An Ivey Business School Case Study.

2. The Challenge
About Boots
Market Analysis
Promotion Alternatives
Optimal Decision

4. Dave Robinson’s dilemma when faced
with the task of selecting the best
promotion strategy among “3 for 2”, “Gift
with Purchase” and “On-Pack coupon”.
Our objective is to analyse the situation
and provide the best solution.

6. Started in 1849 by John Boot in
Nottingham, England.
Jesse Boot expanded it and made
Boots ‘Largest, Best and Cheapest’.
Started as a pharmacy chain providing
herbal remedies.
Subsequently diversified to enter other
markets.

7. Sells medicines, health and beauty
products and services. Also has a food
& drink range.
Operates in 130+ countries.
Provides jobs to 70000+ people.
Active name in the Optical & Dentistry
sectors.

9. 60+ brands, with maximum of 9% market
share.
Sales ∝ Advertisements.
Due to heavy competition, Volume grew
faster than Value.
Boots used Celebrity endorsements to
forge emotional connect.

10. Celeb Hairdressers with own products
had ineffective sales channels.
Partnership with Boots made them more
accessible.
Boots paid a per-unit licensing fee for
the hairdressers.
High awareness & premium positioning.
Formulations with greater functionality
were released.

11. P&G with brands like Pantene and
Head & Shoulders. Pantene had 8.4%
market share.
Alberto-Culver with revolutionary ads
and brands like VO5 and St. Ives.
L’Oreal with its elegant communication
channels and multiple brands had a 5%
market share.

12. Tesco, Morrisons and Sainsbury’s had a
wide range of professional and mass
market hair-care brands.
Superdrug was the other major health and
beauty chain. They were value retailers,
offering everything from essentials to
premium products.
Superdrug launched hundreds of private
label products each year. They identified
trends and made it affordable.

13. Consumers didn’t stick to a single
brand. They thought that changing
brands leads to better results.
Consumers couldn’t identify differences
in the offerings of different brands.
Consumer trends changed continuously.
Only fashion conscious young woman
purchased professional products.

14. With 1300+ stores, Boots was an active
player.
85 per cent of female adults in the UK
visit a Boots store every week.
Wide range of professional and mass
market products with celebrity
endorsements.
One of the only brands with its own
retail arm.

16. Consumers of mass market Hair-Care
products were the targets.
No variation in product sizes.
No media adverts.
Dedicated placement of promotional
stocks at the ends of aisle with
signboards.

17. Buy any two products to receive
another one, of a lower cost, free.
Projected increase in sales by 200%.
60% of sales from people who wouldn’t
have purchased a Boots Hair-Care
product in the absence of promotion.

18. Consumers given a sample of another
product on purchase of one product.
Existing product would be gifted, to cut
cost of creating new products.
Projected increase in sales by 70%.
40% of sales from people who wouldn’t
have purchased a Boots Hair-Care
product in the absence of promotion.

19. Customers would be able to redeem
the 50p coupon during their current
store visit.
More conservative approach.
Projected increase in sales by 50%.
50% of sales from people who wouldn’t
have purchased a Boots Hair-Care
product in the absence of promotion.

20. To use this promotion to secure market
leadership in the Hair-Care segment.
Ensure that promotion was not only
profitable, but also enhancing the brand
value.
Competitors could not easily copy their
strategy because Boots had contracts
with some of the most prestigious salon
brands in the United Kingdom.

22. To go with the 3 for 2 offer as it
maximises sales and creates a buzz.
Ensures that only Hair-Care products
are promoted and the focus doesn’t shift
to other products..
Trade off between maximum profit and
spike in sales.