A Good Deal?

 

Marketing departments – You’ve got to love them. They’re all full of ideas. Pretty adverts. Sultry, stirring campaigns. Trend followers and setters. Responsible for the annual Christmas, heart string pulling, vomit inducing, festive talking point in any office (I love Mog the Cat. Just saying)

But! Great internal communicators and aware of the workings of a large scale business whereby they aren’t the only human beings on a salary… they ain’t. They work in blinkered ignorance and oblivious of the demands they put on their colleagues when they suddenly come up with ‘special offers’ and ‘product campaigns’.

And of course, they always take the credit when it comes up trumps!

If someone want’s to tell me otherwise (and they don’t work in the marketing department), then please introduce them to me.. I would love to work with them!

Just this Friday gone, I had a luncheon appointment with an experienced ex-supermarket buyer,  Mr. Ball, who consults for us on a regular basis. Mr. Ball is very old school – Literally. I am 20 years his junior. But having worked with him on and off over the last couple of years, I have learnt a lot from him, despite him doing what I do now in the 1980s, whilst I was still understanding Button Moon.

He told me the remarkable story of when he was given VERY short notice, that the major supermarket chain that he was working for at the time, decided to have a ‘special deal’ on cos lettuce, over Christmas. After being told to “make it happen”, he spent day and night trying to source cos lettuce from around the world, ending up doing a deal with some growers in California to provide the necessary volume.

But the product was on the west coast of the USA, and the anxious shoppers were in the festive frenzied shores of Britain! What did he do? Of course, he chartered a Boeing 747 cargo plane to carry the product 5,000 miles to London.

The consumers got their cos lettuce, at the expense of both the supermarket, and considering the carbon footprint, at least one polar bear. And his boss got to report some seriously good numbers for the ‘lettuce campaign’

There’s a little bit in all of us that always wonders, after we have made a purchase, if we have got ourselves a good deal.

We usually fall into two thought processes – especially after making a major purchase. Yes, I reckon I got a deal. And.. I wonder if I got a good deal. These feeling are usually reserved for larger purchases, such as cars, holidays, property etc..

But how do you know if you got a good deal if you are, say, doing your weekly food shop? I realise there are supermarket comparison sites, but the whole business of retail is built around getting you into their shop. Full stop. And when you’ve filled your basket, they make a profit.

Well, generally speaking, retailers work on a set percentage margin in order to make ends meet. Having worked in both sectors, retailers will generally seek a 25 – 35% gross profit margin, and hospitality (casual dining restaurants for instance) will work on around an 80% margin.

“That’s a lot of profit!!” I hear you cry – well, yes. But from that profit you have to pay your rent, pay your staff, turn on the lights, gas and electric and still keep shareholders happy. When it all comes out in the wash, there’s actually not a lot left. Which is why, with such paper thin margins, great businesses like Woolworths, BHS and Ed’s Easy Diner, have folded so quickly, when things start to take a small downturn.

I’m guessing here, but I suspect their marketing team and their purchasing team weren’t working as a team.

Despite our differences, we are all supposed to be pushing in the same direction.

I love the marketing team! And I hope they love me, because they create dreams, which we make a reality.

LP