A Richard Ivey School of Business case study analysis.

1. BOOTS : HAIR CARE SALES PROMOTION
CASE ANALYSIS

2. I AM

3. WHY?????????
Why
Study
This
Case?

4. To plan a hair care sales promotion strategy at

5. DAVE
ROBINSONIS THE

6. MARKETING AND SALES HEAD OF BOOTS

10. GIFTS
WITH
PURCHASE
GWP

12. What to choose??

14. John Boot started it as the “The British and
American Botanical Establishment” in 1849 with
only health care products and medicines.
Which is then changed to “Boot and the Company Limited”
when Jesse Boot took over in 1883 who added cosmetics
and beauty care section to it in 1949.

15.  17 cosmetics launched targeting the teenagers in
1968.
 Nurofen, analgesic ibuprofen was launched as a OTC
brand in 1983.
 ‘Boots opticians’ was formed in 1987.
 ‘Boots for men’ stores and ‘Internet services’ were
introduced in 1999.

16. UK HAIRCARE MARKET

17. The major hair care brands are:
 Pantene Pro-V
 Head and Shoulders by Procter & Gamble.
 Alberto V5 by Alberto Culver.
 Elvive by L'Oréal.

18. The competing top market retailers are:
 TESCO
 Sainsbury
 Morrison’s

19.  The sales of all these brands were directly proportional to the
amount of expenditure.
 Among the 60 major hair care brands of UK, none of them
had more than 9% market share.
 The overall market was expected to grow by one to three
percent a year.
 Severe competition proved how volume grew more quickly in
market than value.

20. BOOTS STRATEGY: CELEBRITY
ENDORSEMENTS
 Boots thought of building a new market by using
celebrity endorsements to create awareness and to
create a emotional attachment with the consumers.
 Also no other brand in UK has celebrity endorsed
brands and can neither copy it as boots had already
established an agreement with the popular celebrities
and their hair dressers.
 Boots designed functionally better products than the
existing brands with the help of the celebrity hair
dressers and aid them back per unit license fee for
using their name.

21. CELEBRITY
HAIR DRESSERS
AND BRANDS

29. B
R
A
N
D
S
OVERVIEW

32. MAJOR COMPETITORS

36. MAJOR
HAIR CARE
RETAILERS

37.  TESCO – The largest
supermarket chain in UK
 Sainsbury’s – Second largest
 Morrison’s – provides high
quality + low prices.

38.  The second major hair care product competitor is Superdrug.
 The company’s value offering was that of a value retailer with a wide assortment of around 10,000 products.
 It has around 700 stores in UK alone.

39. CONSUMER
BEHAVIOUR
STUDY

40. Consumers believed that changing shampoo brands provides better results than using single brand.
But there are so many to choose from…..

41. The trends in buying behavior led to
changes in preference:
 In 70’s people wanted mild shampoos.
 80’s saw a emphasis on detangling.
 In 90’s people wanted shiny hair.

42. After studying all these now what to choose from the
3 alternatives???

43.  Current Boots consumers and existing purchasers of mass market brands were the primary
target for the promotion.
 The promotion was to run for 1 month staring from 1st December.
 Boots was not considering any variation in product sizes because of the cost and
complexity involved.
 No media advertising budget was allocated for this promotion.
 Stock would be placed in the dedicated end of aisle or mid-aisle during the promotional
period.

44. STATISTICS
&
CALCULATIONS

45.  Average bottle size(shampoo/conditioner) = 250ml
 Average pre-promotional price = £3.99 ~ £4
 Industry average retail margins on premium brands = 40%
 Manufacturer’s typical margin = 8 – 12% ~ 10%

46. Selling price of the product = £4
Average retail margin = 40%
Retailer’s price = 60% of £4 = £2.4
Let cost to manufacturer = £x
Then, 10% of x+ x = £2.4
x = £2.18

47. Increase in sales = 300%
Manufacture cost @ 300 units/day
= 300x £2.18
= £654.54
Income = 200x4 = £800
Profit = £800 - £654.64 = £145.46
Profit/bottle = £145.46/300
= £0.485
Increase in sales = 170%
Manufacture cost @ 170 units/day
= 170 x £2.18
= £370.6
Additional packing cost = 93p/unit
Overall cost = 170x93p + £370.6
= £528.7
Income = 170x4 = £680
Profit = £680 - £528.7 = £151.3
Profit/bottle = £151.3/170
= £0.89
Increase in sales = 150%
Manufacture cost @ 150 units/day
= 150x £2.18
= £327
Income = 150x4 = £600
Profit = £600 - £327 = £273
Profit/bottle = £273/150
= £1.82

48. SELECTION
STRATEGY

49. Max profits =>
50P OFF strategy
Max sales => 3 for 2

50. But the primary objective is of Dave Robinson is to
drive sales volumes and trade-up consumers
from lower value brands while retaining or building brand
equity.
OBJECTIVE

52. As our objective is to maximize sales…..

53. This is presented by
Priyanka Tatiparthi
during an internship
under the guidance of
Prof. Sameer Mathur.