Boots: Hair Care Sales Promotion

In a time when customers are exposed daily to a nearly an infinite amount of promotional messages, many marketers are discovering that advertising alone is not enough to move members of a target market to take action. To this effect, Boots is considering 3 promotional activities, one of which it wishes to choose. The 3 options available are 3 for 2, Gift with Purchase and an on pack coupon worth 50p. It is no news that any alternative chosen would have short term and long term effects on both costs and sales of its products. Furthermore, the aim of Boots is not restricted to boosting sales. It also wishes to secure market leadership in the UK in the hair care segment, at the same time ensuring that the promotions are profitable, and its existing professional hair care brands are further enhanced.

The major learnings can be enumerated (economic)-

1. Hair care product segment is fairly constant. Moreover, hair care products, being an FMCG product, per se, are not so differentiated and hence does not enhance the aesthetic value of the consumers. And so, new sales generated in this period leads to stocking of the products in the household. This may result in the company taking a slump in sales due to fall in demand from those customers. So, calculations must be done keeping in mind the loss for next period.

2. Loss resulting from self-cannibalization as consumers move from regular product to premium product within the same brand has to be taken into account too.

We further learned that the promotional strategies should not only focus on economic costs but should also take into account the non-economic costs as well.

1. The customer upgrade from mass market to premium market might cause brand dilution and drive away the existing consumers who may no longer perceive the product as being ‘premium’. This may impact the long term viability of brand.

2. Apart from that, factors such as ease of imitation by competitors and the brand exposure that can be garnered by the promotional strategies should be taken into account.

3. Additional setup required both at client and vendor side, ease of implementation, effectiveness of the message to the consumers also play a vital role in the final decision making

The case, further, touches upon several key points like the post war regeneration and development period, the key competitors in the market, the supply chain features (mainly the retailers) and the regular consumer behavior vis-a-vis hair care products. We learnt that these points, too, should be taken into account apart from the aforementioned regular economic and non-economic benefits while arriving at the final conclusion.