The Challenge

About Boots

Market Analysis

Promotion Alternatives

Optimal Decision

Dave Robinson’s dilemma when facedwith the task of selecting the bestpromotion strategy among “3 for 2”, “Giftwith Purchase” and “On-Pack coupon”.

Our objective is to analyse the situationand provide the best solution.

Started in 1849 by John Boot inNottingham, England.

Jesse Boot expanded it and madeBoots ‘Largest, Best and Cheapest ’.

Started as a pharmacy chain providingherbal remedies.

Subsequently diversified to enter othermarkets.

Sells medicines, health and beautyproducts and services. Also has a food& drink range.

Operates in 130+ countries.

Provides jobs to 70000+ people.

Active name in the Optical & Dentistrysectors.

60+ brands, with maximum of 9% marketshare.

Sales ∝ Advertisements.

Due to heavy competition, Volume grewfaster than Value.

Boots used Celebrity endorsements toforge emotional connect.

Celeb Hairdressers with own productshad ineffective sales channels.

Partnership with Boots made them moreaccessible.

Boots paid a per-unit licensing fee forthe hairdressers.

High awareness & premium positioning.

Formulations with greater functionalitywere released.

P&G with brands like Pantene andHead & Shoulders. Pantene had 8.4%market share.

Alberto-Culver with revolutionary adsand brands like VO5 and St. Ives.

L’Oreal with its elegant communicationchannels and multiple brands had a 5%market share.

Tesco, Morrisons and Sainsbury’s had awide range of professional and massmarket hair-care brands.

Superdrug was the other major health andbeauty chain. They were value retailers,offering everything from essentials topremium products.

Superdrug launched hundreds of privatelabel products each year. They identifiedtrends and made it affordable.

Consumers didn’t stick to a singlebrand. They thought that changingbrands leads to better results.

Consumers couldn’t identify differencesin the offerings of different brands.

Consumer trends changed continuously.

Only fashion conscious young womanpurchased professional products.

With 1300+ stores, Boots was an activeplayer.

85 per cent of female adults in the UKvisit a Boots store every week.

Wide range of professional and massmarket products with celebrityendorsements.

One of the only brands with its ownretail arm.

Consumers of mass market Hair-Careproducts were the targets.

No variation in product sizes.

No media adverts.

Dedicated placement of promotionalstocks at the ends of aisle withsignboards.

Buy any two products to receiveanother one, of a lower cost, free.

Projected increase in sales by 200%.

60% of sales from people who wouldn’thave purchased a Boots Hair-Careproduct in the absence of promotion.

Consumers given a sample of anotherproduct on purchase of one product.

Existing product would be gifted, to cutcost of creating new products.

Projected increase in sales by 70%.

40% of sales from people who wouldn’thave purchased a Boots Hair-Careproduct in the absence of promotion.

Customers would be able to redeemthe 50p coupon during their currentstore visit.

More conservative approach.

Projected increase in sales by 50%.

50% of sales from people who wouldn’thave purchased a Boots Hair-Careproduct in the absence of promotion.

To use this promotion to secure marketleadership in the Hair-Care segment.

Ensure that promotion was not onlyprofitable, but also enhancing the brandvalue.

Competitors could not easily copy theirstrategy because Boots had contractswith some of the most prestigious salonbrands in the United Kingdom.

To go with the 3 for 2 offer as itmaximises sales and creates a buzz.

Ensures that only Hair-Care productsare promoted and the focus doesn’t shiftto other products..

Trade off between maximum profit andspike in sales.