plus, Daily Defense.
STRENGTHS
• Best selling hair care brand around the
world as per 1995 census.
• Share 8.4% percent of UK’s hair market
WEAKNESS
• Significant presence in mass market
products/basic products but have less or
no professional hair care products.

7. BRANDS
• St. Ives, VO5, Consort Hair Care for
Men, and FDS.
STRENGTH
S
• Offer Broad Assortment of Hair Care
Products.
WEAKNESS
• Have less or no professional hair care
products.
• Lesser number of stores

8. BRANDS
• Lancôme, Giorgio Armani, Biotherm,
Ralph Lauren.
STRENGTHS
• Global Presence.
• Share 5% percent of UK’s hair market
WEAKNESS
• Significant presence in mass market
products/basic products but have less
or no professional hair care products.

9. Retailers of similar category

10. TESCO : largest super market
chain in U.K
SAINSBURY’S : 2nd largest in U.K
MORRISON’S: provides high quality at low
prices

11. CONCLUSION FROM
ABOVE MARKET STUDY
1. Increase awareness
about its professional
hair care products.
2. Differentiate its
products with others
through packaging or
sales strategy.

12. WHAT’S THE AIM

13. To make
sales
promotion
strategy for
Company’s
Hair-care
Products UK
Stores

14. OBJECTIVES
Sales volumes
should increase
Build and retain
the brand
equity
Consider
competitors
from both, hair
care products
and retail
stores
Attract
consumers
from lower
value brands

15. WHAT’S THE SITUATION ??

16. To
Finalize
A
Promotion
Strategy
Among These
Three

17. Promotional Alternatives
 3 for 2
 GWP (Gift With Purchase)
 On-pack Coupon (50p off)

18. So, Let’s Place Our Self In Place of Dave
Robinson and Remember the words of
Philip Kotler for How to Analyze a Market?

19. Analyze
Customer needs
and Behavior
See competitors
in the market
Propose a
solution and
target your
segmented
customers

20. 1.
Advantage Disadvantage

21. 2.
Advantage Disadvantage

22. 3.
Advantage Disadvantage

23. FOLLOW THE
CASE ANALYSIS
PROCESS TO
DEDUCE THE
FITTING
SOLUTION
SITUATION
QUESTIONS
HYPOTHESIS
PROOF AND ACTION
ALTERNATIVES

24. Select a model to increase sale for lower
brand hair care products that would be
most profitable to the company at the
same time maintaining and enhancing
the professional hair care brands.

25. 1. Which promotion strategy to incorporate
keeping in mind the cost to the company and its
brand equity.
2. Since consumers are not brand loyal, so how to
effectively differentiate the promotion strategy
from other major brands so as to get at least the
estimated sales as predicted.

26. BOOTS TARGET MARKET
Current Boots customers
and purchasers of mass
market brands.

27. Since Boots primary objective is to trade up
consumers from lower value brands and to drive
sales volume, while retaining or building brand
equity.
So, I believe the best promotion
strategy would be “Get 3 for price
of 2”.

28. The reason behind choosing the
above strategy is….

29. REASON 1:-
Since it involves maximum increase
in the total sale viz. 300%, which is
our primary aim.

30. REASON 2:-
Since the technology to implement
this strategy is with few or no other
company, hence it would be unique
as customer will be able to
differentiate it from other
competitors.

31. REASON 3:-
Second aim was to maintain or enhance the brand
equity, this will enhance using the above strategy
since we are using sales promotion for all value
brands and with this the customer inflow is
increasing and hence automatically the incoming
new customers(apart from regular boots customers)
will try its premium products and since the products
are better than any other product in market due to
its professionalized manufacturing process thus will
lead to a satisfy or even a happy customer and
people have value for their money and hence will
increase brand equity and its professional hair care
products will penetrate into the lower income
market too.

32. REASON 4:-
Cost : With this strategy there will be
no increase in cost, nothing from
packaging to manufacturing new
samples as gifts.

33. ANALYZING ALTERNATIVES

34. => Although 170% increase in sale, but 93% of
product price would be spent in offering sample
product as gift along with the purchase.
=> Since above strategy incur more costs with
lesser sales and above that offering competitors
equal opportunity to adopt the model thus diluting
the differentiating itself strategy. So, this strategy
is less likely to be adopted.

35. => This strategy is comparatively good since it ensures
customer to buy more than one product hence increase
sale.
=> But, since it offers a 50p off on the same product, so in
that way no customer would be inclined to buy two
bottles of the same product at a price of 1.5 of original
cost of 1 bottle or 3 bottles at a cost of 2 bottles, which is
equivalent to the first strategy but more sales and
offering variation in products thus more alluring to the
customers.
=> Above all this model is mostly used by other
competitors too, thus is less likely to be adopted.

36. Analysis
Alternatives 3 for 2 GWP One pack coupon
Cost/bottle [£] 1.4 1.4 1.4
Estimated
sales/day
300 170 150
Promotional
cost/unit
Production cost Production cost +
sample cost
Production cost +
discount cost
Promotional
cost/unit [£]
1.4 2.33 1.9
Total cost [£] 420 396.1 285
Total revenue [£] 600 340 300
Net profit [£] 180 -56.1 15
all calculations for one day

37. 0
50
100
150
200
250
300
350
3 FOR 2 GWP 50P OFF
Better Visual Analysis
sales during the
promotional period = % of sales that would have occurred
without the promotion.

38. CONCLUSION
FROM THE CASE
ANALYSIS I WOULD
SAY THAT THE “3
FOR 2” WAS A
BETTER STRATEGIC
PLAN BY BOOTS
FOR THE PRODUCT
GROWTH &
DEVELOPMENT.

39. Thank you

40. DISCLAIMER
Created By Tanmay Garg, NIT Surat,
during a marketing internship by Prof.
Sameer Mathur, IIM Lucknow