A study on BOOTS hair care sales presentation done under the guidance of Prof. Sameer Mathur, of IIM Lucknow.

1. HAIR CARE SALES PROMOTION
A CASE STUDY

2. ?
?

3. • Founded in 1849 by Mr. John
Boot
• In Nottingham
• Mary Boot -> 1860 to 1877
• Jesse Boot -> 1877
• Established in 1883

5. • Good brand image
• “Largest Best Cheapest”
• Sales > 2.5 Million (By 1913)
• 75,000+ Employees (By
2004)
• 130 Countries (By 2004)
• Large variety of products
• Popular brands like Strepsils,
Nurofen, Clearsil etc

7. “TO SELECT A
PROMOTION SCHEME
FOR BOOSTING
CHRISTMAS SALES”

9. THREE SCHEMES :
• Get “3 for 2”
• Gift With Purchase (GWP)
• On Pack Coupon

11. LET’S NOT FORGET!

12. MARKET
RESEARCH!!!

14. Goods Competitors:
• Pantene (Proctor & Gamble)
• L’oreal
• Alberto Culver

15. Retail Competitors:
• TESCO
• Sainsbury
• Morrisons
• Superdrug

16. COMPARING COMPETITOR PRICING
(Source: Harvard Case Study: BOOTS HAIR CARE SALES PROMOTION)

17. WHAT NEXT?

18. ANALYZING
PROMOTION
OPTIONS

19. 3 FOR 2:
• Select 3 items, get the cheapest one
free
• Increase in sales: 300% of Pre
promotion
• 60% purchase from customers who
would not purchase regularly.
• Disadvantage: Could make the brand
look cheap, and could dilute brand
equity

20. GIFT WITH PURCHASE:
• Attaching sample size of other product
from same brand
• Increase in sales: 170% of Pre
promotion
• 40% purchase from customers who
would not purchase regularly.
• Disadvantage: Additional cost for
sample

21. ON PACK COUPON:
• Giving a small coupon worth 50p
redeemable during their current store
visit
• Increase in sales: 150% of Pre
promotion
• 50% purchase from customers who
would not purchase regularly.
• Disadvantage: Conservative approach,
and brands would be using this or GWP
as their major purchase.

22. COST vs PROFIT
(For Each of the Schemes)

23. BASIC ANALYSIS:
• Pre Promotional Price (PPP): £ 3.99 (Assume £4)
• Retail Margin: 40%
• Actual cost to Manufacturer: 60% of PPP
: £ 2.4
• Manufacturer’s Margin: 8%-12% (Assume 10%)
• Actual Production Cost (x)
• Equation from Data: (10% of x)+ x=£ 2.4
• Production cost (x): £ 2.1818

24. Analysing “3 for2”:
• Boost in sales: 300% (Including free Item)
• Cost Price of all Items: 300x 2.18 (No. X Manufacturing Cost)
£ 654
• Selling Price of all Items: 200x4 (£ 800)
• Profit Generated: Selling Price (SP) – Cost Price (CP)
:£ 800 - £ 654
: £ 146
• Profit Per Bottle: Profit/No Of Bottles
: £146/300
: £ 0.48666

25. Analysing “Gift With Purchase”:
• Boost in sales: 170% (Including free Item)
• Cost Price of all Items: 170x (2.18 + 0.90 + 0.03)
£ 528.7
(Cost of manufacturing and cost of attaching sample)
• Selling Price of all Items: 170x4 (£ 680)
• Profit Generated: Selling Price (SP) – Cost Price (CP)
:£ 680 - £ 528.7
: £ 151.3
• Profit Per Bottle: Profit/No Of Bottles
: £ 151.3/170

26. Analysing “On Pack Coupon”:
• Boost in sales: 150% (Including free Item)
• Cost Price of all Items: 150x (2.18)
£ 327
• Selling Price of all Items: 150x(4 - 0.5) (£ 525)
(0.5 reduction on Selling price for coupon compensation)
• Profit Generated: Selling Price (SP) – Cost Price (CP)
:£ 525 - £ 327
: £ 198
• Profit Per Bottle: Profit/No Of Bottles
: £ 198/150

27. Inferences:
• Maximum Profit/Bottle : “On Pack Coupon” (£ 1.32)
• Maximum No of Bottles Sold : “3 for 2” (300 (200 sold))
• Maximum No of New Customers : “3 for 2” (60%)

28. Before We Draw a

29. What
WAS
our
ACTUAL
GOAL?

30. 1. Secure Market Leadership
2. Ensure Promotions are PROFITABLE
3. Maintain Professional Hair Care Brand
Value

31. Also,
DON’T FORGET

32. KEY PARAMETER:
(Low Levels of Stockpiling)

33. SO,
WINDING UP
Our Presentation,

34. BEST SOLUTION: “3 for 2”
• Since the company’s main goal was to drive sales and gain
market leadership
• It maximized the amount of non regular customers purchase
(By 60%)
• Stocks would get over soon as well, as each customer would
buy 3 products, where he/she would usually buy one.
• The fact that the whole system of lowest item free could not
be imitated by other customers was a huge bonus
• This solution maximizes brand equity as well, as it is driving
more sales as well.

35. BUT REMEMBER:
THERE IS NOTHING ABSOLUTELY RIGHT IN MARKETING

36. ALTERNATIVE SOLUTION: “On Pack Coupon”
• On pack coupon has a perfect mix of the two goals we want
• It maximizes profit (Actually, The best option of the three)
• Increases the percentage of non regular customers (By 50%)
(Which is basically the second best option)
• Does not dilute Brand Image, as the same promotion is most
likely being offered by other brands as well
• In case of BOOTS products being offered in other shops, the
scheme could also be applied there (Unlike the “3 for 2”
option)
• Comparing this to the “3 for 2” offer, this is a conservative
approach.

37. These slides were created by Rishab Dev
Bhaskar, under the guidance of Prof. Sameer
Mathur, IIM Lucknow as a part of an
internship.