Boots Hair-care Sales Promotion
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Boots, a UK-based health and beauty retailer, was considering promotional strategies to increase sales of its hair care products. Its head of personalization, David Robinson, was tasked with selecting the best strategy. The options considered were a 3 for 2 deal, gift with purchase, and on-pack coupons. Testing showed the 3 for 2 deal increased sales by 300% over pre-promotion levels, more than the other options. It also provided Boots a unique competitive advantage over rivals. The summary concludes the 3 for 2 deal was determined to be the best alternative as it maximized profits while maintaining and enhancing the hair care brands.
Boots Hair-care Sales Promotion
- 1. BOOTS HAIR-CARE SALES PROMOTION BY- SHIRIN SONALI CET BBSR A HARVARDCASE STUDY
- 2. LET US
- 3. ABOUT BOOTS Target Industries: Healthcare Beauty Pharmaceuticals Employees: 75,000 Operated in 130 countries.
- 5. DAVID ROBINSON Head of Personalisation for Boots UK. In-charge of the Sales Promotional Strategy.
- 7. To select the Best Promotional Strategy for its Hair- Care Products.
- 8. THE
- 9. 3 for 2 Gift with Purchase (GWP) On-pack coupon (50p off) 1. 2. 3.
- 10. THE TIME FRAME
- 12. BOOTS TIMELINE 1849 John Boots opens The British and American Botanic Establishment in Nottingham. 1883 Jesse Boots establishes Boot and Company Limited. Jesse Boots
- 13. PRIMARY OBJECTIVES Increase Sales Volume. Trade-up Consumers from lower-value Brands. Retaining and Building Brand Equity.
- 14. UK HAIR MARKET Over 60 major hair care product brands. None had more than 9% market share. Overall market was expected to grow 1-3% annually the next 5 years. Severe price competition.
- 15. OPPORTUNITIES -
- 16. To be the retail hair- care expert. Could use celebrity endorsements. No celebrity-endorsed products were yet available in retail stores.
- 17. CONSUMER NEEDS AND BEHAVIOUR Consumers not very BRAND LOYAL : 70s Gentle Shampoos 80s Detangling Shampoos 90s Shiny Hair in demand Large Number of Choices. No Brand Differentiation.
- 18. Target Customer Segment bought mostly BASIC BRANDS. PREMIUM BRANDS bought as treats.
- 19. CELEBRITY ENDORSEMENTS To increase BRAND EQUITY and BRAND AWARENESS. John Frieda Charles Worthington Nicky Clarke Toni & Guy Trevor Sorbie
- 21. 1) Pantene, Clairol, Head & Shoulders, Daily Defense, PERT plus, Herbal Essences BRAND S Best-selling hair-care brand in the world by 95 8.4 per cent share of the U.K. hair care market PROS Almost no professional Hair-care BrandsCONS
- 22. 2) St. Ives, VO5, Consort hair care for men, FDS BRAND S Offers a broad assortment of hair-care products has globally acquired diverse firms PROS Almost no professional Hair-care BrandsCONS
- 23. 3) Giorgio Armani, Biotherm, Ralph Lauren, Shu Uemura, Cacharel, Clarisonic, Diesel BRAND S Offered women new ways and means to enhance beauty Great promotional strategies PROS Almost no professional Hair-care BrandsCONS
- 25. SO, TURNING TO THE AT HAND, THE CHOICES
- 26. 1) Buy 2 items and get 3rd free of same brand, the least expensive item being free. Few competitors had the technology to imitate them. Others could only do a 3-for-2 offer : 3 items being equally priced. OFFER COMPETITIVE ADVANTAGE
- 27. 2) OFFER CONS An existing product sample given along with a regular purchase. Can be imitated. Additional Costs expected.
- 28. 3) ON-PACK COUPON - OFFER CONS Coupon redeemable during current store visit. Most competitors used GWPs. Can be imitated.
- 30. INCREASE in SALES 3 FOR 2 - To 300% of pre- promotional sales GWP - To 170% of pre- promotional sales 50p OFF - To 150% of pre- promotional sales
- 31. AFTER SOLVING THE CASE ACCORDING TO THE METHOD ANALYSIS PROCESS -
- 32. FROM THE PROTAGONISTS PERSPECTIVE, THE BEST ALTERNATIVE WOULD BE 3 FOR 2.
- 33. REASONS 5
- 34. SATISFIES DAVES WANT OF A STRATEGY WHICH MAXIMIZES PROFITS AND ALSO MAINTAINS AND ENHANCES THE PROFESSIONAL HAIR-CARE BRANDS.
- 35. MAXIMUM INCREASE OF SALES, TO 300%, AMONG ALL THE STRATEGIES.
- 36. UNIQUE PROMOTIONAL STRATEGY WHICH CANT BE IMPLEMENTED BY MOST OTHERS. HELPS IN BRAND DIFFERENTIATION.
- 37. HIGHEST % OF SALES TO CUSTOMERS : 60%, WHO WOULDNT HAVE PURCHASED A BOOTS ITEM DURING PROMOTIONAL PERIOD.
- 38. NO ADDITIONAL COSTS INCURRED, AND AT THE SAME INCREASE IN BRAND EQUITY & BRAND AWARENESS.
- 39. RECAP ABOUT BOOTS THE PROBLEM PRIMARY OBJECTIVES OPPORTUNITIES CONSUMER NEEDS AND BEHAVIOR MAJOR COMPETITORS CHOOSING THE BEST ALTERNATIVE
- 41. Created By Shirin Sonali, CET BBSR, During A Marketing Internship Under Prof. Sameer Mathur, IIM LUCKNOW.