Name: Gaurav Vasani Roll No: A063 Sub: Sales Promotion

Boots: Hair-Care Sales Promotion Analysis in Brief:

Objective: • Time frame Christmas season• To drive sales volume • To trade-up consumers from lower-value brands • Retain and build the brand equity

UK Hair Care Market Outlook: • None of the brands has more than 9% market share• Highly Fragmented with 60 major brands• Volume growth more than value • Significant price discounting through promotional activity • Severe price competition• Medium to high involvement product

Competitors:

P&G: • 8.4% Market Share • High brand awareness • Leading Brand Pantene

Alberto-Culver :• Broad assortment of shampoos conditioners and styling agents• Increased product base by Global acquisitions • Top brands: St. Ives, VO5, FDS

L’ Oreal : • 5% market share • Portfolio of over 500 brands & more than 2000 products• Pioneer in promotion

Hair Care product Retailers : • Tesco, Sainsbury & Morrison’s – Major retail players • Super drug is direct competitor

Promotional Alternatives:

3 for 2:• Item with minimum price in the purchase of 3 items would be free • Competitors doesn’t have the technology at POS to imitate the promotion and this could be

a differentiating factor

Advantages Disadvantages

Consumers would get 3 items for a regular price buy of two.

Choice of free product limited to same brand & brand of house

Consumers could combine any three items Customers may think boots trying to push its stocks

Competitors did not have the technology at the point of sale to imitate this promotion. Profit margins reduce substantially

Expected that sales would increase to 300 % of pre-promotion sales Brand equity may dilute

Incentive for bulk buying consumers60 % new buyers

3 For 2

Gift with purchase:• A product sample free along with a regular purchase (usually 75 ml) • Existing sample product would be used to avoid the need to design and produce additional

packaging

Advantages DisadvantagesProduct sample would be given free along with a regular purchase

Common strategy, competitors can easily imitate.

Additional packing would be used to pack the free sample along with the existing one

Additional cost of 93 pence for bundling the sample with the product

Estimated sales would increase by 170% of the pre-promotional salesCreates excitement amoung customers40 % new customers

Gift With Purchase

On-Pack Coupon:• 50 pence off on the product • More conservative approach • Easily redeemable

Advantages Disadvantages

Customers would be able to redeem their coupons during their current store visit. Brand dilution Sales are estimated to increase by 150% of the pre-promotional sales.

Common strategy, competitors can easily imitate

50 % of the customers would be just promotional buyers. No differentiation with competitors

Coupons would enable multiple visits for a single customer.

Consumers need toremember to carry thecoupons with them for purchaseCons

On Pack Coupon

Recommendation:

Considering the advantages and disadvantages, it is recommended to Boots company to implement the “3 to 2” strategy for the following reasons:

Cannot be easily imitated by competitors It has more estimation of the increase in market research More consumers would buy the product Boots can push its non selling brand in this strategy This would attract many consumers to buy the associated product of same brand which

otherwise would have not purchased. This offer would boost their sales volume and increase their brand consumption.