The presentation was prepared by Sarath Chandra under guidance of Prof. Sameer Mathur as part of internship.

1. Boots: Hair-care sales
Promotion
Harvard Business School Case

2. Situation Analysis

3. What is Boots?
• Boots is one of the best known and respected retail names in the UK,
provided health and beauty products and advice that enhanced
personal wellbeing.
• It also had ventures in other fields such as Boots Opticians, dentistry,
chiropody, ‘Boots for Men stores and Internet Services.

4. How did Boots enter Hair care
market?
For hair care market in UK the sales for popular consumer brands like
P&G, L’Oreal, Alberto-Culver were directly proportional to
the advertising expenditure. The market share for hair care products
was highly fragmented among the products of these brands and Boots
saw an opportunity to be the retail hair care expert and to offer the
latest ranges.

5. How did Boots develop the products?
Boots built-up on celebrity endorsements and hairdresser
relationships. They developed these products some in partnership
while others through a supplier and retailer partnership.
Exhibit 3 on next slide shows hairdressers associated with Boots.
Exhibit 4 shows product categories.

8. What does a customer want?
Research indicated that the consumers were not very brand loyal for
variety of reasons. They mainly chose between packaging, advertising,
price, ingredients, consistency, fragrance and so forth. Most Boots
consumers bought both basic and premium brands.

9. What is Boots planning?
Now looking at the festive seasons Robinson was planning for a sales
promotion of its hair care products. Due to the efficiency
considerations and ongoing management of stock, Boots was not
considering any variation in product sizes because of the added cost
and complexity involved. No media advertising budget was allocated
although sufficient visibility in the stores was maintained.

10. What is aim of Boots?
Boots aim was to secure market leadership in the UK in the hair care
segment. Competitors could not easily copy their strategy because they
had contracts with some of the most prestigious salon brands in the
UK. He wanted to ensure that the promotions were profitable, but the
importance of maintaining and enhancing the professional hair care
brands could note understated.

11. Problem Statement

12. What is the problem?
The main problem Robinson was facing is to select one of the three
promotional alternatives
1. Get three for the price of two.
2. Receive a gift with purchase (GWP).
3. An on-pack coupon worth 50p.
while keeping in mind his primary objective to drive sales volumes and
trade up consumers from lower value brands while retaining or building
brand equity.

13. Decision criteria for
the alternatives

14. What should be the output of
marketing?
• Sales volumes should increase for its hair care products.
• Attract consumers from the lower value brands.
• Build and retain the brand equity.
• Considering the competitors both in hair care products and retail
stores.

15. Alternatives

16. What are the alternate strategies?
1. Get the three for the price of two (“3 for 2”).
2. Receive a gift with purchase (GWP).
3. On-pack coupon worth 50p.

17. Evaluation of alternatives

18. Get the three for the price of
two (“3 for 2”)

19. Advantages
• Consumer would get 3 items for a regular price buy of two.
• Consumers could combine any three items as they like e.g. shampoo,
conditioner and styling gel of same brand and product with least price
would be offered free.

20. Advantages cont.
• Most competitors did not have the technology at the point of sale to
imitate this promotion.
• Estimation was that sales would increase to 300 % of pre-promotion
sales
• 60 % of the customers would be just promotional buyers.

21. Disadvantages
• This will have clear cut indication of the stock clearing strategy which
could impact potential customers from buying the products.
• Premium products would lose their brand equity and may sound as
some cheap promotion.
• Product partners (Hair dressers) may oppose this strategy for the
dilution of their brand equity

22. Receive a gift with purchase
(GWP)

23. Advantages
• Product sample would be given free along with a regular purchase.
• Additional packing would be used to pack the free sample along with
the existing one.
• Estimated sales would increase by 170% of the pre-promotional sales.
• 40 % of the customers would be just promotional buyers.

24. Disadvantages
• 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.
• This is a very common strategy used by most of the retailers and can
be easily imitated.

25. On-pack coupon worth 50p

26. Advantages
• Customers would be able to redeem their coupons during their
current store visit.
• Sales are estimated to increase by 150% of the pre-promotional sales.
• 50 % of the customers would be just promotional buyers.
• Coupons would enable multiple visits for a single customer.

27. Disadvantages
• This is a very common strategy used by most of the retailers and can
be easily imitated.
• Again this is one of the form of discounting which can dilute the
brand equity.
• This is more of a conservative approach.
• This option has less estimated sales growth as per market research.

28. Recommending a solution

29. Solution for problem?
Considering the advantages and disadvantages, It would be better for
the Boots company to adopt the first strategy i.e. ‘3 for 2’.

30. Why First Strategy?
It can not be easily imitated by the competitors, it has more estimation
of the increase in sales as per the market research and more customers
would buy the product had it not been for the promotional offer.

31. How will it help boots?
The strategy will also help the Boots to push its non selling brands in
this strategy, as general tendency of the consumers is to buy
different brands for different products but this offer would attract
many consumers to buy the 2ndor the 3rdproduct in the offer of their
brand which they otherwise would not have purchased. This offer
would thus boost their sales volumes and increase their
brand consumption.