Will Boots benefit from Treat Street or will it have a negative impact on the perception of their loyalty card - Dissertation Example

Download file to see previous pages total sales as estimated in 2008 in the Health and Beauty sector worth 17.7 billion pounds out of which 36 % of the total was accounted for Boots. Boots being the largest single retailer in the cosmetic and health care division leads the market with innovative activities attracts the customers. In spite of being the leader in the sector Boots also was hit very badly during the period of recession. Due to the economic slowdown in the late 2008 consumers also became very price sensitive in the market. Along with this problem the competitive environment also forced the market leader Boots to rethink on its sales strategies and the discount and promotional campaigns to gain market share. For this reason the company implemented several strategies likes giving discounts and scheme cards to attract customers. Review showed that about 16% of the customers bought more and increased the sales during discount period. Loyalty Cards are introduced by Boots to encourage consumers to avail discounted price and thus become a more loyal customer to the brand. With the change in society and consumers buying habit Boots introduced a more Advantage Card ‘Treat Street’ which gives the existing customer some extra benefits. This research is done in order to find whether Boots benefit from this Advanced Card or it has a negative impact on the perception of their loyalty card holders. About the Company Boots group, PLC is the leading beauty and health care retailer and one of the best known companies at United Kingdom. Boots is one of the members of Alliance Boots which is one of the leading international pharmacy-led health care and beauty group. Boots was established in the year 2006 when The Boots Company PLC was merged with the Alliance Unichem. As of 2010, the company operates in over 20 countries and is sold in over 130 countries around the world leads the market with about 3250 outlets at different locations. Though the company operates in pharmacy and cosmetic/toiletries but it is not known as the specialist in that section only, rather it is popularly classified as a mixed good retailer. With the growing trend towards self-medication the sales of Boots is mainly concentrated to three main products categories i.e. analgesics like Nurofen, Strepsils for cough and cold remedies and also skin care products like Clearasil. Though the company dominates in their own industry segment but they faced a lot of difficulties to grab the market share. As of 2008 the market share of Boots was about 35.9% of the total market. The main problems behind this difficulty are especially building by the competitive brands mainly the supermarkets with toiletries segment. Customers always prefer to have a single point to purchase all there needed products rather than going to different stores and buy different products of their need. This is the main reason for the huge development of the shopping malls and super markets. Though these supermarkets don’t have much variety in products but they attract the customers with good amount of discounts and offers. Along with this due to economic recession in late 2008 the health and beauty sector was very badly hit which affected the purchasing power of the customers also. Thus to gain market share Boots worked out on their sales strategies thoroughly and introduced several discount schemes (Brandy, 2010, ...Download file to see next pagesRead More