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Hair-Care Sales Promotion
By: Katherine White
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The Issue Dave Robinson needs to decide a promotion strategy for a line of professional hair-care products at Boots Three promotional options “3 for 2” Gift with Purchase On-pack coupon
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The Company Located in the United Kingdom Provides health and beauty products and various services Operates in 130 countries worldwide and about 1,300 stores
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The United Kingdom Hair-Care Market
Over 60 national brands are widely available in supermarkets and drug retailers No brand has more than 9% market share (highly competitive market) Overall market expected to grow 1-3% for the next 5 years
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The Opportunity Boots wants to be the retail hair-care expert Build a new market using celebrity endorsement Currently no celebrity-endorsed products were available in retail stores
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The Relationship Mutual benefit for Boots and hairdressers Boots designed formulations Manufactured products and paid per-unit licensing fee for use of celebrity’s brand name Boots managed licensed brands Celebrities managed public relations
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The Major Competitors Procter & Gamble Alberto-Culver L’Oreal
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Procter & Gamble Best-selling hair-care brand in world Shampoos, conditioners, and styling products Held 8.4% share of U.K. hair care market Additional hair-care brands
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Alberto-Culver Multibillion-dollar company Owner of Sally Beauty Company Over 2,000 store locations Hair-care, skin-care and home-care Shampoos, conditioners and styling agents
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L'Oreal Worldwide presence Markets over 500 brands and 2,000 products in all distribution channels Advertising pioneer Holds 5% share of U.K. hair care market
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Hair-care Product Retailers
Major supermarket competitors: Tesco Sainsbury Morrisons Major retailer competitor: Superdrug
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United Kingdom Consumers
No brand loyalty Buying behavior led to changing preferences Difficulty differentiating brands Most Boots customers bought both basic and premium brands
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The Promotion The Target Market Run for 1 month starting December 1st No media advertising budget allocated Advertisement in stores Pricing and Margins
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“3 for 2” 3 products has to be of the same brand Free item is the least expensive Competitors can’t compete with offer Sampling component Introduce product to new consumers
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Gift with Purchase Existing sample product used to reduce cost
Product sample with regular purchase Existing sample product used to reduce cost Packaging issues Time issue Introduce new products
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On-Pack Coupon Conservative approach- cheapen brand Redeem coupon during current store visit Most competitors use price discount or GWP as promotional method
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My Promotion Decision Choose the “3 for 2” Competitors can’t compete Costly but effective Consumers don’t realize price reduction
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