Profit & Solutions Management Research Publication Series
Researched & Written by Deb (Debadip) Bandyopadhyay
Boots UK Limited (formerly Boots the Chemists), trading as Boots, is a British health and beauty retailer and pharmacy chain in the United Kingdom and other countries and territories including Ireland, Italy, Norway, the Netherlands and Thailand. The parent company, The Boots Company plc, merged with Alliance UniChem in 2006 to form Alliance Boots. In 2007, Alliance Boots was bought by Kohlberg Kravis Roberts and Stefano Pessina, taking the company private, and moving its headquarters to Switzerland, making it the first-ever FTSE 100 company to be bought by a private equity firm. In 2012, Walgreens bought a 45% stake in Alliance Boots, with the option to buy the rest within three years. It exercised this option in 2014, and as a result Boots became a subsidiary of the new company, Walgreens Boots Alliance, on 31 December 2014.
Boots is one of the largest retailers in the UK and Ireland, both in terms of revenue and the number of shops. It has 2,500 shops across the United Kingdom and Ireland ranging from local pharmacies to large health and beauty shops. Its shops are primarily located on the high streets and in shopping centres. It sells many health and beauty products, and also provides optician and hearing care services within shops and as standalone practices. Boots also operates a retail website and since 1997 it runs a loyalty card programme called the Boots Advantage CardBoots 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 90% of the market share.
Boots UK (boots.com), the UK’s largest pharmacy-led health and beauty retailer, is part of the Retail Pharmacy International Division of Walgreens Boots Alliance, Inc. (Nasdaq: WBA), the first global pharmacy-led, health and wellbeing enterprise.
With 2,465* stores in the UK, its purpose is to champion everyone’s right to feel good. Boots UK is committed to providing exceptional customer and patient care, be the first choice for pharmacy and healthcare and offer innovative 'only at Boots' exclusive products such as No7, a leading UK skincare brand, Soap and Glory and Liz Earle. Created 170 years ago, the Boots brand is still at the heart of the communities it serves.
Boots is also 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
The other promotional alternatives that are available to Boots apart from premiums, coupons, and product packs are as follows. First, there is the use of Rebates where the company can sell to various people at lower prices, for example, the first one hundred people who purchase the product. Another alternative is the use of sampling and free trials, and this can involve a case whereby when they are selling the shampoos and conditioning gels people can be offered with some free hairdressing to try the products on the spot. This can be carried out through the process of offering to wash their hairs.
The third alternative can be demonstrations of the products, which are also considered to be effective in attracting more customers. In this case, they can be carried out in the designated salons and where the product is being sold at retail. The fourth promotional alternative can be contests and sweepstakes that are organized by the company as a way of boost their sales. Indeed, when the consumers buy the product, they can be allowed to enter into a contest that will enable them win a collection of prizes at the end. Finally, there is the use of loyalty programs for the consumers who remain loyal to the brand, which is also considered to be effective for a company like Boots. In this case, for example, customers who have bought the product repeatedly for one year will be given an opportunity to enjoy loyalty packages that are offered.
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