Boots: Hair-Care sales promotion

Challenge: Choose the correct promotion of the three

1. Get three for the price of two (3 for 2)

2. Receive a gift with purchase (GWP)
3. On-pack coupon worth 50 pence

Primary Objective:

1. Drive Sales volumes

2. Trade-up customers from lower -value brands
3. Retain/build brand equity

Background:

About Boots

 Among best-known retailers in UK – Provides health & beauty products and advice
 Owns Nurofen, Strepsils and Clearasil; employs 75,000 people, operates in 130 countries

Retailers

Retailer No. of Stores Others

Tesco 1800 45,000 employees
Sainsbury’s 700
Morrisons 400
Super Drug 700 10,000 products

UK Hair Care market

 Over 60 brands; <= 9% market share each; market growing by 1%-3%

Consumers

 Not brand loyal

 Changing shampoo brands produces better results
 Professional brands buyers were fashion conscious women in 20-35 age; affluent
 Boots customers bought both basic and premium brands

Products to be considered in Promotion

1. Conditioner
2. Shampoo
3. Styling product

Recommendation
We can go ahead with the 3 for 2 promotion scheme or No promotion at all given the nominal impact
on Sales Volumes, Trade Up customers and the negative impact other schemes have on the Brand
Equity.

Promotion No promotion 3 for 2

Styling Sty
Product Shampoo Conditioner Shampoo Conditioner
Product Pro
Costs New 2.4 2.394 2.394 2.394 2.394
Sales Quantity Promotion Dec 100 100 100 300 300
incl. Jan 100 100 100 20 20
Dec 100 100 100 300 300
Billing Quantity
Jan 100 100 100 20 20
Revenue 798 798 798 1276.8 1276.8
Old 478.8 478.8 478.8 478.8 478.8
Total Costs
New 478.8 478.8 478.8 766.08 766.08
Old 319.2 319.2 319.2 319.2 319.2
Total Profit
New 319.2 319.2 319.2 510.72 510.72
Change in Profit NA -622.44