Boots Hair Care

Boots: Hair-care sales Promotion
Boots, one of the best retail names in UK provided health and beauty products and advice that enhanced the personal wellbeing. It dealt in wide range of hair care products including shampoos, conditioners and styling products. Other of its services included: Boot Opticians, Insurance and initiatives in dentistry, chiropody, Boots for Men stores and Internet Services etc. I n the UK hair care market, there were 60 major brands for hair care products, none occupying more than 9 % of market share. There was an increased competition which led to significant price discounting through promotional activity. Owing to this opportunity Boots started building new market by celebrity endorsements and hairdresser relationships. First, it developed a critical mass of professional hair care brands using its superior technological capabilities and production capacity. Then, it paid per unit of licensing for the use of celebritys brand name which helped to create awareness and to create an emotional attachment between consumers and brand. Boots faced the major competition from manufacturers like Proctor & Gambles Pantene, LOreal, and Alberto-Culver, sales of which increased with increased advertising expenditure. There was also high competition from supermarket segment from Tesco, Sainsburys, Morrison and Superdrug. Consumers in UK were not very brand loyal. They mainly chose between packaging, advertising, price, ingredients, consistency, fragrance and so forth. Most Boots consumers bought both basic and premium brands. Now looking at the festive seasons Boots 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. Problem: To choose one from the following three consumer promotional techniques: 1. Get three for a price of two 2. Receive a gift with purchase 3. On pack coupon worth 50 p.
Objective: To drive the sales and trade up consumers for lower value brands while retaining or building the brand equity.
Evaluation of alternatives:
Get the three for the price of two Analysis: Consumers would get additional product at the regular price of two. They can combine products like shampoos, conditioner and styling products and the product with least price will be offered for free. This technique could not be easily imitated by other competitors. This will triple the sales volume. Potential customers may feel this to be stock clearing strategy and associate
the brand with cheaper value which may influence them to not to buy. Relationship may get hampered with hairdressers and celebrity because of brand dilution.
Receive a gift with purchase (GWP) Analysis : 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. 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. On-pack coupon worth 50p Analysis:
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. This is a very common strategy used by most of the retailers and can be easily imitated. Again this is one of the forms 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.
Recommendation:
Boots should go for option 1 which states 3 for 2 as this will help in promoting the sales among the existing customers as well as attracting new customers in a way which cannot be easily imitated by its competitors. It will triple the sales volume say from 100 to 300 bottles per day. This will help in increasing the non-selling products because of unintentional buying of customers. This will reduce the price of given quantity for customers and provide additional product at lower cost. In GWP there will be just a sample size attached as a gift which might not add value for the costumers. In on back coupon, people may feel irritated to having clipped the coupons and take it to supermarket. They may avoid indulging in such kind of buying at all.

Boots Hair Care

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Boots: Hair-care sales Promotion

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