BOOTS- hair care products

Prepared by
Rahul Batra
140101120
IMT Ghaziabad

UK- Hair market (existing)

Brands
Pantene Pro V and
Head and shoulder
by Proctor and
Gamble

Alberto VO5 by
Alberto

Elvive by LOreal

Stores

Market

Tesco, Sainsburry
and Morrisons

No brand with more

than 9% of market
share

Drug retailer- Boots,

Drug store

Market expected to
grow at 1-3% per
year for the next 5
years

Volume expected to
grow faster than
value

Price promotion for

shampoo causing
overall decline in
prices

UK- Hair market (opportunity)

Celebrity Endorsement
The celebrity products were not known to the common public, so they
needed some exposure
Create an emotional attachment
Availability of Celebrity owned products

These products were basically available in their own stores, so sales

could be generated by making them available in the BOOTS stores.
Products
New range of products were launched in partnership
Existing products only with beneficial supplier and retailer partnership
BOOTS manufactured the products and pay licensing fee
media
Brand owners- Celebrity hairdressers managed the public relation
activity
BOOTS managed all this in consultation with the brand owners

Competitors
P&G
8.4% Market Share
Leading Brand: Pantene
High Consumer
Awareness

Alberto-Culver
Revolutionized Ad-slots
Increased product base
by Global acquisitions
Wide product-range

LOreal
5% Market Share
Portfolio of over 500
brands and 2000 prod.
Pioneer in promotions

Product Retailers
Tesco, Sainsburys,
Morrisons Traditional
Supermarket
Superdrug Value Retail

Consumer
Gentle
shampoos

80s
Detangling
shampoos

70s

Shiny hair

90s

Belief
Changing shampoo brands continuously have better results on hair
Changing trends of requirement
The requirement of consumers have changed since 70s
Difference in choices
No identification of meaningful difference between shampoo brands
Large number of choices varying not just on brand name, but also on
packaging, advertising, price, ingredients, consistency, fragrance etc

Age 25-30 years

More affluent
than mass
market buyers

Target
consumer

Both basic and

premium
products

Premium
products as treat
either for
themselves
specially or for
some special
occasion

Promotional program
Objective
Drive sales volume and trade-up customers from lower value brands
Retain the building brand equity
Size
Boots customers
Purchasers of mass market brands
Duration
One month starting from December 1st, Christmas season
Distribution Vehicle
400 BOOTS stores
Flyers distributed to the visitors
No separate advertisement
Signage within the store to promote the offer
Timing
Christmas season, when consumers spend more than usual
Market is flooded with discounts, keep up with the volume sales

Average industry Pricing of 250ml shampoo

bottle
Mass-market brands (in
pounds)

Premium brands (in

pounds)

0.00

manufacturing cost
manufacturer's margin
(average 10%)
retailer's margin

1.00

2.00

3.00

4.00

5.00

Premium brands (in

pounds)
2.59

Mass-market brands (in

pounds)
1.45

0.26

0.15

1.14

0.40

Promotional alternative- 3 for 2

Cheapest item would be given for free
Competitors didnt have POS tech

Pros

Cons
Consumers could combine
any items of their choice

Boots had the Point-ofSales technology to

implement it

Estimated Sales increase

is 300% of Pre-promotions

Incentive for Bulk-buying

customers

Choice of free item limited

to the same brand and not
the Brand House

Skeptical customers would

think that Boots is trying to
push its stocks

Price Sensitive consumers

would prefer a price
discount instead of in kind

Promotional alternative- GWP

An existing sample would be bundled with the regular purchase

Pros

Cons
No additional designing,
packaging cost

No actual monetary
savings

Estimated 40% sales to

Boots shoppers who would
not have otherwise
purchased a hair-care
product

Discerning buyers would not

be able to choose their gifts

Creates excitement among

customers regarding the
gift

Skeptical customers would

think that Boots is trying to
push its stocks

Incentive for Bulk-buying

customers

Promotional alternative- On pack

coupon (50p off)
Advantage of immediate usage by the consumer

Pros

Cons
Actual savings in
monetary terms for the
price sensitive consumer

No differentiation with
competitors

Estimated high usage of

coupons as customers
would indulge in holiday
season shopping anyway

Consumers need to
remember to carry the
coupons with them for
purchase

Time-tested and easy to

implement no hi-tech
implementation reqd.

Comparison- premium brands

3 for 2
Cost of an average item
pre-promotional unit sales/day
percentage increase in unit sales/day
promotional unit sales/day
Number of sets sold
Total Revenue (pre-promotional)
total revenue
%age change in revenue
Margin earned (pre-promotional)
margin earned
%age change in Margin
promotional cost per unit
total promotional cost per day

3.99
100
300%
300
150
399
1197
200.00%
114
342
200.00%
2
300

Profit
Accusition of new customers

Effect on building brand equity

GWP

negative

50p discount
3.99
3.99
100
100
170%
150%
170
150
170
150
399
399
678.3
598.5
70.00%
50.00%
114
114
193.8
171
70.00%
50.00%
0.93
0.5
158.1
75

42

35.7

96

60%

40%

50%

neutral

negative

Comparison- mass-market
brands
3 for 2
GWP
Cost of an average item
pre-promotional unit sales/day
percentage increase in unit sales/day
promotional unit sales/day
Number of sets sold
Total Revenue (pre-promotional)
total revenue
%age change in revenue
Margin earned (pre-promotional)
margin earned
%age change in Margin
promotional cost per unit
total promotional cost per day

2
100
300%
300
150
200
600
200.00%
57.14
171.43
200.00%
1
150

Profit
Accusition of new customers

Effect on building brand equity

50p discount
2
2
100
100
170%
150%
170
150
170
150
200
200
340
300
70.00%
50.00%
57.14
57.14
97.14
85.71
70.00%
50.00%
0.93
0.5
158.1
75

positive

21.43

-60.96

10.71

60%

40%

50%

neutral

neutral

Indian market- promotional program for Lenovo Laptops

Objective
Maitain its number one position in laptop selling
Drive ismart phones and laptops in the market
Size
People who are looking to purchase both smart phone and a laptop
Recent managers, promoted,and
Duration
For a period of 2 months
Distribution Vehicle
Online through its own website and lenovo stores
Exclusive channels such as amazon online
Exclusive stores such as mobile store
Timing
June- july, when recently promoted people wil prefer to spend higher disposable
income
Promotional at business parks in order to give them offers then and there

Indian market- promotional program for Lenovo Laptops

(contd)

Offers
Smart phone free with a laptop with
the price range of more than
Rs40,000
Exchange bonus when an old laptop
is exchanged or a net discount of
3000 (which ever is higher) for the
laptops of price range of 32000 to
40000
OS and basic softwares installed with
the laptop for the price range of
25000- 32000

3200040000

>40000

25000-32000

cost of one laptop

cost of promotion

27000
5500

19000
3500

14500
2200

total cost

32500

22500

16700

average selling cost

44000

35000

28500

profit per unit pre-promotional

profit per unit after promotional offer

17000
11500

16000
12500

14000
11800

unit sales per day

expected increase in unit sales

75
75.00%

50
100.00%

100
150.00%

final unit sales

131.25

100

250

1275000
1509375

800000
1250000

1400000
2950000

18.38%

56.25%

110.71%

pre-promotional profits
post-promotioanl profits
change in profits

THANK YOU