A case study on Boots Hair Care [Harvard Business Review]

1. BOOTS: Hair Care Promotion Strategy

3. • Sales volumes should increase for its hair care products
• Attract consumers from the lower value brands
• Build and retain the brand equity
• Consider the competitors (Hair Care & Retail Stores)
Promotion Objectives:

4. Get
three
for
the
price
of
two
(“3
for
2”)
Receive
a
gi7
with
purchase
(“GWP”)
An
on-­‐pack
coupon
Promotion Alternatives:

5. “3
For
2”
Offer
• buy two hair-care items at regular price
and receive one free
• three items had to be of the same brand
• least expensive of the three items would
be free

6. Gi7
With
Purchase
(GWP)
• a product sample along with a regular
purchase
• existing sample product would be used
to avoid the need to design and produce
additional packaging

7. On
Pack
Coupon
• Consumers will get 50p off on their
purchase.
• All customers would be able to redeem
the coupon during their current store
visit.
COUPON

8. 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,
condiNoner
and
styling
gel
of
same
brand
Premium
products
would
lose
their
brand
equity
and
may
sound
as
some
cheap
promoNon
Most
compeNtors
did
not
have
the
technology
at
the
point
of
sale
to
imitate
this
promoNon
Product
partners
(Hair
dressers)
may
oppose
this
strategy
for
the
diluNon
of
their
brand
equity
EsNmaNon
was
that
sales
would
increase
to
300
%
60%
customers
–
promoNonal
buyers
“3 for 2”

9. 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
EsNmated
sales
would
increase
by
170%
of
the
pre-­‐promoNonal
sales
This
is
a
very
common
startegy
used
by
most
of
the
retailers
and
can
be
easily
imitated
40%
of
the
customers
would
be
just
promoNonal
buyers
GWP

10. 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
EsNmated
sales
would
increase
by
150%
of
the
pre-­‐promoNonal
sales
Form
of
discounNng
which
can
dilute
the
brand
equity
50%
of
the
customers
would
be
just
promoNonal
buyers
More
of
a
conservaNve
approach
Coupons
would
enable
mulNple
visits
for
a
single
customer
Less
esNmated
sales
growth
as
per
the
market
research
On pack coupon

11. Alterna/ves
3
For
2
GWP
On
Pack
Coupon
Cost
per
bo`le
(Pounds)
1.4
1.4
1.4
EsNmated
Sales
for
1
Day
300
Units
170
Units
150
Units
Promoitonal
Cost
per
Unit
ProducNon
cost
ProducNon
cost
+
Sample
cost
ProducNon
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
Quantitative Analysis

13. “3
For
2”
300%
Increase
in
sales
60%
New
Customers
added!!!
Increasing
Sales
Capture
new
Customers

14. DISCLAIMER
Created by Akshay Julka(DTU, Delhi), during a Marketing
Internship under Prof. Sameer Mathur, IIM Lucknow.