Introduction

Boots the chemist is UK's leading health and beauty retailer. It has more than 1,400

shops in UK and Ireland. Boots is an international business that as well as securing

market leadership is building and marketing its own brand No7 with significant

success. Its parent company is called Boots Group plc that consists of Boots The

Chemist Limited, Boots healthcare International, Boots Opticians and Boots retail

International (boots.com 2008).

The history of Boots’ success was started back in 1877. That was the time when

Jessie Boot opened his first pharmacy. The young gentleman, then age of 22 was

committed to multiplying his customers by cutting the prices of selling goods. At that

time it was not that straightforward because all the leading pharmacies had price-

fixing policy. However it did not discourage him. In order to reach his target he

started advising customers to pay cash rather than take things on credit so the cash

flow would be higher and he would be able to lower the prizes. He put a lot of effort

into advertising as and even employed a bell-ringer that was wandering around

Nottingham's streets and informing the public about a new strategy. This resulted in

doubling the shop's takeover and becoming the busiest retailer in pharmacy sector.

The second successful idea that Mr. Boot introduced to his customers was

employing the young chemist who provided poor patients with prescriptions. Boot

was concerned about people’s lives and at the time it was extremely expensive to

get diagnosed without mentioning prescriptions.

Boots the Chemists, health and beauty retailer, has possibly the largest range of

quality, brand name personal products. 90 % of the UK’s 60 million population visit a

Boots store at least once a year. The company has an annual turnover of around 3

billion Sterling pounds from a network of some 1,300 stores (Branding Asia.com).

Marketing Objectives

Provide reward inspiration and generate awareness amongst the target audience of

the breadth of the offer available with the Boots store card.

• Increase footfall (and frequency) and drive sales across the entire campaign period.

This will be one of the most important objectives of the entire campaign across the

entire campaign period. The number of people visiting a shop or a chain of shops in

a period of time is called its footfall. Footfall is an important indicator of how

successfully a company's marketing, brand and format are to bring people into its

shops. Footfall is an indicator of the reach a retailer has, but footfall needs to be

converted into sales and this is not guaranteed to happen. Many retailers have

struggled to turn high footfall into sales. However, having a high footfall with

frequency is one of the most important criteria’s for showing that a retailer is doing

well. Also, Boots being one of the few pharmacy led retailers a new deals campaign

will be able to boost its sales to a higher level.

• Looking for solutions that excite its existing card customers and those customers

who are looking for newer ways in order to redeem the Boots card points.

It is imperative that the new third party deals that Boots will be looking at do enhance

the appeal of the loyalty card. In order to do that the rewards have to both value as

well as attractive to customers.

• Offer innovative solutions that inspire customers to help them to feel that this loyalty

card is different, better and more rewarding those other retailers.

Most loyalty cards do only provide points that can be redeemed in store. However

having a flexible mind with regards to rewards leads to much better customer loyalty

as customers do not feel that they are bound to spend their rewards in that particular

store. It will enhance the reputation and rewards scheme of Boots if it comes up with

new innovative ideas, something that will be a first in the country and in the

respective sector (Pelsmacker et al 2007).

Marketing communication Objectives

The marketing communication objectives can be divided into three main categories:

market segmentation, target marketing and finally positioning. The following diagram

makes it clear as to what each objective entails.

Figure 1: Segmentation, Marketing and Positioning framework (Source: Havaldar 2002)

Varey (2002) points out how many organisations can use the above framework to

segment target and position its product. During the targeting phase companies

carried out market research to understand the parameters involved and design a

strategy. Boots should research about their customers what they like and which

target segments will they benefit from the most. A good example of such

segmentation is Toyota. When they were about to launch the Yaris in UK they found

out that Their reputation was quite good in the older men’s segment, but after doing

the research it was clear that the main target market should be the 25-50 year old

females who needed more than just reliability to buy a car. They developed an

emotional appeal with the Yaris brand which consequently leads to the car being a

particularly successful car within the target market (Strategic direction journal 2007).

The mass appeal of companies also lies in the way they use their internet

communications campaign. Although new websites for cars have become standard

now, Boots will need to promote heavily using the internet so that more and more

customers are exposed to the new Boots loyalty card deals. Abraham (2008) says

that there is a lot of offline impact of online ads and communications. “Internet

advertising stimulates off-line sales, online campaigns increase sales more at

advertisers’ retail cash registers than on their websites” (Abraham 2008). As in a

number of other corporate ways, companies have understood this impact and have

used internet advertising across segments and demographics to secure sales.

In conjunction with demographics, psychographics or customers mindset can also be

used to segment a company’s products.

Early Adopters/ Technology pioneers

- those who are interested in the latest technology/ innovation, and must be the

first on the block to own this technology and embrace it. The Boots loyalty

card can have gifts that could be redeemed online, something that will fit

within this segment.

Environmentally Friendly

- those who are recognising the environmental impact of motoring and would

like to do something about it.

- those only “somewhat concerned” and seeking to express their concern and

ease their conscience without causing themselves too much inconvenience.

The socially aware mainstream, but more hesitant to buy new technology.

Boots can have some environmentally friendly gifts to give away in the deals

brochure like energy monitors to keep the environmentally friendly people happy as

well.

Value Conscious

- those who are looking for the ideal combination of high fuel economy and low

maintenance cost in long run at an affordable price (Pickton and Amanda

2001).

This segment will form the bulk of Boots customers and any deal or reward must be

value for money or else customers might be left disappointed with what is on offer.

It can be seen that using the above objectives of segmenting, targeting and

positioning, Boots can represent all demographics and psychographics within the

retail market of UK.

Description of communication tools

To launch the new deals brochure Boots will have to use a combination of mail shots

and internet. The next section will explain how each of these tools can help the

Boots loyalty card to fulfil its communication objectives.

Mail shots

Mail shots are attractive to many marketers, because in many cases its positive

effect (but not negative results) can be measured directly. For example, if a company

sends out one million solicitations by mail, and ten thousand customers can be

tracked as having responded to the promotion, the company can say with some

confidence that the campaign led directly to the responses. The number of recipients

who are offended by the junk mail/spam, however, is not easily measured. By

contrast, measurement of other media must often be indirect, since there is no direct

response from a consumer. Measurement of results, a fundamental element in

successfully sending mail shots is one of the main reasons why it is a method that

Boots can use to segment its target market. Furthermore, using the Internet and

heavy databases tracking direct marketing responses and measuring results can be

easily done by companies.

The mail shots can be used to recognise the benefits of using them as a way to build

brands and create customer loyalty by educating customers, as well as to actually

drive sales. For example, if Boots targets more than 100,000 consumers, focusing

on their new loyalty rewards scheme. It can run in two bursts, featuring different

segmented mailings to different kinds of customers whose data they have within their

databases anyway. The first of the mail packs that contain information regarding

Boots and the scheme and what they plan to do can be delivered in a glossy

magazine style featuring any new slogans that can be thought of. It will feature some

incentives as well.

The motivation to purchase is key to any company and market segmentation is very

important to these goals especially as ‘‘not all existing customers [are] suitable for

the products being sold’’ (Barking et al., 1996, p. 253).

Using mail shots Boots can achieve its first objective that is segmenting its

customers and this is very important as it forms the basis of everything Boots does

with its new brochures here on.

Internet advertising

Internet will be the most important source for targeting and positioning its product

i.e. the new rewards given out.

Despite overwhelming statistics regarding Internet development, both successful

and unsuccessful cases of Internet marketing have been reported. There is no

proven successful method that can help management evaluate how beneficial

Internet marketing could be before they commit substantial capital investment on

Internet marketing and risk the possibility of interfering with their current channels.

Not many companies have fully utilized the power of Internet marketing as a new

channel for handling transactions on the Internet. The existing research in channel

design and selection has only considered the traditional channels, including direct

and indirect marketing approaches.

Below is the adoption process for a company’s product on their web site and it is

important to be aware of this in order to decide how best to launch the deals

brochure.

- Create Interest. At this point, the user becomes interested in the Web site but does

not visit it. His or her interest may be increasing because of repeated exposure to the

Web site address, or it may have also been sparked by information, gathered

through word of mouth or other sources, about features on the Web site.

- (3) Evaluation. At this point, the user mentally compares his or her own use

requirements to the product, and anticipates the results. The user considers how the

known features of the product can add value to his or her purchasing decision.

- (4) Trial. During this stage, the user accesses the Web site on a limited basis. Trial

use leads to adoption only if the user considers his or her experience to be

beneficial. The user tests whether the features of the product provide any value to

his or her purchasing decision.

- (5) Adoption. In this stage, the user is convinced that the product contains features

of value, and he or she continues to use it to satisfy his or her needs (Penrice 1995).

While the Internet does offer unique capabilities, it also has the following

disadvantages:

One practical limitation is that the user must actively decide to visit the Web site.

Unlike radio and TV, there is the element of choice rather than the element of

surprise, and there is no guarantee that anyone will visit the Web site.

In general, there is little selectivity of audience; the Web site can be accessed by

anyone on the Internet.

The Web site must compete with thousands of other homepages, all of which are

trying to attract and retain visitors.

Individuals on the Internet have well-defined demographics and psychographics

which may be less than ideal for certain company Web sites.

Given the inherent strengths and weaknesses of the Internet as a marketing

communication vehicle, this campaign must develop techniques to capitalize on the

advantages afforded by the Internet media. These techniques should provide value

to the visitor, and provide them with services not easily replicated by conventional

marketing media. The techniques should also be tailored to address the needs and

wants of typical Web site visitors, providing them with a good reason to visit and an

even better reason to return. The goal of this evaluation is to determine techniques

that can be beneficial to Boots if they want to get exposure to more people and

launch their Deals brochure successfully.

In-depth product/company information

The Web site could provide users the opportunity to receive free information via mail

regarding a company's offerings. Materials received might include catalogs, or CD-

ROMs containing information in multimedia format.

A company could dedicate a section of its homepage to daily news regarding new

deals. This section might also include press releases regarding new product

innovations and discoveries made by the company. Users might value this

information and would likely remember the site where they obtained it. This should

have a number where the brochure could be ordered by the customers.

Boots can also think about open communication with users who could be allowed to

communicate with a company representative while online. This communication could

be achieved through electronic media (typing back and forth), audio media (like a

telephone, but through the Internet), or video conferencing (audio and video).

Complementary services

Company Web sites could provide hot links to sites containing information pertinent

to the company's products or services. This could be a good way for people to

impulse a lot of goods that are sold by Boots.

Budget

(P.T.O)

Marketing Communications Budget Plan

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Marketing

Communications  

Branding £50,000

Advertising £25,000

Web sites £1,00,000

Direct marketing £1,00,000

Internet marketing £50,000

Press relations £10,000

Public relations £20,000

Analyst relations £30,000

Events £50,000

Marketing

Communications Total £4,35,000

The above figure shows the yearly budget for this particular plan. As has been clear

throughout this plan that the main focus for the new deals brochure will be web sites

and direct marketing and that is where the bulk of the money has been utilised.

Furthermore, there have been some well thought out events which are going to cost

money like analyst relations and events especially when the new rewards are about

to be launched.

Boots can look into new ways of attracting customers through these reward card

schemes and decide which customers should receive them, as part of an overhaul of

the Card scheme. The card is seen as vital to Boots' efforts to fend off competition

from supermarkets' expansion into health and wellbeing products and services.

Customers do have a very high level of engagement with the card programme,

especially women who see the points as providing a treat for themselves, but it

needs to be realised that there could be a new way to engage customers as well as

to let customers choose from a wider breadth of goods from Boots than they might

be buying elsewhere.

Boots usually mails quarterly coupon to cardholders, sent with the co-operation of

Boots suppliers, typically selected the retailer's highest value customers, missing the

opportunity to grow spend from the majority of the customer base. This leaves

millions of cardholders, many with a high potential for Boots, receiving very little

communication from the health and beauty retailer.

A new way of selecting customers can be used here as this provides a great

opportunity to do so. A new system can be created by making a targeting system

that could identify potential customer spend across categories, brands and individual

products. The solution needed to identify a person's potential to buy brands and

make the offer selections. This will have the objective of rewarding customers to

keep them coming back into the store and also to get them to buy in areas where

they aren't already buying. Boots has to work out which products they have most

affinity with and how much we have to incentivise them to continue shopping.

One way that this deals brochure can be successful is by identifying and scoring

customers who are not purchasing at their optimum level, based on a certain time

period of their purchasing history. After doing this one can easily compare purchase

history within various product categories, working out potential spend and comparing

this with actual spend. Using this communications could be tailored for each

customer.

Control and evaluation procedures

Target

To increase awareness from 69% to 82% within 6 months of the campaign launch

among Boots customers.

Pre-testing: The current level of awareness comes from pre-testing undertaken

either with the situational analysis or by a specific market test. It is done before a

campaign to see what the current situation is.

Post-testing: once a campaign has been implemented, post-testing is carried out.

The results should match the objectives.

Measurement: Measurements of a qualitative nature, assessing changes in

awareness or perception, are often better handled by an external agency with

experience in this kind of research. Taking into account this statement Boots can

think about either engaging its own employees or outsourcing this work to a

specialist agency.

Conclusion

This piece of work looked at Boots plc and their loyalty card scheme. It looked at the

various ways in which customers using this card can be rewards in a way that more

customer loyalty can be expected from the customers. This piece defined both

marketing as well as communications objective for the plan. Thereafter, using a

number of ways an entire plan was laid out so that Boots can segment, target and

position this new product among its consumers. The piece also prepared a budget

considering various factors like scale and reach expected and also the amount of

cash available in a big retailer like Boots.

References

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Havaldar, K.K.(2005). Industrial Marketing: Text and Cases,

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Pelsmacker, P., Geuens, M. and Van Den Burgh, J. (2007). Marketing

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Penrice, D. (1995). ‘Brand Marketing: An information processing perspective.’

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