Shareholder strategy at M&S
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Have M&S managers made a boob here? They have introduced a policy of price discrimination in the lingerie department; they charge an extra £2 for bras sized over a DD cup, and a pressure group ‘Busts 4 Justice’ has been set up on Facebook and now has over 8,000 members who are campaigning for this surcharge to be removed. The group’s founder, Beckie Williams, has bought a £3.40 share in the company to allow her to confront chairman Sir Stuart Rose at the next annual meeting in July. This story neatly links the issues of publicity, external pressure groups, stakeholders and use of ICT as a number of topics on the A2 syllabus for Business Studies.
Is the publicity likely to be more positive or negative? Marks and Spencer says larger bras cost more as they require more work. They say that their range is the “most competitively priced on the high street. Our bras are much less expensive than many other specialist larger cup size lingerie retailers.” On the other hand, Miss Williams claims that M&S have great power in the market (consider Porter’s 5 Forces) as they have the biggest share in the lingerie market in the country, and that the company had a complacent attitude over its pricing. They don’t apply the policy to other items of clothing and other lingerie shops did not make people pay more for larger bras. “They won’t listen to me as a customer but they might listen to me as a shareholder.” I can’t find any reference to the story on the company’s website this morning, though it was reported yesterday by a number of papers and the BBC website; will Busts 4 Justice have their say at the AGM in July?
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