Morality and Margin Management

At the weekend I was shopping at a well known high street supermarket when my eye was caught by an end gondola display of Men’s Body wash with a Special Offer price of 95p.

“A good buy” I thought to myself and went to buy half a dozen, until I noticed in that the size was 185ml not the usual 200ml; I then noticed the small print next to the label, indicating the price per 100ml.

My inquisitiveness aroused, I soon found the same product, not on offer; in the normal pack size with the price per 100ml some 16p less than the “Special Offer” – a difference of some 37%.

A quick survey of other products ranging from tea, coffee, fresh chicken, soap powder and chocolate all elicited the same range of disparages in the Special Offers; to say that I was horrified was an understatement.

I have always advised my Clients to manage their margins to one percentage points, indeed in some cases 0.5%, after all these represent huge numbers on a multi million pound business unit.

My question is – “At what point does commercial management over step the mark to become a flagrant dupe and therein theft from the Consumer?”

I was aghast at what I perceived to be the immorality of this trade practice – or is it just me?

About Michael Carr

Specialising in Strategy, Systems and Organisational Design I've had a varied and rewarding career and been fortunate to work for some superb companies such as Courtaulds, Unipart International, Akzo Nobel and more recently Jaguar Landrover, all luminaries of a solid, disciplined and a conservative, though never lacking in innovation, approach to business management and development. Augmenting my career with studying for my MBA at Warwick in the early 90's has given me a balanced and I believe rich resource set to draw upon in my Consultancy Practice. My Clients have been good to me, tolerating my idiosyncrasies, giving me enough rope to go along the journey that I was taking them and hopefully in return I've been able to repay them by raising the bar and their business performance, giving them the results and achievements they were looking for. I really enjoy my work and love the challenge - isn't that what it's all about?

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