1849

1927

1975

1997

2006

2014

(1/3)

1. Procter & Gamble 2. Alberto-Culver 3. L’Oreal

(1/3)

The market share for hair-care products was highly fragmented among the products of these brands.

Opportunity for BOOTS:Becoming the hair-care expert with it’s ranges.Strategy by BOOTS:Built up on Celebrity endorsements.

(1/3)

(1/3)Research Results:Customers aren’t Brand Loyal.Factors that matter to them:1. Packaging2. Advertising3. Price4. Ingredients5. Consistency6. Fragrance

(2/3)

1. Tesco 2. Sainsbury’s 3. Morrisons

(2/3)

Largest supermarket chain in the UK with more than 1,800 stores and 45,000 employees.

400 stores all across U.K. Providing quality products at same low price.

Second largest with 700 stores.

Both Tesco and Sainsbury’s offered a wide product assortment that included traditional supermarket items and online shopping.

(2/3)

2nd major hair-care competitor was Superdrug. One of the largest health and beauty retailers, with almost 700 stores in UK. Customer Attraction:Layout, lighting and colour of Superdrug stores.

(3/3)

Customer Belief: CHANGING SHAMPOO BRANDS GIVE BETTER RESULTS…………..Really??

(3/3)

ZZz

(3/3)

Confused customers then rely on :Fragrance, Price & Advertising

Average bottle size: 250 mlAverage pre-promotional price: £3.99 Industry average retail margins: ~40%Average retail price: £2Retailer margins: ~25 per centManufacturer’s margin: 8-12%

Boots not considering any variation in product-sizes. No media advertising budget was allocated for this promotion. Promotions only through flyers distributed by the store.

Most competitors did not yet have the technology at point of sale to imitate this promotion. They could implement only a 3-for-2 offer when the prices for the three items were the same. Sales per day would increase to 300 per cent of pre-promotion sales during the deal period.

Sales increase= 300% Cost Price (300 units/day)= 300x £2.18 = £654.54 Selling Price = 200x4 = £800Profit= £800 - £654.64 = £145.46 Profit/bottle = £145.46/300 = £0.485

A GWP was an offer in which customers were given a product sample along with a regular purchase. Adding the sample would cost approximately 90p per unit for the product plus 3p per unit to secure the sample to the featured product. Sales during the promotional period would be 170 per cent of sales that would have occurred without the promotion.

Sales increase= 170%Cost Price (170 units/day)= 170 x £2.18 = £370.6 Additional packing cos= 93p/unit Total Cost = 170x93p + £370.6 = £528.7Selling Price = 170x4 = £680 Profit = £680 - £528.7 = £151.3 Profit/bottle = £151.3/170 = £0.89

All customers would be able to redeem the coupon during their current store visit.Sales would increase to 150 per cent of non-promotion sales.Most competitors tended to use price discounts or GWP’s as their promotional method. Fifty per cent of sales would come from Boots customers.

Sales increase= 150%Cost Price (150 units/day)= 150x £2.18 = £327 Selling Price = 150x4 = £600 Profit = £600 - £327 = £273 Profit/bottle = £273/150 = £1.82

Primary Objective of Dave Robinson is:To drive sales volumes and trade-up consumers from lower value brands while retaining or building brand equity.

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3 FOR 2

3 FOR 2 seems more profitable as:• It leads to 300% increment in

promotion sales. • It attracts 60% additional customers.

This presentation has been created byShubham Malani, BITS Pilani, Hyderabad Campus during aMarketing Internship by Prof. Sameer Mathur, IIM Lucknow.

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