Boots is one of the best known and most respected retail names in the United Kingdom for providing health and beauty products and various services, operating in 130 countries worldwide with 1300 stores. It has a professional hair-care line consisting of shampoos, conditioners and styling products developed in collaboration with United Kingdom’s top celebrity hairdressers. The primary objective of the company has been to drive sales volumes and trade-up consumers from lower-value brands, while retaining or building brand equity. The UK hair-care market has over 60 national brands widely available in supermarkets and drug retailers with not a single brand having more than 9% market share.
The overall market is expected to grow at a rate of 1-3% for the next 5 years. But the opportunity that lies here for Boots is that currently no celebrity-endorsed products are available in retail stores. So it could build a new market by adopting celebrity endorsement strategy. The major competitors of Boots are Procter & Gamble, Alberto-Culver and L’Oreal.
And the major issue with the UK consumers is that there is no brand loyalty and low differentiation of products. The current problem statement is that the company needs to decide a promotion strategy for a line of its professional hair-care products. And it needs to decide from three promotional alternatives as below: •Get 3 for the price of 2
•Receive a gift with purchase (GWP)
•An on-pack coupon worth 50p.
The important criteria that would help choosing the best alternative are that the increasing sales volumes should increase for its hair care products, it should attract consumers from the lower value brands, should build and retain the brand equity, and be a path that cannot be easily replicated by competitors. The promotion was to run for 1 month starting December 1st, with all advertisement confined to stores. No media advertising budget was allocated. The “3 for 2” offer can help introduce products to new consumers. It would increase the sales by 300 percent, particularly the new sales by 60%, and cannot be replicated by the competitors. The “Gift with purchase” scheme would also bring in new consumers, would encourage trial of new products and increase the new sales by 40%. It would also do away with additional designing and packing charges. But it is fairly common strategy and can be easily imitated by competitors. Further it would entail an extra cost of 3p per unit of sample added to the product costing 90p per unit. The “On-Pack Coupon” is a conservative approach and can drive 150% increase in sales, with 50% sales coming from new customers. But this can dilute the brand equity and can be replicated by the competitors easily. According to me, the “3 for 2” offer would be the best promotional scheme. This is because it would bundle the sales of 3 different products together and thus, diversify the usage of different products. It would be a value-deal for the customers. It would pull in new customers, as well as stimulate trial of new products by the existing customers. So I would suggest to promote the “3 for 2” scheme.
Cite this Boots: Hair-Care Sales Promotion Essay
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