Boots Hair-Care Sales Promotion: A Harvard Case done under the guidance of Prof.Sameer Mathur, IIM Lucknow as an assignment of Marketing Management summer internship.

3. Best-known and respected retail names in the United
Kingdom
Provides health and beauty products
It employed around 75,000 people and operated in some
130 countries worldwide in 2004.

5. •Started in 1849 by John Boot as the ‘The British and American
Botanic Establishment.’
•Started to provide physical comfort to the needy
•Developed into a private company ‘Boot and Company Limited’
•The company began to expand with more stores.
•The marketing strategy involved around being – ‘Largest, Best and
Cheapest.’

6. The company launched its first logo in late
1883.It was focused that customers should
to pay cash as prices were cut a large extent
in product range.
Later in 1960’s mostly after the war
regeneration the company adopted a
new black and white logo.

7. In post war regeneration and
development, the company included a
new power house, printing works and a
new pharmaceutical building.
The company has expanded its major
sector in pharmacy and owned global
differentiated brands in
medication market.

9. The international expansion operations were
performed, which exported healthcare products
to more than 130 countries.

11. •The consumer market comprised of brands such as
Pantene Pro-v , Head & shoulders, Alberto V5 and Elvive.
•These national brands were widely available in
supermarkets such as Tesco, Sainsbury and Morrison's.
•The sales of the brands were directly proportional to the
amount of advertising expenditure.

12. •About 60 major brands of hair care products were
available in the U.K. market.
•None of the brand had more than a nine percent
market share.
•The overall market was expected to grow by between
one to three percent per year.
•Severe competition proved how volume grew more
quickly In market than value.

13. • Boots desired to build a new market by using celebrity
endorsements to create awareness and create an
emotional attachment between consumers
and the brand.
• No celebrity-endorsed products were available in
retail stores. Boots began to cultivate relationships,
beginning 1996, with well-established hairdressers in
the United Kingdom.

14. • Boots developed a critical mass of professional hair-care
brands.
• Hairdressers got access to a large percentage of U.K.
consumers through Boots’ 1,300 stores.
• Boots worked with the celebrities to design formulations
that were functionally better than existing brands. Under the
agreement, Boots manufactured the products and paid a per-
unit licensing fee for use of the celebrity’s
brand name.

15. In the more than five years since the first celebrity
brand was introduced, Boots felt that it had not
been able to sufficiently link its name with these
products and hence missed on maximizing
profitability.

17. One of the most influential
and creative hairdressers.
His name is synonymous
with style, innovation
and success.

18. Entrepreneurial in spirit, global in impact, John
Frieda’s team of celebrity stylists (the “House of
Experts”) fuels the company’s new product
initiatives with the inside track on hot, new
celebrity hair trends.

20. Brand Introduced Distribution Specifies
( No. of salons
in U.K. )
Market
Awareness
Charles Worthington 1996 Only Boots 5 Medium
John Frieda 1996 Widely
Available
3 Strong
Nicky Clarke 1998 Widely
Available
2 Medium
Umberto Gianni 1999 Widely
Available
8 Low
Toni & Guy Jan 2001 Only Boots 250 Strong
Trevor Sorbie Sept 2001 Only Boots 2 Medium
Lee Stafford Sept 2001 Only Boots 3 Low

24. >> Holds a 8.4% market share in hair-care
market. And products include Pantene, Head &
Shoulders.

25. •Product range consists of shampoos, conditioners
and styling products.
•It holds a 5% share of the UK hair-care market.
•Typically a French origin company.
•Owns over 2000 products in all sectors of beauty
business.

26. •Offers a variety of hair-care, skin-care and home-care
products.
•Owns upto 6-7% of market share.
•It has about 2000 stores located worldwide.

27. Most major retailers carried a variety of professional
and mass market hair-care brands. The major
competitors in the supermarket segment were Tesco,
Sainsbury’s and Morrison's.

28. The second major hair-care competitor was Superdrug. It owned
about 700 stores in United Kingdom itself.
Superdrug stores layout, lighting and colour allowed customers to
move at their own pace in an attractive setting. The company’s
value offering was that of a value retailer with a wide assortment of
around 10,000 products

29. •Reasons as to why customers are not brand loyal !
•Why no brand has more than 9% market share ?
There is a general belief among consumers that
changing shampoo brands provide better results
than using a single brand.

32. 1. No variation in product-
sizes because of the added
cost and complexity
involved.
2. No media advertising
budget was allocated for
this promotion.
3. There would only be
signage within the store to
promote the offer.

33. • Average bottle size (shampoo/conditioner) was 250
millilitres (ml) — with an average pre-promotional
price of £3.99. Industry average retail margins on
premium brands averaged 40 %.
• Mass-market brands had an average retail price of
£2, with retailer margins of approximately 25 %.
• The manufacturer’s typical margin was between
eight per cent to 12 per cent on their cost for both
types of products.

36. The 50p off option was a more
conservative approach to promoting the
brands. All customers would be able to
redeem the coupon during their current
store visit. Also, most competitors tended
to use price discounts or GWP’s as their
promotional method.

37. Sales per day would increase to 300 per cent
of pre promotion sales during the deal period
with this offer. And approximately 60 per
cent of these sales would be to customers
who would not otherwise have purchased a
hair-care product from Boots during the
promotional period.

39. A GWP was an offer in which customers were given a
product sample along with a regular purchase. For
example, a sample size of conditioner would be
packaged with a regular bottle of shampoo. An existing
sample product would be used to
avoid the need to design and produce additional
packaging.

40. • Adding the sample
would cost 90p per
unit for the product
plus 3p per unit to
secure the sample to
the featured product.
• Robinson expected
that sales during the
promotional period
would be 170 per cent
of sales .
• It is estimated that 40 per cent of sales would be to Boots
shoppers that would not have otherwise purchased a hair
care product from Boots during the promotional period.

42. The 50p off option was a more conservative
approach to promoting the brands. All
customers would be able to redeem the
coupon during their current store visit. Also,
most competitors tended to use price discounts
or GWP’s as their promotional method.

43. • Robinson estimated that
sales would increase to 150
% of non-promotion sales
because December would
be a heavy promotional
period for mass market
brands.
• 50 % of sales would come
from Boots customers who
would not have otherwise
purchased a hair-care
product within the
promotional period.

45. • Boots is U.K. based company.
• To promote the sales Dave has to consider a promotional
alternative.
• The competition in hair-care is severe and many big brands
fight for the battle.
• Most of the hair-care brands are associated with professional
hair- stylers and celebrities.
• Research shows that consumers are not vey brand loyal.
• Current boots consumers and existing purchases were the
primary target of promotion.
• ‘3 for 2’ seems more profitable as it not only lead to
300% increment in promotion sales but attracts
60% customers who would not have otherwise purchased.

46. Created by Sunil Swaroop, CET Bhubaneswar,
during a marketing internship by Prof. Sameer
Mathur, IIM Lucknow.