BOOTS.pptx

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Chetan 13020841011

Pranav 13020841026

Priya 13020841029

Shivam 13020841041

Viraj 13020841053

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WHAT IS BOOTS?

'The trust and confidence of your fellows:A home and everything it means:The feeling of a job well done,And the urge to do better- are these not essential to man's true happiness?'Edgar Moss, 1940

JESSE BOOTS

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Boots

Pharmacy

Retail

Manufacturer

Optical

Insurance

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CASE OVERVIE

W

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Background• 1883 - Boot & Company Ltd formed.

• Boots – A well known, retail name in the UK went into Health, Beauty products, Personal Care

• 1935 - No7 cosmetics launched by Boots.

• Brands – Strepsils, Clearasil, Nurofen(1983)

• New Services – Boots Opticians (1987)

• Boots Healthcare International (1991)

• Product – Retail products of Premium Hair Specialists

• 75,000 employees in 130 countries (2004)

• (2006)- Boots Healthcare International sold to Reckitt Benckiser.

Merged with Alliance UniChem to form Alliance Boots plc,

• (2007) - Alliance Boots was acquired by AB Acquisitions Ltd.

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• Highly fragmented – 60 major hair care brands

• No brand had more than 9% market share

• Severe price competition

• Volume growth higher than value growth

• Medium – High involvement product

• Significant price discounting via Promotional activity foreseeable

UK Hair Care Market

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P&G8.4% Market Share

Leading Brand: PanteneHigh Consumer

Awareness

Alberto-CulverRevolutionized Ad-slots

Increased product base by Global acquisitions

Wide product-range

L’Oreal5% Market Share

Portfolio of over 500 brands and 2000 prod.Pioneer in promotions

Product RetailersTesco, Sainsbury’s,

Morrisons – Traditional Supermarket

Superdrug – Value Retail

Major Competitors

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70’s - Gentle Shamp

oos

80’s - Detanglin

g

90’s – Shiny Hair

Consumer Trends

• Main purchasers – Fashion Conscious Women (25-30 Age Group)

• Most Boost customers bought Basic and Premium brands

• Gender/ Occasion based usage

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AdvertisingAdvertising

Elementsof the

PromotionalMix

Elementsof the

PromotionalMix

Personal SellingPersonal Selling

Public RelationsPublic Relations

Sales PromotionSales Promotion

Direct MarketingDirect Marketing

PROMOTIONAL MIX

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GOAL is to enhance and speed up the

effectiveness of the other four.

Sales Promotion Consists of media and non-media marketing communications employed for a predetermined, limited time to stimulate trial, increase consumer demand, or improve product availability.

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Promotion Alternatives

Christmas Promotional Activities

3 for 2The item with the

minimum price would be the free one (competitors didn’t have POS

tech.)

Gift with PurchaseAn existing sample would be bundled

along with the regular purchase

On-Pack Coupon50p off on products which the customer

would be able to redeem

immediately

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Consumers could combine any items of their choice

Boots had the Point-of-Sales technology to implement it

Estimated Sales increase is 300% of Pre-promotions

Incentive for Bulk-buying customers

Pros

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’

Cons

3 for the price of 2

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No additional designing, packaging costEstimated 40% sales to Boots shoppers who would not have otherwise purchased a hair-care product

Creates excitement among customers regarding the ‘gift’

Incentive for Bulk-buying customers

Pros

No actual ‘monetary’ savings

Discerning buyers would not be able to choose their gifts

Skeptical customers would think that Boots is trying to ‘push’ its stocks

Cons

Gift with Purchase

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Actual savings in monetary terms for the price sensitive consumer

Estimated high usage of coupons as customers would indulge in holiday season shopping anyway

Time-tested and easy to implement – no ‘hi-tech’ implementation reqd.

Pros

No differentiation with competitors

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

Cons

On Pack Coupon

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Post sales promotion (for premium products)

Impact on variables 3 for 2 GWP On pack coupon

% Increase in Revenues 100% 70% 50%

% Increase in Profits -50% -29% 3%

% of new customer acquisition 60% 40% 50%

Impact on Brand Equity Highly Negative Partially Negative Highly Negative

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Post sales promotion (for mass market products)

Impact on variables 3 for 2 GWP On pack coupon

% Increase in Revenues 100% 70% 100%

% Increase in Profits -200% -236% -100%

% of new customer accquisition 60% 40% 50%

Impact on Brand Equity Little/No effect No effect Little/No effect

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Sales Promotion Strategies Target

Consumer, Trade, andThe Sales Force.

Assessment of Sales Promotion is

Relatively Easy.

Cost for ResultsIn This Industry Are

Relatively Low.

Reasons for the Growth of Sales

Sales Managers are Under Great Pressure to Produce Results

Quickly.

Why Are Companies Spending More and More

Money on SalesPromotion?

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Yes.. The SWOT Analysis

Stren

gths

ChoiceValueSophisticated Info-SysQuality Own BrandsLoyalty Card Program

We

akn

esse

s

Less Focus on Self-BrandingNo ‘Green Products’ Portfolio30,000 Products -> Lengthy R&D

Opp

ortuniti

es

Emerging MarketsDrive-Thru Pharmacy30% Men having Botox ShotsBasic Health AdvisoryStrengths of Alliance Unichem

Threa

ts

Huge Span of ControlIntense Competition (Asda, Sainsbury)Dirty Pricing by the Online Retailers

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OFFERS AT BOOTS

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Earn points for Advantage Card

3 for 2 offer

Boots Parenting Club

More treats to over 60’s

Voucher Codes Pro

Extra Offers Kiosks

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TYPES OF PROMOTIONAL STRATEGIES

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PROMOTIONS OFFENSIVE STRATEGYDesigned for attracting new consumers.

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PROMOTIONS DEFENSIVE STRATEGYDesigned for maintaining present consumers.

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In a Nutshell

Objectives

Intended to Change Consumer

Behavior

Building Brands

Can be Used to BuildBrand Images, ButMay be Long-Term

Introducing New Products

Advertising and PromotionWork Well Together

Here UsingPush & PullStrategies

Promotion Can:Offer an immediate inducement,Cause customers to try a product,Persuade customers to buy again,Introduce a new product or build a brand over time.

Promotion Can’t:Create an image for a brand,Compensate for a lack of advertising,Do much to compensate for a negative image,Reverse a sales decline.

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By Prof. Porter’s Help

Driver

Threat of New Entrants

Threat of Substitute Products

Bargaining Power of Customers

Bargaining Power of Suppliers

Intensity of Competitive Rivalry

Driver




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• Competitive industry with high capital costs -> Requires huge economies of scale to survive

• Boots already has a great cost advantage; evident from its intense sales promotion techniques

• Efficient distribution channels are already “booked” by large players• Lack of awareness in the minds of consumers about the new brands• Boots has been enjoying the first mover’s advantage for over a 100

years

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• Supermarkets provide a large range of cost cut products under 1 roof, that too, with food items

• Local chemists are now providing free mobility services like pick-drop etc

• Boots sells other brands’ products which opens possibilities of imitation -> Low pricing power due to low uniqueness quotient

• Boots products are also supplied by their competitors (Superdrug’s) who can match the low prices that Boots offer

• Cost of switching from one product to another product is low

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Bargaining Power of Suppliers

• Reputable background -> Tremendous advantage over the suppliers of being able to dictate the prices

• Suppliers do not exert as much power compared to the buyers• For Boots to switch from one supplier to another will not be costly, for

its a retailing giant• Suppliers of this industry compete for the firm to choose them as

their supplier• Boots also sets up contracts with each of their supplier before placing

an order so prices are fixed

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• In the retailing industry there are often very large numbers of customers who often do not purchase items in bulk

• But this industry has a lot of competitors. Items sold are similar among the retailers -> Consumers buying power very strong

• Boots have a wide range of products so therefore most of the products other than Boots own range can be purchased from local convenience stores

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Intensity of Competitive Rivalry

• Numerous retailers – Pharmacies (Superdrug’s), Supermarkets (Sainsbury, Asda, Tesco, Marks & Spencer) and local convenience stores etc

• As the number of competitors increase and as they become equal in size and capacity, the rivalry is likely to intensify

• Supermarkets have now started in-store pharmacies to provide customers with their pharmaceutical needs

• Supermarkets are introducing non-food items as they have the expertise and capital required

• Local chemists have built a rapport with their customers, so these customers prefer their local chemists to Boots

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AIDA Model

Attention, awareness & ability to attract the attention of the consumers

Interest the consumers by involving them personally

Desire the consumer has for the product due to it’s value and his involvement

Action by purchasing the product or service

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Real Women.. Ta Dah..!!

Desire Action

Being on TV

Trying a New Look

Release Inner Ta Dah.!Look & Feel Your BestReal WomanAged 25-5570 Year Old MarketProduct Reality

BuyingPositive

Emotions While Trying

Make-up

Attention + Interest

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Dove Real Beauty v/s Boots Real Women

Boots

Powerful Woman

Anybody Can be Beautiful

Real Woman as Models

Joy of Making-Up

Camouflaging the Unwanted You

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PROMOTION CHANNEL

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Consists of directing the promotional mix to channel members to gain their cooperation in ordering and stocking the product.

A comparison of Push vs Pull promotional strategies

Consists of directing the promotional mix at ultimate consumers to encourage them to ask the retailer for a product.

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1. Introduction – wise to use heavy promotion to induce trials and promote brand franchise

2. Growth – promotion should be limited ,if any3. Maturity – Higher promotions required since the brand is under

attack from competitors or product quality or advertising effectiveness is tapering off

4. Decline – Heavy promotions. Used only to retain a set of loyal customers. Prior to withdrawal of the product, it could be used as a one time stock clearance from the trade

Promotion at different stages of the PLC

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Disadvantages

• Increased price sensitivity

• Quality image may become tarnished

• Merchandising support from dealers is doubtful

• Short-term orientation

• Price discrimination

• Effect on consumer behavior

• Effect on trade behavior

• Luring New Customers with Price

• Gaining Community Favor

• Providing Information

Advantages

Sales Promotion

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The 10 Commandments of Creative Sales Promotion

1. Set specific objectives2. Know how basic promotion techniques work3. Use simple, attention-getting copy4. Use contemporary, easy-to-track graphics5. Clearly communicate the concept6. Reinforce the brand’s advertising message.7. Support the brand’s positioning and image.8. Coordinate promotional efforts with other marketing plans.9. Know the media you work with.10. Involve the trade.

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