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Margin = 40%
Marginal Cost
= 60% of Retail Price
Boots: Hair-Care Sales Promotion
18
Marginal Cost
Shampoo Conditioner Gel
Retail Price £3.99 £3.99 £2.99
Cost(60%) £2.40 £2.40 £1.80
Margin £1.59 £1.59 £1.19
• Shampoo: £2.40
• Conditioner: £2.40
• Gel: £1.80
52
Comparison
Decision Matrix
Option 1 (3 for 2) Gift with Purchase Pack Coupon
Brand Dilution High Medium High
Immitation by
Competitors Medium Medium Very High
Brand Exposure to
New Customers High High Low
Additional Setup
Required No Yes No
Cannibalization Medium High Medium
Effectiveness Medium Medium Low