Boots sales promotion

BOOTS: HAIR CARE SALES PROMOTIONHarvard Business School Case

General Information about BOOTS

Present Situation of BOOTS

Haircare Industry: General Overview

BIG CONCEPTSales of the Brands were directly proportional to Advertisements Expenditure.

Customers Mind Space: UK Hair Care Market

▸ Not Brand Loyal▸ Changing preferences of

consumers.▸ Difficult to identify differences in

multiple brands.▸ Lucrative market share of

professional brands.

Competitive Strategy: BOOTS

▸ Celebrity Endorsements▸ Collaboration with celebrity Hair

Dressers.▸ Design new formulations with help

of celebrity Hair Dressers.

Customers Mind Space: UK Hair Care Market

▸ Not Brand Loyal▸ Changing preferences of

consumers.▸ Difficult to identify differences in

multiple brands.▸ Lucrative market share of

professional brands.

1.TRANSITION HEADLINE

Let’s start with the first set of

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Let’s start with the first set of

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1. Drive Sale Volumes

Let’s start with the first set of

slides

1. Drive Sale Volumes2. Increase Market Share

Let’s start with the first set of

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3. Increase Brand Equity

Decisions Made

1.Target current BOOT customers.

2.Target exisitng purchasers of mass-market brand.

3.No media advertising budget. Flyers will be distributed by stores

4.Product placing at end of aisle or mid-aisle

BOOTS: Product Specifications

▸ Average Bottle Size: 250ml▸ Pre-promotional price: ₤ 3.99▸ Premium Brand retail margin: 40%▸ Mass-market brands retail price: ₤

2 and retail margin: 25%

Different Sales Strategies

1. 3 for 2 Strategy

▸ All three items should be of the same brand.

▸ Least expensive among them would be free.

▸ Competitors do not have this technology to implicate the same strategy.

▸ Increase in sales: 300%▸ Increase in customer database:

60%

2. Gift with Purchase

▸ Free product sample along with regular purchase.

▸ Sample addition cost: 93p per unit▸ Increase in sales: 170%▸ Increase in customer database:

40%

3. On-pack Coupon (50p off)

▸ Redeem coupon during current store visit.

▸ Increase in sales: 150%▸ Increase in customer database:

50%

Analysis of Different Sales Strategies

Assumption100 customers enter the BOOTS store per day, before the promotion period begins.

Let’s start with the first set of

slides

Premium Products

1. 3 for 2 Strategy

▸ Cost of Production: £ 2.39▸ Profit over 3 bottles: £ 0.81▸ Number of sales: 300 per day▸ Profit over sales per day: £ 243▸ Profit over December: £ 7533

2. Gift with Purchase

▸ Cost of Production: £ 3.32▸ Profit over single sale: £ 0.67▸ Number of sales: 170 per day▸ Profit over sales per day: £ 113.9▸ Profit over December: £ 3530.9

3. On-pack Coupon (50p off)

▸ Cost of Production: £ 3.32▸ Profit over single sale: £ 1.1▸ Number of sales: 150 per day▸ Profit over sales per day: £ 165▸ Profit over December: £ 5115

Let’s start with the first set of

slides

Best Strategy:

7,533£Total Profit post sales.

60%New Customers.

300%Increase in sales TOTAL

SUCCESS!

Mass Market Products

1. 3 for 2 Strategy

▸ Cost of Production: £ 1.5▸ Profit over 3 bottles: -£ 0.5▸ Number of sales: 300 per day

This strategy results in a huge loss to the company. Therefore no further analysis of this strategy

2. Gift with Purchase

▸ Cost of Production: £ 1.5▸ Profit over single sale: -£ 0.43▸ Number of sales: 170 per day

This strategy results in a huge loss to the company. Therefore no further analysis of this strategy.

3. On-pack Coupon (50p off)

▸ Cost of Production: £ 1.5▸ Profit over single sale: £ 0▸ Number of sales: 150 per day

This strategy results in no profit no loss to the company.Therefore no further analysis of this strategy.

Alternatives

1.One major weakness being neglecting huge losses from mass-market products2.One important alternative which can be taken is using the On-pack strategy. This ensures No LOSS!

SUMMARY

CREDITSSpecial thanks to all the people who made and released these awesome resources for free:

▸ Presentation template by SlidesCarnival▸ Photographs by Death to the Stock Photo▸ Wikipedia▸ Boots Official Website▸ Google Images▸ Marketing Management by Philip Kotler▸ Marketing Management Course by Udemy▸ HBR Business Case▸ CW London official website

HELLO!I am Sumit RajanStudent at BITS GoaYou can find me at @sumit.rajan3001

This presentation is a part of my work during an internship under Professor Sameer Mathur from IIM Lucknow.

THANKS!Any questions?You can find me at [email protected]