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i


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THE FIRST ADVERTISING BOOK
THE FIRST
ADVERTISING BOOK
BY
PAUL TERRY CHERINGTON
ASSISTANT PROFESSOR OF MARKETING IN THE GRADUATE
SCHOOL OF BUSINESS ADMINISTRATION, HARVARD UNIVERSITY
AUTHOR OF
“ADVERTISING As A BUSINESS FoRCE”
PUBLISHED BY
DOUBLEDAY, PAGE & COMPANY
FOR
THE ASSOCIATED ADVERTISING CLUBS
OF THE WORLD
1917

Copyright, 1916, by
THE Associated ADVERTISING CLUBS OF THE WORLD
All rights reserved, including that of
translatiºn intoforeign languages,
;instüding the Scandinavian
* rº
sº
TO -
LEWELLYN E. PRATT
CHAIRMAN OF THE EDUCATIONAL COMMITTEE OF THE
ASSOCIATED ADVERTISING CLUBS OF THE WORLD
THIS BOOK IS DEDICATED
PREFACE
The chief purpose of “The First Advertising Book” is to
put into form for convenient reference some of the available
records of recent progress in advertising methods. This is done
with two separate objects in view.
One object is to give to such persons as may be interested in
advertising (but who are not familiar with its inner workings in
its modern forms) a clear idea of what is being done from within
to make more effective this part of the present-day selling
mechanism.
The other, and the more important object, is to help those who
are actively engaged in selling operations to acquire a working
familiarity with some of the events forming current advertising
history. To such persons, the records of these events may have
suggestive value in connection with efforts to reduce waste in
the processes of distributing merchandise.
In the conclusion of “Advertising as a Business Force,” a simi-
lar compilation made for the Associated Clubs in 1912-13, I called
attention to three lines in which it seemed to me advertising
was making distinct progress:
1. Immediate contact with selling.
2. Accurate knowledge as a basis for action, and
3. Exacting standards of honor.
This new compilation of some articles which have appeared
during the past two years serves to show clearly that the prog-
ress being made in each of these lines—as well as in others—is of
a substantial character.
The present volume may be said to have been built around the
following sentence at the close of “Advertising as a Business
Force”:
“It does not require the gift of prophecy, then, to foresee
the very imminent coming of the time when the very highest
possible standards of honor in advertising appeal will not merely
be ‘good business’ but will be absolutely essential to any ad-
vertising appeal which can be expected to have any real effect.”
VII
viii PREFACE
Unfair or ignorant attacks upon advertising are inevitable.
They are to be expected in any line of effort which touches the
public at large, and of which it is not easy for the public to
have more than a superficial knowledge. Moreover, when the
contact is as direct and the knowledge as extremely superficial
as in this case, the attacks may be expected to be numerous
and hard to answer clearly.
The one convincing defence which advertising can make
against such attacks is its record of achievement. Upon this
alone can it afford to stand. This record, however, will be a
conclusive answer to criticism only in so far as it shows a prac-
tical combination of truth and real service. The desire to do
honestly the work assigned to advertising needs at all times to
be supplemented by ability to do it well.
It would be difficult to find any branch of human activity
which, in as short a period of time, shows a record such as the
advertising business has made during the past few years for
developing from within itself exacting standards of ethics and
morals.
If this development were complete the present would be no
time for issuing a compiled record of advertising experiences.
But the work has only begun. The mission, therefore, of such
a compilation as this is not the recording of an achievement but
the reporting of progress.
To influence demand artificially is a serious matter. Yet
that is the task which advertising assumes. The responsibility
on all who engage in it is heavy. Certain leaders in the pro-
fession are determined that advertising is to be as free from
errors and waste as its friends can make it. The achievement of
this result calls for the co-operation of all concerned, and it is
necessary that this co-operation be intelligent as well as sincere.
The Educational Committee of the Associated Advertising
Clubs of the World has undertaken the task of doing all that
concerted effort can do toward making pointed and constructive
the co-operation of every advertising club member in the feder-
ated clubs. If this book takes a useful part in this work its
preparation will not have been in vain.
P. T. C.
Cambridge, Mass.
November 22, 1915.
CONTENTS
PART ONE
ADVERTISING AND THE DISTRIBUTION SYSTEM
PAGE
Preface . . . . . . . . . . . . . vii
CHAPTER
Advertising and the Consumer . . . . . 3
II. Progress in Retail Advertising . . . . . 44
III. The Regular Retailer's Field and Problems . 82
IV. “Dealer Helps” from the Retailer’s Viewpoint . 108
V. The Regular Retailer and National Advertising I50
VI. The Department Store and National Advertising 183
VII. The Chain Store and National Advertising . 229
VIII. The Wholesaler and National Advertising . . 288
PART TWO
ADVERTISING METHODS
IX. Advance in Methods of Analysis . . . . 811
X. Developments in Advertising Mediums . . 372
XI. Advance in Circulation Standards . . . . 437
XII. Direct-by-mail Advertising . . . . . . 462
XIII. Trademarks and Brands . . . . 494
XIV. Advertising Standards . . . . . . . 555
. . . . . 585
Appendix tº tº
jº * º º º e © © 597
Index © º º
PART ONE
ADVERTISING AND THE
DISTRIBUTION SYSTEM
CHAPTER I
ADVERTISING AND THE CONSUMER
By analogy, avoidance of untruth, essential as it is, may
be called a high dilution of what is meant by the move-
ment underlying the phrase “Truth in Advertising.” The mere
telling of the truth is far short of what advertising is capable
of achieving and what advertising inevitably will be obliged to
demonstrate its ability to achieve. The great task of adver-
tising is to help to deliver goods from the producer to the con-
sumer better and with less waste than they can be delivered
without this help. The public at large has not yet grasped the
meaning of this. Not even all of those who are engaged in the
practice of advertising have come to a full understanding of it.
Under date of January 18, 1915, a circular signed by Mayor
Mitchel’s Food Supply Committee, George W. Perkins, Chair-
An man, was distributed to the number of 830,000 copies
Atj. on through the public school pupils of New York City.
4. This circular was headed, “BUY IN BULK–NOT
OO IN PACKAGE,” and the burden of it was a plea to
householders to avoid the purchase of package goods. It was an
attack upon the whole system of advertising as itis represented by
“identified” goods, and the following excerpts from it show how
completely the committee responsible for it failed to understand
the real nature of advertising in this field. The circular said:
Hº has been called a “high dilution of honor.”
*Have you ever stopped to figure out how much more you
would get for your money if you bought certain articles of food
by the pound instead of by the package?
Food that is wrapped and sold in attractive-looking pack-
*Printers' Ink, January 28, 1915, p. 45.
3
4. - ADVERTISING AND THE CONSUMER
ages must of necessity cost more than the same food sold in
bulk, which means sold by the pound.
In the first place, the box or jar containing the food costs
money. The wrapper costs money. The printing on the
wrapper costs money. And it also costs money to fill the pack-
ages and seal them. It follows, therefore, that you cannot
possibly get as much food for your money when so large a part
of your money has to pay for the box, wrapper, printing, etc.,
There are several reasons why so many foods are put up in
packages.
First: The package looks pretty, appeals to the eye, and
makes the food seem more appetizing.
Second: Most of the packages are air-tight and dustproof,
and for sanitary reasons a great many people prefer food that
is done up in packages.
As a matter of fact, it is possible for your grocer to keep on
hand, in bulk, exactly the same foods as the packages contain, and
it is also possible for him to keep them in bulk in a perfectly
sanitary manner, so that dust and dirt cannot reach them.
We have looked into the matter of the relative cost of cer-
tain articles bought in package as compared with the same
things bought loose or in bulk. The articles referred to were
purchased by our own investigator, the quality was compared,
and the articles weighed and measured in our own office.
Then there followed a list of seventeen articles commonly
sold in packages with a statement of the price at which it was
declared that equivalent articles could be bought in bulk. The
circular then continued:
*Why should you buy things in packages when you can get
almost twice as much of the same article for the same amount
of money if you buy it in bulk?
Sit down and make a list of the various foods that you have
been in the habit of buying in packages.
Think of the money you might have saved had you bought
them in bulk.
Make up your mind to buy them in bulk in the future, if it
is possible for you to get them.
It will pay you to break yourself of the package habit. There
*Printers' Ink, January 28, 1915, p. 49.
ADVERTISING AND THE CONSUMER. 5
are many foods sold now in packages only that your grocer will
be glad to carry in bulk as soon as he knows that you and his
other customers want them.
The manufacturer, the wholesale dealer, and the retail dealer
keep on the watch all the time to find out what the public
wants. Of late years the public has seemed to want food in
attractive packages at a high cost. As soon as people learn
that by demanding it they can get exactly the same food in bulk,
kept in a perfectly sanitary manner, for about one half to two
thirds the cost of package goods, the manufacturer, the whole-
saler, and the retailer will meet the demand.
This is one way to cut down the cost of living, one way to
live just as well for less money. Study the questions yourself
and pass these pointers on to your neighbors.”
The real importance of this circular in the advertising world
does not come from the fact that it was issued by a committee
with headquarters in New York City Hall, nor from the fact
that it was signed by so eminent a person as George W. Perkins,
nor even from the fact that nearly a million copies of it were
circulated in New York City. Its chief importance arises
from the fact that it suggests possibilities of concerted action
by consumers which will test the value of advertising as it
never has been tested before.
Truth in advertising must be jealously guarded, but beyond
this there is a larger responsibility which underlies most of the
recent achievements in advertising and selling practice. That
is the responsibility of real service. If advertising can, and
will, make it possible to deliver better goods to the consumer
with less commercial waste than is possible without its use,
the circulation of countless misleading circulars cannot turn the
public permanently against it. If advertising cannot do this,
it must expect to give way to whatever more economical and
effectual method may be developed for performing its work.
Serving the best interests of the consumer, therefore, no
longer may be regarded as a moral matter alone. It may be
*An extended reply to this circular will be found in Chapter XIII of this
compilation.
6 ADWERTISING AND THE CONSUMER.
said to have already become the measure by which all existing
or new methods in advertising must be judged.
This compilation of records of some of the main events in
American advertising history during the past few months will
commence with a discussion of some of the relations of adver-
tising problems to the consumer’s interests. This will be fol-
lowed by a discussion of some of these same problems as they
affect various types of distributing organizations, first retail
and then wholesale. These will be illustrated by descriptions
of the methods employed in certain conspicuous campaigns.
The latter part of the compilation will be devoted to what
may be called more strictly advertising problems and adver-
tising methods. But throughout the compilation it will be
necessary to keep in mind the supreme question of the adver-
tiser: Are advertising problems being attacked and are ad-
vertising methods being developed in such a way as to permit
advertising to play its rightful part in modern distribution?
The con- Shortly after Mayor Mitchel's Food Committee
sumer's had made its report, the Housewives’ League, which
4; had been established before the report was issued
Consumer's and which at the outset appeared to agree with
Attack the findings in the report, passed the following
resolutions:
Whereas, Since the inception of the Housewives' League movement it has
been our aim to encourage and promote the use of such food products as are
produced, handled, and marketed under sanitary conditions; and,
Whereas, This end can only be achieved when the manufacturer's name is
plainly placed upon the container or product so that the manufacturing plant
may be open to inspection and the manufacturer held responsible for the qual-
ity of his product; and,
Whereas, The use of bulk goods tends to encourage adulteration and insani-
tary handling and nullifies the work accomplished by Federal and State author-
ties in requiring proper labelling of food products; therefore, be it
Resolved, That the National Housewives’ League protests vigorously
against the action of the Mayor's Food Supply Committee in recommending
the use of bulk goods.
Mrs. Julian Heath is quoted by Printers' Ink of February 11,
1915, as follows as to the origin and work of the organization:
ADVERTISING AND THE CONSUMER 7
“When we first organized the League and I became its pres-
ident,” said Mrs. Heath to Printers' Ink, “it seemed perfectly
obvious that one of the greatest causes of the increase in the
cost of living was the increase in the number of food products
put up in packages. We started in to educate the house-
wives, and I began to speak and write against the ‘package
habit.’ I even wrote Printers' Ink about it. But we were
interested quite as much in the sanitary handling of food prod-
ucts as we were in economical pricing, and in spite of myself
I found myself eventually forced to the conclusion that there
could be no sanitary condition for the product unless it were
both made under such conditions and transmitted to the market
and the consumer without subsequent contamination. I found
it true not only that the package goods were best protected
from insanitary handling, but that they were most likely to
be pure and unadulterated in the beginning and be produced
or put up in a cleanly way. I learned this from visiting a large
number of factories and seeing it for myself.
“When I asked myself why this was so, I had no difficulty in
finding the answer: it was because the manufacturers of the
package goods had made themselves responsible for
º, their goods by printing their name on the package
#. and making it possible for the public to identify the
Good goods, and, if it liked, go to the factory as I had done
and see under what conditions it was made or put up.
“When I had reached this conclusion I was at a loss for the
moment to know what to do. We had inaugurated a move-
ment against package goods in the interest of economy and had
begun to interest many influential people. We could not, of
course, have gone far with such a movement which runs counter
to the economic current. . . . The members of the league
are ‘requested to co-operate by refusing to buy goods that are
not properly protected from dust, dirt, and flies, or that are
handled in an unsanitary manner.” This was started last year,
but the league has improved its strategy by devising a sign for
the grocer or butcher who passes 85 per cent. On a shop inspec-
tion by members of the league. There is a printed form which
calls for a description of the store, the stock-rooms, the stock
itself, and the general cleanliness of the clerks, the shop, etc.
The league does not work through committees, but through
individuals. Each member sees her tradesman. This helps
to make the league work effective. The best grocery stores in
8 ADVERTISING AND THE CONSUMER.
New York have been glad to display the sign. It is expected
that grocers who cannot get it will take steps to deserve it
rather than lose custom. t
“The bearing of this on the package habit is obvious; it is
strong Support. .”
This organization has certain points of similarity to the
National Consumers’ League, through which, for several years,
consumers have exercised a somewhat similar influence in the
sale of women’s and children’s wearing apparel, insisting that
certain conditions of manufacture and sale be lived up to if the
patronage of the members of the League is to be expected. For
advertisers both of these movements get their significance
from the fact that the public apparently is becoming conscious
of its power to insist that it be not only well served, but that
it be served in the best possible manner.
Another aspect of this problem of the relations of advertising
to the interests of the consumer was brought out by Hugh
A Plan Chalmers of the Chalmers Motor Company when
for he outlined a plan of constructive action. This
Action he did at the dinner tendered to Edward W. Hazen
*:::: in New York City on February 25th at the time when
Mr. Hazen retired from his position as advertising
director of the Curtis Publishing Company:
*Mr. Chalmers asked what the manufacturer could do to
meet the most urgent problem of the high cost of living. It
is not likely that the cost of raw materials will decrease. Wages
will not be reduced, nor should they. Moreover, haven’t the
biggest savings coming from quantity production already been
effected? The best chance for great savings lies in lowering
the cost of distribution. Advertising can be used to reduce
this cost if certain obstacles which are preventing it from ac-
complishing the best results are removed.
“What are the things that prevent us from getting one
*Printers' Ink, March 4, 1915, p. 59.
ADVERTISING AND THE CONSUMER 9
hundred cents’ worth of sales value out of every advertising
dollar we spend?” Mr. Chalmers asked.
“I think the greatest cause of waste in advertising is in the
fact that too large a section of the public is still skeptical about
advertising. Too many people are still in the attitude of
mind to say, ‘Oh, that is only what the advertising says;
but it doesn’t prove anything.” This condition of
Where mind, I think, is due to two chief causes. First, that
* there has been and still is, in spite of much im-
of the 6 5 * © e
Hui. provement, too much ‘bunk’ in advertising. The man
Starts who sticks to truthful advertising has too much to
overcome in the exaggerated statements of other
advertisers. There is still too much advertising of propositions
that are purely “fake.” The publications which continue to
run advertising of questionable propositions, or of “fake” prop-
ositions pure and simple, are doing the general cause of ad-
vertising great harm. By these methods they are contributing
to the high cost of advertising.
“The second cause for public skepticism of advertising is a
lack of public understanding of advertising. What advertising
needs most is to be advertised. The people generally do not
understand it well enough; that is, they do not understand
well enough the direct benefits that may come to them
through advertising. I have had in mind for a long time
that a full explanation of advertising, what it is and what
it really accomplishes for all the public, should be made
to the public. Specific instances should be given, and they
should be multiplied from month to month and from year to
year. º,
“My present notion is that this should be in the form of a
booklet, because I believe it is impossible in page announce-
ments in the magazines and newspapers to tell this story of
advertising in a satisfactory way. This is not a work that any
one publication can or should do, or any one advertising man
or advertising agency. It is a work that all should do together,
using a carefully worked out plan. My suggestion would be
that the main part of this plan be a booklet dealing with ad-
vertising in its broader aspects, especially making very plain
the actual service that advertising renders—not to the selling
public, but to the buying public.
“Now it seems to me if some committees representing the
publishers, the advertising agencies, and the advertisers could
10 ADWERTISING AND THE CONSUMER.
be named to get up this booklet on the benefits of advertising
to the buying public, that it would be a service well worth while
rendering, and one that would help to put advertising on a higher
business and moral plane than it is to-day. +.
“The cost of such a booklet properly should be paid from a
fund contributed by advertising agencies, publishers of maga-
zines and newspapers, and leading advertisers of the country.
I think it would be to the interest of every publisher of maga-
zines and newspapers in the country to give the space free to
advertise this booklet and to distribute it free to any person
who would like to have it.”
The most absorbing question in the public mind to-day is
how to meet the increased cost of living. It is coming to be
recognized that if there is any answer to this it will not be found
in any single remedy, but in a combination of them. Not the
least among those in the combination will be minimizing of
waste by every possible means. Advertising may expect to
take its turn at being criticised and investigated. It will be
obliged to show that it is an effective and economical aid to the
process of merchandise distribution. And in the meantime it
may expect attack in exaggerated forms from those with whose
interests it conflicts.
The consumer occupies the position of advantage in this
struggle. From him all decisions will come, and these decisions
may all be expected to be made in his own interest. The
advertiser who forgets this for any length of time is picked for
destruction. Thus, the advertiser who insists upon being of
real service to the consumer is no longer doing merely a highly
moral thing. He is taking the only safe course, if he expects
to continue in business.
Since that indefinite composite to which we have referred as
“the consumer” has the final voice in the future of advertising,
it may be well to look at some of his main characteristics which
bear directly on the problems of the advertiser. The following
excerpts cover some of these. They make it clear that: (1) While
a brand or other means of identification may be useful to
ADVERTISING AND THE CONSUMER. 11
the consumer, it does not live long in his mind and it has no
great value to him unless it is associated with some real serv-
ice. (2) The guarantee of quality and the preservation of
it is a real service, and to this the consumer responds with
an allegiance which is a tangible asset to the guarantor. (3)
The consumer and the conditions of consuming are constantly
changing so that it is not enough merely to serve the consumer.
Effectual methods of modifying the service to new conditions
are necessary, and the consumer needs to be reminded that the
Service is being rendered. (4) Close contact between the
advertiser and the consumer is a necessity. This contact is
needed as much for the education of the advertiser as for the
shaping of the wants of the consumer:
(1) THE LENGTH OF THE CONSUMER’s MEMORY
There is much dispute in various quarters as to the success
with which the methods of advertising now employed actually
secure control over the public's purchases by identifying the
product through a trademark or by connecting it with the
manufacturer's name. The only satisfactory answer to this
question comes from tests of sales over a long period of time
and a comparison of these results with the cost. At the
same time there is a good deal of interest and some suggestive
value in tests made on a small scale like that reported by
Cheney Brothers. This test of course was not on a suffi-
ciently large scale to justify its use as the basis for the develop-
ment of advertising efforts, but it may have substantial value
as a measure of the readiness with which the consumer responds
to appeals of different types.
*How quickly are trade names, slogans, etc., recognized, and
how accurately do consumers identify them? That question
is the basis of a test recently concluded by Cheney Brothers,
South Manchester, Connecticut, makers of Cheney Silks. The
results have been given to Printers' Ink.
*Printers' Ink, August 20, 1914, pp. 61, 62, 65, and 66.
12 ADVERTISING AND THE CONSUMER.
Horace B. Cheney, who has charge of the concern’s advertis-
ing, wanted to find out the relative value of certain kinds of
appeal. He wanted some indication of the impressions made
upon different people by firm names, trademarks, slogans, and
names of products. Which would be most quickly recognized
and identified as belonging to a certain product?
The experiment was tried on 117 persons, 90 men and 27
women, practically all of whom were employed by Cheney
Brothers. Mr. Cheney says:
“The questions were submitted to a men's club composed of
clerks, room superintendents, and workers of the better class,
and these comprised the larger part of the men who filled in
the blanks. Boys and girls under fifteen years of age were
also asked to make replies, and we were surprised to find that
some of the most complete and accurate replies were from
children under fifteen years of age. The women were composed
of clerks, members of families, and workers, both well-to-do
and in very moderate circumstances, a fair representation of
each class being made among both the men and the women.
“Nobody was given an opportunity to consult any magazine
or look through any advertising material, or consult with any
other person before making his replies, and all were requested
to do it rapidly, simply naming the things which first came to
mind.”
The following questions were the basis of the test:
“1. What are the products manufactured by firms using the
following names? Hamilton, Oneida Community, Welch,
Peter’s, Lydia Pinkham, Gillette, Ford, Williams, Mellen,
Waterman, Pears, Iver Johnson, Tiffany, Heinz, Hart, Schaffner
& Marx, Beecham, Chalmers, Colgate, Campbell, Pabst, Stein-
way, Kellogg, Fairbanks’, Skinner, National Biscuit Company,
Rºleinert.
“2. What are the following products and who makes them?
Bon Ami, Beaver Board, Nabisco, Pompeian, Big Ben, Prince
Albert, Keen Kutter, Aeolian, Velvet, Uneeda, Koh-i-noor,
B. V. D., Alco, Zu Zu.
“3. What are the trademarks used by Heinz, Dutch Clean-
ser, National Lead Company, Skinner’s Satin, Beaver Board,
American Telephone & Telegraph Company, National Biscuit
Company, Cream of Wheat, Fairy Soap, Ford, Swift & Com-
pany?
“4. Who says ‘Ask the man who owns one,’ ‘Good-bye, old
ADVERTISING AND THE CONSUMER. 13
hook and eye,” “Hammer the hammer,’ ‘It hasn’t scratched
yet,” “It floats,’ ‘You dirty boy,” “There’s a reason,’ ‘99.1% Wö
pure,” “One of the 57,’ ‘Chases dirt’?”
Only five seconds were allowed for the answer to each ques-
tion. The results are tabulated by Mr. Cheney as follows:
PERCENTAGES OF CORRECT ANSWERS
1. What are the products manufactured by firms using the
following names:
Men Women Total
Hamilton . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70.0% 77.8% 71.8%
Oneida Community ... . . . . . . . . . . . . . . . . . . . . 50.0% 59.2% 52.6%
Beecham's . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85.5% 66.7% 81.2%
Sºlº.................... • * * * * * * * 90.0% 81.5% 88.0%
Kellogg's . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76.7% 77.8% 76.9%
Gillette . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97.8% 77.8% 93.2%
Kleinert ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.8% 55.6% 34.2%
Peter's . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80.0% 92.6% 82.9%
Skinner's... . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78.9% 66.7% 76.1%
Pabst . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90.0% 85.2% 88.8%
Ford . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98.9% 100.0% 99.0%
Fairbanks (scales) . . . . . . . . . . . . . . . . . . . . . . . 65.6% 62.9% 64.9%
Fairbank (soaps) . . . . . . . . . . . . . . . . . . . . . . . . 30.0% 33.3% 30.8%
Colgate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93.3% 96.4% 94.9%
Chalmers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84.4% 77.8% 82.9%
Iver Johnson . . . . . . . . . . . . . . . . . . . . . . . . . . . 87.8% 85.2% 87.2%
Hart, Schaffner & Marx . . . . . . . . . . . . . . . . . . 85.6% 66.7% 81.2%
Heinz . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94.5% 96.3% 94.9%
Welch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82.2% 81.5% 82.5%
Williams “. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96.7% 100.0% 97.4%
Steinway . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97.8% 92.6% 96.5%
Tiffany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95.6% 88.9% 94.0%
Pears'. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94.5% 100.0% 95.7%
Waterman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97.8% IOO.0% 98.3%
National Biscuit Company ..... . . . . . . . . . . . . . 91. I9% 88.9% 90.6%
Mellen's. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81.1% 96.3% 84.6%
Lydia Pinkham . . . . . . . . . g g º e º e e º 'º e º 'º e º 'º e 91.1% 74.1% 78.6%
Average . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82.0% 80.8% 81.5%
2. What are the following products?
Men Women Total
Bon Ami ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90.0% 96.3% 91.5%
Beaver Board . . . . . . . . . . . . . . . . . . . . . . . . . . 47.8% 48.1% 47.9%
Aeolian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62.2% 70.4% 64. 1%
Velvet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85.6% 85.2% 86.3%
Big Ben . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71.1% 70.4% 70.1%
14 ADVERTISING AND THE CONSUMER.
- Men
B. V. D. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74.4%
Nabisco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38.9%
Koh-i-noor (snaps). . . . . . . . . . . . . . . . . . . . . . . 5.6%
Koh-i-noor (pencils) . . . . . . . . . . . . . . . . . . . . . 50.0%
Pompeian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85.6%
Prince Albert. . . . . . . . . . . . . . . . . . . . . . . . . . . . 88.9%
Uneeda Biscuit. . . . . . . . . . . . . . . . . . . . . . . . . . 91.1%
Zu Zu. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46.7%
Keen Kutter . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88.9%
Alco . . . . . . . . . . . . . . . . . . . . . . . . ... . . . . . . . . . . 71.1%
Average . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66.5%
2A. Who makes them?
Men
Bon Ami. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68.9%
Beaver Board . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.1%
Aeolian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.7%
Velvet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.2%
Big Ben . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.6%
B. V. D. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.8%
Nabisco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77.8%
Koh-i-noor (snaps) . . . . . . . . . . . . . . . . . . . . . . 1.1%
Koh-i-noor (pencils) . . . . . . . . . . . . . . . . . . . . . 15.6%
Pompeian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.5%
Prince Albert. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.4%
Uneeda Biscuit. . . . . . . . . . . . . . . . . . . . . . . . . . 73.3%
Zu Zu. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.8%
Keen Kutter... . . . . . . . . . . . . . . . . . . . . . . . . . . 20.0%
CO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.4%
Average . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.1%
Men
Swift & Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.2%
Beaver Board . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.6%
Am. Telephone & Telegraph Co. . . . . . . . . . . 40.0%
Fairy Soap. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.4%
Ford... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4%
Skinner's Satin... . . . . . . . . . . . . . . . . . . . . . . . . 31.1%
National Lead Co.. . . . . . . . . . . . . . . . . . . . . . . 28.9%
Cream of Wheat . . . . . . . . . . . . . . . . . . . . . . . . 54.4%
National Biscuit Company. . . . . . . . . . . . . . . . 18.9%
Old Dutch Cleanser. . . . . . . . . . . . . . . . . . . . . . 73.3%
einz . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70.0%
Average . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.7%
Women."
55.6%
40.7%
7.4%
51.8%
92.6%
77.8%
100.0%
44.5%
88.9%
62.9%
66.2%
* * * * * *
Total
70.1%
39.3%
6.0%
50.4%
87.2%
86.3%
93.2%
46.2%
88.9%
70.9%
66.6%
ADVERTISING AND THE CONSUMER. 15
4. Who says?
Men Women Total
“You Dirty Boy” . . . . . . . . . . . . . . . . . . . . . . . 23.3% 37.0% 26.5%
“There’s a Reason” (Postum) . . . . . . . . . . . . 44.4% 44.5% 44.4%
“There’s a Reason” (Grape Nuts). . . . . . . . . 20.0% 29.6% 22.2%
“It Floats”. . . . . . . . . . . . . . . . . . . . . . . . . . . . 68.9% 77.8% 70.9%
“Good-bye Old Hook and Eye” . . . . . . . . . . 8.9% 18.5% 11.1%
“Ask the Man Who Owns One” . . . . . . . . . . 31. I9% 29.6% 30.8%
“Chases Dirt”.. . . . . . . . . . . . . . . . . . . . . . . . . 66.7% 74. I97, 68.4%
“One of the 57” . . . . . . . . . * * * * * g e is º e s is e º e 66.7% 70.4% 67.5%
“99 44/100% Pure” . . . . . . . . . . . . . . . . . . . . . 41.1% 51.8% 43.6%
“Hammer the Hammer”... . . . . . . . . . . . . . . . 43.3% 40.7% 42.7%
“It Hasn’t Scratched Yet” . . . . . . . . . . . . . . . 66.7% 70.4% 67.5%
Average . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.7% 49.5% 45.1%
Perhaps, as Mr. Cheney says, the results of the experiment
do not “prove anything,” but they at least indicate that nobody
is safe in assuming that his name and his product is so well
known that he can rest on his oars with security. Probably
the investigation was not conducted according to strictly scien-
tific principles, and it is easy to see where many errors might
creep in. It is interesting to note, however, and it may be
significant, that while 81 per cent. of those 117 people were
able to identify the kind of product from the name of the
manufacturer, only 66 per cent. were able to identify the kind
of product from the trade name. Further, when it came to
connecting the manufacturer’s name with the trade name ap-
plied to his product, only 28 per cent. succeeded, and 37 per
cent. were able to describe the trademarks used by a list of
well-known concerns. Strange as it may seem, a higher aver-
age was attained when it came to identifying slogans, 45 per
cent. Succeeding in doing that to Mr. Cheney’s satisfaction.
The present writer has no intention of analyzing the results in
detail. Such a process would instantly involve him in mathe-
matical difficulties of considerable magnitude, and this article
would wind up in the realms of pure speculation. The results
are, however, given at some length for just exactly what they
are worth. -
Some very curious replies were received to some of the ques-
tions. Thus, Hamilton was identified with the manufacture of
pianos, soap, silverware, and cotton print; Welch with watches;
Peter’s with firearms and medicine; Lydia Pinkham with sooth-
ing syrup and talcum powder; Iver Johnson with skates, pianos,
Soap, and paint; Heinz with spark-plugs; Hart, Schaffner &
16 ADVERTISING AND THE CONSUMER.
Marx with velvet, candy, pianos, and collars; Beecham with
chewing gum and bacon; Colgate with socks, mustard, choc-
olate, and drugs; Pabst with grape juice, tooth paste, soap, and
medicine; Kellogg with Post Toasties, Cream of Wheat, cold
cream, biscuit, and strawberries; Skinner with pianos, pills,
and beans; and Kleinert with pianos, food products, draperies,
scarfs, and Dutch Cleanser. -
Pompeian was described as a soap and as a hair dressing; Big
Ben as tobacco and cigars; Prince Albert as clothes, biscuit,
crackers, and cigars; Aeolian as a cream; Koh-i-noor as a mat-
tress, a tea, and a diamond; B. V. D. as corsets and garters;
Alco as cleaning material, a range, and a dress shield; Zu Zu as
breakfast food and chewing gum.
Readers of Printers' Ink will doubtless remember an article
by R. S. Childs, of the Bon Ami Company, in the issue of July
24, 1913. Mr. Childs said: “The dear old Congregational
minister who cooked up the name (Bon Ami) twenty-odd
years ago, when he constituted the literary element among the
stockholders of a little country soap company, knew little
about advertising, and the company has doubtless been to
some extent the victim of his ignorance ever since.” Yet in
the Cheney experiment, Bon Ami made pretty nearly a perfect
score. It was described as soap, soap powder, cleaning soap,
cleaning powder, Scouring soap, cleaning polish, glass and window
cleaner, and washing powder—all of them near enough right to
be counted. Only nine men and one woman returned no answers
at all, a record which was excelled only by Uneeda Biscuit.
Some of the answers to the question “Who makes them?”
are as follows: Bon Ami: Orford Soap Company, J. T. Robert-
son Company. Nabisco: Sunshine Biscuit Company, Nabisco
Wafer Company, Dayton Company. Pompeian: Colgate &
Co. Big Ben: Hamilton Company, Waterbury Clock Com-
pany, Big Ben Association, National Clock Company, Waltham
Watch Company, Western Clock Company. Keen Kutter:
American Tool Company, Keen Kutter Company. Aeolian:
Steinert, Aeolian Piano Player Company. Koh-i-noor: Eagle
Pencil Company, A. W. Faber Company, British Graphite
Company, Eberhard Faber Company, American Pencil Com-
pany. B. W. D.: Chalmers Knitting Company, Erlanger &
Co., Boston Underwear Company.
The National Lead Company’s trademark was described
as a lead pencil, a paint can, and a painter; Skinner's Satin was
ADVERTISING AND THE CONSUMER. 17
credited with a kitten and spool, and a “girl”; Cream of Wheat
with “I want some more”; and Fairy Soap with “It floats.”
When it came to the slogans, “Ask the man who owns one”
was credited to Ford, Hamilton Watch, Cadillac, Pierce Ar-
row, and Gillette Razors; “It hasn’t scratched yet,” to Sapolio,
Fairy Soap, and “Chicken”; “You dirty boy,” to Fairy Soap
and Gold Dust; “There’s a reason,” to Kellogg; and “991%,96
pure,” to Pears’ borax, whiskey, Duffy Malt Extract, Fairbank’s
Soap, Crisco lard, Fairy Soap, and Heinz’s Pickles.
Of course, the answers referred to above are only scattering,
and the great majority who answered the question at all an-
swered fairly correctly. But the number of “No replies” to
each individual question is astonishingly high. For example,
85 people out of the 117 made no attempt to say who manu-
factures Prince Albert; 81 could not tell the owner of the Keen
Kutter name; 80 were stumped on Aeolian; 81 on Velvet
Tobacco; 29 on Uneeda Biscuit; 108 on B. V. D.; and 51 on
Zu Zu. The following is the number of “No replies” to the
list of questions under the first heading, “What are the products
manufactured by the firms using these names”:
Hamilton... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Oneida Community... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Welch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Peter's. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Lydia Pinkham. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Gillette. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Ford. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I
Williams'. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Mellen's. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Waterman. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Pears'. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Fairbank's. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Skinner's. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
*leinert. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Tiffany. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Iver Johnson. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Rein”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . • * * * * * * * * * * * * * * * * * * * * * 5
Hart, Schaffner & Marx. . . . . . . . . . . . . . . . • * * * * * * * * * * * * * * * * * * * * * * * * * * * 18
Peecham. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Chalmers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - - - - - - - - - - - - - - - * * * * * * * * * * 20
Colgate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Campbell's. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Pabst. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Steinway. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
Kellogg's. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
National Biscuit Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
• 18 ADVERTISING AND THE CONSUMER
As stated above, the results of this experiment may not
“prove” a blessed thing. Most of them can be very readily
“explained,” and one may argue about them till the cows come
home. But they do indicate something, which is this:
There is no concern whose trademark, or firm name, or slogan,
is so firmly fixed in the mind of the average consumer that it
cannot be uprooted or transplanted. It is indeed a remark-
able tribute to advertising that so large a proportion of those
people were able to identify and describe products with many of
which they had probably never had the slightest experience. It
indicates a tremendous volume of good will which has been
built up for the manufacturers represented. But the point
is right here: that the good will can be very quickly dissipated,
or transferred elsewhere. There are many replies in the doubt-
ful column; many indications that competitors’ products are
confused; many “no replies”—all of which indicate that the
advertisers must keep hammering away without ceasing in
order to keep the percentage of correct identifications as high
as it is.
Perhaps there are other deductions which may be drawn from
the experiment. If so, the results are given, and any one is at
liberty to put upon them whatever construction he pleases.
(2) THE USE AND VALUE OF THE GUARANTEE
The guarantee, whether it takes the form of a printed prom-
ise or merely of a reputation for fair dealing, is really at the
heart of the relations between the advertiser and the consumer.
This fact gives more than passing interest to the following
article written by a storekeeper in Baltimore:
*The main cause of trouble is that a customer’s conception
of the word “guarantee” is mostly different from that of the
maker and retailer. -
If the guarantee really guaranteed everything that could
happen to the article it accompanied there wouldn’t be any-
thing to say. But in many cases the list of things it does not
cover is longer than the enumeration of those on which the
manufacturer will make good.
*What is a Good Guarantee?” By Joseph Katz of the Hub, Baltimore, Md.,
in Printers' Ink, July 23, 1914, p. 4. .
ADVERTISING AND THE CONSUMER. 19
Let's take the guarantee conditions that are printed on the
inside of the top of a box of well-known silk gloves:
RULES GOVERNING THE EXCHANGE OF SILK GLOVES
1. The “Guarantee” is intended to cover only the “TIPS” of the gloves
while the rest of the glove is in good condition.
2. It is not the intent of the guarantee to cover worn-out gloves, washed gloves,
gloves cut by rings, strained gloves, gloves started to run between the fingers
usually caused by FORCING them down with the fingers of the opposite hand.
3. The customer MUST SURRENDER the “guarantee ticket” from the
original pair as well as the ticket from the new pair received in exchange. THIS
RULE CANNOT BE DEVIATED FROM as we require BOTH tickets in
order to entitle the gloves to be exchanged by us.
A WORD OF EXPIANATION
The object of the “guarantee ticket” is to insure the wearer that the “Tips”
WILL WEAR WELL and is placed in each pair of gloves in good faith. But
the silk thread from which a silk glove is made is by nature a very delicate
fibre, and will not stand the abuse to which a silk glove is frequently subjected.
Therefore the manufacturers cannot be expected to exchange gloves that do not
justly come under their guarantee.
Now here's the guarantee ticket that the customer received
with the gloves:

GUARANTEE
Blank’s Silk Gloves are made with Double Finger Tips and are
WARRANTED
not to cut through or wear out at the finger ends, with reasonable wear.
In Case They Should while the Gloves are otherwise in good condition,
then upon the surrender of this Ticket
THEY ARE EXCHANGEABLE FOR A NEW PAIR
OUR GUARANTEE DOES NOT COVER GLOVES THAT HAVE
BEEN WASHED
There are a few more conditions on the “inside cover” guar-
antee than there are on the individual guarantee the customer
gets.
Now, let’s say that the folks who issue this guarantee are
justified in imposing those conditions from the standpoint of
sane merchandising. But that’s not the point with the dealer.
The saleswoman passes on a pair of these gloves and says,
“They’re guaranteed!” She doesn’t say the guarantee says
20 ADVERTISING AND THE CONSUMER.
the finger tips must outwear the other part of the gloves and
that it does not cover gloves that have been washed.
Some women have gloves sent home, try them on there, tear
them—and still ask for a new pair, because “They’re guaran-
teed,” they say.
Once the word “guarantee” is used, the store must make
good—or lose a customer, whether the store is right or wrong.
The store can’t stop and quibble and show the purchaser the
maker’s list of the things that are not covered by the guarantee.
And so the point is this: A store would rather have an arti-
cle without the word “guarantee” on it if a lot of strings are
tied to it.
Here’s a guarantee of a well-known brand of hose for men
and women: -
This hose is guaranteed to give absolute satisfaction. If it wears holes
before you think it should, return to us, with your dealer's name, and we will
give you a new pair free.
We leave it entirely to your judgment and sense of fairness as to the service
you expect from this hosiery.
Looks like it would cover everything, doesn’t it? Now
read the slip that comes with it with the exceptions:
We disclaim responsibility for any hose that may be damaged as follows:
Hose purchased in too small a size. This stretches the heel beyond its
normal size and pushes the toes through the stocking.
Pulled threads caused by rough nails, finger rings, or chapped hands. These
often catch in the thread which causes it to break and then “run” throughout
the length of the stocking.
“Runs” caused by garters attached to the body of the stocking instead of
the garter welt which is specially reinforced to withstand strain.
Use of washing powders which “kill” the silk and destroy its “life” and
wearing qualities. Ironing with a hot iron which scorches and “kills” silk.
(Do not use boiling water and do not rub soap direct to fabric. Launder in
lukewarm suds of pure soap and do not use soap containing alkali.) ſ
Damages caused by the above are not faults of manufacture, and we cannot
be held responsible for them. -
NOTE:—Hose should be changed daily, as acids forming from perspiration
will rot the fabric.
Now nine times out of ten the customer doesn’t read this list,
which was printed on the inside of a folder that was headed
“How much service should this hosiery give you?”. Now I
am not saying that the makers are not justified in insisting on
these restrictions. But I do say that they contradict the word-
ADVERTISING AND THE CONSUMER. 21
ing on the guarantee itself. The guarantee on the hose prom-
ises everything and the folder makes a lot of exceptions.
Lucky for us, however, these people are unusually liberal in
making good.
Note the first exception about hose purchased in too small a
size. Who is going to decide whether the customer bought the
right size or not? What store would want to argue with a
customer about that?
You can’t stop a person with perspiring feet from buying
silk hose. And yet perspiration will rot the best pair of silk
hose that money can buy.
But say “guaranteed”—and the customer will hold you to
your word. You can’t argue with her—she thinks she’s right,
and you lose a customer as sure as you are born, if you don’t
give her a new pair. And if the maker doesn’t stand back of
you, and he doesn’t if he has put strings on the guarantee,
you’ll find the guarantee on hose, gloves, and the like a boome-
rang instead of an advantage.
Our buyer of women’s hosiery told me of a customer who
came back complaining of a pair of hose that were rubbed out
at the heel because her shoes were not properly fitted—and so
the hose rubbed through, due to the constant friction of the
hose against the inside of the shoe in walking.
When he told her it was more the fault of the shoe than the
hose, she ejaculated, “What is the guarantee for, anyway?”
We had to give her a new pair—or lose a customer.
Another buyer here said that if a woman were to buy a
guaranteed article and on her way home a brick were to fall
from some building in course of construction and damage that
article, she would bring it back.
I wish manufacturers had a vivid conception of how unrea-
sonable many customers are when bringing back merchandise.
A department store executive has this to say in Women’s
Wear:
BIG STORES ARE AFRAID OF THEIR. CUSTOMERS
Another thing is the department stores are afraid of their customers. They
let women who buy of them do anything they like. If you get a complaint
from a man and you fix it up for him it promotes a kind of good feeling on his
part, and the next time some little thing happens to be not just as he would
like it he passes it over for he feels friendly toward your store, but not so with
the women. You let a woman do a thing once and she regards it as her priv-
ilege ever after. Why, I know of stores where a woman who has been allowed
22 ADVERTISING AND THE CONSUMER
a credit of $2 on a pair of shoes that did not give satisfaction has expected a
credit on every other pair of shoes she bought, and very often she gets it.
The department stores are afraid to resist this sort of thing. They’re afraid
to lose a few customers even when they could easily satisfy themselves that this
sort of trade is a losing game.
I don’t know about it being a losing game. But I do know
when a customer thinks he or she is right, he or she might as
well be right for all practical purposes, because you’ll lose the
customer if you don’t do what he or she wants you to do.
A customer bought a sheer silk dress at our store in March of
last year. She wore that dress through a terrific hot spell
right into the month of October. An entire side of the dress was
stained with perspiration. She hadn’t even worn dress shields
—and yet she said she wanted a new dress or her money back.
The point is this: If a woman will do this with an article
that had no printed guarantee with it, what will she do when she
is given the guarantee with an article?
The guarantee with men’s clothing is not vital. A man
expects to get good wear out of a suit of clothes; and if it doesn’t
satisfy, every good store will make good without
* quibbling.
Guarantee There are not many makes we handle that have
guarantees with them, although we have found that
every maker will make good on suits that have not rendered
satisfaction—whether they have printed guarantees with them
Or not.
Here’s the guarantee that goes with Hart, Schaffner & Marx
clothes:
GUARANTEE
You are entitled in buying Hart, Schaffner & Marx Clothes to a most Posi-
tive Assurance of your Satisfaction.
Every dealer in our clothes is authorized to say this to you:—
Every garment made by and bearing the label of Hart, Schaffner & Marx is
Guaranteed to be of All-Wool or Wool and Silk fabrics with no “mercerized”
or other cotton added; to be Thoroughly Shrunk before cutting; seams sewed
with Pure Silk Thread; tailored in Clean, Sanitary Shops; and to be free
from every defect of material and workmanship.
More than that: The Dealer is authorized to say that if the Clothes are not
right, or not satisfactory, your money will be refunded. * *
Now that’s a good example of a guarantee that really means
something.
And so is this a good guarantee for hose:
ADVERTISING AND THE CONSUMER. 23
WE GUARANTEE
that these six pairs of Holeproof Hose will need no darning for six months. If
they should, we agree to replace them by new ones upon the surrender of
this ticket with the worn pair and Coupon A, provided they are returned to
us within six months from date of sale to wearer.
Signature of Dealer
And that’s all there is to it. The hose are sent to the maker
—and back comes a new pair.
So let’s sum up: We like guarantees that will cover the cus-
tomer's conception of a guarantee, and the latter's idea of one is
pretty broad. Once a maker uses the guarantee without any
“ifs” to it, he must stand ready to make good, even the unrea-
sonable complaint, because no store can afford to argue with a
customer.
A portion of this article was sent by Printers' Ink to a num-
ber of widely known manufacturers who have employed the
guarantee and a number of other selling plans, and it was accom-
panied by the following list of questions:
1. Do you think that Mr. Katz’s view of what a good guar-
antee is, is right, and why? If not, why not?
2. Judging from your own experience, is it good business for
a manufacturer to accompany his guarantee by “an explana-
tion” or “bill of exceptions?” (See first and second examples
cited by Mr. Katz.) -
3. Is your guarantee an outright one, or do you make some
clearly stated reservations? With what result?
4. Have you ever found it advisable to change the wording
of your guarantee? What were the circumstances?
5. Have you heard from your dealers or your consumers in
any way that would throw light upon the points raised in the
article?
6. Do you believe a manufacturer can, with justice to him-
self and the consumer, give a guarantee short of the ideal one
described in the last paragraph of the article?
This list of questions brought out replies from twenty-five
manufacturers who in the main agreed that the guarantee has
24 ADVERTISING AND THE CONSUMER
no value unless it takes the form of a plain, unequivocal agree-
ment to “make good” any purchase the consumer finds un-
satisfactory.*
(3) THE CHANGES IN THE CONSUMER AND IN
CONSUMING CONDITIONS
The most conspicuous feature of the relation between the
advertiser and the consumer is the fact that so far as the con-
sumer is concerned nothing whatever is stable. Most of the
rest of this compilation will be devoted to some of the elements
of instability and change which are conspicuous in the distrib-
uting organization and in the advertiser’s problems, but in
addition to these, there are countless elements of change in every
market. Forexample, George L. Sullivan brings out the following
points covering some changes in the automobile market result-
ing from the general downward tendency of automobile prices.
Each drop in price changes the size and character of the manu-
facturer’s market:
* > * I do not think there ever has been an opportunity
like the present one for manufacturers to watch, right out in the
open for all to see, the vital play and interplay of the forces of
market-making.
About a year ago, at the time the cyclecar threatened to
invade the automobile market, a very shrewd observer of auto-
mobile conditions in this country made this remark:
“The trouble with us in this country is that we began to
build automobiles at the top of the pyramid of prices. The
little section at the top of the pyramid was quickly filled. Then
makers began to realize that the nearer they approached the
base of the pyramid in prices the wider they increased their
angle of possible customers, and with every reduction of $100
or $200 in any model, they made it possible for a constantly
increasing proportion of Americans to purchase automobiles.”
Automobiles since their first manufacture, or more correctly
*Printers' Ink, July 23, 1914, p. 3, and July 30, 1914, p. 56.
fprinters' Ink, July 29, 1915, p. 26.
ADVERTISING AND THE CONSUMER. 25
after a period covering two or three years immediately follow-
ing the inception of the industry, have had a constant tendency
to drop in price. The betterment of the product has kept con-
stant pace with this downward trend in prices, so that to-day
it is possible to buy an automobile fully equipped, with every-
thing that the owner may desire, at about one third the price
he would have been asked for a less perfect product even five
years ago, and to which he would have had to add as extras,
and at an additional expense, such things as windshield, top,
horn, speedometer, etc.
With every succeeding season the public asks itself how much
lower the automobile can go and still be worth buying. Enor-
mous productions and standardization of manufacture
With , have been largely responsible for the reduction in
sº prices. It is obvious that when a manufacturer
‘.... turns out 300,000 units all exactly alike, his overhead
Drops per unit and cost of materials and labor are very low
in comparison to similar charges against any one of a
number of models.
This multiplicity of models was the cause a few years ago of
nearly wrecking one very large manufacturer who was very
well known. When the reorganization committee took hold
of the proposition they insisted that the number of models
should be reduced from over 60 to 12. To-day that concern
is in a more healthy sound condition than ever before.
The reduction of prices this year has made a very deep im-
pression on the buying public. A car that has been selling for
two seasons at $1,075 has been reduced to $750. It is identi-
cally the same car. Another model selling at $1,550 has been
reduced to $1,350. This, too, is identically the same car as at
the higher price. This reduction has been duplicated in many
instances.
The question must inevitably arise in the mind of the man
who paid $1,550 as to whether or not he had furnished the manu-
facturer, distributor, and dealer an unjust profit. And this
question may be truthfully answered “no,” because at the time
he purchased his car the cost of production at the factory was
proportionately higher than at the present time.
Another question which comes up to every thinking man at
the present time is this: What is the significance of the pres-
ent reduction in price and what will be its effect in the purchase
of an automobile? The first significance of it has been touched
26 ADVERTISING AND THE CONSUMER.
on above, i. e., the ability of the manufacturer to produce at
less cost and his willingness to give his purchaser the ability to
buy a better product at less cost.
Probably the next significance of it is the effect it will have on
the second-hand car market. The dealer will suffer some in-
trinsic lack of profit, perhaps not in percentage but in actual
money, which will force him to efforts toward a greater sale.
At the same time it will make him very cautious about taking
in second-hand cars as partial payment for new cars. This
will result in the owner of a second-hand car being dissatisfied
with the deal offered him by the dealer, and he will decide
i. many instances to run his present car another season at
east.
On the other hand, it will bring into the market a great
host of people who have long desired to own an automobile
and who now find it within their power to purchase a new car.
In other words, the angle of the pyramid will have progressed
near enough its base to have included them in its purchasing
power. . . .
What the insurance companies would call “actuarial figures”
show that this country can absorb between six and seven hun-
dred thousand new cars every year.
This observer points out that the production of a million
cars means a production of one car for every one hundredth
person of the entire population of the United States—man,
woman, and child. Based on the average life of a car of three
years, and taking into consideration the growing tendency
for a man to keep his car more than one season, these figures
would provide one new car a season for every thirty-third person
of the entire population of the United States—man, woman, and
child. He predicts an enormous overproduction, and it is not
expected that foreign conditions will better themselves suffi-
ciently soon to make the foreign market a dumping-ground for
any of this surplus.
Already some of the larger manufacturers have grasped this
fact and have curtailed their original plans for enormous pro-
ductions. In one case a concern making 10,000 cars this year
announces 75,000 for the coming year, but have cut that to
50,000. Even with these reductions, this man thinks that there
will be a great overproduction.
Every year the automobile is coming to be more certainly a
utility. The man who drives 50 miles into the country of a
ADVERTISING AND THE CONSUMER 27
Sunday afternoon and 50 miles back is not nearly as numerous,
with the exception of the enthusiastic brand-new owner,
... as he was a year ago. He is going back to his golf,
* his tennis, his gardening, or his quiet Sunday at home,
...” and the car stands in the garage or is used to bring
Üülity his guests from the station only.
A striking instance of this, which is developing
all over the country, is observed in a very small Jersey town.
This year eight men whose average income is not over $4,000
a year have purchased automobiles. They are used almost
entirely by the women of the families to run over to the
county town for shopping and to the neighboring golf-courses
for a round of golf. But these cars are used very little by
the men. Perhaps not more than once a week for the mere
sport of riding somewhere and coming back.
I look to see automobile selling and advertising proceeding
from now on with some degree of certainty as to possible de-
mand. Every well-wisher of the industry can ask nothing
better than that automobiles be sold on their utility basis, for
being so sold, they will in the main be sanely sold.
One other illustration of the extreme changeability of a
market is to be found in the effects upon certain markets pro-
duced by the pursuit of sales. This is illustrated by the fol-
lowing unsigned article, describing how an optical company
developed a new field. It shows how a market sometimes grows
by being appealed to.
*About four years ago a man holding a prominent position
in one of the great American steel industries walked into the
office of the Julius King Optical Company, New York, with an
unusual request.
“I want you to make us some safety goggles,” said he, “for
our workmen.”
At that time the market was flooded with goggles of the
crudest nature: clumsy affairs with thick glass, wire netting
oggles which ruined a man’s eyesight, their makeshifts of
isinglass which shattered at the lightest tap, and dozens of
*Printers' Ink, February 11, 1915, p. 33.
28 ADVERTISING AND THE CONSUMER
barbarous contrivances made without regard to the health,
comfort, or appearance of the workman.
The Julius King Optical Company, in its capacity of handling
a wholesale jobbing optical business, sold various of these im-
ported models without having a very clear conception of the
field or its needs. In a general way the officials knew that the
annual sale of glass eyes ranged in the neighborhood of from
20,000 to 30,000; but where this large number of glass eyes
went was an unknown problem. That people lost the use of
their eyes was accepted as a matter of course, but at that time
little attention had been paid to tracing where the false eyes
went and what causes had been responsible for the destruction
of eyesight.
Acting upon the request previously stated the company began
to experiment with the safety goggle proposition with a view
of making radical improvements over the crude imported types,
and as the work progressed many interesting and undreamed of
things came to light.
For example, it was discovered that the annual toll of eyes
sacrificed in the industries of this country was great. In this
country alone there are over 80,000 blind men who owe their
loss of vision to the fact that their eyes were not protected, and
it was disclosed that 40 to 50 per cent. of the accidents taking
place in industrial plants were eye accidents.
Figures like these were significant, and as the market pos-
sibilities of the safety goggle began to be unfolded the company
plunged deeper into the subject, with especially keen interest
when it was realized that the great majority of these accidents,
with their attendant suffering, pecuniary and economic loss, were
inexcusable and unnecessary.
Standing on the threshold of what looked to be an unde-
veloped branch of the optical business the company had much
to learn, and the market was carefully investigated
F. A. in order to find out the exact standing of the goggles
held Un- tº
... thus in use. It was found, as the result of a thor-
ough canvass, that, except in rare instances, opera-
tives in most lines of industry carried on their work without
special means of guarding their eyes from particles of abrasive
and flying steel chips, rivet heads, and other objects, menacing
the unguarded eye. Employers of labor were for the most part
indifferent toward extending the use of eye-protectors in their
shops, and as far as the men themselves were concerned the
ADVERTISING AND THE CONSUMER 29
attitude bordered almost on antagonism. There seemed to be
a prejudice against wearing goggles while at work; users claimed
that the practice hurt their eyes, shut out their light, and did a
hundred and one other things. A certain small percentage
wore the various ungainly makeshifts then on the market, but
the majority preferred to “take chances.”
It was soon seen that there were two factors to the spectacle
problem: first, securing suitable spectacles; second, getting
them worn. As far as the first factor was concerned the Julius
King Optical Company reasoned that it had this branch of the
problem solved. As regards the second factor, it was realized
that the success of the “Saniglas” goggle depended upon the
result of a campaign of education brought to bear upon both
employer and employee.
It was just about this time that the “Safety First” crusade
touched the shores of this country on its way from Europe and
started to sweep a broad path through the great industries.
Nothing could have been better than this for the spreading of
the gospel of eye protection, and the company made the most
of it, riding the crest of the wave.
While a great deal of the educational work was done by per-
sonal solicitation, advertising played a great part in the cam-
paign—and the same conditions hold good to-day.
Naturally the subject enabled a collection of very striking
material to be accumulated, not the least important of which
were photographs by the score of workmen minus an eye.
While affording an unpleasant sight the evidence was extremely
forcible and photographs of this nature were, and are, used in
all sorts of ways and combinations. Metal hangers for shop
use were made to reproduce some of the most startling examples,
and catalogues and booklets pictured the results of not wear-
ing goggles. Very important, also, were pictures secured of
goggles which had been broken on the job, yet which had saved
an eye. . . .
In this campaign of education the company is being helped
to-day by a form of publicity of the most valuable kind which
has its origin in the safety department of some of the great
industrial companies. Many industrial concerns, among them
being the American Car and Foundry Company and the New
York Central Lines, furnish safety goggles free of charge to
their workmen; the two companies mentioned using the “Sani-
glas” goggle. These companies issue educational booklets of
30 ADVERTISING AND THE CONSUMER.
their own for distribution among their men, urging them to
wear goggles while at work. While the trade name of the goggle
is not mentioned, the Julius King Optical Company secures
practically as much benefit as if it issued the literature itself.
Twenty thousand copies of a bulletin were issued by the
American Car and Foundry Company. The front cover of this
Safety Bulletin, as it is called, bears the injunction—“This
bulletin is an appeal to the workmen for their co-operation in
preventing eye accidents. Take this home with you.”
The bulletin itself is largely pictorial. A page shows a series
of four pictures telling the story of a chipper in a foundry who
was handed a pair of safety goggles by his foreman. Rather
than wear them the workman fastened them to his hat, an
accident happened and the final picture shows him coming out
of the hospital. The bulletin is full of just such vivid evidence;
the kind that grips the reader and sets him busy thinking. . . .
Much more might be told of the manner in which the com-
pany is winning, as, for example, the practice of fitting special
prescription lenses into the frames in order that each wearer
may have the glass exactly suited to his vision. It is service
of this order which is winning the men in the shops and foundries
away from the old idea that goggles were merely blinders and
incidentally increasing their efficiency 25 to 50 per cent.
There are twelve Saniglas salesmen on the road, visiting
plants in all parts of the country and doing missionary work.
These salesmen report visits in full, and from them much valu-
able data is secured which is used in advertising. It is almost
impossible to go into any plant in the country and not pick up
a good “eye story.”
(4) THE NEED OF CLOSE CONTACT BETweBN ADVERTISER
AND CONSUMER, -
It is obvious that with the distributor’s direct dependence
upon the consumer and with the constant change which is
going on in consumer conditions, it is necessary for the adver-
tiser to keep in close touch with what the consumers think of
his goods. Ernest Cohn, Advertising Manager of the Kahn
Tailoring Company of Indianapolis, Ind., discusses this as-
pect of the question as follows:
ADVERTISPNG AND THE CONSUMER. 31
*A number of years ago an enterprising machinist hit upon
one of those happy ideas which are both patentable and sal-
able and started out in a small way as a manufacturer. Gradu-
ally extending his business, he finally assumed the place where
his advertising required the assistance of experts.
The fact that the proportionate increase was even better
after the organization of his advertising department than it
had been in those old days, when he himself had done every-
thing about the shop from assisting the shipping clerk, helping
out the assembler, and running the ads, made him believe that
his publicity was now 100 per cent. efficient.
What was his surprise, therefore, when one day a large
user of his invention said to him, “Mr. Blank, I have often
wondered why you don’t advertise the fact that your machine
not only does the punching and stamping claimed for it,
but is useful also in handling intricate folds of metal which
otherwise have to be made with slower and less satisfactory
appliances.”
Now, as a matter of fact, Mr. Manufacturer had never
known or dreamed that his product had uses with which he
was unfamiliar. The idea had been the child of his own brain,
and had been his pet through the years of its development and
exploitation. Surely no one could be more familiar with it
than he was. And yet, though this machine had been origi-
nated for a certain specific purpose and all the advertising
and sales literature had been promulgated with that one use
in mind, it had remained for a user to call the attention of the
inventor to a new field of usefulness for the contrivance—a
field which opened up new possibilities for the advertising de-
partment and new activities for the sales department.
Naturally the inventor—his faith in his full familiarity with
his product badly shaken—made a hurried trip to the shop of
his informing customer and saw his machine in actual operation
on work to which he had never thought it could be adapted.
After that he sent his advertising experts on the same errand,
and as soon as the story of the new discovery was correctly
told throughout the trade, he found his sales were increasing
in two channels.
First, he found that he could sell additional machines to
plants already using a limited number, because the increased
*Printers' Ink, January 8, 1914, p. 86.
32 ADVERTISING AND THE CONSUMER.
use of the machine along the new lines made it imperative for
shops which were now using their present equipment to the
fullest capacity for the purposes for which it had been originally
pºsed to install additional ones to take care of the new
WOI’Ke
In the second place, he found it was possible to get his prod-
uct adopted by people who previously had no use for it as it
was described in the original advertising matter—
A º but found they could not do without it after the
** sº revelations made in the newer copy. For example,
Here there were some shops which could not use the machine
for cutting and stamping, but which had urgent need
for a high-speed metal-bending machine.
By exploiting both uses the firm both lined up new customers
and increased the buying capacity of those old users who were
susceptible to the fullest use of the machine.
This man did not stop there. He arranged his office affairs
so that he could get away on a short trip and, donning a pair of
overalls, secured jobs incog. in a number of shops in his territory.
Naturally this was not difficult, since he made his wants known
to the heads of the plants, although to their workmen he ranked
no differently than any other shop employee.
By this means he succeeded in learning a number of tricks
which users of the machine had put it to, and which he never
would have known had he continued in the old rut of directing
his business without inquiring into what others knew about his
product. What he learned by this method not only served to
increase sales, but gave a new impetus to the publicity of the
company, in that it gave the advertising department new things
to talk about—that ever-welcome opportunity to spice up the
publicity and make the ads tell a continued story.
Of course, not every large advertiser has to be shown that it
is to his interest to learn what others know about his goods, and
not all need to employ subterfuge in doing it.
For instance, numbers of food manufacturers maintain their
own experimental laboratories for the discovery of new uses and
combinations of their products, while others achieve the same
results by interesting cooking schools and culinary authorities,
as well as by offering prizes to housewives for new and practical
recipes in which their product is specified. Thus they manage
to secure the proper viewpoint, that is, the consumer's viewpoint,
in regard to their wares.
ADVERTISING AND THE CONSUMER. 33
One food manufacturer, however, hit upon a very novel plan—
much less expensive than the ordinary one. He was a manu-
facturer of a package brand of cornstarch. For some
Cooks, time he had felt that his product could be given a
Nº., wider use in kitchens which would result in increasing
for sales if he could but devise new recipes for it and new
Cornstarch uses to which it could be put.
- He hit upon the very simple plan of hiring and re-
hiring cooks, all of whom were given a short reign in his kitchen,
and to all of whom—through his wife—without letting them
know that he was in that business—he gave instructions to
prepare a variety of cornstarch dishes. By encouraging the
originality of his successive cooks and by affecting a keen en-
joyment of each new cornstarch combination, he really put a
premium on the origination of new cornstarch recipes.
Of course his plan was rather hard on the cooks, but by means
of connections which he formed with an employment agency he
managed to let them down easily by finding new places for them
as necessity arose. And at the end of his cook-hiring experi-
ment he found that he had learned more about his product than
he had ever known before. A brand-new cookbook entitled
“New Cornstarch Dishes That Tempt the Palate” was the result.
One feature of learning what the user knows about your goods
may not be immediately apparent to the casual reader, but on
second thought it is easily discernible. For if it is possible
through the user of your goods to learn good things about them
it is also possible through them to put your finger on serious
flaws which may not be readily apparent to the manufacturer
and his force (and which may be retarding the growth of sales)
thus giving you the opportunity to repair them.
For instance, a manufacturer of a new office device found that
though it was an easy matter to make original sales for a single
machine it was extremely difficult to close deals whereby he
could later entirely equip large offices with his device. This
was the case in spite of the fact that the sales force repeatedly
made the assertion that something was holding back complete
office installations, and no one could lay his finger on the reason.
There seemed to be no discoverable objection against the ap-
pliance, yet for some reason or other there was not that decisive
approval of the device which would get it used throughout
large offices in spite of the expense attached to the installation
of a complete equipment.
34 ADVERTISING AND THE CONSUMER
As is usually the case, the fact that the first machines sold
readily was taken as conclusive evidence that the product was
good. And the fact that it was impossible to close larger deals
was also taken as unquestioned evidence that both the adver-
tising department and the sales force were at fault. One shrewd
salesman, however, finally made up his mind that though the
machine looked good on demonstration, for some reason or other
it had not worked right when put to the actual test of continuous
normal working conditions.
For this reason he asked an indefinite vacation and improved
his time by finding employment in an office in which a trial
machine had already been installed. Here he could,
#. # from day to day, watch its operation and manipula-
nº."... tion. Finally he discovered that the reason the
covered machine did not go well after the first demonstration
was because the shifting of a single lever was more or
less a clumsy operation and served as a sort of “mental hazard”
or unconscious handicap to the acquisition of ease and speed of
operation. This had not actually prevented the acquiring of
speed, but it had discouraged it.
Thus it is seen that it is important to know what the user
knows about your goods, not only because by finding new uses
for them you can extend their field and liven up their
Ascer* advertising, but also because if your product has any
‘.... faults or apparent drawbacks which the user knows
yiewpoint and which it is possible to repair, not only will that
knowledge be the open sesame to further success, but
the lack of it will be found to be an actual stumbling-block in
the path of sales progress. And a change for the better always
puts a fresh incentive back of the advertising—giving it the
pleasant aspect of change and progress.
And indeed the consumer’s viewpoint does not always come
as an accidental inspiration from without. Those cases are
the eacceptions. The man who knows best what the user knows
about his product is the one who finds it out by means of careful
and cautious investigation and by the affable “mixing” with
the class of people who actually use the article. Thus, some
manufacturers of machinery make it interesting to a few bright
employees to keep on good terms with mechanics who actually
use their product. Other organizations keep investigators
travelling all the time “butting in?” at stores where their wares
are handled and calling on people who use them—not to sell
ADWERTISING AND THE CONSUMER. 35
goods, but just to see how things are running and to learn, if
possible, something new about the product.
Methods employed by certain manufacturers for keeping In
touch with the market are described in an unsigned article as
follows:
*“I am the complaint clerk for this business,” said the pres-
ident of a pretty large corporation to a Printers' Ink representa-
tive. “By that I mean to imply there is nothing so important
in this entire business as the proper handling of customers who
for any reason whatever have become disgruntled. I figure
that every old customer should produce five new ones. I
spend more in advertising to get my first sale than the profit
actually amounts to. Therefore, if I don’t get those five addi-
tional sales, my advertising has been a losing investment.
“Not only that, but complaints enable me to keep my finger
on the pulse of every department of the business. If the factory
superintendent relaxes his watchfulness, if the delivery depart-
ment grows careless, if some of the salesmen promise too much
for the sake of forcing a sale, my record and analysis of com-
plaints flashes a warning signal. Instead of regarding dis-
satisfied customers as a nuisance and keeping as far aloof from
their kicks as possible, I insist upon knowing the details. I
want to know whether a certain class of complaints is increasing
or decreasing. I want to know whether we can improve our
goods, our packing, our selling methods, etc., and so I go on a
still hunt for complaints rather than try to shut them off.”
In the last statement particularly is indicated a modern
tendency of successful business. Captains of industry now-
adays are not waiting for complaints voluntarily to put in an
appearance. Scouts are being sent out to unearth complaints
that might otherwise never be heard of. Sometimes adver-
tisements are so adroitly worded as to invite the sending in of
complaints. And then, when received, they are not handled
perfunctorily by a cheap subordinate, but are analyzed and
tabulated by some person of good judgment who is capable of
reading out of them fundamental principles of vital importance
to the growth of the entire business. . . .
*Printers' Ink, February 26, 1914, p. 85.
36 ADVERTISING AND THE CONSUMER.
The cases quoted are all typical big businesses, but the les-
sons they convey can be utilized to a greater or less extent by
every manufacturer or merchant who has dealings either di-
rectly or indirectly with the great consuming public.
The establishment of “service” departments, which are in
their essence departments for the handling of complaints and
the satisfying of complainants, has, under some form or other,
become a regular feature of these organizations.
In them complaints are received, settled, analyzed, classified,
and recorded, and from such a department the various other
branches of the organization are notified of the troubles and
their causes, and such conclusions are drawn as will best insure
greater efficiency for the future.
Such an organization may sound formidable, but, in practice,
a very small staff under a capable head will do a surprising
amount of effective work, and those firms which have tried out
the system thoroughly are generally convinced that it is a pay-
ing proposition in every sense of the word.
Complaints readily divide themselves into classes, and one
will often resemble another so closely that the same treatment
fits them both.
The New York Telephone Company finds that its main
causes of complaints usually take stereotyped lines—delayed
or imperfect connections, defects in appliances, re-
How Some moval and installation troubles, and disputed toll
£º charges.
comine To facilitate dealing with them the company
Handled has located district managers in various parts of
the city, and through these offices the various trou-
bles are traced and suitable explanations or adjustments fur-
nished.
To trace actual examples: A writes indignantly to complain
he has not had his new telephone installed. Reference to
the file shows that sufficient time has not been given for the
work to have been done. The complainant has the facts
courteously placed before him and is usually pacified.
B claims he did not make a certain call charged against him.
The toll slips are examined and date, time, and place established.
Usually this suffices, but occasionally the reply is that the
alleged party called is unknown, and in such cases compromise
is the only way out.
C could not get a number promptly, and here, said Mr.
ADVERTISING AND THE CONSUMER. 37
King, manager of the Murray Hill District office, is our most
common source of complaint. Turning to the switchboard,
he showed convincingly how much easier it is to give an im-
mediate connection—just a few mechanical movements and
it is done—whereas any failure means three or four rings and
usually a heated but one-sided argument from the party mak-
ing the call.
“We find it easier and cheaper to avoid complaints than to
give cause for them,” continued Mr. King, “and I am pleased
. . to say that courteous attention and careful explana-
# tion of the causes usually prove effective.” In
&j, fact, this company is going a step further, and pur-
poses using the advertising columns of the daily press
for the purpose of “heading off complaints by pointing out
how the public themselves can assist in the giving of better
service.”
Express companies have come in for a considerable share
of public opprobrium, and it is by no means surprising to find
that they are beginning to realize that it is better to meet
justifiable complaints frankly and to make friends with the
public by such improvements in their service as seem called for
by their own experience.
Claims for delay, loss, and damage have formed a heavy
percentage of an express company’s expenses, and it is
with the double view of settling claims promptly and of also
eliminating the causes that the Wells, Fargo Company has
during the past year inaugurated a service department with
E. H. Stevens, an experienced express superintendent, at the
head, and offices in New York, Chicago, St. Louis, San
Francisco, Los Angeles, and Houston, each under an experienced
manager. -
Mr. Stevens thinks the public feeling has been that it was
almost useless to complain to an express company unless one
had a “pull” because of the great quantities sent by
How One express, but realizing that this unsatisfactory rep-
#### utation meant actual loss of de business, the new
{j} departure is based on equitable lines, the policy being
to further to pay every just claim as soon as it is presented.
Efficiency To gain any real benefit, however, it was felt that
the department must endeavor to locate the trouble
and eliminate it. One of the means adopted is that of a travel-
ling squad of “inspectors.” These men visit points where
38 ADVERTISING AND THE CONSUMER.
troubles are frequent, find out the causes, and straighten them
out. Mr. Stevens pointed out that every claim meant a dis-
tinct loss in money, and that not infrequently the fault was
directly traceable to the error of an employee of the company.
“If that is so, we want to know it and either educate the man
to the proper way of handling the traffic or else put a competent
man in his place.” These ideas are brought prominently
before every employee in the Messenger, a monthly house-organ
which is chiefly made up of helpful and instructive talks on
better service and kindred subjects.
Before leaving the subject of public-service corporations it is
interesting to note that at the national conference of commercial
... gas managers, held at Philadelphia in December,
T}. º special attention was given to this subject, a com-
tº "...a mittee being appointed to investigate and its report
Work made the occasion for an extremely spirited session,
wherein the conviction was almost universally ex-
pressed that the old “public be damned” attitude was dead,
and that from all points of view it paid to study out consumers’
complaints and to trace and remedy the causes.
The committee was made permanent and was further en-
trusted with the task of preparing textbooks of instruction
on the subject for the use of employees of the various com-
panies.
Turning from this class of corporation to another group which
also deal at close quarters with the user, we find that manu-
facturers of the various machines so common in our offices find
it essential to their business to keep in touch with their customers
after the sale and to use every care to insure satisfactory
service.
Many of the typewriter companies maintain an inspection
service which insures that every machine in use shall be visited
periodically, cleaned and adjusted. They further give free
instruction to operators in the care of the machines, and, in
addition, maintain a corps of skilled repairmen to look after
more serious troubles.
All this is done with the sole view of avoiding cause for com-
plaint and may be classified under the head of “Service.” It
is admittedly expensive, but even at that it is claimed to
pay better than leaving the customer to shoulder his own
troubles.
The Burroughs Adding Machine affords another striking
ADVERTISING AND THE CONSUMER. 39.
example of service to customers. So far is its maker from
waiting for complaints that a fully equipped service de-
partment is kept constantly on the move, and as
Service” a rule every machine sold is visited three or four times
Fºp a year at least.
p.ſ., No sooner is a sale made than it is recorded on a
Uses service card, with number and kind of machine,
date of sale, and all details.
Prospective users are carefully instructed in the use of the
machine at the start, and a few days after delivery a letter is
sent asking if everything is satisfactory, or, if not, for details
of the trouble.
Sometimes this arises from the ignorance of the operator,
the omission of some simple operation, or even occasionally
from the fact that the machine purchased is not exactly suited
to the work required, all of these being quite outside the ques-
tion of defects in the machine itself, but the same care is taken
in each instance to leave the customer absolutely satisfied.
Typical of still another class of business, in the Aeolian
Company of New York we find still the same tendency.
Its problem is slightly different from those already cited,
although the results are practically the same. To sell a highly
technical instrument like a player-piano to a public compara-
tively unused to mechanical devices of any kind requires con-
siderable tact and care, not only in the original sale, but in
the after handling of the customer.

(Customer's Name) Date. . . . . . . . . . . . No.
Defective Part Finished Product
Bought. . . . . . . . . . . . . . . . . . . 19. . Sold . . . . . . . . . . . . . . . . . . . . 19. .
TOID. . . . . . . . . . . . . . . . . . . . . To. . . . . . . . . . . . . . . . . . . . . .
Made . . . . . . . . . . . . . . . . . . . . I9 Shipped. ... . . . . . . . . . . . . . . 19
By. . . . . . . . . . . . . . . . . . . . . . . Route. . . . . . . . . . . . . . . . . . .
Packed. . . . . . . . . . . . . . . . . . . I9 Reported. . . . . . . . . . . . . . . . . 19
By . . . . . . . . . . . . . . . . . . . . . . By. . . . . . . . . . . . . . . . . . . . . .
Remarks . . . . . . . . . . . . . . . . . Complaint . . . . . . . . . . . . . . .
Claim . . . . . . . . . . . . . . . . . . .
FRONT OF CARD-RECORD OF GOODS
40 ADVERTISING AND THE CONSUMER.

Claim made on. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19. .
How settled. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amt. $. . . . . . . .
Remarks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net loss $... . . . . . . . . . . .
BACK OF CARD-RECORD OF COMPLAINT
These details would, of course, be subject to alteration as required by the
particular business. This card has been used successfully by a rubber manu-
facturing firm.
Although every improvement has been adopted to render
the instrument “fool-proof,” there are yet certain adjustments
and mechanical attachments which require to be
4eºlian's thoroughly understood before entire satisfaction can
*... be obtained.
º To “head off” trouble as far as possible is, there-
Purchasers fore, the aim of the Aeolian Company’s service de-
partment, and a free instructor is sent to the user's
home to show the entire family, if necessary, how to operate
the instrument properly. The service record cards are also
used as part of a follow-up system for the sale of music rolls
as well as for keeping in touch with the condition of the instru-
ſº and possibly leading up to an exchange for a more recent
IſlC)O1621.
So it would be possible to go from one field to another and
add to the list of firms which have adopted the practice of
heading off their complaints by—to use an Irishism—taking
care of them before they happen. It all points to the growing
tendency among manufacturers to profit by their own mistakes
and to eliminate the cause as far as possible.
It is claimed by the makers of National Cash Registers that
many of their most important improvements were suggested
ADVERTISING AND THE CONSUMER. 41
by users who found the regular type of machine did not do what
they wanted. So with almost any business. It is not sufficient
merely to settle a claim or silence a complaining cus-
How Cash- tomer. There is something at the back of every
#. complaint, or it would never have been made, and
ClF667°S. e &
P. by when these are sufficiently numerous in any one
Complainis direction to indicate some defect in the product, every
investigation should be made of the cause and every
endeavor made to remedy it.
Some of the greatest advances of recent years have been
evolved out of some apparently trivial cause of complaint, and
this applies not only to cash registers, but to typewriters, add-
ing machines, and almost every modern domestic or business
appliance.
Every reader of Printers' Ink owes it to himself to look into
this question of complaints. If there are many of them, get a
full report on each, dig down for the cause, and ten to one the
remedy will not be far away.
Even the apparent laxity or want of interest among employees
has sometimes a deeper foundation than just laziness or cussed-
ness, and a little “gum shoe” work along these lines may prove
a permanent blessing, even if in the disguise of a disgruntled
Customer.
The manufacturer who desires to systematize his complaints
or to create such a service department with a view to the im–
provement of his product has no need to set up an elaborate
Organization. -
All that is required is a small card index to carry a set of
cards classified according to the particular lines on which the
complaints are found to run.
These need not be larger than five by three inches or six by
four inches, and a set of 500 cards in various colors will fill a
single drawer file. The colors are suggested as a means of
classifying the cards according to the fault complained of, thus
showing at a glance whether any particular form of complaint
is more or less prevalent at any particular time.
Thus, a selection of pink cards could be taken instantly
from the file, showing convincingly not only what this partic-
ular fault happened to be, but also who was responsible.
By means of dividing index cards, they could be further
classified into groups by territories, or in such other form as
might be desired. For instance, a jobber might require to
42 ADVERTISING AND THE CONSUMER.
know the percentage of complaints on a certain manufacturer's
goods. By means of this sub-index the facts would be easily
ascertainable. Any system adopted would necessarily be
subject to modifications, but the sample card shown may be
readily adapted to any business desired.
The front of the card records the outward or factory end of
the transaction, while the back is reserved for the details of the
settlement.
By “guaranteeing” his product a manufacturer does not
absolutely warrant that every piece is absolutely faultless, but
he does imply a readiness to be responsible for all defects, and
by so doing he at once places himself in closer touch with the
consumer and incidentally gains a keen insight into the merits
and defects of his goods.
That this is good advertising and good business is borne out
by the experience of such firms as the “Holeproof” company,
which, encouraged by the success of its “Holeproof” hosiery,
has added a “Holeproof” glove also to its line. It is admitted
that a certain small percentage of these goods do wear out
within the limits of the guarantee, but as they are promptly
replaced, the effect to the consumer is the same as if they had
not proven defective, while the experience gained through the
settlement of such claims is utilized in the direction of further
improving the quality of their products.
The cost of maintaining such policies as those outlined is,
naturally, an item for investigation, but while it was admitted
by one firm that at the outset it added 5 per cent. to its expenses,
it was claimed that this loss was more apparent than real, being
more than made up in the long run by improved service, and
that by a gradual reduction of the causes of complaint this
percentage had been considerably reduced, and that as business
had also greatly increased through the system, the firm had
ceased to regard it as an expense item at all.
This experience was more or less corroborated by all the firms
interviewed, the general verdict being that, viewed even as an
investment, a service department was a paying proposition.
These excerpts from articles concerning the relations between
the advertiser and the public make it clear that ability to serve
the consumer involves an understanding of the enormously
complicated series of processes involved in the distribution of
ADVERTISING AND THE CONSUMER. 43
merchandise under present-day conditions. No matter how
high the advertiser’s moral standards may be or how sincere
may be his desire to make his advertising of real service, a
failure to adjust his plans or adapt his methods to the distri-
bution processes may thwart him.
No one connected with advertising to-day possesses all the
knowledge necessary to make his operations perfectly sure.
But the body of knowledge which is available to advertisers,
large or small, rich or poor, is increasing constantly.
CHAPTER II
PROGRESS IN FETAIL ADVERTISING
purchases, figures in advertising problems chiefly in
two ways: (1) As an independent advertiser, and
(2) As a feature in national campaigns.
As an independent advertiser we shall consider at this point
only the so-called “regular” retailer. Department-store adver-
tising and other forms of advertising by large retailers we shall
leave for consideration at another point. The small “regular”
retailer depends for his continued existence upon his ability to
serve the consumer in matters of personal contact and conveni-
ence. This puts all the emphasis in retail operations of this
kind upon service and economy. If the small “regular” re-
tailer is able to render for the consumer the services which are
expected of him and do it at a price which the consumer is
willing and able to pay, he will be able to compete with other
forms of retailing. If he is not, he must expect to be eliminated.
As an independent advertiser, therefore, this type of retailer
finds his problems intimately associated with questions of
operating costs.
As a feature in national campaigns, the “regular” retailer’s
problems are concerned partly with his relations to his sources
and partly with his ability to compete with other forms of
retail distribution. These latter competitive relations are so
complicated that it will be necessary to devote separate chap-
ters to a number of them. In this chapter, however, our at-
tention will be confined to the problems of the “regular” retailer
as an independent advertiser.
y | WHE retailer, as the immediate source of the consumer’s
44
PROGRESS IN RETAIL ADVERTISING 45
(1) THE PLACE OF ADVERTISING IN BETTER RETAIL METHODs
During the past few years marked progress has been made in
bettering the methods of retailing. Conspicuous among the
methods employed in the betterments which have been brought
about is advertising by the retailer himself.”
In the year 1914 System published a series of articles on
“keeping up with rising costs,” which contained a large number
of figures on retail costs, prepared under the direction of Wheeler
Sammons of the System. Staff.f
This series of articles has been followed by a new series
relating the experiences of progressive merchants in attempting
to meet the problems discussed. These have appeared in
practically every issue of System since October, 1914. Several
of these merchants in reporting their experiences mention in-
creased speed of turnover as one of the most effectual methods
of meeting the problem of rising costs, and a number of them
recount in detail their experiences with advertising as a method
for increasing the speed of turnover. For example, in the first
article of the series, Carl J. Ricker, President of the firm of
S. F. Ricker & Son, Jewellers, of Emporia, Kansas, describes
five methods which he has employed in meeting the rising costs.
Of these, three have to do with advertising. He says:
f . . . In this article I am going to describe in detail
five of the broad policies I have used. They are, (1) adver-
tising focused on specific classes of customers; (2) special ad-
vertising plans; (3) advertising connected with local events;
(4) frequent trips to the primary markets; and (5) watchful-
ness for new lines.
*The Harvard Graduate School of Business Administration through its
Bureau of Business Research has developed a standard system of accounting
for boot and shoe stores and for grocery stores, and these systems have served
as the basis for accumulating a large amount of valuable material on the costs
of operating retail business. Further information concerning these may be
secured by addressing the Bureau, No. 1, Lawrence Hall, Cambridge, Mass.
fThis series has been brought together in a book bearing the same title
that the articles had originally. This book is for sale by the System Company.
£System, October, 1914, p. 378.
46 PROGRESS IN RETAIL ADVERTISING
First, then, come my ideas and practices associated with
directing advertising so that it hits hard. System’s cost investi-
gations indicate that on the average retailers spend
* from one half of 1 per cent. to 4 per cent. of their
2)6?"Sº! S tº e
Ad...n, sales for advertising of one sort or another. I be-
lieve this item in the cost of doing business is increas-
ing as fast as most of them. At any rate, they tell me about
advertising expenses of the eighties that rarely exceeded 1
per cent. of the sales.
I imagine my early experiences with advertising are typical.
I advertised rather as a matter of course. If I had not worked
out methods for bettering the returns I guess that I would have
gradually come to consider direct profits from the space I
bought little short of miracles. Judging from the amount of
time they give to their advertising, I believe a good many
retailers have actually given up expecting results. They
are in the habit of spending money for advertising, but con-
sider it a very bad habit. So they hold that the less time they
give to the spending the better.
Certainly I had enough discouraging advertising adventures
before I found the “how” of influencing my customers and
discovered that the advertising bills could be used to buy weapons
mighty effective in fighting rising costs. I spent from twenty-five
to fifty dollars at a time, in the early days, advertising absolutely
staple goods at less than cost. I failed to get a single reply.
Finally the truth of the matter simmered down to the fact that
I used newspaper space liberally because I was afraid to quit.
I tried large space and I tried small space. The story was
about the same every time—very few, if any, returns. I
keyed the advertisements in order to establish the pulling power
of each medium. For instance, I spent thirty-five dollars on
an advertisement to go in five papers, keyed so that we could
tell just what each one did. A paper with one hundred and
fifty circulation sent three answers; another with two thousand
readers pulled but one! And I might add that I netted about
ten dollars on the goods sold as a result, which left me twenty-
five dollars in the hole.
Of course, I would not like to say that the business did not
benefit indirectly from the advertising. Occasionally some
one wandered into the store and referred to our advertising in
a general way. But as a rule it was rather difficult to put my
finger on direct benefits from the money I paid out for space
PROGRESS IN RETAIL ADVERTISING 47
in the newspapers, signs in the post office and the hotels, ad-
vertisements in theatre programs, and “cards” in school papers.
Gradually I became convinced that I was doing too much
mere “announcing,” as they call advertising in New England,
and far too little real advertising with a definite sales pulling
power. Then I worked out my plan for focusing a profit-
able portion of my advertising appropriation on specific groups
of customers. The remainder of my advertising funds I
decided to connect up with special sales plans. Naturally
a small amount still went into lifeless “announcing,” but not
any more than I could help. I had found a way to make my
advertising both announce that S. F. Ricker & Son existed
and fight rising costs by actually pulling sales. The experts will
tell you that all good advertising does that, but I am afraid the
average retailer does more “announcing” than real advertising.
Here I am telling exactly how I carried out the task of focusing
my advertising expenditure—the first of the five plans described
in the article. It cost me more than three thousand dollars to find
the way. First of all, I decided that personal contact with pros-
pective customers is the best kind of advertising. But it was
evident I could not spend mytime advertising exclusively byword
of mouth—and keep the sheriff away—though I haveencountered
retailers whom I believe are endeavoring to do so.
Next I convinced myself that I should use a large share of
the money I had been spending on “announcements” to pay
o for advertising through the mails with lists focusing
Mºw my offers on the right class of customers. This
A. dºing cost a bit more than newspaper space, but I hit
Personal hard just where I wanted to hit. By mail, I reasoned
with myself, you can talk almost personally, certainly
in the style you usually use, and while the customer is reading
your letter he is not looking for news. It is true that for ex-
tensive campaigns direct mailings generally cost too much to
be used, but I am a retailer interested in exciting a limited sales
area. Moreover, my lessons from my direct advertising ex-
periences taught me how to make my newspaper advertise-
ments effective as sales stimulants.
Furthermore, in most places letters get into the home and
every member of the household old enough to do so at least
glances at them. If they are well gotten up, they pass as per-
sonal communications in the average house. Of course, you
would not be deceived by a form letter—still, take a glance at
48 PROGRESS IN RETAIL ADVERTISING
the second or third paragraphs of some of the letters you have
received recently from the factories before you agree with me too
enthusiastically—but on account of the facilities modern office
equipment affords it is not difficult to turn out form letters
that the general run of American families will consider personal.
There are several other advantages to using some of your
advertising appropriation on direct advertising. Your com-
petitors, for example, do not know what you are featuring when
you advertise through the mails, unless some one happens to
tell them or they are wise enough to arrange to secure your
mailings. Further, by direct advertising you can hold a special
sale limited to those to whom you write and those they tell.
It is exceedingly easy to extend special inducements to pros-
pects with whom your competitors have unusual influence.
Most important of all, you will not—if you focus your mail-
ings according to my plan—offer diamonds to both the bank
president and his gardener. You will avoid attempting to sell
the attorneys and the doctors dollar watches and plated spoons,
or whatever corresponds in your shop to the cheap lines of
jewelry stocks. In other words, you can make your special
offers to those who appreciate them most—your high-priced
goods will be described to the high-priced people, your medium-
priced stocks to those in moderate circumstances, and your
cheap lines to those unable to afford better. By the way, I
have found it wiser to over-estimate the prospect’s purchasing
ability than to under-estimate it. It is best, I think, not to
draw the distinctive line too close.
How do I collect these lists for my direct advertising? It is
cheapest to stock up at first by securing a list of the taxpayers
from the tax records. Then, when people come into the store
who are not on this list, they can be added. For instance,
suppose a woman comes in to look at knives and forks. She
decides that she will “drop in again.”
I always secure her name and address at this stage in the
conversation and make a note that she is looking at “k and f.”
Later I write her a letter and call attention to my
Starting lower-priced lines, if I believe she was shown too
Mään9 expensive stocks. If she fails to come in again. I
List mark the card carrying her name and address with
a signal to indicate that she is buying of competitors.
At reasonable intervals she and the others in the same “cus-
tomer class,” as I call the divisions of my direct advertising
PROGRESS IN RETAIL ADVERTISING 49
list, will receive special offers that I believe should interest them
in my store. -
Once the list is started, it grows almost automatically if every
sale is recorded on a sales slip that calls for the purchaser's
name and address. An extra carbon copy can be secured with-
out added effort, if your accounting system makes it useful.
I have a slip made out for each purchase. So that customers
will not think we are cross examining them unreasonably when
they make cash purchases, we give away many little gifts at
regular intervals to names drawn from our lists.
If a customer hesitates about giving his name and address,
we explain about these drawings from the list. After the
presents are awarded notices go to the lucky customers. Fully
two thirds of them call for the presents. It is not necessary,
naturally, to write out detailed information every time a steady
customer buys, but it would not take much time to do so, at
that. I also secure the names and addresses of all those who
use only the repair department, to add to my general list. The
detailed classifications concerned with age, credit, standing,
patterns of stock preferred, and the like are usually added when
cards are made out from the sales slips for new customers.
When using my direct mailing list I have in mind a number of
pithy facts about the purchasing power, as the economists would
style it, that lies right here under my nose, so to speak. Some
day I am going to write them out on a card for my salesmen,
and when I do, these will be among the first:
Every newly married couple surely need from the stores something in addi-
tion to their normal demand.
Every young man with a “best girl” is interested in certain lines, which in
jewelry include a diamond, and probably a plain gold ring.
Every piece of patterned stock is a foundation for more sales in the same
pattern.
Every owner of certain types of valuable possessions should have them re-
paired at regular intervals.
Every automobile owner has special wants.
Every baby offers a chance for varied sales, especially if its birthday is
recorded.
Every boy needs “grown-up equipment” of various kinds at a certain age,
and his father should be reminded.
Next I want to show how I handle these direct mailing lists.
I use a 3 x 5 card, although 5 x 8 size might be more service-
able. It is cheapest in the long run to use good cards. Along
50 PROGRESS IN RETAIL ADVERTISING
the top of the card runs a line reading: “1, 1A, 1B, 2, 2A, 2B,
3, 3A, 4, 5, 6, 7.” These signals, which are checked to fit each
case, have the following meanings:
1. Customer who uses high-grade goods.
1A. Customer who uses medium-grade goods.
1B. Customer who uses cheap goods.
2. Customer who uses high-grade goods but divides his business.
2A. Customer who uses medium-grade goods but divides his business.
2B. Customer who uses cheap goods but divides his business.
3. Customer of competitors who uses high-grade goods.
3A. Customer of competitors who uses medium-grade goods.
4. Prospect who sends off for goods.
5. Prospect I know will want something from my stocks.
6. Prospect living out of the city.
7. I leave this number blank for special occasions.
Over the check mark in this line of signals on each card I
place a small metal tab such as any business equipment shop
carries. I buy tags of a certain color for each of the divisions,
so that it is easy to sort my cards at a glance. On the right-
hand side of the cards I have these signals: “A, B, C, D.”
They have to do with credit standings and mean:
A. Good.
B. Good, but slow.
C. Not good. Unworthy of credit.
D. No credit information available.
The remainder of the card is not different from others in use
all over the country. There are these self-explanatory headings:
“Mr., P. O., No., St., or R. F. D. No., goods wanted, advertising
sent, date, results, remarks.” -
Under “remarks” I record the approximate age of each
customer and prospect, so that I do not spend money telling
young folks about goods only elderly people can use. Re-
cently I decided to send some direct advertising about “far
and distant” spectacles to elderly people and found I had over
five hundred suitable names. Under this heading I also classify
the names according to the special lines of my stocks in which
they are particularly interested.
These lists can be easily handled by a girl—at low pay—who
need give only a small portion of the day to them. If your
business is not large enough to warrant hiring a girl for general
office work, half an hour of your time, or a salesman’s, will do
PROGRESS IN RETAIL ADVERTISING 51
the trick. But unless it is absolutely necessary, do not give
your time to handling the routine of your mailing lists. Al-
though it does take a bit of time, a mailing list classified so as
to focus your advertising will more than pay for itself. At
any rate mine does. The savings which it puts into my profit
and loss account by bringing cash returns from advertising
expenditures I formerly expected to pull nothing, helps me to
make money in spite of the tide of rising costs.
So much for the first of my five plans. The second deals
with special advertising plans. In place of many of my dis-
. . carded “announcements.” I use advertisements about
A jº,g unusual advertising campaigns or stunts. I have two
p.” or three that go particularly well, but there is little
need for my describing all of them, for if I show the
advantage of hitching advertisements with unusual sales, others
will probably be able to think up plans better than mine.
However, I want to describe a typical sale. I have used it
twice, and it went better the second time than the first. In a
neighboring town, owing to a misunderstanding, it started a town
row which, of course, had only one effect on my business—to
help it along. When this plan is working, Ricker & Son are
usually the topic of conversation wherever two people living in
our selling radius meet.
I take ten prizes from stock: five watches that sell at a dol-
lar, three dollar-and-a-half watches, one man’s watch fitted in
a silverine case, and one woman’s filled watch. These I number
from one to ten and show in the windows. To ten people
known only by me as “volunteers” in my plan, I give tickets
numbered from one to ten with instructions to hand them to the
first person inquiring: “Do you trade with Ricker & Son,
the jewelers?” I tell about the sale in my advertisements—
no longer “announcements” when they have news such as this to
spread—and during the first few days hire a man to go aboutfiring
the question at every one he meets. Of course, those who get the
tickets receive the watches with the corresponding numbers.
Usually I hand several of the ten tickets to men out among
the public a great deal, and, curiously enough, these are
almost always the last to be located. In most instances the
lucky numbers are searched out in odd ways—at entertain-
ments, school affairs, and the like—which causes comment that
is the best kind of advertising. After the excitement is over
people tell how near they came to getting a prize or that they
52 PROGRESS IN RETAIL ADVERTISING
had intended to ask this one and that one. This sort of plan
does not cost much and it puts life into portions of my advertis-
ing costs which I had considered almost, if not absolutely, dead
items. If I get but half of 1 per cent. increased effectiveness
from my advertising bills as a result, it is just half of 1 per cent.
that I can count on to check rising costs.
My third method of keeping up with rising costs by securing
more sales at my old expense rate is to connect my advertising
with local events. This is worth while for the same
ał*!... reasons that make my methods one and two helpful
'vertising e & © *
f.” –it concentrates my advertising and takes it out
of the announcement class. For instance, when the
state normal school had a May-pole celebration, one of my
windows contained a miniature pole surrounded by dolls.
During our city ball league's season I usually show a little base-
ball field, with tiny players properly named. Under this
method belongs my belief that it is advantageous to connect up
with the manufacturer's national advertising.
At one time I tried to buck the 1847 silver national advertis-
ing. I spent a lot of money and in the end lost out. Now I
attempt to use the 1847 advertising and push my own line indi-
rectly when the opportunity offers. As a result, I am selling
more of both the 1847 line and my own. I also find it wise
to use freely the various advertising services offered to retailers
by the manufacturers.
Another article in the same series tells how Charles E. Spil-
lard, a clothing dealer in an Illinois town, utilized advertising
to develop what he calls “store personality.” A. portion of the
article follows:
*First of all, I decided that the customers must unconsciously
feel that the clerks had their satisfaction at heart absolutely
as keenly as I, the owner. Then they would not
pº object to buying from the boys when Spillard was
ºw not at hand. It was as plain as the nose on
Store your face that the clerks would not make an impres-
sion of this sort—of the strongest kind—unless I
made them, too, owners.
So I called the boys together and gave them a working interest
*System, February, 1915, p. 141.
PROGRESS IN RETAIL ADVERTISING 53
in the business. It was the most satisfactory deal I ever
closed. º
The advertising, for example, played its part. I wrote ad-
vertisements that emphasized the store policies we ratified at
the meeting which ended in the boys getting a share of the
business. I mentioned the boys in these advertisements.
This publicity made good.
Here is a sample of it:
MY BUSINESS BIRTHDAY
To-day is my business birthday. As a business man, I am fifteen years
old to-day. I can’t let the occasion pass without a word or two addressed par-
ticularly to the young men associated with me in the store (who have a profit-
sharing interest) and to the good staunch friends and loyal customers by whose
aid I have been able to climb a little way up the ladder of success.
Our motto has always been: “To the other man’s business we give our
respects; to our own we give our attention, our ability, and our all.”
Ours will always be a progressive and aggressive policy. For your business
we will fight with fair methods and first-class merchandise, not over-priced,
but never, never with slander.
I find it hard to express in a few words my deep sense of obligation for and
my sincere appreciation of your help and patronage. This means all of you—
the man who buys a fifty-cent working shirt, as well as the man who buys a
silk-lined overcoat.
Another—one that drew attention to the way the boys and
I buy:
OUR way—Is IT YOURs?
We’ve told you from time to time about our method of selling goods: Nothing
misrepresented, the same price to all, trade back for your money back, and so on.
We follow what we believe to be the best way—the fair way. We’ve often
said, “If you can tell us a fairer way, we’ll follow it,” and we will.
Now, we want to tell you about the way we buy. The boys here in the
store and I try our best to do what is right, not only in the selling, but also in
the buying. We think we sell the best of everything for the price. If it’s a
shirt for a dollar, ours is the best for that price. If it’s a suit or coat for
twelve-fifty to thirty dollars, ours is the best for the price. And it’s just so
with everything in the store.
This is the way we figure it. We don’t take any one man’s judgment in
any of the buying. Every one of us in the store helps to buy. When a shirt
manufacturer tells us he can offer us a better shirt to sell for a dollar, we com-
pare it with the kind we carry. We examine it from tail to collar band. We
first examine the quality, next the make, then the style, and then the fit. We
never ask a customer to buy them until we have tested 'em and tested 'em
thoroughly. That’s the way we do it with all the goods we buy.
When you buy, why don’t you try this buying method of ours? If you do
we will get the lion's share of your trade.
54 PROGRESS IN RETAIL ADVERTISING
One more—purely about store policies: ;
THEY CAN, IF THEY WILL–BUT THEY WON’T
“Why is your store a better place to buy a shirt, or anything in the clothing
line, than any other store?”
“Can’t other dealers use the same methods in buying and selling as you use?”
These are two questions I confronted the other day. Here’s my answer.
“They can if they will—but they won't.”
When the boys or I sell you a suit, we all strictly enforce this rule—we fit
you or we won’t sell you. We don’t sell you a suit, the coat of which you find
a little too low or a little too high in the neck when you get home. You will
not find the trousers too long or too short, and you will not find any other
defect, either. Nothing of that sort to our suits. They must be right before
they go out.
Another rule: Wool must be wool, not part cotton.
Another rule: The price is the same to everybody, and the lowest that
good, honest goods can be sold for.
A third rule: If by mistake anything should go wrong, or an error be made,
I stand ready and willing to make good. And you won’t be made to feel
uncomfortable when you bring the goods back, either.
Will you take time some day to visit my store? Then you can judge if it
is, or if it is not, the best place to buy.
Will you take time to see if my suits for $15, for $18, for $20, and the higher
prices, are not the best—and much the best—around this section for the price?
Will you take the time to look? Will you?
In the succeeding issue Mr. Spillard outlines somewhat more
fully some of the main features of the advertising policy.
* . . . I think most of us will agree that it is very diffi-
cult to decide what it is right to spend for advertising. Fur-
thermore, after we have reached a conclusion and paid out our
money, it is often even more difficult to trace definite results.
Under these conditions we are sooner or later tempted to treat
advertising as a bad habit, write our copy or dress our windows
in a lackadaisical way, and let it go at that.
Please do not think I am putting a pedestal under Charles
E. Spillard when I say that I have gotten enough out of my
advertising to warrant looking at it in a different way. Many
a time I have worked for hours over an advertisement and paid
out good money to have it printed—without obtaining any
sales that I could trace. But by fighting it out over and over
again, I now consider advertising one of the keenest weapons
with which to master rising costs.
*System, March, 1915, p. 267.
PROGRESS IN RETAIL ADVERTISING 55
It is a bit difficult to put into words exactly how I make my
advertising pay. Still I think I can do so in at least a rough
º and ready way. For one thing, I always have a defi-
Mºkºng nite object in mind when I start to write an adver-
Adv *sing tisement. I find that doing so gives a “slant” to the
9 e e
Pay advertisement. Ideas and statements which have
nothing to do with the object of the advertisement are
kept in the background. The result is that the reader carries
away the thought you really want to impress upon him, and
not a jumble of more or less vague impressions.
Here is a concrete example of what I mean—an advertise-
ment intended to drive home the fact that mistakes are bound
to occur every now and then, even in the best regulated of
stores:
ONLY ONCE IN A THOUSAND TIMES
A customer came in the other day—returned a shirt. The conversation
follows:
“How much did you pay for the shirt?” (Shirt still wrapped up.)
“I paid a dollar for it.”
“Here's your dollar. How long have you traded with me?”
“On an average, I buy something of you twice a week.”
“Let’s figure. Twice a week means about one hundred times a year. A
hundred times a year means that in ten years you have made about one thousand
purchases in my store—and only once in these thousand transactions has a
mistake been made. How many are there—in business for themselves or
employed—with whom something doesn’t go wrong once in a thousand times?
I can say—and say it honestly—that my percentage of mistakes here in the
store is even less than that. Still I stand ready to make each of these once-
in-a-thousand-times mistakes right. And if the time should ever come when
that percentage increases, I shall make all the additional mistakes right. Can
any one do more?” .
Next in importance to loading advertising with solid shot,
instead of buckshot, and then aiming at a bull's-eye, comes, I
think, obtaining the right ring. By this I mean that the copy
needs to ring true to the average reader and thereby carry over
to him an impression—unconscious, possibly—that what you
say is based on fact. -
Of course we all believe what we say in our advertisements
—we know the goods and we are confident of their value.
Certainly if we did not believe what we say we would not have
lasted long in business. But it is difficult to color printed
words with this belief to such an extent that the reader will
56 PROGRESS IN BETAIL ADVERTISING
become so firmly convinced he will not doubt for a moment what
they say.
I find that the best way to make advertisements ring true
is to word them just as if I had the reader in front of me in the
store. I try to talk through the newspapers exactly as I talk
across the counter. I forget fancy words and strike out straight
from the shoulder. Most of the time I do not use illustrations
but rely on big, clear type; a snappy heading that will arouse
curiosity; and plenty of white space, to get a reading for my
advertisement. The following advertisement is of this type,
which I hope hits straight from the shoulder and has no fancy
words or other frills:
THIS REALLY HAPPENED AT SPILLARD's
“Hello, Spillard. I have often read your advertising telling about the good
clothes, hats, shirts, and so forth, that you sell. I also have heard a good
many speak highly of them and say that your prices are never higher—and
often less—than those asked elsewhere. I don’t know why, but I was under
the impression that you were high priced. I have started for your store several
times, but in some way I was sidetracked or something interfered. But last
season I came to you and bought a suit for twenty dollars—that's the price
I usually pay for a suit—and all I can say is that many, many times I have
wished that I had gone to you before.”
I thanked him for telling me of this experience, and said: “Just tell your
friends not to make the same mistake—tell them to come in and look—that's
all. Will you?”
Suits and overcoats are priced step by step from $12.50 to $35.
In this advertisement I came right out and talked about the
ring of the copy:
THE RIGHT KIND OF A RING
Don’t think me egotistical or conceited just because I sound such loud praises
about the clothes, the hats, the shirts, and so forth, that I sell. I am enthusi-
astic about them. I just can’t help it. I’m enthusiastic about them because
I know every word I say about them is true.
You know, just as well as I, that when a person says a thing that he really
believes, it’s got the right kind of a ring to it. Isn’t it so? When I say I
sell the best clothes, the best hats, the best shirts, and the best rest of my
line, that can be had around here for the price, I believe I am speaking the
gospel truth.
I sell the best that are made for several very good reasons. While the
profit is not quite so large on each individual sale as on lower grade goods,
customers come back again to trade. And, besides, these best goods are
easier for me to sell and easier for you to buy. There’s more than one way to
prove what I say is true, but the best way is to come to my store, and if
you're wearing a suit you paid $15 for, or one you paid $18 for, or $20, or a
PROGRESS IN RETAIL ADVERTISING 57
higher priced one, to compare it with mine at the same price. Then it’s up to
you.
Will you compare? Will you?
Before concentrating copy on a definite object and making
it ring true can do much good, we must of course get the right
kind of stock and offer it at fair prices. That goes without
saying. I am assuming that fair values stand back of the ad-
vertising. Still I do not believe in being at all backward about
telling the customers that we have the right sort of stocks.
This advertisement, for instance, helped me to convince people
that my goods are right:
PUTS IT RIGHT UP TO YOU
Ask yourself a question or two and answer them fairly and squarely. Then
figure if you are getting what’s coming to you in the line of clothes.
Do your clothes look and fit as good as some of your friends' or neighbors',
who pay the same price? Do they fit as if they belonged to some one else?
If you’re of a slender build, do your clothes make you look more slender,
or if you are a stout man, do your clothes make you look bigger than ever?
If either of these possibilities is a fact, there is something wrong with the
clothes.
If you get the right make of clothes you can overcome a good many diffi-
culties that loom pretty big. Our time against yours. Will you look? . . .
Just one more—one that stands up for my goods and has
unusual attention value for reaching the skilled men with
whom I like to trade because it mentions our largest local in-
dustry, watch-making:
WHAT DEVELOPED FROM A COLLAR SALE
The Time—(One year ago).
The Place—(Spillard’s clothing store).
Customer (a watch factory man)—“I bought two of those ‘Slidewell’ collars
of you and never was so well pleased in my life. Since then I have always
worn them.”
Salesman—“Did you ever buy anything else of us besides collars?”
Customer—“No, I guess not.”
Salesman—“What kind of sox do you generally buy?”
Customer—“Almost always I buy black, two pair for a quarter.”
Salesman—“I wish you’d start in sox buying from us just as you did collar
buying. If you’ve been buying twelve-and-a-half-cent sox, or twenty-five-cent
ones, or fifty-cent ones, try out ours at the same price. Wear 'em hard, com-
pare 'em with the kind you’ve been buying, and you’ll say just as good things
about them as you did just now about the collars.”
What Happened—He bought two pairs of two-for-a-quarter sox. A little
later on he bought a suit. Now he not only buys here everything he needs
58 PROGRESS IN RETAIL ADVERTISING
in our line, but is continually at his friends who trade elsewhere to try our
collars and sox. He figures that if they try our collars and sox once, sooner
or later they’ll buy everything here, just as he does.
Will you try our collars and sox next time?
So much for advertising in the newspapers. The advertising
bills do not stop when the newspapers are paid, however.
The show windows are expensive—sometimes I am afraid we
feel like calling them expensive and stopping at that.
Indeed, at one of the store meetings which take place regu-
larly with us, this very question came up—“What do we
get out of the windows in dollars and cents?” So for a time
we carefully watched the people who went by the store; we
counted them and recorded how many stopped to look at the
displays.
After we had thought over the figures that resulted we tried
an experiment. We had some neat show-window cards made
—16 by 20 inches—and quiet frames for them. These cards
told in a few words what the windows were intended to dis-
play and mentioned prices. There was nothing outlandish
about them, but they were striking enough to catch the eye.
Again we watched the passing people. More of them stopped.
The cards gave the windows a chance to say something—our
displays were no longer displays and no more; they were dis-
plays that told what they displayed and why they displayed
it.
We even traced direct sales to the windows, once they were
given a chance to tell what their offerings cost and why they
were worth buying. Now we make it a practice to keep cards
in the windows, for we believe they have a share in the fight
against rising costs. -
The experiences thus recounted indicate the degree of atten-
tion which is now being given by retail stores to scientific
methods of operation. And among the problems
How Much * gº & &
j ñ, which they are constantly encountering is the question
Retailer of how much of their total cost of business they ought
Żºłº, to spend on advertising. I. R. Parsons, Advertising
Manager of Carson, Pirie, Scott & Co., of Chicago,
in an address before the Chicago Convention of the Associated
Advertising Clubs of the World, discussed this question spe-
PROGRESS IN RETAIL ADVERTISING 59
cifically. While Mr. Parsons represents the department-store
type of problem in his main positions, there are many points
in his paper which “regular” retailers can use to advantage.
He said:
*How much should a retail store spend for advertising? An-
swering that question reminds me of the fix into which an indul-
gent fiance got himself one day. It seems each week they dined
at a well-known restaurant, he and his sweetheart. Being most
Solicitous of her pleasure, he would insist that she order what-
ever her whim might dictate. Gradually she ran out of gastro-
nomical ideas and one evening she said, “Now, Jack, I don’t
See why you make me order all the time. To-night you please
say what you want this time. Now do; you say what you want
and then I’ll say what I want—and then we can argue.”
So, to say what a retail store should spend for advertising
puts me in the same boat with this fiance. After all, I am
afraid it’s simply a case of “then we can argue.”
Naturally, I have some very definite ideas regarding how
much a retail store should spend for advertising, just as I have
regarding how that amount should be spent. But so many
varying conditions surround the matter, and there are so many
different conditions constantly arising in the daily conduct of a
retail business, that to put any figure down in dollars and cents
or in percentage is a most difficult matter indeed—and at best
it will remain open to argument. -
However, we all do know that there must be some limit to the
amount a retail store should spend for advertising and there
must be a figure below which a store cannot safely go in trying
to save in the matter of its advertising. But putting down any
figure as an arbitrary limit either way, without very definitely
outlining the conditions which must surround that retail busi-
ness to make this figure practical, would be like taking a man
blindfolded to a certain spot of your own selection. He may
have to admit he's there, but he doesn’t for the life of him know
where it is or how he got there.
I know of stores that are purported to spend but 1% per cent.
of their entire gross receipts for advertising, their advertising
charges including many items of more or less general expense,
like window decorating and other general promotion costs,
*Printers' Ink, June 24, 1915, p. 97.
60 PROGRESS IN RETAIL ADVERTISING
and each of the stores in question does a tremendous business.
I know of several other stores whose yearly advertising cost
amounts to 4 per cent. of their gross sales or thereabouts and
they seem to get away with it. But I do not know of any retail
store of any consequence which spends less than 1% per cent.
for advertising, nor did I ever hear of any store lasting very
long with an advertising burden of more than 4 per cent.
Somewhere between these two extremes must be that state of
sublime business existence where, as mother used to read to us
out of “Little Goldie-Locks,” the soup is “just right,
4.he being neither too hot nor too cold.” In fact, be-
Affºn, tween these two extremes lies the advertising expen;
Investmen; diture upon which a retail business can build and
prosper, upon which it can justify every dollar it
spends for advertising as the proper cost of just another branch
of the actual service rendered to its public.
In fact, if a store does not advertise enough to make the daily
happenings of its business known or to keep the public informed
of the advantages of every kind which it offers, whether they be
of monetary or simply educational consideration, that store is
just as much lacking in its plain duty to the public, which it
has been favored by the Fates to serve, as is the store which
resorts to methods of over-exploitation. These methods, by
the way, may be as seemingly innocent as the attempt to create
for a sale a false impression of extraordinary value or import-
ance by the use of a tremendous amount of space and big black
type, even without any extravagant statements contained in
the wording of the advertisement itself or without being as
luciferous as any deliberate falsehood might possibly be. For,
in the one case, the public remains un-informed about the store
and in the other case the public is mis-informed about the
Store.
So a retail store, to be worthy of success, must advertise
enough, just as it must not advertise too much.
While, of course, one or two stores in the Loop of Chicago
spend much less for advertising than would be necessary were
they not so ideally situated, out of my experience has grown the
belief that a basic figure amounting to between 2% and 3 per
cent. on the gross business done is about the right amount the
average store should spend for advertising—that is, if the store
in question is situated in a fairly good location and its other
physical features are equally favorable.
PROGRESS IN RETAIL ADVERTISING 61
Such a store, being generaled by a merchant in the good old
Anglo-Saxon meaning of the term, can fulfil its serv-
* ice to the public without spending over 3 per
§'#. cent. Such a store generaled by the man and mer-
Ba Diºed chant, or the composite of several men, as I will pic-
ture later, may have an index of its advertising per-
centages covering its principal departments reading something
like this:
YARD GOODS AND ACCESSORIES
Advertising
Department Percentage
Silks and Velvets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1}%
Dress Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 %
Wash Goods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13%
Laces and Embroideries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 %
Ribbons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 %
Trimmings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 %
*Notions and Dressmaker's Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 %
DRESS ACCESSORIES
Veilings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13%
Handkerchiefs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1#%
Women's Neckwear . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I 96
Gloves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I#%
Hosiery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 %
Knit Underwear (cotton) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 %
Knit Underwear (silk) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 %
Parasols and Umbrellas. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 %
Jewelry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 %
Hair Goods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 %
Leather Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . • - - - - - - 3 %
*Toilet Articles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 %
Furniture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 %
Linens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I#%
Carpets and Rugs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 %
Blankets, Bedding, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 %
Lace Curtains. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 %
Art Needlework. . . . . . . . . . . . • * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * 1#9%
Silverware. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 %
China and Glassware . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 %
Trunks and Bags. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 %
Housefurnishings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 %
Books. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 %
*Such departments are often used for promotion purposes in which case
any definite advertising percentage would be hard to estimate.
62 PROGRESS IN RETAIL ADVERTISING
READY-TO-WEAR APPAREL FOR WOMEN AND CHILDREN
Advertising
Department Percentage
Women’s and Misses’ Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 %
Women's Dresses... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 %
Girls' Apparel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 %
Women's and Misses’ Coats. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 %
Shoes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 %
Waists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 %
Separate Skirts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 %
Millinery (in season). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 %
Petticoats . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2%%
Lingerie . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . '• * * * * * * * * * * * * * * 2%%
Negligees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 %
Infants’ Wear... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2#%
Corsets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 %
Furs (in season) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 %
. READY-TO-WEAR APPAREL FOR MEN AND BOYS
Men's Clothing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 %
Boys’ Clothing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 %
Men's Shoes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 %
Men's Furnishings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 %
Men's Hats. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 %
Total Average Advertising Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23%
Which figure, being reduced by business done by departments not adver-
tising, will undoubtedly come within the 2#% limit.
Now, as I said in the very beginning, to place any figures of
this kind before you necessitates surrounding those figures by
an hypothetical case, and so I wish to picture to you the kind
of man and merchant, or, taken compositely, the kind of firm,
which must direct a business having this ideal department
list of advertising percentage.
He is a fair, just, good-natured, cheerful despot over a store
reasonably well located, enjoying a good reputation, pursuing
diligently every day a straightforward, honest, and
p:: aggressive policy of business-getting and business-
% ... building. He insists that the store hold strictly to
Prºtor the truth in its merchandise and its advertising.
He believes that the sin of omission is as great as the
sin of commission. He insists that advertising space shall be
used to inform the public about the store, not cajole or tempt or
entice the public into buying something it doesn’t want.
PROGRESS IN RETAIL ADVERTISING 63
He generals a store that considers it a duty and therefore
does tell the public the truth about itself, telling that public
editorially and otherwise in its advertising of its business
purpose and intent and to what extent it is achieving that
purpose.
His store goes out to do big things when it has big things to
do, but he doesn’t believe in filling page after page of newspaper
space unless the store has something to say worth all the space
it takes to say it.
He doesn’t believe in using any very large fixed space every
day in the newspapers, but instead feels it better business to
use the space each event justifies, even if the space costs a
little more that way, than to run the risk of finding the store
some day forced to fill a big fixed space with copy whether or
not the sales or the merchandise or the season or the weather
justifies it.
The store which this great man generals has not been forced
to shout at a pitch of 125 degrees, because his is not the store
which the public, tolerantly standing for it in the past, has now
decided to discount in every way in its attempt to arrive some-
where near the truth hidden under the bluster of its advertise-
ments.
No, indeed, this store of which I speak has been founded on
the Abraham Lincoln principle, and so words in this store's
advertising are to be taken literally as expressing the absolute
facts they plainly state. Each adjective, when it gets into this
store's advertising, continues to hold its exact shade of mean-
ing, and “remarkable” and “unusual” and all these other words
so commonly used to fill space are used under this store's name-
cut only when the sale or the article the words describe are just
what they are supposed to describe and nothing else.
As I am creating an hypothetical case, I think I have a right
to draw still further upon my imagination and picture to you
the man in control of this business, who makes possible this
ideal advertising situation because he is in control of it.
He is a big man, of great executive ability, with an infinite
regard for detail without being enmeshed in the red-tape of too
much system. He is a man of imagination, but absolute master
of his dreams. He is a man who commands the respect of his
associates and the love of his employees. He is not particularly
a financier, for he doesn’t need to be. He isn’t doing business on
borrowed capital or bondholders' money, so all his time can be
64 PROGRESS IN RETAIL ADVERTISING
taken up with being a merchant, as he was born and brought
up to be.
His work of a day begins with the advertisement or that
which has a definite bearing on the advertising and ends with
the advertising, and to begin and end his day in this way he
gets into closest possible touch with every essential detail of
his business.
His advertising manager is one of his close associates in busi-
ness. This advertising manager is fully capable of assuming
all the responsibilities that have been put upon him,
The for this business general long ago picked his adver-
ºt tising manager out from all the rest, made him a busi-
...iis; ness intimate, and instilled in him the policies and
Manager principles of the business to such an extent that he is
a living, breathing expression of it.
Now, this well-liked, hard-working ruler of the store's destiny
started on January 1st with a fixed amount in mind to be spent
for that year's advertising, this being between 2% and 3 per
cent. of last year’s business. It has been divided tentatively
into twelve parts—larger or smaller, as the case may be, to
suit the needs of the months and the seasons.
This fund is absolutely under his personal control, as is the
appropriating of this fund among the different departments,
as is the passing upon all advertising and merchandising mat-
ters. His is the final word which decides whether a department
shall or shall not advertise, because the merchandise does or
doesn’t justify it. His is the word which says: “No, we can-
not advertise your department simply because you need busi-
ness or because you have a lot of old goods you want to move or
because you had an advertisement last year. Get something
worth while that you know the public wants and we’ll adver-
tise it. Take your own loss if you have goods that are not
selling, don’t try to cover up your mistakes by foisting those
undesirable goods on the public and adding to the burden of
our general advertising, even to lowering the confidence the
public has in the store and our advertising, and possibly de-
ciding the public to discount our printed statements hereafter.”
And so this really great business general, being in touch every
minute of every business day with every detail of this great
business, not harassed by borrowed finances, free from entan-
gling alliances with manufacturers, ready to sell anything with
merit that will do credit to the store provided there is a demand
PROGRESS IN RETAIL ADVERTISING 65
for it, but not willing to sacrifice one single precious minute of
his freedom in the conduct of his daily business affairs or in
the interpretation of the store's business policy or principles
by any outside advertising arrangement or other sort of deal,
can control the destiny of his business and so control the store's
advertising.
(2) USING ADVERTISING AS A WRAPON IN RETAIL
COMPETITION
A serious feature of the operation of regular retail establish-
ments is the meeting of competition by mail-order houses and
other concerns which sell direct to the consumer. Advertising
plays its part in this type of activity. The hardware mer-
chants of Ohio, for example, recently formulated a plan for
meeting mail-order competition through the Ohio Hardware
Association. The campaign proposed is thus described:
*Ohio hardware merchants are about to combat mail-order
competition with the aid of newspaper advertising, according
to a recent interview with James B. Carson, secretary of the
Ohio Hardware Association, which appeared in the Toledo
Times.
“These big mail-order houses advertise, and our local hard-
waremen must advertise to compete with them,” Mr. Carson
says. “The Ohio Hardware Association at its Toledo conven-
tion, February 24, 25, and 26, hopes to give this matter con-
siderable attention. We plan to so strengthen our county
organizations that hardware men in every section of the State
will not only advertise the goods on their shelves, but will buy
space in the newspapers to call the attention of the residents of
their communities to the folly of sending money to the great
cities when they can buy goods as cheaply or cheaper at home,
and at the same time keep their money within home circula-
tion.”
The Ohio Hardware Association comprises close to 1,000
merchants, which means that if the contemplated action takes
place and works out well it can probably be adopted by a large
number of associations which are now in thirty-eight States
and comprise the national association. sº
*Printers' Ink, February 5, 1914, p. 100.
66 PROGRESS IN RETAIL ADVERTISING
Following the appearance of the interview with Mr. Carson
in the Toledo newspaper, Printers' Ink asked Mr. Carson to
give more details relating to the proposed local newspaper cam-
paigns and he gave the following interesting reply:
“I note what you say in regard to the news item in the Toledo
Times, but I think you have put the wrong construction as to
our intentions, as I am sure the Ohio Hardware Association
does not intend to wage a campaign against any one, but it
is going to wage one for itself.
“We have no fight with anybody, and I cannot understand
why if we adopt modern ways and means to take better care of
ourselves, the same that are being used successfully by others,
that the cry should go forth that a war of extermination is
going to be carried on against such and such a party, whoever
it may be.
“There is no doubt that the newspapers in Ohio do more in
molding public opinion than all other forces combined, and I
am sure they will be glad to lend their influence in building up
their home communities if we will work hand in hand with
them. This our merchants must do.
“The sentiment of the hardware dealers in every State is
about the same, and the awakening is not confined to Ohio,
nor are the troubles of Ohio hardware dealers greater than those
of any other State, but our merchants have come to the conclu-
sion that one’s business should be treated as one’s physical
self, and when there is trouble, the case should be diagnosed
and the remedy applied.”
During the past summer the National Retail Jewelers Asso-
ciation discussed a joint advertising plan at their convention
in New York City.*
This type of operation raises the question of the legality
under the Sherman Law and the special correspondent of
Printers' Ink gives the following report of an effort to secure
legal sanction of this type of activity:
fis a retailer’s bureau of information, in any sense, a menace
to the manufacturer or the jobber, or could it prove a factor
*Printers' Ink, September 2, 1915, p. 65.
iPrinters' Ink, April 30, 1914, p. 93.
PROGRESS IN RETAIL ADVERTISING 67
that could disturb existing methods of distribution and sales?
This is a question which manufacturers and advertisers in
certain lines may well ask themselves, because the right of
organized retailers to maintain information bureaus for the
dissemination of confidential news as to trade policies, etc., is
rapidly developing into an issue as clear-cut as legalized price-
maintenance, the proposed taxation of tobacco and other cou-
pons, or any of the other questions which have been brought
before Congress at the present session, with a view to the se-
curance of legislation which will indicate to business men ex-
actly where they stand.
Retail merchants, especially the classes of retailers who are
banded together in national organizations, are pressing Con-
gress for specific authority—in the form of either
cº, new legislation or amendments to existing acts—to
#..." circulate information for , their mutual advantage
Enter, and protection. In their representations before
Congress they disclaim any intention to conduct boy-
cotts, and take the stand that there can be no more valid objec-
tion to information bureaus than there is to credit bureaus,
which associations of retailers are now permitted to maintain.
At the same time the spokesmen of the merchants at Wash- .
ington have let it be inferred that one of the objects of the
average information bureau would be to spread knowledge of
the acts of manufacturers or jobbers who sell to mail-order
houses at the same time that they seek distribution through
ordinary channels or who openly or secretly maintain chain-
store systems in competition with independent retailers. This
phase of the question will make clear the application of the
whole subject to the broad interests of makers and advertisers
of goods.
Perhaps, however, the chief significance of this matter is in
the increasing probability that the retailers may secure the
authority they seek. So strong have been the representations
made at hearings before the House Committees on Judiciary
and Interstate and Foreign Commerce that there is a growing
impression in Congressional circles that if any legislation along
this line is recommended some effort will be made to satisfy
the small merchants who would use concerted action in buying
as a weapon of offence and defence. Not the least interesting
feature of the situation that has developed is found in the seem-
ing willingness of some of the retailers to sacrifice their convic-
68 PROGRESS IN RETAIL ADVERTISING
tions as to the manufacturer’s right to fix a resale price in order
to obtain concessions for the circulation of trade information.
In their answers to questions asked by Congressmen several
of the spokesmen for the retailers have indicated that they put
the right to conduct an information service above compulsory
price-maintenance, although, in some instances, in favor of the
latter also.
In stating the grievance of the retailers, J. R. Moorehead,
National Secretary of the Retail Merchants Association of the
United States, said: “When I, for instance, with my
Rºº. , competitors, undertake to get together in an organi-
#.” zation or an association to combat the methods of
Are Tied the mail-order houses, we can get into a conspiracy;
but we may be fighting one man and he cannot get
into a conspiracy; he cannot violate the law, but he can say to
us, “If you interfere with my business and my methods of busi-
ness I will hold you responsible under the Sherman anti-trust
law’; and our hands are tied. We cannot even tell the truth.
“I want the right to give publicity—through organizations
or personally; in any way, by publication or by letter—to any
act of any competitor that tends to injure me in my business.
The fact that I would have the right to say to a hundred or a
thousand men, dealers in my line of business, that such and
such a manufacturer or mail-order house has done such and
such a thing, knowing it to be the truth, would help to correct a
condition a great deal easier than a lawsuit. If I did not tell
the truth he would have action against me for libel, but when
I am telling the truth I do not believe the Sherman law should
say you are violating the law, when the big fellow cannot violate
it, claiming he is doing it by himself. We do not desire to keep
a blacklist. Here is the proposition: Dun or Bradstreet can
report me for not paying a debt or being slow pay and things
of that kind that would absolutely ruin my credit. But when
I come back and attempt to speak the truth about a matter of
this kind I am confronted with the Sherman law and I cannot
fight it by myself; I cannot afford to. We understand the
mail-order house is here to stay forever. We have got to fight.
We are up against severe competition, and we welcome that
competition, but the thing we want is a chance to fight back,
and we do not want our hands tied.” .
The anxiety of the retailers on this score has been precipitated
largely because of the action of the Department of Justice some
PROGRESS IN RETAIL ADVERTISING 69
time since in bringing action against certain retail lumber asso-
ciations for alleged violations of the anti-trust law. The his–
tory of this case has been gone into very extensively at the
Congressional hearings, it being explained that the indictments
against the secretaries of the associations have been withdrawn
in the criminal case, but that a civil suit is still pending. The
assertion was made repeatedly at the hearings that these
indictments were procured by competitors of the organized
retailers. It was also asserted by one witness that the Govern-
ment case was the outgrowth of the organization of the Secretaries
Bureau—a bureau of the secretaries of various trade associations
which had as their common object the dissemination of informa-
tion with respect to manufacturers and mail-order houses.
In answer to a question from Congressman Volstead, of the
Judiciary Committee, Mr. Bolman, of the Southwestern Lum-
ber Dealers’ Association, said: “We do not want to publish an
unfair list. I have been a member of associations for seven
years and a director for several years. I have never heard
during my membership or during my directorship any discussion
of the question of division of territory or the setting of prices or
of a boycott. I think the association would not object if the law
specifically prevents any attempt at a boycott or combination.”
“What you wish,” questioned Congressman Nelson, “is the
right to disseminate information that will make it impossible
for a jobber or wholesaler to sell to the consumer, and the con-
sumer would have to buy from the retailer, or else the whole-
saler would be punished by your withdrawal of patronage?”
“Certainly,” said Mr. Bolman.
“That would result,” pursued Congressman Nelson, “in
every retailer knowing what is being done so that he can with-
draw his patronage from the wholesaler who is selling direct to
consumers?” -
“That would be within the choice of the retailer,” said Mr.
Bolman.
(2) THE CHANGES BROUGHT AIBOUT BY SUCCESSFUL RETAIL AD-
VERTISING
Before entering upon a discussion of the place of regular
retailers in national advertising campaigns it may be well to
look at one or two special features of the retailer’s skill in doing
business as it affects national advertising.
70 PROGRESS IN RETAIL ADVERTISING
One thought to which it is necessary to give due considera-
tion is the fact that any really skilful retailer is in process of
development and will need to be progressively better dealt with
every year. Not many of these, of course, will expand rapidly
into concerns doing a large national business, but the following
account of how a local merchant became a national advertiser
on his own account in an incredibly short time will serve to
emphasize the fact that the same fluidity of conditions which
were discussed in regard to the consumer must be considered
in connection with the retailer. -
*Eliminate advertising and you reduce buying to its barest
bread-and-butter basis.”
“Advertising will convert the luxury into a necessity.”
“Advertising makes buying; without it, you must sell.”
“Advertising is the pendulum that regulates and keeps manu-
facturing, retailing, and final buying in motion.”
These were some of the epigrammatical utterances of J. J.
Phoenix, the president of the Bradley Knitting Company, of
Delavan, Wis. Thus the head of a big, prosperous manufactur-
ing establishment expressed himself on the subject of advertis-
IIlg.
But not until one learns the story of the Bradley Knitting
Company can there be a full appreciation of these pointed, de-
cisive statements. Mr. Phoenix did not confine himself to ad-
vertising as it related to the manufacturer. He committed
himself, authoritatively, as a producer, as a retailer, and as a
consumer. And he does not have to use the past tense in dis-
cussing conditions in this triple rôle as a maker, dealer, and
final buyer. He is the president of the Bradley Knitting Com-
pany, a partner of the Bradley Dry Goods Store, and, naturally,
a daily consumer-buyer. . . .
- Aboutfourteenyears ago a small knitting factory was
Not started in an outlying Chicago neighborhood. A Ger-
S ºul man, who was familiar with the knitting process and
Star, had a thorough technical knowledge of knitting, but
who knew very little about selling, was the owner.
He made arrangements with a Chicago jobber to take his
*Printers' Ink, May 7, 1914, p. 3
PROGRESS IN RETAIL ADVERTISING 71
entire output. Although he disposed of all of the sweaters and
other knit goods that were made, the undertaking was not
successful. In the first place, the goods were sold at too close a
price, and secondly, the owner of the factory knew nothing of
the economical, efficient systems and methods of conducting a
manufacturing business.
In a little over two years the business was on the verge of
bankruptcy. While on a buying quest for his retail store Mr.
Phoenix visited the wholesale house that was selling the goods
of the knitting concern. “Why don’t you take over this knit-
ting business?” it was suggested. “You ought to be able to
build up a big manufacturing business in Delavan.” Mr.
Phoenix and his partner, W. H. Tyrell, after a careful investi-
gation of the knitting factory in question and of the possibilities
of this business, decided to buy it and remove it to their home
town. -
“There were three things which prompted us to go into this
business. First of all, we saw the necessity of having some kind
of a manufacturing business in Delavan to give employment
to the young men and women and boys and girls who would
otherwise drift to the surrounding cities. We wanted to help
build up our town, give it a more solid foundation,” Mr. Phoe-
nix explained. “Then, of course, the money-making idea was
a strong inducement. We were pretty sure we could make a
financial success of it. Lastly, we determined to go into it
just to prove to the many men who strongly advised against it
that we could make it go.
“Well, we began in a small two-story brick building in 1902.
We employed the original owner as our manager. We, Mr.
Railer, Tyrell and myself, devoted most of our time to our
Layout retail store. The manufacturing business lost heavily
Manufac- the first two years. The goods were sold to jobbers
# only. It was finally decided that the business was
* being mismanaged, so we let the manager go and
Mr. Tyrell and I went into it more actively. We knew retailing
pretty thoroughly. We’d been at it for many years and had
built up a splendid business. But we knew very little, scarcely
anything, about manufacturing.
“I remember how discouraged I was when I went to New
York to consult with some trade-paper men whom I had known
for a long time. When they explained the conditions in the
knitting industry, how many competitors we had, how we would
72 PROGRESS IN RETAIL ADVERTISING
have to compete with very cheaply made lines and with long-
established, high-grade lines, it didn’t look very rosy.
“You see, as retailers, we subscribed for the leading trade
journals and used them and the service of the men connected
with them in every possible way. On my twice-a-year New
York buying journeys I always went to the offices of a big dry-
goods trade paper and advised with its men regarding our store
and the best way to conduct it. In this way I got to know
them intimately and went right to them when we undertook
the knitting business. And, by the way, let me say that I
consider the trade paper one of the principal factors in success-
ful retailing. The merchant who reads and studies a good trade
paper and takes advantage of its assistance, like we did and
still do, has everything in his favor. He can thus find out from
an authentic source the latest and best and most economical
methods by which to conduct his store. He learns what others
are doing. He can find out everything about the merchandise
he sells. And he’s able to get the personal help and advice of
experienced, able men. To try to run a retail store without
the trade journals is to close yourself off from almost all that
is new, and to ignore the experiences of others. The Bradley
Drygoods Store owes much of its success to the trade papers.
It was the practical advice of these trade papers which I im-
mediately sought when we undertook to operate the Bradley
Knitting Company ourselves. -
“It was first decided to eliminate the jobber as a sales agent
and to approach the retailer directly. The first year of our
control there was a loss, but much less than before.
F* The second year also showed a loss, but very much
jjer decreased. In the ten subsequent years, up to the
present time, the Bradley Knitting Company has
been a paying institution. From a two-story, 140-foot-long
building, it has expanded into a four-story, 400-foot-long struc-
ture. We now have five selling branches and two other manu-
facturing branches. When we began business the total sales of
the knit-wear industry ranged between five and six millions.
That’s twelve years ago. Now it’s up to fifty and sixty millions.
We feel we have been instrumental, in a small way, in thus in-
creasing the demand for knit goods.
“We were in a peculiarly favorable position to plan our cam-
paigns to get dealer distribution. We could analyze retail buy-
ing clearly and practically at first hand. We had only to reason
PROGRESS IN RETAIL ADVERTISING 73
out why we, as retailers, had bought and continued buying of
certain manufacturers and why we did not buy of others. We
could figure out pretty well how to approach the retailer, for we
knew what approaches had won our interest and business. We
knew what the retailer expected from the producer or wholesaler
and what he wouldn’t tolerate. For we knew what had helped us
and what hadn’t. We knew how trade-journal advertising and
consumer advertising affected our retail actions.
“In short, we made two composites—one of the manufac-
turers, who had used good selling methods according to our
T views, and the other of those concerns which did not
coºl as succeed with us and the practices of which we consid-
ered weak. We adopted as far as possible the plans
of the former and took care to avoid the policies of the latter.
“Our position, you see, was unique. Right at our door—
the door of our retail store—we had every practical and unprac-
tical selling method from which to make our selection. That
we were fortunate enough to put out the very best methods
and apply them effectively is pretty well demonstrated by the
fact that for the last seven of the twelve years we have been in
this knitting business we have had more orders than we could
fill. Our capacity has been taxed to its very limit. This
capacity business has been done under rather unfavorable
external conditions. We resolved from the start to make only
high-grade goods. Inasmuch as the knitting industry has
never been standardized, as most other manufacturing busi-
nesses are, there never has been any uniformity in prices or
goods. The variation in price of knit wear of a given grade was
so marked that the retail buying had been seriously under-
mined. Then buying was largely a matter of bargaining.
Prices were ruthlessly slashed by the manufacturer in order
to make sales. Conditions are somewhat better now, but
things were pretty bad as we originally faced them. And be-
sides, there were, as there are now, some very cheaply made,
low-priced knit goods with which we had to compete
“I credit our success, despite these and many more handi-
caps, to one basic fact, the good will, the harmonious relation-
ship that we established with the retailers distributing our goods.
Given the best merchandise and prices, the most convincing
advertising campaigns that can be planned, good salesmen, in
fact everything favorable, except the retailer—and there’s
ninety-nine chances out of a hundred that a selling campaign
74 PROGRESS IN RETAIL ADVERTISING
will be a failure. But throw up every obstacle you can, make
conditions as hard as possible, if you can get the retailer in
harmony with your selling, get him to work with you earnestly
and willingly and you can reverse the ratio—there’ll be but
one chance out of a hundred of failure.
Trade “It may appear as if I am unduly prejudiced in
Journals favor of the retailer because I have been one so long
to Win myself, and am still a retail merchant. It may be so;
gººd. Will but let me tell you that by pursuing this policy of put-
* * ting every possible effort on the dealer to win him
over the Bradley Knitting Company owes its very existence to-
day.
The trade paper and the salesmen were, and are now,
our only means of approach to the retailer. From the reports
of our salesmen and from the inquiries and orders from our trade-
journal advertising, we can see definitely and tangibly the results
this advertising is bringing.
“We do very little talking in our trade-paper advertising,
and what we do say is simple, direct, and free from buncombe.
How copy Illustrations of knit wear, descriptions and price quo-
Was tations are the dominant characteristics of this copy.
Worked The trade paper will sell goods just like a salesman, we
Out find. The dealer isn’t interested in what you’ve
got to say about yourself or the possibility of business and
profits from your goods. He wants to know about the goods
themselves. Our trade-paper advertising brings in actual
orders because we use it for that purpose—to solicit orders.
“By dealer distribution, I don’t mean simply selling to the
retailer. The fact that a retailer has our goods in stock is not
sufficient. Our interpretation of ‘dealer distribution’ is to
have the merchant a working principal in the selling of Bradley
knit wear. You’ll find that the men who retail our goods are
strongly with us and our business methods and that they are
pushing the sales of our knit wear vigorously and enthusiasti-
cally. We have gained this standard of distribution by square,
fair dealing with the retailer and by pursuing certain policies
that have won for us their highest favor.
“Our policy, that we have found to be extremely
Pſºlº profitable, is to give exclusive selling rights to one
poi..., store in each small or average-sized community as
far as possible. The attitude of the dealer determines
this to a great extent. If he shows an interest in our goods, a will-
PROGRESS IN RETAIL ADVERTISING 75
ingness to do all he can to promote their sale, he can have the ex-
clusive agency. We encourage this idea in every possible way.
The merchant who has the sole privilege of selling any goods
is in a position to do far more than if they are sold generally
to other competing stores. We know this is the case of the
retailers selling Bradley knit wear and it is the case with our
retail store. We are glad to advertise in every way the mer-
chandise that our retail store sells exclusively. Then we know
all returns will come to us, not our competitors. A dealer can’t
possibly let himself out in the advertising of goods that his
competitors also sell and who would get some benefit from
it. We find that one dealer alone can do more to establish
our goods in a town and in selling volume than two or three in
the same town. And it costs us much less to handle the one
account than the two or three.
“Our actions on price-maintenance is another policy that has
made the dealers friendly toward us. This wasn’t any easy
problem to solve by any means. There must be some
#ſº attempt at price-standardization. There must be
#.” Some semblance of uniformity in retailing as well
Deal. With as manufacturing. If dealers vary too much in price
quotations, the consumers will soon be always bar-
gain-hunting, and that is bad. Yet the retailers, selling
under such different conditions, as many of them do, cannot
sell at the very same prices. We do not expect the retailer of
the Western coast to sell Bradley knit wear at the same
price as our Illinois or Middle West States’ dealers, whose
tºportation and general “over-head’ charges are so much
OWer.
“Nor do we expect a merchant who has some numbers in
his stock that do not sell readily to maintain the prices. He’s
justified in cutting prices unless we are willing to take them
back. We issue catalogues for the wearer in which retail prices
are quoted. Prices are also mentioned in our general advertis-
ing. But, if the dealer wishes to vary from these prices, it is
his business and he has a right to do so. In several cases we
tried to get dealers to maintain given retail prices, but it led
to so much misunderstanding that we let it drop. Now, know-
ing that they can manipulate prices as they wish without inter-
ference, most of our retailers, and we have over seven thousand
of them distributing our goods, seem contented to sell at the
prices we suggest.
76 PROGRESS IN RETAIL ADVERTISING
“Due to broad policies, such as these, we were able to gain
a widespread, favorable dealer distribution. Then we were
ready for consumer advertising. I won’t even dare guess how
many possible sales have been lost at our retail store for newly
advertised goods which were given publicity before we could
get them.
“I am strong for general advertising in its proper sequence.
When it’s employed at the right time and in the right way,
there’s no limit to its possibilities in producing sales. But
when a concern begins to advertise, to build up a demand for
its goods before it has built up the proper distribution, it is a
wasteful, extravagant indulgence. This is a mistake that too
many advertisers are committing. The theory is that adver-
tising in general magazines, newspapers, etc., establishes dis-
tribution at the same time it creates a consumer demand. It
does to a small measure, but I should say that about 80 per
cent. of it is wasted. The inquiries for advertised goods are
immediate. They begin to come in the very day the adver-
tising appears. It may be from two to three days or two to
three weeks before the retailer can get the merchandise.
“I can’t urge this too emphatically: Get distribution first—
then go after the buyers. That will reduce waste to a minimum
and promote sales to the maximum.
“This is being clearly shown in our campaigns. When we
began advertising we had a good dealer distribution. When we
receive inquiries for our booklets from men and women, we
send the literature and tell them who sells our goods in their
vicinity. We write the retailer about the inquiry, too. As
far as we are able to trace these inquiries, I judge that probably
70 per cent. are turned into sales. For, you see, we have the
dealer actively with us, and he uses his local influence in con-
nection with the interest or demand we have aroused. 5 5
In answer to the question, “What do you do in co-operation
help for your dealers?” Mr. Phoenix said: “There is too
much being done in dealer work by the average manufacturer.
In our rôle as retailers, we find this so. In the attempt to
‘tie-up' the retailer to a line, the manufacturers are hampering
him in his local selling. They are surrounding him with sug-
gestions, directions, and ideas that may or may not be best for
his locality. If you could see the accumulation of stuff that
a drygoods store like ours gets from various manufacturers
from whom we buy, you’d quickly realize the uselessness of
PROGRESS IN RETAIL ADVERTISING 77
most of it. We don’t use one tenth of it; we can’t. We want
to talk to our town people ourselves; we can’t afford to talk to
them through the mouthpieces of the manufacturers, the cards,
posters, newspaper electros, etc.
“Knowing this so well from our own experience in retail-
ing, we are very particular what we give out and we give
º very little. We help the retailers in every possible
º: way we can, but we’re careful not to overdo it. It’s
ºº:: worth 100 per cent. more to us to have the retailer
tiºn personally recommend and endorse our knit wear
than if we told the consumer what fine goods we make.
I would prefer to have the retailer make the one short statement
to a possible buyer, ‘Bradley knit wear is the most reliable and
serviceable you can buy,” than have the same possible buyer
read an advertisement of five hundred words over our signature.
That one remark from the merchant or his clerks will do quicker,
more certain work than all we could say about our goods.
When customers go to a store they do so because they have
confidence in that store. So, most generally, whatever is said
there in favor of any goods is accepted and acted upon. What
an advertiser says about his own goods does, without doubt,
make a deep impression and arouses a desire, but there’s some-
thing lacking that is necessary to make a sale; that ‘something’
is what the retailer supplies, the personal assurance of some one
that the goods are as advertised.
“In our retail business this situation makes itself evident
every day. Customers come to our store and ask about some
advertised merchandise. They come in a favorable mood to
buy. Advertising is directly responsible for this mood. But one
tenth of 1 per cent. ask directly for the goods they are prepared
to buy. They wait for the clerk to strengthen their buying
inclination. They don’t come out decidedly and buy an article.
They make some kind of an inquiry about it first, giving the
clerk the opportunity to put in his closing selling talk that
usually makes the sale.
“I’ve studied our retail customers very closely and carefully
in regard to this one point and know how they act in their buy-
ing. It’s up to the retailer to make the sale. The advertising
does everything up to the actual exchange of money for mer-
chandise—there’s where it’s necessary to insert a personality—
the retailer—to close up the sale.
“Acting in the double capacity as manufacturers and re-
78 PROGRESS IN RETAIL ADVERTISING
tailers, we are able to gauge conditions and conduct our pro-
ducing business on a very practical basis. - -
“Under no circumstances do we sell by mail to any inquirer;
nor will we sell to mail-order houses. We were approached by
one large mail-order house that offered to take over our entire
output each season, but we quickly and flatly refused even to
discuss terms with it. As long as we are distributing through
the retailer we will have nothing to do with the mail-order
selling. You can’t play the game from both ends and win out.
The manufacturer who doesn’t protect his retail distributors
at every possible angle is only handicapping his own business.
The small-town merchant is too valuable a factor in our business
to slight in any way. This brings me to a subject that I con-
sider one of the most important in the building of a manu-
facturing business—the small town.
“Being a small-town resident and a small-town retailer my-
self, I know conditions there rather well. Being a manufac-
turer, I also am familiar with the situation in the large cities.
We do not go after the big-city business with nearly as much
force and energy as the trade of the small and average-sized
towns. City business is far more costly to get and it repre-
sents the smaller per cent. of our population. It’s harder to
handle and much more exacting. The big volume of our busi-
ness comes from the smaller towns. It’s simpler to get, easier
to hold if you treat it right, and has more business for you.
There’s a bigger profit in it because it’s less expensive to handle.
“We have been fortunate in having an excellent advertising
agency to help us. The guidance of our advertising agency
has kept us away from many pitfalls and has provided us with
strong selling campaigns that have been very successful. I
can’t see how a business that makes a good article can possibly
fail if it places its selling affairs under the advice and help of a
trade-journal and an advertising agency. A business to-day
has at its command the service of experienced men who know how
to proceed, what to do, and what not to do in business building.
The Bradley Knitting Company is a good example of this.”
Hugh McVey of Successful Farming, Des Moines, Ia.,
brings out one other phase of the bearing of the individual
merchant’s skill upon the national advertiser’s plans. The
thought which underlies this article by Mr. McVey is the fact
PROGRESS IN RETAIL ADVERTISING 79
that it is dangerous to forget that relations with retail merchants
are in a large measure individual problems and that it is not al-
together safe to proceed too far upon generalizations. Mr.
McVey says:
*Some firm is going to make a big winning one of these days
by comparing and compiling the methods used by different
active retailers and spreading the service broadcast throughout
the agricultural States. I have interviewed over 400 retail
dealers in the North Central States and have come to the con-
clusion that manufacturers have scarcely begun to develop
the sales possibilities of merchants in small communities.
I know many instances where live retailers are working out the
problems of their trade and have devised plans that might be
profitably used by small-town dealers generally if some
manufacturer would take up the ideas and encourage their
UISé.
There is H. G. Larimer, clothier of Chariton, a county-seat
town of southeast Iowa. Senator Lafe Young, publisher of
the Des Moines Capital, has said of him: “He is the biggest
man in a small town I have ever met.”
Mr. Larimer is the “father” of the Iowa State Clothing
Dealers’ Association, probably the most active State associa-
tion of its kind in the United States. He delivered an address
in the agricultural division at the Toronto convention on “The
Analysis of a $50,000 Retail Clothing Business in a Town of
4,000,” which attracted so much attention that it was later
repeated by request in the retail division.
What he has done can to a considerable extent be carried
out by clothiers in other country towns.
Mr. Larimer has gone outside his own county for business—
and gotten it.
Ordinarily, one would suppose that his sales would be limited
to people within eight to ten miles of his store. This is prob-
ably the basis upon which many manufacturers operate. They
evidently believe that if they have an agent in every good
agricultural town they will get their share of the business.
The regular follow-up system of Mr. Larimer’s store has not
only all the names of the farmers of his county, but also the
names of those in the row of townships in each county which
*Printers' Ink, September 17, 1914, p. 31.
80 PROGRESS IN RETAIL ADVERTISING
border on Mr. Larimer’s own county, in which huge circle
there are more square miles of territory than in Lucas County
and more people than there are in Lucas County, outside of
the town of Chariton. The addition of these townships, there-
fore, doubles Mr. Larimer’s list, which is divided into “tall
men,” “fat men,” “old men,” “young men,” etc. Informa-
tion as regards children is also carefully compiled.
Mr. Larimer made a lone fight among the business men of
his town to get this trade started, but the better roads, the auto-
mobiles, parcel post, better values and liberal advertising have
produced wonderful results, not only for Mr. Larimer, but for
all of the business interests of Chariton.
Just at the proper time, from an agricultural point of view,
and disregarding entirely the clothing seasons in the cities, de-
cisive arguments in literature form for his clothing go out to
these lists.
Does Mr. Larimer know that this pays him? Absolutely.
He keeps a check on everything sold and knows at the end of
every day just how much profit he has made from that day’s
sales and where the profit came from.
A hat manufacturer recently co-operated with him in an ex-
tensive hat display in his windows. A week after the display
was made Mr. Larimer received a letter from the manufacturer
asking if it had been a success. “Which,” said Mr. Larimer,
“proves they don’t know the first principles of trade in a small
town. I know my display attracted some attention, but I
didn’t sell a whole lot of goods while it was in the window.
Maybe in the city a store would have done this, but down here
things are different. We have, however, since the display
felt an increased demand for these goods right along. That is
the difference between country-town and city trade. The effect
On the trade of that company’s display will last in Chariton
for a year—in the city the effect would be over in two or three
weeks. These are the things that it seems hard to get into the
heads of the manufacturers.
- “Another thing,” said Mr. Larimer, “most manufacturers
have not the right viewpoint of small-town trade. In the
cities the game is to go after the young man. All the advertis-
ing is pointed that way, and if I would follow the advice I get
I would be doing that here. I have been told that the young
fellow about town is the liberal spender and that the farmer
only purchases when dire necessity forces him to. This isn't
PROGRESS IN RETAIL ADVERTISING 81
true. The farmer wants high-class goods; we sell him just as
good quality as do the city stores to the young men.
“The farmer, furthermore, is deeply interested in knowing
all about the wares he buys. He has to be a good judge to be a
success as a farmer, and he employs this judgment when he’s
buying goods in town. Once he finds an article of true merit
he is loyal to it and it is hard to switch him to another brand.
My success has been made largely by acquainting the farmers
in my vicinity with the fact that I have high-class goods and
then keeping up the standard.
“We have much less transient trade than city stores. We
know most of our customers personally. We hold them by giv-
ing them service and we attract new ones by intelligent adver-
tising.” g
Mr. Larimer’s advertising bills have run as high as $400 in a
single month, which must be considered a good deal for a coun-
try-town retail store.
“The solution of many of the problems of the manufacturer
and retailer will be found when they go direct as possible to the
farmer with their advertising, truthfully educating him in the
merits of their products. The manufacturer who needs or
wants more business should give this his attention, and the
retail merchant must realize his mission is to render service.
“As a retail merchant, I only ask that the manufacturer ad-
vertise his wares to my customers to the extent that they are
in a receptive mood; that they know there is a well-organized
factory and force that is putting out a product they are not
ashamed to have their name connected with; that their name
and mine offer a double guarantee, an additional safeguard
that will assure them full value and entire satisfaction.”
CHAPTER HII
THE REGULAR RETAILER's FIELD AND PROBLEMS
EFORE passing to a consideration of the retailer as a
B factor in national advertising campaigns, it may be
well to look a little more fully at some of the problems
of the retailer which grow out of the nature of his market.
It is coming to be recognized that retailing has a social as weli
as a purely economic side. A sign for window use by retailers
says: “If you trade outside of our town and I trade outside of
our town and everybody trades outside of our town, what
will become of our town?” Back of this question is one of the
most complex and serious of modern economic and social prob-
lems. Local boards of trade and chambers of commerce as
well as economists and sociologists recognize in this a group of
problems worth thorough and careful study.
The larger types of retailer have made at least three positive
contributions to the merchandise distributing process: (1)
They have given the consumer larger stocks from which to
choose. (2) They have, by large-scale buying, made possible
a reduction in price to the consumer in some lines. (3) They
have introduced some methods of management which cut down
wastes and increase the speed of turnover. There may have
been other positive contributions in certain cases, and in some
instances certain bad features have been introduced also, but
these three are undeniable and no one would be willing to give
them up altogether.
Changes of this kind, however, have considerably upset
the “regular” retail trade. They figure largely in the attempts
to get an answer to the question: “What is to become of our
82
RETAILER'S FIELD AND PROBLEMS 83
town?” No matter what arguments are brought to bear in
favor of supporting the home retailer, or in favor of abandoning
him, the fact remains beyond dispute that what the consuming
public apparently wants and will have is a combination of the
good points of both systems of distribution. The large stores
will be forced to do their work better, and the small stores will
be forced to compete more skilfully each year.
This constant betterment is working out even now. It is
not a deliberately planned process, but there is abundant evi-
dence that it is going on. Large stores, chain stores, etc., have
come to stay permanently in one form or another, but they will
be forced to improve constantly. On the other hand, the smaller,
“regular” retailer and the distribution organization back of
him are not in process of annihilation. They are merely learning
how to do their work better. This process of readjustment is
sometimes gloomy, but it is by no means hopeless.
And in this process of readjustment advertising is beginning to
take its part. Local advertising by the “regular” retailer has
been shown to benolonger mere announcing. It is one of the most
effectual of modern means for winning and holding confidence
and friendship. With these the retailer’s fight for life is won,
and to get them at all, this appeal to the consuming public calls
for the homely virtues of truth and service. National advertising
also is taking its place as a means for equalizing competitive
conditions between the large and small retailer. In many lines
of goods it is bringing to the consumers in every section the
advantages of the consumers in the most advanced sections,
and at a lower price than ever has been possible in any other
way. -
There are two methods of attack upon the regular retailer’s
problem outside of the direct use of advertising which deserve
particular mention here. We have shown how advertising
may, and does, figure directly in many betterment plans, and
in even those which at first glance seem remote from it adver-
tising often has a conspicuous part. The two methods chosen for
84 RETAILER'S FIELD AND PROBLEMS
discussion here are: (1) The study of the small town and its needs
in a search for principles, and (2) The application of modern
methods of management to the organization and operation of the
smaller type of store.
(1) THE SMALL-Town PROBLEM
About 53.7 per cent. of the population of the United States
in 1910 lived outside of cities, towns, or other incorporated
places of 2,500 population or over. This is the fact which
gives so much importance to the problems of the regular re-
tailer. But the percentage of rural population had declined
to this figure from 59.5 per cent. in 1900. There was an actual
increase in the rural population of over four million persons, but
the rapid growth was in cities. It is this fact which makes the
problems of the “regular” retailer so serious.
To be sure, not all of the purchases of this rural part of the
population are made in country towns. But, on the other hand, as
long as this percentage remains large no form of concentrated
city retailing will meet the needs of a manufacturer who seeks
a national market for his product. This country market is a
substantial part of the field of the small retailer and it will be
successfully occupied by him just in proportion to the extent to
which he applies modern methods in occupying it. These
methods include first of all the acquiring by the retailer of a firm
knowledge of what the elements of his problems are.
J. B. Powell, Instructor in Advertising in the University of
Missouri, has given some attention to this phase of national
advertising and writes as follows concerning it:
*Manufacturers with a national distribution are looking seri-
ously into the matter of the decline of hundreds of country
towns and the merchants of country towns.
Let’s tell the worst side of the situation first, and then turn
to the many constructive things that are being done to get out
of the rut.
*Advertising and Selling, June, 1915, p. 56.
RETAILER'S FIELD AND PROBLEMS 85
J. R. Moorehead, formerly secretary of the National Federa-
tion of Retail Merchants and now secretary of the Southwestern
Lumber Dealers’ Association, compiled figures from the 1910
census showing the decline in population of small towns in
the Central West that are of vital interest to national adver-
tisers as well as small-town merchants.
He showed that nearly 6,000 towns in seven Middle Western
States lost in population as follows: . -
Wisconsin, 346; Missouri, 540; Iowa, 564; Indiana, 639;
Michigan, 677; Illinois, 788; Ohio, 1,136. Out of 777 county-
seat towns in these States, 217, or nearly 28 per cent., lost in
population, notwithstanding the fact that the county seat is
in many ways the centre of most of the activities of the county
unit along the line of politics, courts, the collection of taxes, and
other county functions. -
There has been a lot of oratory on the causes for this decline
of the picturesque country town and the country-town store
that handles everything from dried herring, prunes, and calicoes
to reapers, mowers, and patent medicines. Some lay it to the
automobile, that enables a desirable class of customers to trade
at distant and more attractive markets. Others lay it to the
better country roads, that help the automobile. A Chautauqua
speaker last summer told small-town audiences in Iowa, Mis-
souri, Kansas, Nebraska, and Oklahoma that the mail-order
man was the bogey gentleman who was killing off the country
towns, and that once he got the farmer in his clutches he stopped
nothing short of taking the farmer’s shirt, his family, and the
old home farm. Still others lay the decline to the coming of the
rural route that killed off thousands of country post offices that
operated profitable country stores as side-lines. Country mer-
chants all over the land fought the parcels post as the latest
weapon of the city merchant and especially the mail-order mer-
chant aimed at their destruction. Country merchant influ-
ence forced the zone system of parcels post distribution, and
now the mail-order merchant cashes in on the zone system by
shipping his merchandise and catalogues by freight to various
distributing points and then using the parcels post.
We must first get it out of our minds that the farmer is going
back. An investigation of country towns along the Rock Island
Railroad showed that 70 per cent. of all the bank deposits were by
farmers, and that out of an average of eleven directors per bank,
from three to nine were retired farmers. In Kansas one farmer
86 RETAILER'S FIELD AND PROBLEMS
out of every five owns an automobile. In Missouri the ratio is a
little better than one car to every twenty farmers. A visitor
at a Michigan county fair in September, 1914, counted more than
2,300 automobiles. At the University of Missouri more than
2,000 students out of a total enrollment of 3,500 listed their
fathers as farmers and retired farmers. A glance at the mem-
bership of any of our State legislatures will show a good big
proportion of the membership is made up of farmers and re-
tired farmers. -
No, the farmer is not going back. He is going ahead. He is
becoming a better business man and is buying better things
and living better every year. Investigators for the
- º: United States Government have recently reported a
Te IV of wº e
G. H.; steady increase in the tendency of farmers to form
co-operative buying units. The co-operative selling
idea has been a success for some time.
What have the average country-town merchants been doing
in the midst of all this general prosperity in their trade terri-
tories? They have been doing just what a majority of the
country preachers and a majority of the country editors have
been doing. They have been exerting themselves just enough
to get by with the least possible effort and thought and prac-
tically no service. -
The main cause for the decline of country towns and country-
town merchants lies in the general lack of efficiency and modern
business judgment on the part of the country merchants them-
selves. In brief, the average country merchant spends too
much time in damning the “interests” that he thinks are forcing
him out. He spends too much time in trying to keep his compet-
itors from getting ahead, instead of studying his own problems
and trying to get ahead himself.
Fortunately there is a dawn of light in all this general deso-
lation of country towns. In many towns, through the organiza-
tion of retail merchants’ associations, commercial clubs, and ad
clubs, the towns are awakening to their problems. When this
happens the town takes on a new lease of life and goes ahead
instead of the reverse. Through the study of credits the coun-
try-town merchant is finding that the desirable cash trade of
his community is going to larger trading centres through the
medium of mail-order buying, while he is left to deal with the
cheaper, poor-pay customers.
In opposition to this tendency to trade away there has started
RETALLER'S FIELD AND PROBLEMS 87
the “Trenton (Mo.) Idea,” the Franklin Co. (Kan.) Associa-
tion,” the “Hampton Plan,” the Neosho (Mo.) Ad Club Plan,
and a number of other movements. Many towns are
Wº: * copying wholly or in part these schemes. The first two
are similar in that they are based upon a closer union
between the merchant and farmer, the local organiza-
tions being composed of both for the common development of the
community. The “Hampton Plan” includes this feature and in
addition the idea of coupling up with national advertising, by the
local merchants, as a way of boosting the prestige of the town
as a retail centre by showing that the stores have in them goods
of national fame at prices as low as can be secured elsewhere.
These small towns have a new type of commercial secretary
who is rapidly developing into a town business manager. He
maintains in his office the leading books and periodicals on ad-
vertising, business promotion, foreign trade extension, credits,
store efficiency, window trimming, and so on. He advises mer-
chants on their advertising copy. He inaugurates trade exten-
sion movements. He plans celebrations, corn shows, municipal
Christmas trees, downtown lighting systems. He sometimes
has a vigilance committee that keeps the fly-by-night fire-sale
fiends away, and discourages misleading advertising. He
has a filing cabinet that contains the thumb-prints of all the
professional dead beats of his town and other towns.
This type of town has taken the farmers into partnership
with the business man. The farmer has learned that the proxim-
ity of a good town with a market for his products means an
increased valuation for his farm. This type of town and this
type of rural community will forge ahead because it is based
on that old word with a modern meaning—service.
The national advertiser will find all these towns responsive
to his dealer work and excellent places to establish a second line
of defence against the encroachment of chain stores, private
brands, and other forms of opposition to his methods.
The Hampton plan referred to in Mr. Powell’s article has
created a good deal of comment. It is described in somewhat
more detail in the following article:
*Westfield, Mass., and other small towns which have made
themselves famous are going to have a close rival in Hamp-
*Printers' Ink, February 11, 1915, p. 55.
88 RETAILER'S FIELD AND PROBLEMS
ton, Ia. The merchants of that town have seen a great
light. They are going to start a campaign of coupling up with
national advertising, using the means they have at hand, their
local papers, their windows, the United States mail, etc., in
an effort to show that their stores have in them the best-known
goods in America. They are going to demonstrate that they
are entitled to all the patronage of buyers of their neighbor-
hood, to draw new buyers from a distance, and to “cash in ’’
on general publicity. If the idea proves “a go” in this typical
farming centre, the farm-paper publishers will extend the cam-
paign throughout the country. In other words, Hampton is
to be made a sort of laboratory test.
At a meeting of the Commercial Association of Hampton,
President E. P. Andrews related how he and others had become
interested in a plan suggested by the trades relationship com-
mittee of the Agricultural Publishers’ Association.
H. G. Larimer, of Chariton, Ia., whose success in coupling
up with national advertising has already been described at
length in Printers' Ink, told how he had built up a retail business
in his town of $60,000 by pushing advertised goods.
“During last November,” he said, “there were many days
when more than 50 per cent. of my sales were with farmers who
lived outside my county. The same thing can be done in
Hampton.
“Each merchant carries certain lines of nationally advertised
goods. Get in touch with your manufacturers; tell them what
you want to do. And don’t forget that one of the most essen-
tial things in advertising is timeliness—it would not pay, for
example, to advertise B. V. D. underwear in February. This
campaign will be built on timeliness. Find out from the manu-
facturers when various lines are to be advertised heaviest.
Then couple up with their advertising campaign. Insist upon
wholesalers and manufacturers furnishing all kinds of dealers’
helps, inserts, circulars, etc., to mail out to the trade.
Cultivating “Did you ever see one of these old ‘crabs’ who look
Affaii; as though they never smiled in their life? Watch
as an Aid them when they run for office. They are affable,
* Sº pleasant, and can get out and fraternize with every-
* body. Practise along this line. Put it on a little
stronger. A colored woman once told me, ‘I like to trade in
your store.’ I said, ‘I am glad you like to trade here, but why
should you like to come here rather than elsewhere?' She re-
RETAILER'S FIELD AND PROBLEMS 89
plied, “This is one place I am treated as a lady, whether I am
one or not.” Everybody likes a slap on the back. Don’t be
afraid to tell Jones, who has been trading at your store a long
time, that you appreciate his business. Act as if you really ap-
preciate his help.”
James M. Irvine, of the Curtis Publishing Company; E. W.
Rankin, representing the Capper farm papers; Arthur Haubold,
of the National Farm Power Papers, and S. R. McKelvie, pub-
lisher of the Nebraska Farmer, spoke in support of the plan.
C. F. Roemer, of Hampton, president of the Iowa Retail
Dealers’ Association, said:
“There is good for Hampton in most advertising. I, as a
general implement dealer, have been selling, among other goods,
one article for seventeen years. That article is advertised in
farm papers. It is the De Laval Cream Separator. Seventeen
years ago a 350-pound separator sold for $125. This machine
has been nationally advertised and I have advertised it locally
to couple up with that of the manufacturer's advertising and
get the benefit. To-day their 900-pound machine sells for $110.
The 350-pound machine sells at $70. This bears out the state-
ment that the cost of advertising is not added to the cost of the
goods.”
Cards were distributed reading as follows:
BUY IT IN HAMPTON
BECAUSE HERE ARE FOUND AMERICA’s BEST KNowN GOODS—THOSE THAT
HAVE THE TRIPLE GUARANTEE
(1)
Guaranteed by Our Own Reliable Merchants
(2)
Guaranteed by the Leading Manufacturers of the United States
(3)
Guaranteed by the Foremost Farm Papers and Magazines
BUY IT IN HAMPTON
The meeting at once raised a fund to engage a manager for
the “Buy It in Hampton” campaign, and started work. It
has already attracted attention among national advertisers,
who see in it an opportunity to make their advertising much
more effective, and perceive the fact that the small-town mer-
90 RETAILER'S FIELD AND PROBLEMS
chant often carries more nationally advertised lines of goods
than those of the larger cities.
The Agricultural Publishers’ Association plans, after Hamp-
ton has succeeded in the work, to spread the idea by the use of
trade papers and convention work.
One development which promises to take on great importance
in the next few years is the development of analytical methods
and their application to selling problems. In the case of the
small-town problem it is comparatively easy to make use of
data already available, and it will not be long before advertisers
will have as much of such material as they need for a really
careful study of the retail-town problem. W. H. Bridgman,
at a recent meeting of the Wisconsin Farmers’ Course and Coun-
try Life Conference, gave the following summary of the business
conditions of Stanley, Wis., which indicates something of the
simplicity and definiteness of this phase of the market-analysis
problem:
*The subject of this paper is a typical American small city
whose population in 1900, according to the United States cen-
sus, was 2,387. In 1910 it was 2,675. Apparently it is en-
joying an increase now in a ratio equal to that which prevailed
during the ten years which elapsed between 1900 and 1910,
It was originally a sawmill settlement in the woods, its loca-
tion being determined by the proximity of much merchantable
pine and other timber. The first settlers brought hither to the
number of 300 or 400 to man this single industry were Scandis
navian in nationality. They left the impress of their character
on the town for all time.
These people are extremely conservative in their business
habits and inclinations as related to their personal affairs an
as related to public affairs. They never loaned themselves
to the plans of the town boomer and real estate speculator.
They always cast their votes against bond issues in any con-
siderable amount, and the city indebtedness, except for a few
ºrt-time loans for school buildings, has always been practically
Illl.
*Advertising and Selling, September, 1914, p. 78.
RETAILER'S FIELD AND PROBLEMS 91
Notwithstanding this the city has to-day $100,000 invested
in school buildings and equipment, nearly a mile of brick and
cement paved streets, a fine sewer and water system, a brick
city hall, and well-lighted streets, and the people are grateful
to those who, during the first thirty years of the city’s life,
have seen fit to steer clear of the shoals of debt.
The schools cost twenty thousand dollars a year, with courses
in domestic science and manual training. The assessed valu-
ation is one and a half millions and the tax rate 2% per cent.
Six hundred and fifty children attend the public schools. The
high school has approximately one hundred and fifty students,
half of whom are from the neighboring farms.
I deemed the above preliminary statement essential to an
intelligent analysis of the business of the town. In keeping with
the usual course, as the timber areas receded the farms have taken
their place, and while the lumber manufacturing industry is
still the important industry of the city, the logs are brought from
a'considerable distance by rail, and on three sides of the city for a
distance of ten miles the improved farms occupy practically
the entire area, but with a population much less dense than is
found in similar areas of older settled farming communities.
I have been unable to estimate the density of this population
with any considerable degree of accuracy, but I have taken the
delivery of the Stanley post office as the basis on which to esti-
mate the population tributary to the city in a business way. I
find that mail is delivered to 1,200 resident families in the city
and surrounding country, indicating a population of at least
6,000, more than half of which is from the farms. I find that
five hundred families of these farmers are supplied from the post
office by carrier.
The trade of these people is with Stanley merchants or dealers
in all the following lines: General merchandise, including gro-
ceries, meats, and provisions, feed stuffs, drygoods,
Amounts clothing, shoes, hardware, lumber, brick, lime, cement,
Y º, implements, and vehicles, approximately $600,000 dur-
early in . tº
Dj.n. ing the year, 1913, or approximately an average of
fines $500 to each family in Stanley and the Stanley
country. To pursue the analysis, hardware sales
amounted to $80,000; groceries, $150,000; shoes, $80,000; cloth-
ing and drygoods, $210,000; lumber, $50,000; brick, $3,500;
implements and vehicles, $75,000; feed stuffs, $52,000; jewelry,
$12,000; drugs, $20,000, and furniture, $20,000. This trade
92 RETAILER'S FIELD AND PROBLEMS
was about equally divided between the farm and the city
homes, with the exception of the following lines: vehicles and
implements practically all with the farmer. Furniture, 25
per cent. with the farmer; meats, only 10 per cent. with the
farmer; jewelry, only 10 per cent. with the farmer. I find
that 75 per cent. of the farm business is cash business, while only
about 60 per cent. of the city trade is cash business.
The dealers in general merchandise and regular dealers in
grains and feeds bought from the farmers $100,000 worth of prod-
uce, such as grains, poultry, butter and eggs. This
fº.º. does not include live stock. In addition to this the
f.” local creamery bought cream for $100,000. The pea
cannery paid $30,000 for peas. The potato dealers paid
$30,000 for potatoes, and a salting station paid $12,000 for cucum-
bers. A rough estimate of live stock purchased by dealers is
$150,000, and the farmers probably sold $10,000 worth of wood to
customers in the city. This totals $432,000. In this connection
the cheese factories, many of which are located in territory tribu-
tary to Stanley but outside the city, should be taken into account
as perhaps the farmer's most important source of revenue.
The total bank deposits in the two banks of the city are
$430,000, $250,000 of which is farmers’ deposits. The loans
of the two banks are about $420,000, and the farmer loans al-
most exactly equal their deposits.
The so-called mail-order business is an important factor in
the relations of this city as of many others with its tributary
population. The amount of this business is difficult to esti-
mate with any degree of accuracy, but I found records of busi-
ness with Chicago mail-order houses by the farming people
amounting to $25,000. I am positive that I do not exaggerate
in estimating the amount of retail trade which is lost by the
tradesman of Stanley to the mail-order houses and large stores at
$100,000, and the amountshould be about equally dividedbetween
the city and farm populations, which is a fair proportion.
Such institutions as the creamery, the cannery, the cucumber
salting station, and potato warehouses bring many farmers to the
city regularly at certain seasons and make it convenient for
them to do their banking here and naturally benefits trade.
One certain nationality has found cucumber culture much to
its liking, the work being done by women and children on small
clearings on farms of small acreage. The men of these families
work at the mills and leave the women to do the farming.
RETAILER'S FIELD AND PROBLEMS 93
Another nationality finds dairying much to its liking and spe-
cializes in butter fat production, both for butter and cheese.
People of different nationalities are wont to colonize to some
extent, and a certain industry frequently finds favor with a cer-
tain nationality of immigrants.
The Scandinavian people who populated the city, being born
and bred lumbermen, do not become farmers to any great ex-
tent, but move on westward as the centre of the lumber in-
dustry moves.
My observation is that the most important factors in the re-
lations of the city people with those of the surrounding country
are the schools and the churches. Many of the high school
students from the farms spend their nights at home, while
those who board occasion two trips to the city by the home folks
during the week, who bring them to the city on Monday and
come after them on Friday.
Practically all of the church affiliations of the 6,000 or 7,000
people of Stanley and the Stanley country, with the exception
of a possible 500, are with church organizations in the city of
Stanley.
The place of national advertising in this problem of the
“regular” retailer’s knowledge of his market is brought out
in an article on the general store by Frank Farrington, editor
of the Inland Storekeeper, who has a wide reputation as an alert
student of the small retailer’s problems. In this article he says:
*The proprietor of the village general store knows little and
cares less about chain stores and their ravages among the small
individual dealers. He is not worrying about whether he shall
sell advertised goods or not. The high cost of living is to him
largely a subject for the attention of newspaper and magazine
writers, turnover means a kind of cake, and the war is a his-
torical event a long way off.
All of which is merely another way of saying that our small-
town and crossroads general merchants are sawing wood and
saying very little.
When I say general store, meaning it in the common sense,
I do not refer to commissary and company stores, such as
are run throughout the South and in the lumber sections of
*Printers' Ink, November 26, 1914, p. 51
94 RETAILER'S FIELD AND PROBLEMS
the Northwest. These stores sometimes employ managers
who have made a considerable study of business methods and
who occasionally are quite scientific in their work. I refer
rather to the average storekeeper in the small community,
operating a store which sells anything he thinks he can make a
profit on, and who does not hesitate to throw out that which
does not pay at least an apparent profit.
Taking the census figures we find reported the following stores
in towns of 5,000 and less serving 53,639,074 of our population:
General stores. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141,724
Groceries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,131
Drygoods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,733
Shoes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,035
Drugs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,870
Men's furnishings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,474
Clothing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,206
Hardware . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,143
Jewelers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,463
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 256,779
In the aggregate these handle a tremendous amount of goods.
With an average annual trade of $5,000, they will sell mer-
chandise each year up to the gross amount of $1,283,895,000!
There is a business worth going after, and it is all provided
with credit facilities, and, what is more, with the money to pay
its bills. South America may have a business of twice as much
waiting for us, but it hasn’t the money now. Here are 256,779
merchants who sell from $1,000 a year up to $100,000 a year or
more, and they have the money. If there is any money in circu-
lation anywhere it is in the small towns.
The farmers have plenty of everything to sell. They are the
customers of the general stores; they and the village business
men, who, in turn, get their money from the farmers.
The war has not interfered with the business of these mer-
chants, except to the extent of inconveniencing them a little
about getting just exactly the goods they have ordered.
No. 4f. If prices have been a little higher, they have merely
ſºu charged more. Even in towns as large as 10,000 in
Worries up-state New York business is going on as usual. The
local daily papers there play up the war no more than
any other news. Unless they are sensational, they have re-
duced the ordinary war heading to single column. “We can’t
RETAILER'S FIELD AND PROBLEMS 95
sell any of these war weeklies,” says the newsdealer in such a
town. The war has not shaken the rural population out of its
groove.
The farmer likes to sit back a little while in the evening and
read in his newspaper the progress of the war, but as for its
making any difference in the amount of business he is giving
the local storekeeper, it only increases it by giving him rather
more money to spend.
Throughout the Middle West there are thousands of small
communities where practically all the business is handled by
general stores, which carry everything up to the latest of the
advertised goods. These stores are managed by men who are
on the lookout for new goods, and these stores are selling many
brands of advertised goods.
Investigations have shown the following goods to be in active
demand in general stores:
Ostermoor mattresses Porosknit underwear
Holeproof stockings Munsingwear
Black Cat stockings Walk-over shoes
Hart, Schaffner & Marx clothing Douglas shoes
Queen Quality shoes President suspenders
Whittemore shoe polishes Boston garters
Prophylactic toothbrushes Velvet Grip
Colgate's dentifrices Gillette razors
Sanitol dentifrices Omo dress shields
DeLong hooks and eyes Rleinert dress shields
Arrow collars Warner’s corsets
Oriental collars American Lady corsets
Hoosier kitchen cabinets White Mountain refrigerators
Jewel stoves
Arctic refrigerators
Alwin baby-buggies
Haywood baby-buggies
Ivory soap
Gold dust
Mellin’s food
Kellogg's corn flakes
Bissell carpet sweepers
Gold Medal flour
Royal baking powder
Knox gelatine
Remington typewriters
Oliver typewriters
Winchester arms
S. & W. arms
Colgate's perfumes
Gage hats
Toledo steam cookers
Universal food choppers
Enterprise food choppers
Elgin watches
Ingersoll watches
Baker's cocoa
Karo corn syrup
Post toasties
Liquid veneer
Uneeda biscuit
Ringsford’s starch
Rogers’ silverware
Clipper lawn mowers
Ferry’s seeds
Burpee’s seeds
Mennen’s talcum
Old Trusty incubators
Kodaks -
96 RETAILER'S FIELD AND PROBLEMS
Ford automobiles Armour's beef extract
Campbell’s soups Durkee’s salad dressing
Van Camp’s pork and beans Heinz’s products
Mason fruit jars Macbeth lamp chimneys
Richardson's silk Diamond dyes
Corticelli silk Fleischer's yarn
Estey organs Seth Thomas clocks
Edison talking machines Victrolas
This list does not pretend to be complete, and might easily
be doubled in length to-day.
In the East the average volume of small-community busi-
ness is smaller than in the Middle West, but in a little village
of a couple of hundred people in the Catskills there are
º * three storekeepers hauling in their goods about nine
jaji.e. miles by team, and the smallest of the three paid
freight and teaming charges the past year on 200 tons of
merchandise sold over the counter. The two others handled
amounts largely in advance of that. This in addition to such
bulky stock as dairy feeds and grain, of which some 350 car-
loads went into the town to be sold through three dealers. And
this community is not a rare exception.
One product of the section mentioned is creamery butter.
One creamery in a recent year bought some seven million
pounds of milk, for which it paid the farmers cash monthly.
While the Eastern farmers are not getting grain money like
those of the West, they are getting its equivalent in other forms,
as above.
To-day the farmers of the East are getting 28 cents per pound
for dressed turkeys, all they can ship. Their hens cannot pro-
duce eggs fast enough to keep the market price to the farmer
down to 40 cents. Butter and milk are in proportion. If there
is money anywhere it is in the pockets of the customers of the
general stores. This is not a war-time condition solely: it is the
usual thing. There have been hard years for the farmers, but
they have been the exception, and scientific farming and increased
demands have made such years a thing scarcely to be feared.
The general storekeeper in the country does not know much
about scientific management. He hasn’t time for it, or he
thinks he hasn’t, which amounts to the same thing. His busi-
ness must be large and his goods must pay good profits, because
he is wasteful. His dead stock accumulates rapidly and he
lacks the initiative to get rid of it as a city merchant will and
RETAILER'S FIELD AND PROBLEMS 97
must. He is improving as a class and adopting modern methods,
but there are still very backward exceptions.
Within a few miles of me is a store doing a business of $20,000
a year in a general line. It is managed in viólation of all the
rules for successful store management. The proprietors trust
every one who wants to be trusted, and when they cannot col-
lect they take a judgment and get something. They buy any-
thing the farmer has to sell. They sell him anything he wants
to buy, and they cut prices on a few things just enough to en-
able them to say they are selling cheap. This general store
needs modern methods and better financial handling. But it
makes money as it is, by sheer volume of business. It could
make more. It might handle better goods and handle them
better if the manufacturers would give its proprietor the ad-
vantage of what they know about good storekeeping. Gen-
eral storekeepers are not as keen as they might be about mod-
ernizing their stock and methods, but they do respond to right
missionary work. -
Some time ago I told the readers of Printers' Ink that a ran-
dom list of country merchants, whose annual business was
known, averaged over $20,000 each, with stores averaging
2,600 feet of floor space. It would scarcely be possible to take
a list of city dealers without making a special selection for the
purpose and get as good a showing. . -
If we go to Dun or Bradstreet and select only the best-rated
small-town merchants east of the Rockies and north of the
* Ohio, we will get about 30,000 of them. These are men
4. the figures show to be good business men and live
#. operators. Their business bulks large, but don’t make
Agencies the mistake, Mr. Manufacturer, of ignoring the country
merchant who is not rated or who is poorly rated.
There is only one way to be sure the general storekeeper is
not doing enough business to make him worth approaching,
and that is to see his store and talk with him. The fact that
he does not show up well in the commercial agencies’ books
shows not that he has no business or money or credit, but that
he prefers to keep his affairs to himself.
I have been a small-town merchant. I have hundreds of
small-town merchants whom I count my friends. I know that
these men do not take kindly, as a rule, to the representative
of the commercial agency or to the complicated-looking blanks
he offers them. True enough, he approaches them politely,
98 RETAILER'S FIELD AND PROBLEMS
and he is perhaps entitled to the information he wants. He
says he only wants to know a few of the main facts, but when
you have filled in the whole of one of his blanks, you have given
the story of your financial life. The country merchant will
not do it. He can buy all the goods he wants. His jobbers
trust him. If the manufacturer doesn’t want to trust him, he
needn’t do so. He should worry; that is his attitude.
To the question, “Do you give the commercial agencies a re-
port?” I have heard merchants here, there, and all over reply,
“No. It’s none of their business how much I owe or how much
I’ve got in my wife’s name. I can buy all the goods I want.”
Of course, the attitude is wrong. It is not the whole of busi-
ness prestige to be able to buy all the goods you want, but we are
looking for facts. The facts are that the manufacturer is watch-
ing the man of South America form in the smoke of his 35-cent
panetela, forgetting that the map of the United States, showing
the smallest post offices, is hanging on the wall right back of him.
Let any manufacturer take a map that shows all the post
offices of any section and spot with red the communities where
he knows his goods are sold. The freckles will be as far apart
as the buttons on a two-button Balmacaan. “I can’t send my
men into those little villages,” says the manufacturer. “It
takes too long to get in and get out again.” Perhaps this is so.
But there is a great volume of business filtering through these
villages and somebody thinks enough of it to go after it.
The jobber's man gets there and perhaps he takes your line
and perhaps he does not. You and I know, and so does the
The jobber storekeeper know, that if the jobber's salesman has
and His any private-brand stuff that competes with your ad-
Private vertised line, the private brand is the one that comes
* in in case lots, while the advertised kind comes only
when it must. .
The general storekeeper is more independent in marking his
goods than the city merchant. The latter marks them as he
must to meet the competition around him. He does not have
the privilege of selling at such a rate as he thinks will pay him
a proper profit. The general storekeeper can mark the 25-
cent size of a proprietary medicine up to 30 cents if he likes,
and get by with it, too. He does not figure up how much it
costs him to do business and say to himself, “This package
costs me sixteen and two thirds cents. My percentage ex-
pense of doing business is 18 per cent. On the selling price, which
RETAILER’S FIELD AND PROBLEMS 99
is 22 per cent. on the cost price, so I must get 22 per cent. of
163, which is. . . . .” Not on your life. He says, “Two
dollars a dozen. That sells for a quarter.”
Does the mail-order house sell the same thing for 19 cents, or
does the nearest large town cut the price about the same amount,
Mr. General Storekeeper goes peacefully along his way with his
profit-paying price just the same, unless enough of his customers
complain so that he has to meet the outside quotation.
If the goods come into the store billed at $2.50 per dozen,
they may slip by without getting much attention if they are
something that sells only once in a while. The general-store
man does not dig very deep into facts and figures on the items
of semi-occasional sale. But let an article get to where he is
buying it regularly and finds that he must give up 20 cents for
something to sell for a “quarter,” and he will investigate the
cause and forever after, in spite of changes in policy or even
price, remain antagonistic to the goods.
In order to acquire the trade of the country storekeeper the
manufacturer must start right. In order to retain that trade,
he must keep right. He must not make the fatal error of raising
the price just because he thinks the trade will insist on having
the goods. The country storekeeper will not insist on having
anything but a profit. It may be a difficult thing to get him
to stock your line at first, but it is nothing compared with the
difficulty of getting him to restock it after once getting dis-
gusted with it and throwing it out.
What kind of trademarked goods does the general store sell
in quantity sufficient to be of interest? He sells all the neces-
saries of life, of course. Some of these are trademarked brands
and some are not. Many of those which he sells in bulk or in
brands not trademarked would be replaced by the advertised
kind if the right kind of encouragement were offered. In some
cases this replacement has occurred.
Here are some of the goods in which the farmer is specially
interested and which might be sold to him in trademark brands:
Veterinary remedies, machinery and implements, tools, locks, chains, and
ropes, wagon and auto jacks, kitchen-ware, foot-warmers, axes, heavy shoes,
seeds, harvesting machinery, guns and ammunition, farm explosives, gasoline
engines, wire fencing, refrigerators, builders’ hardware, poultry and stock foods,
lamps and lanterns, automobile and wagon accessories, brooms, scales, and
measures, cutlery, horse-blankets, fur coats and caps, rubber boots, paint, lap-
cloths, fruit-tree spraying material and tools, insecticides, heating apparatus,
roofing, bathroom supplies, window and door screens, oil or gasoline stoves.
.*
* @
*
g &
*
*
&
º
I00 RETAILER’S FIELD AND PROBLEMS
In addition to all of these, the farmer and his family are inter-
ested in and are possible purchasers of practically everything
that any one else buys.
The country general store to-day is a distributing point for
supplies for a very large proportion of our population. It will
pay any manufacturer to study the census reports in this con-
nection. The possibilities are ample to occupy the mind and
imagination of the most ambitious.
One of the best indications that the village merchant will
adopt progressive methods and modern ideas is the tremendous
success the makers of computing scales and cash-registers have
had in selling in this field. These are sold to him purely on
their efficiency value—a strong hint to the manufacturer who
may think that the general-store merchant is uneducatable.
The merchant who will buy modern equipment will buy trade-
marked goods every time. He is that kind of a dealer.
(2) APPLICATION OF MODERN METHODS OF MANAGEMENT
Reference has been made to the articles on “Keeping up
with Rising Costs,” in which System has presented some of
the results of its study into the possibility of modernizing retail-
store methods. This series will repay any retailer for any
amount of careful study.
The principles of scientific management as developed by the
late Frederick W. Taylor were worked out, primarily, for indus-
trial enterprises. But the system of thought upon which they
are based certainly has value in commercial operations as well.
Most of the refinements of the system call for a larger field for
application than is furnished by the ordinary retail store, but
the five principles described in the following article by C. Ber-
trand Thompson clearly have value to any retailer. And sooner
or later they will perform their part in bringing retailing to a
better basis:
*Running a retail store by scientific management is an idea
quite new to store managers. They have heard of scientific
*System, December, 1914, p. 568. Other articles in this series are to be
found in System, January, 1915, p. 66, and February, 1915, p. 178.
RETAILER'S FIELD AND PROBLEMS 101
management and the possibility of its application to railroads,
and they know that factories and a few government establish-
ments are being operated under scientific management. The
popular idea of this particular development is that it consists
in the application of stopwatches and motion study to the work
of operatives and the administration of a factory with an ex-
cessive amount of red tape. -
One would not have to reflect long, however, to arrive at the
conclusion that, if this is all scientific management consisted
of, it would have died a natural death long ago, instead of being,
as it is, the livest issue in modern industrial developments.
Scientific management includes time study and motion study
and an elaborate number of forms and records which naturally
gives the appearance of red tape. But these things do not
constitute the system; they are merely parts of the mechanism.
The system itself consists of a series of principles whose applica-
tion, as made by Fred W. Taylor and his group of engineers,
is but one particular form. The mechanism is in many cases
not adaptable to retailing, but the principles are. . . .
The fundamental principles of scientific management
rº as practised in industrial establishments are: first, the
... organization of the present scattered knowledge in
Principies regard to the business into a coherent science; and,
Second, the organization of the human and material
factors involved to secure the most efficient application of the
science.
That there is a science of production has been known to
engineers and factory managers for decades; and that this sci-
ence includes not merely the chemistry and physics of engi-
neering, but the technique of machine operation and hand work
has been demonstrated for years under scientific management.
As Mr. Taylor has shown, there is a science of shovelling as
well as a science of bridge building—simpler, of course, but none
the less ascertainable and definite. There is a science of selling,
too, and many people are trying to find out what it is, thus recog-
nizing the application of this manufacturing principle to market-
Ing.
The principal methods in a scientifically managed factory for
securing proper organization of the human and material factors
include: first, the selection of the right men for the job; second,
the systematic training of each man for his job and for transfer to
other jobs when needed; third, an accurate determination of a
102 RETAILER'S FIELD AND PROBLEMS
definited uantity and quality of work which each man may reason-
ably be expected to produce, day in and day out, without in-
convenience; fourth, the establishment of such conditions as
will in every way facilitate the work of the operator, such as
careful planning of all work in advance and having on hand at the
machine or work place all the materials, tools, and instructions
necessary for the workman to proceed; fifth, the payment of a
wage sufficient above the ordinary to be an inducement to the
workman to accept the instruction and other facilities offered
him.
Some of these methods are already familiar to store and sales
managers and have been consciously developed, in some cases,
to a high degree of perfection.
Though it cannot be said that the selection of salespeople,
buyers, and the force of help about a store, is done on any no-
ticeably scientific basis, it is evident that considerable thought
has been given to the training of such people as are actually
employed. Classes in salesmanship are quite common. Com-
mittee meetings of buyers, and so on, practically amount to the
same thing; and frequent conferences between the heads of a
concern and their subordinates are in many stores the occasion
of definite instruction. Conventions of salesmen are utilized
for the same purpose. Thus the second method has secured
considerable recognition.
The establishment of a quota of sales, whether as the basis
for the tenure of a job or the fixing of a salary, is a recogni-
tion of the third method: the establishment of a definite task.
Fixing the salary proportionally to the sales made, whether
in the form of commission, bonus, premium, or what not, is
in a degree a recognition of the fifth method—I say “in a degree”
because the increased compensation in selling is usually paid
simply for the product; that is, the quantity of sales and not,
as in factories operating under scientific management, for the
acceptance of instruction and increased facilities provided by
the management, which brings with it as a by-product an in-
crease in output. Commission and premium schemes as ap-
plied to sales are more like the old piece-rate system in factories.
In the piece-rate system some one sets a rate according to his
judgment, and the worker is paid exactly in proportion to the
number of pieces produced. The management does nothing
in particular to assist him in production, but depends on the
operator's initiative and ability to devise improvements and
RETAILER'S FIELD AND PROBLEMS 103
increase his output. This is evidently entirely different from
the method of scientific management, which has standardized
so far as possible all the conditions under which the operator
works, trains him thoroughly to the best use of the conditions
provided, sets a task based upon the continuance of such con-
ditions, and pays a high rate for their acceptance.
It should be clear from this comparison that the feature in
which sales management is most undeveloped in comparison
with factory management is in the organization of the conditions
in which the work is done. In other words, in the adequate
performance of the duties which should devolve upon the man-
agement and which affect sales only indirectly. Take the stock-
handling system of any large department store as an example.
The store gives the best of its attention and ability to advertis-
ing, to the selection of buyers and the training of salespeople;
but its store and stock-rooms are usually inadequate, poorly
lighted, poorly located, poorly accounted for, and, in general,
in comparison with the factory storeroom, quite inefficiently
managed. The expense connected with the management of
a storeroom is charged as “non-productive” or “burden” and
the idea, now becoming obsolete in factory management, that
overhead or indirect expense is a burden and therefore to be re-
duced to a minimum, still prevails largely in marketing.
The same observations apply to the usual retail accounting
systems. They are looked upon as a necessary evil. As much
attention as is necessary is given to the commercial accounts—
those by which the manager keeps posted on how much he
owes and how much is owing to him. But of cost accounting,
as that term is known to the factory manager, there is little or
nothing; and yet it is reasonable to suppose that the same
methods of cost accounting which have fully demonstrated their
value in manufacturing might be at least equally useful if applied
to selling. * @
. . . The manufacturer considered that he existed to
make the product and that his chief problem was to make it as
quickly and as cheaply as possible. The product was apparently
made “at the point of the tool,” and it was therefore the technique
of machinery, equipment, and material that got his attention. It
was at least twenty years ago, however, that manufacturers dis-
covered that there was more involved in the economical making of
a product than merely the machinery and the material. The
propaganda of “costs” called his attention to the fact that the
104 RETAILER'S FIELD AND PROBLEMS
indirect expenses of his business constituted a large element in
their real cost; and with this discovery came the resolution first
to find out exactly what these indirect expenses were, and then
to take the necessary steps to reduce them to the minimum con-
sistent with efficient operation or else to make them of value
proportionate to their cost. This determination to eliminate
wastes of equipment, materials, and later of effort is behind the
whole modern movement of scientific management.
The time seems to be ripe for retailers to pursue the same
course. Nothing is more striking to the student of industrial
methods than the co-existence in the same store of the most re-
fined methods of buying, advertising, and selling, with the very
crudest methods of receiving, storing, handling, and delivery
of goods, and the most cumbersome methods of accounting.
The relatively greater profits in retailing—or perhaps the ig-
norance of the retailer as to the real extent of his profits—have
succeeded in covering up the necessity for close supervision
and the importance of detail. Retail merchants, however, are
already bitten with the cost germ and are discovering that their
profits are not quite what they thought they were. Or else
they have begun to take a pride in the efficient management of
their business for the sheer artistic satisfaction that comes from
doing a thing exactly right, and they appear to be at least in a
receptive attitude toward scientific management.
As the store manager reads this and reflects on the great
mass of printed forms, running into the hundreds, which he
uses, he may wonder what these statements mean. It looks
to him as though, if his store has anything, it certainly has sys-
tem. It undoubtedly does have system of the type familiar to
manufacturers fifteen years ago: that is, numerous and vari-
egated cards and sheets, expensively ruled and highly colored.
It is the very quantity and complexity of these forms and the
clumsiness of their use which open him to the charge of waste-
fulness. Retail merchants should see what manufacturers
have long since discovered, that efficient system does not con-
sist in a multiplicity of forms, but in the quick, accurate, and
economic securing of valuable results in the way of useful in-
formation in regard to the business, and more particularly in
the reduction of wasted effort.
The extent of antiquated methods in the administration of
retail establishments as revealed by recent investigations would
almost lead one to question whether store managers are any-
RETAILER'S FIELD AND PROBLEMS 105
where near ready for any form of scientific management. One
gains reassurance, however, from the readiness with which shoe
retailers are accepting and installing the uniform cost account-
ing system developed and provided for them by the Harvard
University Bureau of Business Research. Reports from all over
the country indicate that this system is not only being adopted
bodily by leading shoe retailers but is also influencing the account-
ing system and business methods of many more. This cost
system should lead retailers, as similar systems led manufactur-
ers, to take the next step, which is to reduce the costs of doing
business as soon as those costs are accurately ascertained.
As I have pointed out in former articles,” the beginning of
wisdom is analysis and classification. A classification once
made is exceedingly useful and pays for itself many
The times over, as will be shown later. But even more
P* valuable than the classification is the detailed analysis
O * tº tº ſº tº
Bºn of the business which is necessary before classification
can be begun. Before you can classify your costs, you
must know exactly, exhaustively, and in minute detail what you
are spending your money for; and the mere gathering of this
information and putting it down on paper is in itself a startling
eye-opener.
Probably the first thing it will show is that from twice to
five times more blanks and forms are being used than are neces-
sary, and that, with proper management, the clerical force can
be considerably reduced and quicker and more accurate results
secured. It will also undoubtedly show, in a fairly large store,
that the stock of supplies of various sorts, such as wrapping
paper, twine, elevator supplies, janitor's supplies, and so on,
is a considerable but indefinite quantity, scattered all over the
place, and subject to no direct control whatever.
If the store runs a soda fountain or a restaurant, an analysis
of costs will probably show first that they (or at least the restau-
rant) do not pay; and an analysis of supplies will probably show
a variety of brands and of prices and a laxity of control which
may account largely for the deficit. t
You undoubtedly have, or can easily get, a sufficiently good
system of accounting for your merchandise. You know from
your inventory the billed prices of your purchases, the freight
*The earlier articles to which Mr. Thompson refers will be found in System
for September, October, and December, 1912, and January, February, March,
and April, 1913. -
106 RETAILER'S FIELD AND PROBLEMS
and cartage on them, and the discounts. It is not so safe to
wager that you know or can get easily the depreciation on your
stock or the cost of returned goods in the course of a year; but
even this you may have. If you are right up to the minute, you
know the cost of heat, light, power, repairs, and renewals of
equipment, depreciation of equipment, office supplies and ex-
penses; and, of course, it is easy to get your rent, insurance,
taxes, and licenses, and management of office salaries. If you
are running a small store as a unit, you can know, with this in-
formation in hand, whether you are making a profit. But if
your store is departmentalized even to the slightest extent, it
is reasonably certain that the indirect expenses are not being
apportioned properly over your departments and, consequently,
that you cannot tell which departments are running at a profit
or at a loss and how much the profit or loss is per department.
For you must remember that the mere accounting for merchan-
dise does not give you this information. Your merchandise
accounts may show a profit for a department which is in fact
entirely wiped out by a proper apportionment of your indirect
expenses; and it is precisely this indirect expense which store
managers as a rule know little or nothing about.
The analysis and classification of costs which I shall describe
is intended to make it easy to determine the exact amount of
indirect as well as direct cost and to provide a quick and easy
method of apportionment of the indirect over the direct cost.
It is not an easy and simple matter to make the analysis and
classification. On the contrary, it calls for a great deal of
thought and painstaking care. But as usual, thorough plan-
ning means easy application; and that such is the case with this
analysis and classification has been demonstrated. Applied
to an up-to-date department store in which the manager got
each month, from twenty to thirty days after the end of the
month, an accurate distribution sheet, its first result was to get
the distribution sheet five days after the end of the first month,
and three days after the end of the second. It is now used to
get a weekly distribution sheet laid on the manager’s desk the
first thing Monday morning.
For what kind of things does a store pay out its cash? In the
first place, of course, it pays salaries and its bills for merchandise,
and in most cases rent, and interest on borrowed money. In
addition it has many bills for freight, express, and cartage, ad-
vertising, office supplies, wrappings and delivery expense, in-
RETAILER'S FIELD AND PROBLEMS 107
Surance and taxes, repairs and renewals of equipment. In addi-
tion to these actual expenditures, the store should have a proper
charge for depreciation on stock and on fixtures. There will
be many other items of expense such as telephone and telegraph,
elevators, janitor service, stock handling, and so on, and in
some large stores there may be such adjuncts as an employ-
ment department, an information bureau, waiting rooms, and per-
haps even a bank.
This does not exhaust the list by any means. Every store
has an accounting department more or less developed, and
occasionally has to meet legal expenses and to pay for protec-
tion against theft. One of its largest items is likely to be for
advertising, including primarily newspapers, window dressing,
catalogues, and billboards, and extending into a wide variety of
special advertising accounts, such as contributions to charities,
fairs, and so on, dodgers, circular letters, programs, magazines,
and gifts, such as playing-cards, fans, rulers, pencils, and so on,
inscribed with the name of the concern.
To illustrate in further detail, the advertising department
may employ special men of its own, requiring salaries and wages;
there will be certain telephone and telegraph charges against
this department alone; it will consume a considerable quantity
of supplies and stationery, and in some cases may even main-
tain a small printing plant to set up large newspaper advertise-
ments in advance.
All these items and more need to be analyzed and classified.
The procedure will be explained in a second article.
CHAPTER IV
“DEALER HELPs” FROM THE RETAILER’s VIEWPOINT
changed by the betterment of advertising. The term
was employed originally to describe various devices
provided by national advertisers to help retailers sell the
advertiser’s goods. The term in this sense still covers a
large part of what is done by national advertisers for re-
tailers, and in this field much progress is being made year by
year.
But recently there has been added a new type of dealer help
which has even larger promise for future development. That
is the type designed to help the dealer be a better merchant,
and not merely to help him sell more of the advertiser's goods.
These two types are both making history very fast and it will
be worth while to examine them before taking up some of the
more general features of the relations between retailers and
national advertising. Our consideration of this adjunct of
advertising will fall into three main divisions. (1) The atti-
tude of the retailer toward dealer helps, (2) Some accepted
forms of dealer help, (3) Methods of using dealer help.
D EALER HELP” is a term the meaning of which is being
(1) THE ATTITUDE OF THE RETAILER TOWARD DEALER HELPs
There is no satisfactory way to learn how a majority of re-
tailers regard nationally advertised goods nor how they look
on the efforts in the way of dealer help made by national ad-
vertisers, because there is no general issue, and no chance for a
vote. Some retailers have expressed an opinion, however, and
that opinion in nearly every case resolves itself into favoring
108
“DEALER HELPS ’’ 109
anything which helps them make money and preserve their in-
dependence:
*A prosperous-looking, alert man about forty years old
walked into the office of Printers' Ink the other day. He wanted
to talk to somebody about the material that advertisers have
been sending out to the small-town dealers this fall. His name
is H. C. Larimer, and he owns a clothing store in Chariton,
Ia.—a big little town of 4,000, a typical Western farming
Centre.
Mr. Larimer was persuaded to talk about the character of
his town, and in the course of conversation it developed he did
a business of $50,000 a year. He had a mailing list indexed
and cross indexed to eliminate duplicate work. This list con-
tained 7,000 “live” names. He was in New York to look over
the styles and see what was what on Broadway. He wanted
to make sure that the farmers who depended on him for the best
and latest would not be disappointed. Quite different from the
small-town dealer of your childhood days, isn’t it? Yet Mr.
Larimer says he is only one of a number of clothiers belonging
to his association, who work lists of this size, and take just as
keen an interest in giving these prosperous farmers what they
want. Incidentally his views as to what advertisers should and
should not do, when it comes to dealer co-operation—especially
in planning advertising material—are mighty interesting.
To start with, Mr. Larimer made the statement that with
one exception no manufacturer with whom he did business
understood him or his needs. “They don’t seem to be able to
realize that there is all the difference in the world between the
dealer in the town of ten thousand and over and the dealer in
the farming centres like Chariton. In the small towns the
dealer must depend largely on his out-of-town business; he does
business on mail-order principles, and he requires a different
kind of co-operation from his larger-town brother.
“I want good, high-grade advertising material,” he said,
“especially the kinds which I can use in connection with the
mail campaigns which I am constantly waging. But I won’t
use anything that is not designed to appeal to the farmer. I
want different material for different purposes: material for the
farmer, his hired man, or his son. This material should have a
*Printers' Ink, November 26, 1914, p. 45.
110 “DEALER HELPS ’’
farm flavor about it; a manufacturer shouldn’t waste postage
on style books, mailers, blotters, and such matter ornamented
with a picture of some milk-fed youth with blooming cheeks
i. chic airs. I want men, real men, the kind we see out in
OW3.
“But all this material, to appeal to me, must be prepared
with some definite purpose. In other words, I won’t waste
, good American postage stamps on a whole lot of dis-
"...º connected advertising matter. Neither do I want a
jº..." lot of stuff thrown at me fighting the mail-order houses.
Mail-order competition is bad enough without being
reminded of it, and besides that is not the way to fight mail-
order competition. What I want is advertising material that
connects my store up with advertising in publications which the
farmer and his family read; but it has to do it in a way that will
not rob me of my individuality.”
“Just what do you mean, Mr. Larimer, by robbing you of
your individuality?”
“I mean 55 per cent. of the material I receive—electros,
booklets, signs, window trims, and the rest of it—I never use,
because whoever designed it is not familiar with how a small-
town dealer sells a nationally advertised line. They seem to
think we go out and say: “Look here, I have been honored by
having been chosen by the Jones Dustless Duster Company
to represent it in Chariton.” Well, I don’t, and no one else with
any brains does. What we do say is this: “After looking over
every possible line of clothes to find the one best suited for your
particular needs, I have decided upon Hart, Schaffner & Marx
clothes, and because of my knowledge of goods and styles you
may be assured that when you buy your suit from me you
will be well satisfied.’ And we expect the advertising matter
which the manufacturer sends us to strike that same tone.”
Questioned further as to just what material fitted into his
advertising plans and would be put to the most effective use,
Mr. Larimer said: “Of course, my mailing list is the backbone
of my business. Upon it I depend for the greatest percentage
of my sales; but at the same time I do a lot of newspaper ad-
vertising and appreciate good electros. I will not use electros,
however, which advertise a manufacturer's product too obviously.
I can’t afford to have people think I am cheap. Rather than
give that impression I would send 50 or 75 cents away to a
stock cut house, whose catalogues I have, and get cuts of my
“DEALER HELPS” III
own. Neither will I use the cut-and-dried ready-made ads,
although I suppose there are lots of country dealers who are
foolish enough to use them. It has always been the idea of the
members of the Iowa State Clothiers’ Association that if news-
paper space is worth buying it is worth using to good advantage
to advertise our store and not some manufacturer's underwear.
“I think the plan of the Superior Underwear Company is one
of the best I have seen for some time. This concern will send
Praises you cuts for illustrative purposes without mentioning
Superior its name. I just saw a large half-page cut of this com-
Underwear pany used in connection with a Harvest Home sale.
* Any fair-minded dealer will agree to mention your
product in the ad; but in the name of efficiency don’t try to
get your money’s worth by sticking your name all over it.
When you do you are simply labelling the dealer as being too
cheap to get cuts made especially for him.”
Mr. Larimer talked so understandingly about advertising
that he was asked where he acquired his information. “Well,”
said the gentleman from Iowa, “we have had to educate our-
selves or go out of business. The only way to fight the mail-
order people is with their own weapons—advertising. And
So we have set out to be just as good advertising men in our
little centres as we possibly can be. It is remarkable what a
man will learn when he has to.
“Then, of course, there are other educational forces at work.
We read the same trade papers as does the merchant in the
larger city, and usually read them more thoughtfully, as we have
to depend more on them. Manufacturers like Hart, Schaffner &
Marx are continually educating us into being better dealers; and
just lately some of the farm papers, Successful Farming for in-
stance, seem to have realized that their future depends to a great
extent on getting us lined up with them, and they have started
in to show us how to tie up our stores with advertising carried
in their columns. So you see we have education a-plenty.” . . .
But before the maximum benefit can be secured through these
dealer helps, the rural dealer and his way of thinking and doing
business must be given serious study and thought. Some ad-
vertisers are even going so far as to establish, under the super-
vision of some successful salesman in the small-town field, a
Separate division to develop and promote business in the small-
town market. The packers, for instance, are doing this in their
fertilizer and animal food departments. With the bulk of the
II2 “DEALER HELPS”
$8,498,311,000 which represents the value of American farm
products passing through the small-town channel, surely the
field is worthy of special cultivation and special study. It is
too valuable an outlet to let go by default.
S. R. McKelvie, publisher of the Nebraska Farmer, presented
at the Toronto Convention of the Associated Advertising Clubs
of the World some interesting views of Nebraska storekeepers
On this question. He said:
*Recently I secured reports from one hundred and twenty-
five Nebraska retailers, advising me: First, whether they prefer
to handle advertised or non-advertised brands of merchandise;
second, what percentage of each they sell; and, third, the names
º, some well-known, nationally advertised lines handled by
them.
A large majority of the retailers that reported to me indicated
a preference for advertised brands. It was particularly no-
ticeable that this majority was developed in the smaller com-
munities.
The one hundred and twenty-five retailers who gave me this
data indicated that sales of advertised goods average approxi-
mately 42 per cent. of their total business. In the list of ad-
vertised brands carried by them I find practically every article
that is seen advertised nowadays in all the various classes of
publications.
Quoting from among the one hundred and twenty-five com-
munications, here are some of the arguments against handling
advertised brands advanced by Nebraska retailers—mostly by
those doing business in larger cities:
One retailer says: “I prefer to sell non-advertised goods as
they usually have more merit. Fifty per cent. of the adver-
tised goods in my line could not be given away if they were not
advertised.” But he also says: “Let us have more advertising
but cleaner and more honest advertising. The publisher is the
One who can bring this about.”
Nearly every retailer opposed to advertising is antagonistic
because of the small margin of profit allowed on advertised goods.
On this point I quote the following:
*Printers' Ink, August 13, 1914, p. 42.
“DEALER HELPS” 113
1. “There is hardly a nationally advertised product upon
which there is a reasonable profit to the retailer. Advertising
helps to make sales, but not money, for the retailer.”
2. From one who says that about 10 per cent. of his sales are
of advertised goods: “We can hardly say that we prefer
to handle advertised goods as a whole. But we do find it ad-
vantageous to handle them in about the proportion that we do.
This is because of the good that we get out of the advertising,
though we feel that this cost has to be paid by some one.”
3. “Nationally advertised goods cost more money and are not
any better than, if as good as, non-advertised goods.”
4. “Under a recent court ruling the large department stores
cut the price of nationally advertised goods and at the same time
make long profits on non-advertised goods.”
5. “As a rule the margin of profit on nationally advertised
goods is too low. We prefer to handle jobbers’ private brands
exclusively because of a better margin of profit.”
6. “Non-advertised goods are sold to the retailer for less
money and allow a margin of profit which enables him to do his
own advertising. It also allows him to specialize on goods that
are not carried by all his competitors. Advertising helps the
manufacturer at the retailer’s expense.”
7. “The tendency of all advertised lines is to force the re-
tailer to handle the products without a profit.”
8. “Advertised goods cost the retailer more, quality
§ considered, and are used by mail-order houses in many
É.; instances as leaders at cut prices.”
9. “We can buy non-advertised goods a little
cheaper than the advertised lines. Furthermore, we want the
name of our store to stand out pre-eminently in the minds of our
customers, instead of the name of some manufacturer.”
10. An Omaha retailer says, “The purchaser of the non-ad-
vertised article makes his selection upon his own judgment
rather than upon that of the persuasively worded advertisement
which is bound to be an ea parte statement. Ninety-eight per
cent. Of all the sales of nationally advertised goods should be
attributed to the power of advertising, as it is a fact that such
goods are seldom personally recommended by the seller.”
There seems to be considerable antagonism to advertised
goods because of the fact that they are occasionally sold to
mail-order houses, and are by them listed at a lower price than
the retailer is obliged to ask for them. This fact is indicated in
114 “DEALER HELPS”
the following, which comes from a small-town retailer: “Some
years ago the Blank Stocking Company, after years of adver-
tising its product, allowed Sears, Roebuck & Co. to catalogue
its hose, for which the merchant had to pay from $2.10 to $2.25
per dozen, at 19 cents per pair. Blank & Blank Company did
practically the same thing. In such cases, and in many others
of the same nature, a nationally advertised product is an injury
to any merchant. It is very possible that Sears, Roebuck &
Co. did not pay as much for the hose as the average retailer,
but they did not make a profit, selling cost included, when they
sold these hose at 19 cents. At the same time, that low price
created in the mind of the consumer a false impression since we
were charging 25 cents and made only a very nominal profit. It
is not unusual that mail-order houses have profited by slaughter-
ing a nationally advertised product, and have at the same time
discredited the retailer, thereby enabling them to sell something
that is not advertised at an excessive profit to make up for the
loss on the advertised article.”
As arguments in favor of handling advertised goods, I submit
the following extracts from letters from retailers in small towns:
1. “Advertised goods are easily sold. Quick sales, smaller
profits, and manufacturers’ co-operation can’t be beat. Any
national campaign of advertising, if properly displayed, will
produce results for the retailer; but the retailer must co-operate
with the manufacturer through window displays and other-
wise.”
2. “It gives to a store a standing that cannot otherwise be
gained when goods are found in stock that are well known to the
people who call.”
; “Too much time is lost in introducing non-advertised ar-
ticles.”
4. “Nationally advertised lines are those of quality, high
class, that give a store distinction, are sold on a close margin,
a sure quality and good value. Price, to our customers, is
secondary to quality.”
5. “We believe that there is less dead stock among goods
that are advertised by the manfacturer. Also, we know that
advertised goods are more easily sold and better goods as a rule;
for national advertising means national competition.”
6. “Ease and speed in disposing of customers is the principal
reason why I handle advertised goods. I could make more
money on other lines for the individual sale, but saving of time
“DEALER HELPS” - 115
and increased sales make the advertised lines more remunera-
tive.” -
In connection with an article on dealer window displays pre-
pared by A. M. Lucas, Second Vice-President of the George F.
Eberhard Company, appearing in Advertising and Selling,
March, 1915, there was printed the following summary of the
opinion of manufacturers in ninety-two lines of goods concern-
ing different forms and methods of dealer help:
(1) Ninety per cent. of the manufacturers quoted consider
dealers’ window space valuable.
(2) Eighty-two per cent. consider that the attitude of their
dealers is favorable to their dealer helps; 15 per cent. that it is
unfavorable; and 3 per cent. that the attitude of country dealers
alone is favorable.
(3) The average estimate is that 72 per cent. of the display
material sent to dealers is used by them.
(4) The methods of distributing dealer helps used are as fol-
lows: 75 per cent. send directly to dealers; 62 per cent. send
through salesmen; 80 per cent. send to dealers upon their re-
quest; 33 per cent. send to dealers without their request.
(5) The considerations which influence dealers to put up dis-
plays or signs are estimated to rank thus: desire for gain, 70
per cent.; co-operation with the manufacturer, 47 per cent.; lack
of more attractive material, 36 per cent.; liking for salesman, 25
per cent.; because manufacturer pays for space, 2 per cent.
(6) Ninety per cent. of the manufacturers quoted use store
and dealer helps.
(7) The average percentage of advertising appropriation de-
voted to dealer helps is 38.3 per cent.
(8) Twenty-nine per cent. of the manufacturers quoted state
that their appropriation for dealer helps is increasing; 17 per
cent. that it is decreasing.
(9) Twenty per cent. of the manufacturers quoted have a dis-
tribution crew.
(10) Forty-five per cent. of the above manufacturers using
window display state that the effect on sales of such displays is
immediate and visible; 16.5 per cent. report that their effect
on sales is slow; 39 per cent. that their effect on sales is lasting.
116 “DEALER HELPS’’
(2) FORMS OF DEALER HELP
Several valuable series of articles have been printed in the last
year or two concerning window displays. One of the most sug-
Window gestive of these was a series written by M. P. Staul-
Displays cup of the Burson Knitting Company of Rockford,
Ill., manufacturers of women’s cotton hosiery.*
From these articles the following quotations are made:
f.Just to clear the ground, let me state that the Burson Knit-
ting Company, like the majority of manufacturers, sells its
product through jobbers. It does not grant exclusive agencies,
either to dealers or jobbers, and it has no direct dealing with re-
tailers so far as the sale of its goods is concerned. Its product
(hosiery exclusively) is made in an assortment of styles and
patterns, and in grades ranging in price from 25 cents to 75
cents. Its business differs in no essential particular from that
of hundreds of other manufacturers of wearing apparel, food
products, hardware, and so on
The company’s window displays in the larger cities were
placed in a few stores at a time by myself or my assistants, were
allowed to remain for a week or ten days, and were then re-
moved. In the smaller towns we used a lithographed set, which
was sent to dealers upon request, and which they themselves
set up from our directions.
When the editor of Printers' Ink asked me to write these ar-
ticles he told me that he wanted them to be thoroughly practi-
cal. He would expect me to be able, he said, to answer some
of the troublesome questions which manufacturers are facing
in connection with displays in their dealers’ windows. To
that end he wrote to several concerns, asking them to tell him
what particular features of the problem would be most inter-
esting to them. Most of them replied with a list of questions,
which I have before me. I shall endeavor to answer those ques-
tions as fully as I can, illustrating my answers from personal
experience. *
*Printers' Ink, November 12, 1914, p. 17; November 26, 1914, p. 20; De-
cember 17, 1914, p. 44.
fBrinters' Ink, November 12, 1914, p. 17.
“DEALER HELPS” 117
“How can the merchant be convinced that the fine window
display benefits him as much as the advertiser who furnishes it?”
That can be done more or less easily according to the
}. # kind of stores in which the goods are sold. Drygoods
Jasy for & *
jej, and department stores are easiest to convince, drug
stores come next, then hardware stores. Grocery stores
are most difficult, as a rule. The first-named have been most
thoroughly educated to the value of their window space, and
the last appreciate it least. Drygoods and department stores,
from the very start, have dealt in goods which lent themselves
most obviously to display. The other stores have needed out-
side influence—speaking broadly—to show them that their goods
also have a display value.
Convincing the merchant that a display, is of benefit to him
depends, first, upon the quality of the display as demonstrated
by good photographs. No argument is likely to get under the
skin unless he is able to see the display as a whole and use what-
ever judgment he possesses in determining its value. Then, if
he is to install it himself, he must be shown how easy it is to set
up and take down, and perfectly plain directions must be given
so as to convince him that he can readily duplicate the effect
of the photograph. . . . Above all, don’t ask him to do
something for you. Make it perfectly clear that you are offer-
ing to do something for him, which will cost him no money and
the very least possible time and trouble.
In less than three years the Burson Knitting Company has
secured the display of more than 4,000 twelve-piece litho-
graphed sets, which required not only some time and trouble
to install, but also required the merchants to take some of the
goods from stock and put them into the window. The cost of
the entire campaign, including everything down to transporta-
tion charges, came to a little less than three dollars a set. Four
thousand merchants were convinced that the displays would
help them sell Burson hose by the line of procedure outlined
in the foregoing paragraphs.
First, we advertised the display in the trade papers which
reached our field. We made it important enough to devote
Letting the page spaces to it exclusively. . We showed a photo-
Dealer graph of completed display and offered to tell a dealer
Sell’. how to get one. We did not offer to send the outfit,
*ſ only to tell him how to get it. f -
To all inquiries we sent a booklet, showing ten different ways
118 “DEALER HELPS’’
in which the material could be combined—in effect ten different
displays—and giving all the arguments for its use. A post-
card was enclosed which entitled the dealer to an outfit without
charge. The dealer was led first to inquire; then he got the
book, which he was able to study at his leisure, and, finally,
after he thoroughly understood the proposition, he was led to
ask for the material. If he wasn’t convinced that it would pay
him, he never would ask for it. . . . I have been told by
a merchant that I could have his windows for one of our big
displays for so much a day. “Thank you,” I usually replied,
“but if your windows aren’t worth any more than that we can’t
afford to give you the service. This display cost a great deal
of money to build, and the company is paying my salary and
that of my assistants simply to give this service to those mer-
chants who are important enough to deserve it. If you don’t
think that your windows are worth a good many times twenty-
five dollars a day to you, we’ll have to accept your own valua-
tion of them, but we are sorry to say that it isn’t high enough to
warrant us in placing the display in them.”
That novel viewpoint usually led to a discussion of the real
value of window space, and we very seldom failed to secure the
window on our own terms. It is needless to say that we never
accepted it on any other terms.
*“How can we give our displays an immediate sales value, so
as to bring actual customers into the store while the display is
give Each installed?” is another question asked.
Display a I suppose any display, no matter how poor, has
Pºfinite some immediate sales value, depending upon the
* clearness with which it deliversits message. What that
message is depends in turn upon the goods which are on display.
With most things it is necessary to inform possible buyers of the
quality, the styles, assortments or sizes, and the price. Often
it is necessary also to indicate what the product will do. The
sales value of the window depends upon the definiteness with
which those things are indicated. A merely “pretty” window
may give an air of attractiveness to the store, but does not
necessarily promote sales of any particular line of goods.
First, it is important to know the class of buyers to whom
the appeal must be addressed. The Burson Company, for
*Printers' Ink, November 26, 1914, p. 20.
“DEALER HELPS” 119
example, must appeal to the middle-class woman—not the
cheap trade, nor the fashionable set. Those who wear silk
hosiery, high or low-priced, were absolutely eliminated from the
start. The bargain-hunter also was eliminated, since there are
plenty of other concerns making hosiery of similar grades, to
retail at the same prices, and our appeal was not based upon
price but upon durability and lasting fit. Our message was just
this: “Burson Fashioned Hose. Knit to fit without a seam.
Will not lose their shape after laundering. Black, white, and
tan. Twenty-five, thirty-five, and fifty cents.
Every feature of the displays was arranged so as to illustrate
or suggest one of those points. Plenty of decorative features
were used, but they were never placed so as to distract the at-
tention from the goods themselves, or the show-card in the cen-
tre of the window, low down, containing the whole story in a
few lines of type. The central figure, posed in a frame against
the background, might be a girl in cap and boudoir gown display-
ing a trim ankle, or a laundress hanging stockings on the line;
but whatever it was it spelled hosiery, and suggested perfect-fit-
ting qualities or lasting shape. When we displayed leg forms,
the backs were turned toward the glass to show the construc-
tion of the back of the stocking. No price tickets were placed
on the goods, but the range of prices was announced, once for
all, upon the centre card, which nobody could escape.
As for immediate sales, we never kept any very complete
records, for we considered our windows as largely a medium
of general publicity—and with good reason, too, as I shall at-
tempt to demonstrate later on. I know of one salesgirl in a
Chicago store who sold, during the week of the display, 23
dozen pairs of Burson hose. That was a single clerk, in a ho-
siery department which carried probably a dozen other lines
of cotton stockings. When a display was installed I went to
the hosiery department and talked with the salespeople, show-
ing them how to sell our goods. They were very quick to make
use of the points I gave them, though they probably never
would have discovered them for themselves.
But the best indication of the immediate sales value of the
displays was the purchases which the stores made from the
Some Sales jobbers. One store in Pawtucket, R.I., which had a
#.” fairly representative stock when the display was in-
stalled, ordered 180 dozen more from the jobber, and re-
ordered three times on certain numbers during the week. A store
120 “DEALER HELPS”
in Lynn, Mass., ordered 78 dozen and reordered during the dis-
play. A store in Manchester, N. H., bought between 200 and
300 dozen. And all of those stores were stocked with some of the
goods before the displays were installed, so that the orders re-
corded were due almost wholly to the displays.
Supplementing an investigation into certain aspects of win-
dow displays which will be found quoted elsewhere, the Printers’
Counter Ink staff early in 1915 made an investigation of
Displays counter displays. The following quotations are from
the report of this investigation:
º *Several dealers were prevailed upon to give a frank
statement of their attitude toward manufacturers’ counter dis-
plays. Among them was Charles Holzhauer, of Newark, N. J.,
one of the leading pharmacists in the State of New Jersey and
past president of the New Jersey Pharmaceutical Association.
Mr. Holzhauer’s idea of counter display hinges principally on
the question of profit in the article to be displayed. He brings
out the fact that many times a fine display has to be refused
by him because he has a similar article under his own name
which yields him a better profit.
Commenting upon the value of the counter display, he said:
“Our counter space is valuable and we must put it to the best
use. We do use counter-display devices very often where the
article does not conflict with other goods and the profit is good.
A great deal of money is wasted, I believe, in getting up material
of this sort, which, falling into the dealer’s hand, is at once con-
signed to the ash-barrel because he can sell the goods at no
profit.” § – — -- -
One of the greatest objections the dealer offers in not accept-
ing a counter display from a manufacturer is that the article is
cut to such an extent that it either limits his margin of profit
or cuts him off from a profit entirely. As a result, he loses in-
terest in the article or his antagonism is aroused and he becomes
a critic of the article instead of a booster. Where a manufac-
turer has to confront such a condition, he might as well put his
good money into something else besides counter displays. In
one case a manufacturer under such conditions invested about
*Printers' Ink, April 22, 1915, p. 33.
“DEALER HELPS” 121
$8,000 in counter displays, and he is still trying to give them
away. Formerly, he thought he would be able to induce the
dealer to stock more goods on the strength of the counter dis-
play, but latterly he was glad to see the dealers accept the dis-
play without the order. In fact very few cared to accept it.
It was a handsomely gotten-up counter display and quite origi-
nal, but in view of the fact that the article was constantly being
exploited by cut-price stores, the dealer was not willing to give
the manufacturer the friendly co-operation which he extended
to some of the others. e
The investigator saw as many as five different counter dis-
plays of well-known advertised brands in one of the most ex-
clusive shops in the Wall Street section of New York. Seal-
packerchief handkerchiefs, Ingersoll watches, Ever-Ready razors,
and Paris garters are displayed in most of the leading men’s fur-
nishing shops.
The hardware field is probably the most lucrative of them all.
From interviews with the retailers, they all favor the counter
displays and gladly accept them. This is due to the fact that
many commodities in the hardware store are bought upon im-
pulse. The dealer is aware of this situation, and realizes the
necessity of the counter display. Many of the fine-tool manu-
facturers realize that in order to have the purchaser appreciate
quality they must display the tools in an artistic manner.
The L. S. Starrett Company, Athol, Mass., makes a fine dis-
play which it sends to the dealers. In order that the dealer may
avail himself of this display, it is necessary for him to buy an
assorted outfit amounting to $125. The company makes up
several styles of cases—some are placed around the post in the
store, others are hung on the wall. Other cases have drawers
to hold surplus stock.
E. F. Wing, treasurer of the company, says: .
“We believe thoroughly in the value of these displays. We
have some 3,500 of these cases in the hands of dealers in this
country and Europe. From this number in the hands of the
dealers you can plainly see the attitude of the dealer toward
them.”
Another manufacturer of hardware and tools says that the
dealer who will not accept a counter display is an exception to
the rule. “But,” he continued, “displays must be constructed
in such a manner as to add to the appearance of the store, and
must not be too large and bulky.”
122 “DEALER HELPS ’’
Manufacturers are at liberty to draw their own conclusions
from the data given. A few general conclusions may, however,
be drawn. In order to secure representation, a counter display
should fulfil the following conditions:
1. It should be distinctive, so that the dealer will feel that it
will add something to his store.
2. It must feature goods which the dealer really wants to
sell, i. e., goods which afford him a good margin of profit.
3. It must be presented as a means to help him sell more
goods; not as a bait to get him to buy more.
H. J. Winsten, Sales and Advertising Manager of the Chicago-
Kenosha Hosiery Company, believes that dealer helps if properly
used may be made to give valuable assistance in maintaining
prices and credit rules. Some of his ideas on the subject are con-
tained in the following article:
*Dealers’ co-operation is the business stimulus that the
manufacturer injects into the veins of the business body of the
man who sells his goods. Competitive conditions have been
responsible for its growth. It’s a big problem in the manufac-
turer’s mind to-day. -
Every manufacturer who is working toward success through
the known laws of business science is asking:
“How can I make my dealers’ co-operation more highly effi-
cient?”
We have wrestled long in the throes of the problem, analyzed
it carefully and then gone ahead. Results seem to prove we are
on the right track. We found two evils—two channels through
which money, time, and effort were flowing off territory which
the manufacturer seeks to irrigate. These are:
h Haphazard, unscientific, voluminous distribution of dealer
helps.
“Pauperizing” the dealer by doing all the work and paying
all the bills.
In solving the problem for ourselves we considered first the
vast quantity of advertising material that the postman brought
weekly to the dealer from the various manufacturers whose lines
he handled. We realized that the value of dealers' advertising
helps were under-estimated because of their volume and their
*Printers' Ink, March 12, 1914, p. 17.
“DEALER HELPS” 123
lack of connected motive. They lost their dollar value in his
eyes. Quantity meant cheapness—weakness. That’s what the
report of our salesmen showed.
Then we found that other manufacturers were over-stimulat-
ing the dealer. The result was impoverished business blood–
pauperization, as we termed it.
These manufacturers were carrying the whole advertising
burden. They were paying the whole bill. The dealer was
being fed out of a gold spoon. He was being deprived of his
own strength, made lazy, indolent. To pay for the dealer’s
local advertising, in almost every instance, is to lower the dealer’s
estimate of its worth and to strangle his own co-operative
effort. -
We go at this whole proposition on a plan that approximates
the method of promoting a show on the road.
We put on an “advertising show.” First, our advance man,
who is a Black Cat salesman, outlines our complete advertising
“Black plan. A special portfolio is turned over to him,
Cat” Con- covering every phase of our advertising work. Strong
nºtive emphasis, however, is laid on one particular week, say,
* for example, “Black Cat Week” in April.
We explain what we are going to do in the way of national
advertising at that special time. Then our salesmen explain
how we have provided different phases of local advertising to
make it possible for the retailer to get the full benefit not only
of our advertising but to place his hosiery department in the
best light before the public.
We show him full reproductions of an electro to couple up
with our national advertising, using the same illustration and
copy to fit local conditions.
Perhaps he has no local paper, or he may prefer to use a lan-
i. slide, using the same illustration. Often the dealer takes
oth.
Our eight-sheet poster fits in generally with the same illus-
tration, imprinted with the dealer’s name.
Last, but not least, we show him a complete window display,
generally “before and after,” to help him make it right. The
window display most likely incorporates the same illustration
as is used in our other plans.
Furthermore, the salesman shows the dealer other selling
helps—notion envelopes, folders emphasizing the local condition,
with the dealer's name imprinted, calendars, at the same or a
124 “DEALER HELPS ’’
less price for a few hundred as it would cost him were he to pur-
chase 100,000.
Our salesmen make out an advertising order as follows:
T
ADVERTISING ORDER 191.
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * s s e e s • * * * * * * * * * * * * * * * * * * * *
Imprint . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Salesman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
No advertising is ever sent to any dealer without either a
salesman’s order or a dealer’s written order. Our salesmen are
positively instructed to be liberal with advertising, but to be
just as certain that our retailers are using or will use what we
send them.
Our salesmen are interested and enthusiastic over our ad-
vertising program. No opportunity is lost to ginger advertis-
ing in the same degree as selling Black Cat.
We send preliminary notices to our dealers about the special
campaign. Then we send a broadside description of our April
week, with return card for the special electro, slide, poster, and
window trim.
Whatever the dealer orders is sent prepaid about ten days be-
fore the “event” and a letter goes out at the same time.
Do we get satisfactory results? Well, that’s a question of
comparisons. We want more!
In the spring of 1913 we had such a plan. We had 2,214
requests for window displays. We sent out 1,014 electros for
Results of illustration and copy for a newspaper ad, nine inches
Co-opera- deep and four columns wide; 901 slides were mailed
* Plan to dealers; 5,000 eight-sheets were used by dealers,
nearly half through the National Bill Posters and retailers
were charged for the posting.
We work this sales-stimulating campaign four times a year.
Then the dealers use the electros and slides throughout the year.
For example, we got out special “Black Cat Christmas” ads.
“DEALER HELPS ’’ 125
Let it be noted that we seldom feature Black Cat to the ex-
clusion of all other merchandise. We try to get our dealers to
use both kinds of advertising, one featuring Black Cat entirely,
the other featuring store service and general quality, naming
Black Cat as one feature of quality and service.
We believe that advertising must be one of the important
links which unite and bind the dealer and the manufacturer.
It must connect both to a fair, honest policy toward consumer,
for our mutual interest lies ultimately in the absolute satisfac-
tion of the consumer. That’s why we tell our dealers: “We
hold no sale final which does not result in the customer's com-
plete satisfaction.”
What has our advertising plan done for us? It has helped
to eliminate to a considerable extent two very disastrous phases
of competition: Price and credit.
We hold steadily to our prices and seldom deviate from strict
credit rules. We are gradually building up our retailer force
to a point of high efficiency.
I think our competitors will testify that it is difficult to dis-
lodge Black Cat when it is intrenched through our co-operative
plans plus quality merchandise.
Our selling and advertising department is inseparable. It
can’t be “unscrambled.” One is the right, the other the left,
arm of distribution. There is no dividing line. They work
in harmony. Every stroke counts with the use of both
3,FIO.S.
Generally the hosiery order and sales report come in with an
advertising order. Both orders are treated alike. Advertising
orders are given just as keen attention as the hosiery orders.
The different advertising material is assembled in the advertising
room or in our printing shop, then taken to the shipping room
to be packed with the hosiery shipments.
The shipping room has nothing to do with the selection of ad-
vertising matter. It cannot hand it out indiscriminately.
Every order specifies what and when on advertising just as
plainly as the orders for hosiery.
To get distribution where there is no appreciable demand, the
manufacturer must treat the case differently from where the dis-
tributive channel is already effected.
There is room for serious thought and discussion as to how
far the manufacturer should go and what should be done for the
local dealer in the town where the manufacturer has no dis-
126 “DEALER HELPS ’’
tribution and his national advertising has not been felt appre-
ciably by any merchant.
Our problem is not so much one of distribution, for 8,000
dealers spread over the medium-sized towns of the United
States afford us fairly good distribution.
What to do to cut down the rising cost of advertising and sell-
ing without taking that cost from quality or retailer’s profit
is the problem we have to contend with.
The answer to a considerable extent is efficiency, or the elimi-
nation of waste, coupling selling and advertising forces—a clearer
understanding by all parties as to how far the manufacturer
can go, how far the retailer should expect the manufacturer to
go, how far the manufacturer wants the retailer to go, and how
far the retailer must go in order to reach at least cost with great-
est efficiency the final count—the consumer.
The key to the situation so far as the older types of dealer
helps are concerned is in the degree of helpfulness to the dealer
possessed by the material sent out from the manufacturer.
In the same series of articles on “dealer helps” already quoted
there occurs the following passage, which sums up in compact
form the central idea which seems to be developing out of the
manufacturer’s studies of the purpose and value of dealer help:
*But perhaps the greatest factor in making sure material is
used is to get up the right kind of material to start with. The
H. Black Company seems to have pretty nearly the right idea.
“The helps must be prepared,” states this company from its
experience, “so that to the consumer, the ultimate buyer, they
will look like material originated, designed, written, ordered,
and paid for by the dealer. The average dealer’s own copy con-
tains a great deal of favorable mention of his store’s facilities,
service, buying judgment, etc.—and quite properly And it also
contains reference to the consumer and needs of the consumer,
also quite properly. So it follows that advertising matter sent
from the manufacturer to the merchant should take into account
the dealer’s natural pride and customers’ needs.” Or, to make
the same point in another way, we might take a paragraph from
a letter from the H. W. Gossard Co.: “We find the dealers only
*Printers' Ink, December 10, 1914, p. 70,
“DEALER HELPS” 127
too glad to co-operate with us, provided we study their problems
first-hand and not at the desk.”
The newer idea of dealer help goes one step further than the
direct help obtainable from the cards or other displays furnished
by the manufacturer. The central feature of this idea is that
whatever makes the merchant a better merchant makes him a bet-
ter distributor of the manufacturer’s product, and the emphasis,
therefore, is centred not upon direct stimulation of sales for
the manufacturer’s own goods so much as upon anything that
will make the retailer a better merchant. Some phases of this
idea as they bear upon increasing costs will be discussed in the
following chapter. But at this point it may be well to look
at one or two methods which have been employed with success
in educating the retailer’s sales force as a form of dealer help.
R. E. Fowler describes as follows the correspondence course for
dealers’ clerks which has been employed with success by the
Printz-Biederman Company of Cleveland, Ohio, makers of
the Printzess garments: s
*We, as well as almost every other manufacturer who dis-
tributes a trademarked article direct to the retailer, have
known for some time that the weakest link in our distribution
chain is the retailers’ sales force.
Our national campaign to the consumer, our trade-paper
campaign to the dealer, our retail service department—all
might be working to their maximum efficiency, and yet when
Mrs. Prospect stood face to face with the clerk the whole struc-
ture would come tumbling about her ears—and the sale be
lost, in most cases simply because the salesperson had not had
ready for immediate use the real selling points of the article—
its advantages, its uses, its quality.
We established the Printzess Correspondence Course of
retail salesmanship because we wanted the saleslady or sales-
man to have something more to say than “It looks nice on you”
when she slipped a Printzess garment on a lady’s shoulders.
Lost sales mean merchandise left in stock; and merchandise
*Printers' Ink, October 1, 1914, p. 3.
128 “DEALER HELPs”
that wears a brand and that is left in stock looms up in a buyer's
mind like a skyscraper in a community of cottages, for buyers
forget the merchandise that “sold” but do remember the mer-
chandise that lagged.
For years we have been bending every effort toward the edu-
cation of the retailers’ sales force. We have issued booklet
after booklet, pamphlet after pamphlet, personal letters direct
to the clerks, store talks delivered to the entire sales force.
Four years ago we made what we call a demonstration shell;
A “Demon-it shows just how our garments are tailored. This
stration shell was sent to all of our dealers who made requisition
Shell” for it, and who sent us the names of their salespeople.
To the salespeople we sent letters of advice and suggestion,
together with a little booklet “How to Use the Printzess Dem-
onstration Shell,” by this means giving the salespeople the
“Reasons Why.” This helped, but still didn’t accomplish as
much as we wished it to, and we began reaching out for some-
thing that would go still further.
We felt if it were possible for us to have a representative visit
each one of our dealers’ stores and organize and conduct a class in
retail salesmanship that we would reach the goal we were seeking.
At one time we thought seriously of doing just this thing, of
hiring some of the trained sales experts and routing them over the
country on an educational tour. But when we had gone a little
further into the analysis of the subject we saw not only how expen-
sive such a tour would be, but also how littlecould be accomplished
unless our experts could spend at least a week in each town.
With this avenue shut off we naturally turned to the next
available one—teaching by mail. After we had convinced our-
selves that such a course would be practical, we decided to ob-
tain not only the opinion of our retailers on the subject but also
an idea of how many would actually be interested in such a
course to the extent of seeing that their clerks studied the lessons
and answered the questions.
So we sent out the following letter with the return card en-
closed. It might be well, right at this point, to say that it is
A Letter the policy of our advertising department always to
That Started test out our new ideas by getting in touch with our
the Wheels trade—before even any preliminary work is done,
*9 other than uncovering the original thought. If the
verdict is negative, into the waste basket the idea goes and the
money it might have cost remains to the credit of the depart-
“DEALER HELPS” 129
ment. This policy has saved us money; that is the best recom-
mendation we can give.
The letter that was sent:
DEAR SIR:
Do you have any trouble in getting your garment salespeople to talk your
merchandise intelligently?
Do you feel that you are getting 100 per cent. sales efficiency?
Are you selling a goodly percentage of the lookers?
We are not asking these questions out of idle curiosity but because we be-
lieve that there is room for a vast improvement in retail sales efficiency.
We are willing to do our part to raise the standard of retail salesmanship.
You can do yours by reading this letter and giving usy our reply on the stamped
and addressed card enclosed.
If there is a sufficient number of merchants who will co-operate with us we
will establish a correspondence course of Retail Garment Salesmanship—which
wº start with the woolens and bring the students up to and through the actual
S8,162. -
This course will be gratis to your garment department employees and will
lead to a Printzess Diploma of Salesmanship.
Your co-operation will be essential throughout the course, so if you are
willing to co-operate and think that such a course could be carried through
successfully in your store—fill out the enclosed card and mail it to us at once.
Give us your opinion whether favorable or not.
THE PRINTZ-BIEDERMAN COMPANY.
The card that was enclosed in it:
The Printz-Biederman Co., Cleveland, Ohio.
I am willing to co-operate with you in forming a correspondence class of
salesmanship in my store and will do all in my power to make it a success.
The response was gratifying, merchants from all over the
United States not only signified their willingness, but also their
enthusiastic desire for something of this nature.
With the retailers’ co-operation assured, we then turned to the
actual task of compiling a practical course of retail salesman-
ship, one that would cover the subject, and yet have enough hu-
man interest to hold the attention of the student until the last
lesson was learned and the last question answered.
A number of experts familiar with the teaching of salespeople
were interviewed. The writer listened to discourses on psy-
chology from some, and on the best way to keep a salesgirl’s hair
within bounds by others; but at last the course was written and
we were ready to offer it to our retailers.
130 “DEALER HELPS”
We decided that the average person will take almost anything
you give him and lose interest in whatever it is as soon as he re-
ceives it, but if you can bring him to the point of actually buy-
ing something, the very fact of having invested some money,
regardless of how little it may be, gives him an entirely different
viewpoint. So we decided to make a charge of two dollars for each
course, not by any means to cover the cost, but as an evidence
of good faith, and to insure that the lessons would be studied.
We argued that if the average merchant invests from ten
Why a dollars to thirty dollars in a number of salesmanship
Change courses for his clerks that he is interested enough to
Was Made see that his clerks study the courses.
The results prove that we were right in our suppositions.
The course as we had had it written covered the subject in a
broad way, and only mentioned our product where it was deemed
absolutely necessary, and was really of as much service to a girl
selling dress goods as to one in the garment department.
The course consisted of sixteen chapters, with sub-headings.
It was issued in loose-leaf form, and each student was sent with
the first lesson a suitable ringed cover for the permanent binding
of the lessons.
When Lesson No. 1 went forward to the clerk the questions
on Lesson No. 1 went to the firm with the request that when the
students had familiarized themselves with the lesson, the lesson
be taken up by the firm and the questions issued; these questions
to be answered and mailed to our advertising department for
marking, and when we returned the corrected questions with
them would go the next lesson.
I
MEETING THE CUSTOMER
You Teach Yourself—Essentials—Three Parts of a Sale—What Study Is—
Readiness for Business—Confidence the Keyword—First Influences—Bodily
Carriage—The Smile—Dress—The Voice—Its Influence—The Tone—Train
Your Ear—Formation of the Tone—Lips Mold Tone—Lip Practice—The
Jaw—The Tongue—The Ear Critic—Tone Expresses You—.
II
GREETING THE CUSTOMER
Mind Meeting Mind—People Different—People Alike—Scientific Salesman-
ship—Mind Thinks, Feels, Wills—Saleswoman Director—Attention the First
Step in Sale—First Words—Get Cue from Customer—Signs of Choice—Enter
Into Madam’s Thought—The Looker—Interruptions—Your Customers—
“DEALER HELPS’ I31
Individual Greetings—Poor Greetings—Question Not—Suggestive Greetings—
Size—Color—Attention—First Step—.
III
THE HISTORY OF WOOL FABRICS
Interest Second Step in Sale—Expert Advice on Garments—Printzess All
Wool—Scouring Wool—Characteristics of Wool—Sorting Wool—Qualities—
Woolens and Worsteds—Worsted Processes—Combing—Dyeing—Spinning—
Yarn Inspection—Woolen Processes—Weaving—The Loom—Sizing—Burn-

ing—Blending Wools—Oiling Wool–Mending Cloth—Cleansing Cloth—.
IV
THE TAILORING OF PRINTZESS
Finishing Processes—Fulling—Napping—Lustre—Final Touches—For Mar-
ket—Telling a Worsted from a Woolen—Printzess Career Begun—Measuring
Examination—Examination of Material—Material Returned—Sponging—
Shrinkage Examination—Pattern Designing—The Master Pattern—First
Model—Board of Critics—Second Model—Finished Pattern—What Our Care
Means to You—Cutting—Assembling—Tagging—Setting Together—First Gar-
ment Examination—Pressing—Lining, etc., Examination of Separate Parts—
Final Pressing—Final Examination—Filed Records of All Workers—Canvass
Ideal—Our Discovery. Printzess Plio–Oualities—Printzess Complete—Seven
Examinations—. -
V
THE SALE
Two Tests—Profitable Salesmanship—Printzess Label—Printzess Greeting—
Printzess Name—Interest—Desire to Be of Service—Signs of Interest—Desire
Third Step in Sale—Decision Fourth Step in Sale—Recognize Desire and Get
Decision—Summary—Wise Leadership of Saleslady—Thoughtful Advice—
º: too much–Recognize Steps—Decisive Attitude Important—Selling to
a Group—.
VI
THE SELLING ARGUMENT
Three Rules—The Selling Points—Style—Fit—Material—Tailoring—Analyz-
ing into Selling Points—Values of Comparison—Good Selling Talk—Price Not
Important as Such—Value for Price Important—Saleslady as a Teacher—Rule
for Attention—Article—Slow Sellers—Steps for Promotion—Quick Sellers—
Diminish Alterations—Exclusiveness—Good Stock Keeping—How Your Gar-
ments Serve You—.
VII
STUDIES IN COLOR AND LINEs
Color Effects—Nature the Model—Nature Provides Color Settings—Color
Changes—Color Mental—Gray Harmonizes—Change and Rest—A Dominant
132 “DEALER HELPS’’
Color—A Combining Color—Vividness in Touches—Rule of Balance—Colors
as Neighbors—Successive Colors—The Complexion—The Neck—The Pink
and White Face—The Reddish Face—The Over-Pink Face—The Red-Cheeked
Brunette—The Yellowish Brunette—The Yellowish Skin—The Red-Cheeked
Gray Skin—Match Eyes or Lips—The Red Gold Blonde—The White Face—
The Uncertain Skin—Freckles—Gray or White Hair—Rules of Lines—Shiny
Materials—Folds—Colors Differ in Materials—Value of Study—Study of Cus-
tomers’ Style of Individuality—When and Where to Decide—.
VIII
READING THE CUSTOMER
Individualities Differ—Experience Teaches—Observation Signs of Mind—
Memorize Types—Curved Outlines—Amiability—Irritability—Your Influ-
ence—Unbelief—Purpose of Study—Types of Will—Combining Signs—Curved
pºight Lines—Facial Expression—How to Use Signs—Eliminate Your
eelings—.
IX
THE SALESWOMAN
Study Yourself—Your Desire—Opportunity or Necessity—Point of View—
Penetrate the Surface—Examples—Point of View a Habit—Success Grows by
Use—What Habit Is—Will Directs Habit at First—The Pattern for Habit—
Value of Right Pattern—How to Change a Habit—Password to Habit for
Saleslady—Examples—Not Easy to Start Right—Fear and Worry—Direct
Your Thoughts—Fear Is Negative—How to Prevent Worry and Fear—Hope
Finds Solution—You Are Captain—No Time but Now—Self-Control—Money
Stored up Labor—Dignity of Money—The Money-Maker and Money-Saver—.
X
SUCCESS HABITS
The Emotions—Desire Inspires Intellect—Observation—The Senses De-
fined—Mind Observes—Reasoning—Memory—Personal Memory—Promises—
Imagination—Accuracy—Things Mental First—Example—Opportunities—Im-
agination in Speech—Truth—Judgment—Tact—Judgment in Tact—Tact as
Bluff—Tact Uses Memory and Imagination—Virtues of Tact—Free Self—
Three Ways for Tact—Language—Your Word Wardrobe—Word Variety—
Worn Words—Extravagance—Slang—.
Each lesson was to be given a standing, and this class stand-
Hoº ing, taken into consideration with the answers of 20 fi-
Standing nal examination questions, determined whether or not
of Clerks the students had maintained an average of over 75 per
Was. Pºſer-cent. and were eligible for their Printzess Diploma in
* Retail Garment Salesmanship.
Some time had now elapsed between the receipt of the cards
expressing interest and the date that we were actually ready to
“DEALER HELPS ’’ 133
issue the course, so the following letter, with enclosure and order
blank, was sent out:
T) EAR SIR:
Some months ago, in response to a letter which we wrote you, you told us
that you would be willing to co-operate with us in establishing a course of
retail garment salesmanship in your store. This course is now ready for dis-
tribution, and if you will read the multigraphed sheet enclosed it will give you
a general idea of how carefully we have compiled it.
We are enclosing an order blank, and hope that you will make use of it,
letting us know at once how many of your clerks you wish to have take ad-
Vantage of this course. We ask this so that we may be supplied with advance
information so that we may know just how many of these courses to compile
and have them ready for delivery.
THE PRINTZEss-BIEDERMAN COMPANY.
The multigraphed sheet, signed by our firm name, was en-
closed as follows:
“We have realized for years that if we could assist the re-
tailer in making his sales force more competent that we would
be strengthening what we all agree is the weakest link in the
chain of modern merchandising. This knowledge and desire
led us to have prepared a sixteen-lesson course in retail-garment
salesmanship, which we now offer to the salespeople of our cus-
tomers.
“You can readily see that in offering you this correspondence
course of retail salesmanship we are placing at your disposal one
of the most progressive steps that any manufacturer has at-
tempted in co-operation with the retailer and that we are offer-
ing you the knowledge, advice, and suggestions of experts whose
services, if you were to engage them, would cost you thousands
of dollars.
“The course will take up in detail, but in an easy, chatty way,
the fundamentals of woolens, garment construction and gar-
ment salesmanship, as well as the proper decoration of the gar-
ment department.
“Examination questions will be asked on each lesson, and
corrected and returned to the student. At the close of the
course a final examination will be held, and all of the students
who pass this final examination with an average of 75 per cent.
or better will be presented with a Printzess Diploma of Garment
Salesmanship. -
“This course, if offered for sale, would readily command a high
price; but we will gladly shoulder the expense of its preparation
134 “DEALER HELPS”
if our retailers will in turn see that their salespeople give it the
proper attention; and, to insure this attention, we ask a fee of
$2 for each student, payable by the firm he represents. This
charge of $2 will by no means cover the necessary expense per
student of postage, leaflets, binders, and lessons that we will in-
cur, to say nothing of the heavy initial expense of compiling,
editing, and printing the course; but the charge is made to Se-
cure, in so far as possible, a pledge of genuine interest.”
The results were gratifying. Stores from one end of the coun-
try to the other replied. Big department stores, which main-
tain their own system of schooling, and little stores, tucked away
in the edge of nowhere, entered their clerks in the course; and
what seems a good deal better to my mind than the first flush of
enthusiasm with which the idea was greeted is the fact that we
began signing diplomas some time ago and are still at it.
In lines where personal and somewhat expert service is nec-
essary in selling there are rather large possibilities for training
the retailer’s sales force. H. W. Gossard, President of the H.
W. Gossard Company of Chicago, manufacturers of corsets,
describes as follows the methods which his concern have em-
ployed in this type of work:
*In the long run it is more economical to indicate to your deal-
ers how to sell your goods than it is to try to argue or cajole, or
drive them into doing so. This is particularly true if the prod-
uct is one on which the public needs education. The real
question turns on how to show the dealer and how far to go in
helping him.
One of our travelling saleswomen will sell a dealer a bill of
goods and after they have arrived will dispose of the greatest
part of this initial stock in two or three days. She will, if the
merchant wants her to do so, reorganize his corset department,
adding our high-priced nationally advertised numbers that give
the merchant a better profit than the low-priced lines do, and
will train his saleswomen in the fitting and selling of our corsets.
It is necessary to continue the training of the store sales-
women by mail and we publish a house-organ largely for this
purpose. We also devote a good deal of attention at our home
*Printers' Ink, January 29, 1914, p. 3.
“DEALER HELPS ’’ 135
office to the instruction of women who come to us for personal
training in Chicago.
This is expensive, but on the other side of the balance sheet
are the following advantages: We actually sell the goods, dis-
pose of the dealer's stock, and book a duplicate order. We
show him that high-priced corsets actually can be sold; we
teach one or two of his saleswomen how to sell them, and in this
way, and by means of our house-organ, we lay the foundation
for close relations with the dealers and their saleswomen. The
saleswomen in the stores become almost as much a part of our
organization as our own saleswomen are. The relations are
quite close when we train them in Chicago and supply them to
dealers. Lastly, we must not overlook the local advertising
the dealer does in connection with these demonstration sales
and at other times as a result of our co-operation and the im-
portant consequences to us that flow from building up a first-
class corset department in his store. Our dealers are our friends.
“We have at last made the corset department pay better than
any other,” is the statement of many dealers. Wherever our
Made Cor-corsetiere saleswomen have been we hear such things,
set Depart- and now that we are bettering our written instructions
ment Pay and getting them on a more practical basis we are se-
* curing similar results and testimonials fromidealers who
bought and stocked as a result of our advertising and not of the
saleswomen’s helps.
The special training of the corsetieres was an absolute ne-
cessity. We could have done nothing without it.
“There are just two trades in the store—gloves and corsets,”
a New York department store man told us the other day.
“Everything else just fills in. We could transfer any other
clerks from one department to another without its making any
particular difference. After they had learned the prices they
would be just as good in one place as they would in another, but
we could not transfer them to the corset or glove departments.
The young women who fit gloves and corsets must know their
business, and good ones do.”
When we first began to do business a dozen years ago the
average sale price for any kind of corset on the market was about
$1.50. Practically everything above $3.00 was sold to order
from measurements. There were no extensive lines, and the
attention they got from either the public or the store was com-
paratively small in comparison with what is given to-day.
136 “IDEALER HELPS ’’
Improved designing and advertising has changed all that.
Our dealers, at least, have now come to realize that high-priced
corsets, such as $5, $6.50, $8.50, $10, and $15, and up-
ward, can be sold from stock, and there is a larger net profit
from the corset department than from any other department
in their stores.
That is one of our most constant representations to them.
Our greatest effort, we point out, is to raise the average retail
sale price of corsets in their department. There is a solid busi-
ness reason for this aside from giving the dealer a profit that
will assure his interest in the line. Corset-making is a science
and corset-fitting an art, and both of these cost something to
support; they cannot be done on nothing; but the net result
of doing both right is that everybody is satisfied. The cus-
tomer cheerfully pays the higher price for better corsets and
comes back for more. We could not possibly give this satisfac-
tion if we reduced our own or the dealer’s profit. There is no
place in our policy for “skinning or shaving” in either material
or workmanship. We count such practices as commercial
cowardice and regard their indulgence as a confession of in-
competent salesmanship. It is encouraging to note a whole-
some tendency toward honesty in merchandise, and it is believed
manufacturers generally are beginning to recognize the value
of a standard unalterably maintained—a pride mark—a jus-
tified price, real advertising and salesmanship to move the goods.
More explanation is necessary, more efficiency required, etc.,
but when we sell corsets to a dealer, they stay sold and he will
go to some little personal expense to acquaint the public with
the character of the merchandise. The higher-priced corset
brings a higher class of trade to his store and the careful fitting
and personal service please customers and other departments
of the store profit in turn by it.
Our main contact with the dealer is our travelling saleswomen.
They are both a sales force and a teaching force. They open new
Corsehere's accounts, arrange corset department sales, reorganize
Contact the departments, pick out store girls for local cor-
with setieres and train them, and sometimes visit physicians
* and surgeons to enlist their help. It goes without
saying that we could not get this service out of the corsetiere-
saleswomen unless they were a picked body and had been care-
fully instructed.
We have three retail stores of our own in Chicago. They
“DEALER HELPS” 137
give us an outlet into a large population centre and they enable
us to keep our finger on the public pulse and thus confirm our
interpretation of styles, understand complaints, and generally
see things from the outside of the counter. It helps us to see
things from the dealer's side, too. But one of its greatest bene-
fits has been in giving our corsetieres a practical training in
fitting and selling before we send them to our dealers.
Our force of travelling saleswomen is now thoroughly
grounded in everything that pertains to corsets and their fitting.
They have a working knowledge of anatomy and physiology,
and also, for special availability in medical fittings, some knowl-
edge of such weaknesses and deformities as hernia, corpulence,
spinal curvature, floating kidney, enteroptosis, post-partum,
gastroptosis, etc.
They must also be informed in regard to the demands of
fashion, and receive instruction in the elements of selling in-
cluding skill in reading character. -
These acquirements are indispensable to our saleswomen, who,
as may be seen, fill a responsible place in our organization, play-
ing the triple rôle of travelling saleswomen, corsetieres, and
teachers. Even this does not fully describe their function.
. is something of the manager and organizer in each one of
them. -
The corsetieres are not an evolution of a previous sales force.
They really represent a revolution in sales method. In fact,
our business has been a series of revolutions. We were originally
a wholesale house selling dressmakers’ supplies to the trade and
engaged in the corset business almost by accident.
It was about twelve years ago that our Paris buyer, when over
here, suggested that it would be good for us to add a French
corset to our line of gowns, trimmings, and laces. I thought well
of the idea, and on my next trip to Paris made it a point to look
around. Of the corsets I saw, I was most impressed by one in
the Bon Marche, a high-priced corset with the unique—at that
time—feature of front lacing. It was called “L’Irresistible,”
and I learned from the manufacturer, whom I found in spite of
obstacles thrown in my way by uncommunicative tradesmen,
that it was the joint invention of a countess who also was a
famous artist, and a well-known dressmaker. The demand
for it, though exclusive, was very small, and the manufacturer
was open to a proposition. I closed the transaction at
OIlC62,
138 “DEALER HELPS”
We arranged for an initial importation of twelve and a half
dozen. The retail price of the corset was to be $25. If I had
known anything about the corset business of that day, I prob-
ably would never have ventured on such an undertaking.
The average price of a corset was probably one dollar. Five
dollars was a high price. And I had undertaken to sell a corset
at $25! But, not knowing the situation, I rushed in where most
experienced corset men would have feared to tread. We were
saved only by our selling agencies. If they had been any other
than the highest class of dressmakers in the country, we prob-
ably would not have succeeded. Nobody else, I believe, could
have pulled the proposition through.
It was done, however, and done, all things considered, with
astonishing rapidity. The secret was in the front lacing, which
not only made it much easier for the wearer to put on the cor-
set, but gave a degree of comfort which we can only assume,
from the large sales at our high prices, had been before un-
known.
One of the largest elements in the high price was the 60 per
cent. customs duty on corsets. We at length decided to manu-
facture them on this side of the water. Our first product was
crude, but we soon overcame the manufacturing difficulties
and have since gone on improving the garment and increasing
the output and our factory facilities. This made it possible
to extend our line. We now have corsets ranging all the way
from $40 to $2, the lowest price being the most recent
addition.
As our business continued to expand we found it necessary
to make the indicated change from a selling organization of
dressmakers to drygoods stores. We did not drop the old
organization all at once; in fact, we have some of the old repre-
sentatives in many parts of the country.
It had not been difficult for the fashionable dressmaker to
induce her patron to buy a high-priced corset as a means of get-
ting a better fit for her high-priced dress. This was the chief
appeal of the dressmaker. When we changed over to the stores,
we lost a good deal of the power of that method. Usually the
saleswomen did not have the influence with the customer that
the fashionable dressmaker had. So it became necessary to
supplement this appeal with another. We began to analyze
the corset proposition more closely than we had ever had any
occasion before for doing.
“DEALER HELPS ’’ 139
Corsets are two parts necessity and one part fashion. We
could, and did, put in a strong word for them as the embodiment
Corsets of fashion in corsets. Necessity, we had not gone
and so strong on. Convenience, yes, and comfort. Why
Poctors not health? The medical profession was, as a whole,
very pessimistic on the subject of corsets. Since practically
all women continued to wear them, it had been the fashion
to ignore the doctors as factors in the corset business. Was this
good business? We were not satisfied that it was. Women
might wear corsets, doctors or no doctors, but unquestionably
few women gave the attention to corsets that they should, and
the right kind of attention. Thousands of them unquestionably
were wearing cheap, ill-fitting, injurious shapes when they could,
by paying a little more, get something that would be positively
beneficial. -
We knew that the corset had been maligned. We knew from
experience that all corsets were not bad, but only those which
were ill-fitting, which bind where there should be no pressure,
and fail to give support where it is needed. Physiological com-
fort had been taken into account by the original designers of
“L’Irresistible” and we had followed the lead, but now we
went into the question with great thoroughness, consulting medi-
cal literature and some of the leading men in the medical pro-
fession, hospital surgeons and specialists.
When it was at length evident that a growing number of the
physicians were not only approving our efforts to follow scientific
principles in the construction of our corsets, but were actually
prescribing them in hernia, spinal curvature, and post-operative
cases, we saw the great possibilities of securing the moral sup-
port of the profession. We prepared special literature for dis-
tribution to the doctors. Our corsetieres made it a point to call
on leading specialists in the cities they visited and direct the
matter personally to their attention.
This led to a change of view on the part of many physicians
and to actual prescriptions of our corset in medical cases. This
professional support was especially valuable when a two or three
days' Gossard sale was being held in a town. The use of the
doctor's name and his endorsement went a long way toward in-
spiring confidence.
You observe that the actual work of interesting the doctor,
or most of the work, is done by the corsetiere. She comes into
the town, interviews the dealer, sells him a bill of goods. He
140 “DEALER HELPS”
must do something to get the people into the store. She will
supply him with electrotypes and copy for the local paper and
suggestions for a circular letter to the patrons of the store who
are likely to be interested, and for a letter to the physicians.
Any physicians especially interested and influential she is willing
to call on.
And then on a later day she returns and gives a demonstration
sale. She helps arrange the stock and drills any helpers she
Sells in needs. She then receives the women who call, fitting
Dealer's them with care and making them satisfied and walking
Store advertisements of the Gossard corset. With such
success has this been done that often a woman who is fitted the
first day returns the following day with a friend or two whom
she wants fitted.
At the end of the second or third day our corsetiere has sold
the stock and taken the merchant’s re-order. When she moves
on she has that department started on the right road. The
double demonstration of selling and teaching often impresses
the merchant so much that he wants to make full-fledged cor-
setieres of his best one or two clerks and sends them on to Chi-
cago for a few days’ instruction in our stores and school. We
have done this for merchants a great many times. It is a part
of our service.
They do this because they realize the importance of trained
saleswomen and corsetieres in the corset department. It makes
all the difference in the world to them. An experienced sales-
woman can sell our high-priced corsets by fitting and make a
larger profit on each, and she will satisfy the women who come
into the Gossard stores and bring them back again.
The corsetieres we train and place in retail stores are really
high-grade saleswomen who can go anywhere and get from $60
to $150 a month. -
We are urging all the local corsetieres to study our literature
for physicians and perfect themselves in medical fitting. Those
who have done so have been enabled to get into touch with the
hospitals and fit many patients with our corsets under phy-
sician’s prescriptions, often over bandages and plaster casts.
In the same way they have gone into private homes. This part
of the work has been developing step by step with the dealer
Co-Operation.
We have been consistent advertisers from the very first, in
the dressmakers’ magazines, trade papers, and women's maga-
“DEALER HELPS ’’ 141
zines, with large space copy. We have also used several news-
papers in Chicago, where our retail stores are located, and news-
papers in New York.
I think we can account our advertising second to none in the
corset line, which boasts some very fine advertising. We de-
rive some advantage from the fact that we are the largest manu-
facturers of high-priced corsets in the world and that our modes
are authoritative and are so accepted. When we began to im-
port the front-laced “L’Irresistible” corsets, they were the only
front-laced corsets on the market. To-day all but a bare half-
dozen of the many corset-makers have front-lacing corsets.
The front-lacing principle has won out, as we knew it would,
because it is aligned with progress and because the front-lacing
method is the only logical one. I think we may give much
credit to advertising for the general adoption of the front-lacing
principle.
Our position also enabled us recently to make what without
presumption we could fairly call a “proclamation” of the au-
The Proc- thoritative corset styles. We issued these proclama-
lamation tions in the spring and fall. We arranged in con-
of Style nection with them “proclamation weeks.” We fol-
lowed the announcements up with the ads giving samples of the
new models of our corsets. The models were electrotyped for
the dealers and the dealers ran the cuts in their local papers and
direct advertising. This “proclamation” advertising has been
among the most successful that we have done.
The basic note of our trade-paper copy is that we extend
privilege to the dealer when we let him sell our goods. We say
this good-humoredly, but earnestly, and he knows it is so. We
see to it that he has been convinced by the merit of the corset.
One of the most important forms of advertising that we do is
for the education and stimulation of our sales force, both those
actually on our payroll, travelling on the road, and those also in
the dealers’ stores, who are specializing on our corsets and whose
interest in everything pertaining to sales promotion we endeavor
to satisfy. We do this by means of our Gossard Corsetiere, a
house-organ of 24 pages, with cover. This is a practical little
magazine, reproducing our advertising, discussing the new
models, following up the sales talks, giving helpful hints about
personal appearance, and just now conducting a discussion on
how to read character. There are in it also hints for the ad-
vertising man, ideas for window display, and like matter.

142 “DEALER HELPS”
Among the most interesting things in the book are the testi.
monials and anecdotes reprinted from letters received from wear-
ers of the corsets, many of them former hospital patients.
We are adopting a new advertising policy for next season.
Up to this time we have rung the changes on the superior value
of the front-laced corsets and we have converted the public—
including our competitors. We are now ready to take the next
educational step. We shall point out that having established
the comfort and hygiene of the front-laced corset, we can now
go on to the not less important point, that an equal value of the
corset is in the design. -
It is by such advertising that we are giving support to our
corsetiere saleswomen on the road, our dealer agents, and their
local corsetieres. The three must work in harmony to get the
best results. The best evidence that they do is the growth of
the business.
(3) USES OF DEALER HELPs
Quite as important as the nature of dealer helps is the way
they are used. A series of five articles which appeared in Printers’
Ink in the fall of 1914, covering the dealer help situation as it
then existed, gives almost as much attention to the uses of dealer
help as to its forms. *The following paragraphs are taken from
the third article in this series and illustrate the importance
which is attached by retailers to the methods used in getting
out dealer helps:
f0rdinarily one thinks of dealer “helps” as supplementary
to national advertising. To reverse this and say that there
are advertisers this season who are making their advertising
supplementary to their dealer helps might appear startling.
Yet it is so. -
These advertisers have discovered that the old cry of “hitch
our trademark to your store” is losing its influence. Dealers
seem to feel that advertisers have grown fond—perhaps too fond
—of saying: “Use these electros in your newspapers, put this
*Printers' Ink, October 22, 1914, p. 17; November 5, 1914, p. 33; November
19, 1914, p. 12; December 10, 1914, p. 67; December 17, 1914, p. 60.
iPrinters' Ink, November 19, 1914, p. 12.
“DEALER HELPS’’ 143
display in your window, distribute these booklets in your bun-
dles, so that the buyers in your town will know that your store
is the “Home of Wear-forever Clothing.’” So they have tried
to circumvent the condition by building the campaign upon the
“helps”; that is, advertised helps in the newspapers, trade pa-
pers, outdoor displays, and magazines.
Isn’t dealer material so advertised likely to enjoy preferred
position and preferred use? It would seem so. Such “helps”
have a value in the eyes of the dealer, greater than that of the
material itself.
Like a good many other sound ideas that are in evidence this
fall, this plan originated in the clothing field. But it is spreading
to other fields, and for a reason. “We get great quantities of
dealer material,” said an alert clothier, just out of Philadelphia,
“but nothing that gives us as much benefit as the material sent
out by Hart, Schaffner & Marx.” And you can go into any up-to-
date clothing store and you will be told the same thing. Dealers
swear by this company’s style book and store material. Why?
Because Hart, Schaffner & Marx send out material that is
a credit to the merchant’s store, material which people will come
into the store to ask for. “I have sold a good many dollars'
worth of goods this fall,” said a Newark, N. J., clothier to a
Printers' Ink staff man who was making inquiries, “by putting
the Hart, Schaffner & Marx ‘dancing couple’ (one of the fall
window-cards) in our windows with a little card. This card
says that if any one wants a copy of the poster, to come into the
store. It proves that people who hang posters in their dens like
it, for several score of men have come in to ask for copies.
Seldom do they go out without buying something.”
But the real reason for the popularity of Hart, Schaffner &
Marx dealer “helps” appears in this statement, made to
Printers' Ink by Joseph Schaffner, secretary of the company:
“It is not so much because we understand the dealers’ needs,”
said Mr. Schaffner, “that we have been successful in getting
their co-operation, but rather because we give our material a value
in the eyes of the dealer other than the value of the material itself.
“Unless we advertised persistently and effectively we could
not expect one fiftieth as much service from our dealer litera-
Joseph ture. The advertiser who expects the most from
Schaffner dealer literature is the in-and-outer who advertises to-
*Plains day and immediately tries to make his dealers believe
he has tapped the springs of continuous demand. This form of
144 “DEALER HELPS ’’
deception is very common. The next year his courage fails or
pocketbook rebels and he drops out.
“The mistake is a grievous one because it amounts practically
to a request to the dealer to advertise for the purpose of aiding
the manufacturer, whereas what the dealer wants is something
that will aid him. The thing he can and does advertise is the
article which means something to him, to his salesmen, and the
public.
“Here is a case in point: We publish a style book for the use
of our customers. It is a good thing in itself, but we have multi-
plied its value to the dealer many times over by giving it na-
tional publicity. We have spent thousands to advertise that
piece of dealer literature and have made it so well known to the
public that it becomes an almost indispensable part of the
dealer’s campaign.”
In other words, by exploiting a dealer help locally in the news-
papers, street-cars, or by outdoor displays people are brought
to the dealer’s store. The advertising immediately becomes an
immense aid to the dealer, not only because its contents sell the
goods he has on his shelves, but it actually gets people into his.
Store.
One dealer said, when asked why he gave the Hart, Schaffner
& Marx window-card such prominence in his store: “Because
they advertise in the newspapers that merchants who sell Hart,
Schaffner & Marx clothes can be quickly found because they
have this picture in their window—and the ad is illustrated with
a cut of the window-card. I would be a chump if I didn’t put
it up, wouldn't I?” .
This series of articles on dealer helps brought out from
Joseph Katz of the Hub, Baltimore, Md., the following discus-
sion of dealer helps written from the retailer’s point of view.
The centre of Mr. Katz’s conclusions seems to be that dealer
helps which really assume the dealer’s point of view are the only
ones which have any chance of bringing satisfactory results:
*Manufacturers who have read the series of five articles on
dealer helps in Printers' Ink recently have undoubtedly found
much in them in the nature of a surprise.
*Printers' Ink, January 7, 1915, p. 57.
“DEALER HELPS’’ 145
Those who read between the lines could not help but note a
growing resentment of the type of dealer help that makes no
allowance for the individuality of the dealer.
The big town was always the hard town for the manufacturer
who wanted to put “Home of My Product” across the dealer’s
door, on his side wall, in every one of his windows, and all over
his newspaper advertising.
But Printers' Ink’s investigation has uncovered my long-held
theory that the small-town merchant is changing his view-
point.
There is one paragraph in one of the articles that’s worth its
weightin gold. In it is found the key to 100 per cent. efficiency
in getting dealer helps used—and that is this by A. W. Newman
of the H. Black Company: “The helps must be prepared,”
states this company from its experience, “so that to the con-
sumer, the ultimate buyer, they will look like material originated,
designed, written, ordered, and paid for by the dealer. The
average dealer’s own copy contains a great deal of favorable
mention of his store’s facilities, service, buying judgment, etc., -
and quite properly. So it follows that advertising matter sent
from the manufacturer to the merchant should take into ac-
count the dealer's natural pride and customers’ needs.”
Read that again; paste it in your hat; it’s the key to the en-
tire situation.
Let every manufacturer give this test to his matter. How
many sets of dealer helps can stand this test? Very few. I’m
sure. I’ve seen very little of such advertising matter.
It’s a clever manufacturer who knows the art of putting the
dealer to work. The best way to do it is to give the dealer a
place in your argument. Write your ads and booklets as if
the dealers were to sign them. Say: “Our clothes are made by
Hart, Schaffner & Marx,” instead of, “Hart, Schaffner & Marx
clothes are the finest in the world and are sold by W. C. White.”
Read this copy from a folder furnished to dealers by the House of
Kuppenheimer:
In justice to you as one of this store's good friends, we cannot let winter
weather approach nearer without telling you something about the greatest
overcoat success of the season—the Klavicle.
The Klavicle—we say it without reservation because it is our conviction—
is the greatest overcoat achievement of recent years. Coming from America’s
greatest overcoat makers—The House of Kuppenheimer—there is nothing like
it to be found under any other label—in comfort, in style, in service. It is
146 “DEALER HELPS ’’
cut on the free, loose lines of a cavalryman’s cape, full sleeves and back without
a seam; wide rolling lapels; velvet collar; natural color buffalo horn buttons.
But the look and feel of the garment—the way it drapes upon your shoulders—
will tell you more about its merits than anything we can say.
You know us well enough to be assured that our welcome to you is always
broad enough to show our merchandise at any time you call and leave the
question of buying entirely to your judgment.
w THE HUR, Baltimore St. at Charles.
The dealer is doing the talking in the folder, even if the marker
did furnish it. And the merchant is only too glad to get folders
of this character.
To write copy like this a manufacturer must anticipate how
far a dealer will go in talking about an advertised make over
his own signature. It is taken for granted that statements like
these must be milder than usual.
Advertising matter of this character cashes in on the local
reputation of the dealer—the biggest kind of factor in producing
business. If I may judge by the way most advertising is
worded, few manufacturers admit it, but it is a fact that manu-
facturers can profit by the recommendations of their dealers.
A good dealer is a power in his community, and few articles are
so strong that they can afford to kill this individuality in the
dealer’s advertising.
A store wants to lead its own life. Let the manufacturer en-
courage this good quality—it is the hallmark of a good mer-
chant.
The fact that some dealers can be induced to use almost any
kind of dealer helps doesn’t make it right or good business to
“put it over.” It is surprising to what lengths some manu-
facturers will go to preserve their own individuality, but they
don’t care much about the dealer’s end of it.
A certain manufacturer was running a series of advertise-
ments in a Baltimore paper. We tried to put our signature
cut inside of the border, but the newspaper told us it had orders
to place a cut-off rule after the ad, and so our name would have
to be cut off from that of the manufacturer.
We wrote to the makers—these folks get out unusually good
dealer helps—and they replied they would have to follow their
original intention “because it will help us to maintain the
natural character of our newspaper work.”
Yet most manufacturers don’t hesitate to ask you to run
“manufacturer-created” copy—and even pay for it yourself.
“DEALER HELPS” 147
Another big mistake to which much waste is due is in getting
up but one set of helps. The H. Black Company again has the
Analyzing right idea. They say: “Small-town stores do things
Dealers’ differently and have different facilities from the large-
Weeds town stores. We have learned this lesson and we are
# to express it in the work that we do with the dealer this
all.” -
Most manufacturers make no distinction between their cal-
culations of the big store in the metropolitan city and the cross-
roads merchant.
The advertising policy of the big store differs radically from
the small establishment. The big fellow, for example, rarely
uses anything over a five-inch clothing cut in his regular ad-
vertisements—space is too costly. Country paper space is
reckoned by the inch instead of the line—and the larger cut is
often used. The big storekeeper doesn’t care for a cut with
the maker’s trademark plastered all over it. An agate copy-
right li.le is his idea of the maker’s share in it.
A cut in the paper is worth a thousand in the cut cabinet.
Clever concerns like Hart, Schaffner & Marx, Kuppenheimer,
and the makers of Society Brand clothes long ago learned that
cuts with but an agate copyright line are used every time—and
have for their pains advertisements in hundreds of towns paid
for by their dealers.
Another reason why so much dealer’s material is not used is
because it does not take into consideration that in most cases
the dealer handles competitive lines.
If a dealer handles half a dozen lines of hose and each show-card
says “the best on earth,” how in the world can any sensible
dealer put them all up?
I believe that manufacturers have a very hazy idea of how
much advertising the average store does. Most dealers handle
several good lines of nearly everything they handle. They can
only use a small part of the helps they receive.
It is also vitally important that your matter reaches the right
man. Hart, Schaffner & Marx send letters to every executive
so that they all get behind the campaign. Here’s one:
Advertising Manager,
The Hub, Baltimore, Md.
DEAR SIR:
Advertising matter like the enclosed is going separately to your concern
but we wish to call your particular attention to it. We believe you will recog-
148, “DEALER HELPS ’’
nize an opportunity for hooking up with our own campaign, and getting some
immediate sales on this full dress suit at $35.
Our own newspaper advertisements will appear in your city about November
6th. You can learn the exact dates later from the publishers. The copy will
be confined to this one item—a full dress suit to retail at $35.
The Saturday Evening Post of November 7th, Collier's of the same date, the
Literary Digest of the 14th, and all the December magazines will contain an-
nouncements of this same dress suit.
The whole force of the campaign is going to centre on November. We
write you about it in advance so that you may be fully prepared to get the
biggest possible benefit.
Yours truly,
HART, SCHAFFNER & MARx,
Per R. O., Advertising Dept.
Another weak link with many manufacturers is not to notify
the dealer in advance of advertising slated for his local papers.
Misceſ- More than once we have been surprised to see big
laneous announcements of goods we handle—and we were
Suggestions not tipped off early enough to enable us to place our an-
nouncement under them. This bad slip, I am glad to say, is
rapidly becoming obsolete.
Cut books should be printed on one side of the paper in black
ink. This gives the dealer a chance to make cuts any size
wanted.
For the larger stores, instead of books with ready-made ads
that are never used, why not furnish a vest-pocket affair with
terse paragraphs giving the selling points peculiar to the product
advertised, for the use of the store’s advertising man?
Signs for windows should be small, so as not to interfere with
the display of the merchandise. Those in imitation of hand
lettering are particularly desirable. Small brass signs are al-
ways welcome.
Writing dealer helps from the standpoint of the merchant is
also a way to make better dealers. Don’t ask a merchant to
sink his individuality—it’s his most valuable asset.
Interest yourself in the dealer’s problem. Give him some
good general advice once in a while.
Read this paragraph from a letter that came with some sug.
gested clearance ads from Hart, Schaffner & Marx:
This season, more than ever before, try to keep away from the common
clearance-sale idea of sensationalism—“enormous,” “gigantic,” and all that;
people seldom believe this sort of thing, anyway, so give them the truth straight
from the shoulder. We’ve tried to do it in these advertisements.
“DEALER HELPS” 149
Have the newspaper use light-faced type, Caslon old style, if possible; you
want to be sure to keep away from the big, black, noisy type.
Note the plain, homely style; it’s the kind of talk that wins a
dealer’s confidence. Compare it with the average bombastic
form letter.
The maker whose helps don’t “kick out” the dealer’s own
personality is the one who will find most of his material used.
And the fellow who is all wrapped up in his own importance will
find his carefully prepared, expensive cuts, booklets, etc., on the
way to the scrap heap.
CHAPTER V
THE REGULAR RETAILER AND NATIONAL ADVERTISING
the value of advertising than in the relations between na-
tional advertisers and retailers. In the days when na-
tional campaigns were few, the pioneers in the field were able to
demonstrate to dealers an enormous increase in speed of sale as a
result of nation-wide appeals to the consumer. But with in-
creased conflict between these national appeals themselves as
well as between advertised and unadvertised products, it be-
came more difficult to convince the retailer of the substantial
advantage accruing to him from a national advertising cam-
paign.
This was followed by the development of various forms of
dealer help. Window displays, counter cards, etc., were worked
out by various national advertisers, and a great variety of
plans grew up for co-operation by the national advertiser with
the retailer in his local advertising. It was characteristic of
all these efforts that they aimed to stimulate the sale of the
products of some one national advertiser directly. When there
is only one large advertiser, or when there are at most only a
very few, in any field this form of co-operation between the
national advertiser and the retailer still works very effectively.
But when the number of concerns bidding for the dealer’s show
window, or his counter space, becomes large these “dealer helps”
lose most of both their interest and value to the retailer.
The problem of “rising costs,” which we have already dis-
cussed, has become the most absorbing feature of the thought
habits of most progressive retailers. And some national ad-
y | WHERE is no point at which there is more dispute about
150
RETAILER AND NATIONAL ADVERTISING 151
vertisers have grasped the connection between this and their
responsibility for preserving the ability of advertising to help
to deliver goods from the producer to the consumer better and
with less waste than they can be delivered without this help.
The betterment of form and methods in dealer helps is still
in progress and is by no means a negligible feature of the present
situation. But what appear to be the two most important new
developments in the relations between national advertisers and
“regular” retailers are: (1) An increased appreciation of the
national advertisers’ stake in the retailer’s fight with “rising
costs.” (2) Increased attention to the exclusive agency idea
as a means for making more certain the results of national ad-
vertising.
(1) HELPING THE RETAILER MEET RISING COSTs
At the Rochester Advertising Club meeting on March 18,
1914, O. K. Johnson, President of the Rochester Retail Shoe
Dealers’ Association and Advertising Manager of Wm. East-
wood & Son Company, a local shoe-retailing firm, expressed the
retailers’ views of what dealer helps ought to be in the following
language:
*“The manufacturer who thinks that he has a cinch on a con-
siderable proportion of the business done by the retailer, be-
cause he advertises to the consumer, is very much mistaken.
Because his national advertising to the consumer does not con-
trol the customer's purchasing. It would be possible to name
several well-known brands of shoes, whose names are well
known because they have been nationally advertised, of which
I can positively say that in seven years I have not so much as
heard the name spoken, either by members of the company,
manufacturer's salesmen, buyers in the departments, salesmen
On the floor, or customers in the stores, and they are nationally
advertised. But I do hear frequent calls for the product of
makes whose names have never been printed in magazines or
newspapers, and have become known to consumers only because
a retailer has made them known to his customers.
*Printers' Ink, April 2, 1914, p. 97.
152 RETAILER AND NATIONAL ADVERTISiMG
“The retailer controls the situation. The manufacturer
will never control it by national advertising or by branding his
The Re- product with a trademark. It is a good thing for
tailer Con- the manufacturer whose product is distributed through
trols the retail stores to get next to the retailer.
* “Help the retailer sell your goods, but not alone
your goods, but any goods that he may carry in stock.
“It is a great thing to be able to regard this problem from the
point of view of the retailer. What do you do for the retailer
must be done unselfishly, not to help sell your goods, but to
help sell his goods. Way back in the subterranean caverns of
your mind you may know that his goods are your goods, but
in dealing with him keep yourself in the background, keep your
interest concealed, and keep him and his interests in the fore-
front. Right here, too, many manufacturers err; everything
they try to do for the retailer is so permeated with themselves
and their interests that they fail to convince the retailer of their
good faith, and he refuses their aid because he does not feel that
his interests are properly conserved.
“Do you know, I have never yet seen a so-called dealer's
service prepared by a shoe manufacturer that I could use? If
Why some I wanted an illustration of a shoe, it was sure to have
Dealer the name of the manufacturer cut into its surface.
Helps Are If it was a booklet that I wanted to use, it was sure
* to have in it some outrageous laudation of the manu-
facturer's product, or something that I could not afford to let
go out because it would do injustice to the goods of some com-
petitor of the manufacturer, and I must not make a gain in
business in one line at the expense of another, save as difference
in quality makes the distinction between the two lines.
“Of course, I know that when a manufacturer smears his
name and his trademark over everything he does for the re-
tailer, he is under the impression that he is making a little money
go a long way in corralling the trade of a large number of the
retailer’s customers. But he is mistaken. He is practising so-
called business insurance. But business insurance is not to be had
in any such way. It is to be had by quality of merchandise
and satisfactory factory service, and on these grounds only are
you entitled to make a bid for further business from the retailer.”

The call which retailers of this type have made upon national
advertisers to help them in attacking their problems has not
RETAILER AND NATIONAL ADVERTISING 153
fallen always upon deaf ears. Help of far wider scope and
greater practical value than the “dealer helps” of even five years
ago is no longer rare. But, if one may hazard a forecast, the
movement has only begun. The basis for such a forecast lies
not in the fact that it has been done in several instances, but
that some of the far-sighted minds in the advertising world see
its possibilities.
Earnest Elmo Calkins, of Calkins & Holden, New York, re-
cently wrote a reply to a letter which Printers' Ink had received
questioning the value to retailers of national advertising. Mr.
Calkins’ reply presents an able advertising agent's view of this
very situation. The letter and his reply were as follows:
*WM. G. HILDEBRANDT,
GROCERIES, MEATS, FRUITS, AND VEGETABLES
CHAPPAQUA, N. Y., January 9, 1915.
Editor of Printers' Ink:
What right on earth has national advertising, anyway?
What justification can you advertising men offer for its existence?
I am a dealer.
Every once in a while I buy or borrow a copy of Printers' Ink and other
advertising publications and I read and hear a whole lot about the desirability
of handling nationally advertised goods. I get a ton or more of circular letters
and folders from manufacturers telling what a lot of advertising they are
going to do—how it will “move the goods right off the shelves,” “put a lot of
money in my pocket,” “start a stream of dollars and people moving my way,”
“turn my stock over so much quicker and oftener and enable me to make so
many more profits,” and so many other wonderful things to make me rich,
prosperous, and fat, if I will only lay in a stock of goods and put them in the
window or advertise them in my local paper.
Most of them are especially keen about the latter. “Connect with our
national advertising,” they say. “Do as much for yourself in your local
papers,” Some of them have the nerve to tell me, “as we are doing for you
through our national advertising.” And, “in order to make it easy” for me
“to take advantage of the valuable work they are doing” for me, most of
them are kind enough to send prepared advertisements and electrotypes. All
with complete directions for using in my local paper and “getting my share of
the big profits.”
Very few of these national advertisers, however, offer to contribute toward
the cost of this local advertising, and most of those few that do want you to
burden yourself with an awfully big stock of their goods in return for an aw-
fully small share in the cost of the local advertising—not to mention the
trouble, time, mental energy, and elbow grease involved in looking after the
work so graciously laid out for you by the benevolent national advertiser.
*Printers' Ink, February 25, 1915, p. 33.
154 RETAILER AND NATIONAL ADVERTISING
Now what I’d like to know is this: If, as so many of them say or imply
in their circulars, my local advertising is necessary to make their national
advertising more effective, if the more local advertising I do brings so many
more people into my store who have seen “the ads in the magazines,” tell me,
then, please, you advertising men, why national advertising is necessary at all?
What proportion, do you suppose, of those whom my local advertising brings
into my store, don’t see the corresponding magazine ad?
What proportion would come whether they saw it or not?
How do you know but what a proportionate share of the money spent in
magazine space added to the amount invested in local space would not bring
far more people into my store for a given brand of goods than the same amount
split up between magazines and local papers?
Tell me, if you can, why the manufacturer wouldn’t sell more goods if he
cut out national advertising entirely? Does any manufacturer know for sure
from his own records and experience that national advertising is absolutely
essential—that he couldn’t reach more people by depending upon local adver-
tising entirely? t
Of course I’m not a manufacturer, and I look at things from a dealer’s
viewpoint, but as a close observer of business methods for many years I’ve
come to the conclusion that national advertising is the modern fetish—“every-
body does it because everybody does it.” I may be wrong—but I’d like to
have some tangible proof to the contrary.
Can you or some of your readers, in the interest of good advertising, offer
it to me?
WILLIAM G. HILDEBRANDT.
Mr. Hildebrandt: You ask, “What right on earth has national
advertising, anyway?”
The answer to that is easy. It is that the national advertiser,
or in other words, the manufacturer, has a right to exploit his
business in any way he sees fit. But that does not answer the
real question behind your rhetorical question which is this:
“Why should I sell advertised goods?” “How am I benefited
by national advertising?”
In other words, while the manufacturer may exploit his busi-
ness in any way he sees fit, he must, for his own sake, exploit
that business in a way which will appeal to the dealers who dis-
tribute his goods.
That puts a new wrinkle in this question, because your point
of view, whether it is a wrong or a right one (and I hope before
I have finished I will prove to you that it is a wrong one) must
be reckoned with by the manufacturer who advertises in the
hope of selling his goods through your store.
I will leave the Question of the dealer’s advertising helps and
other advertising material which you receive in such large quan-
tities for discussion later, while I take up the question of the ad-
RETAILER AND NATIONAL ADVERTISING 155
vertised goods themselves and their relation to your store and
your customers.
The people who buy at your store have a right to know the
name of the maker of the goods they buy. While advertised
Consumer's goods are not essentially, on account of their adver-
Right to tising, better than unadvertised goods, they are apt
Know to be. The handling of advertised goods tends to
* standardize the whole transaction. Makers of un-
advertised goods recognize the value of advertising by cutting
the price of their own goods in order to influence the dealer,
which is not in the long run to the best interest of your customers.
Whatever your individual experience may have been, the selling
of goods by advertising has proved of great benefit to the great
mass of people in more ways than can be specified in a single
letter like this.
This brings us up to the specific advertising of a given manu-
facturer whose goods you sell.
This manufacturer, having spent his appropriation in national
advertising in magazines, or newspapers, or street-cars, or bill-
boards, or some of them, or all of them, and having taught peo-
ple to believe that his goods are desirable and that the price is
right, and that they can be obtained at a reasonably large num-
ber of retail stores, realizes that there are many dealers whose
mental attitude toward all this work is the same as yours.
He tries to stimulate the good will that he ought to have from
you by offering you various advertising helps.
The retail dealers of this country in all lines spend through the
pages of theirlocal papers millions of dollars in advertising—much
more than all the money spent by all the national advertisers—
but very little of this advertising is as good as it should be.
The manufacturer realizes that the dealer who advertises
regularly and has to fill a certain space in his local papers appre-
ciates advertising help of some kind. Many manufacturers
have made the mistake of supplying to the dealer such help
overloaded with their own advertising. I believe that there is
room for improvement in the ready-prepared advertising which
the manufacturer furnishes the dealer. I think that a large
amount of the stuff sent you has undoubtedly been worthless.
If you had looked at it more critically than you evidently have,
you would probably have found some good things in it. Also
in writing about it stronger claims have been made for it than
should be.
156 RETAILER AND NATIONAL ADVERTISING
But let me ask you a few plain questions: -
Do you or do you not believe that advertising in local news-
papers helps a retail store? .
If such advertising helps a retail store, should it not be based
upon the goods that that store sells?
If your store is going to advertise the goods upon its shelves
which advertising will go farther—the advertising of the un-
known goods that you sell or the advertising of goods that are
otherwise advertised by the manufacturer?
If you should prepare copy yourself about the goods in your
store, and if you should decide to advertise goods that are na-
tionally advertised, would you or would you not welcome an in-
telligent advertisement furnished by the manufacturer of these
goods?
This is the theory of the ready-made advertising supplied you
by the manufacturer.
If you advertise, you probably utilize the mailing of your bills
each month to carry some sort of a stuffer or folder about your
business. Here again, if you sell advertised goods, would not a
folder about advertised goods have more weight with your cus-
tomers than a folder about unknown goods? Is that folder any
less valuable because it has been prepared by a manufacturer's
advertising expert than when it has been prepared by you per-
sonally?
No retail store can afford to hire the advertising services that
a manufacturer can hire. He is undoubtedly able to furnish you
better literature than you can get up yourself. If that litera-
ture is biased in favor of his goods, that is the pay he gets for
the expense this matter costs him.
The only answer you can make to all these contentions is that
you do not believe in advertising at all. If you do not, there
is no argument upon which I can base a letter in reply to you,
because the cause of national advertising rests upon the same
sound basis as the cause of retail advertising.
The dealer who does not believe in advertising and, therefore,
does not use it, is so hopelessly out of the running in these days
that his attitude toward national advertising is more or less negli-
gible.
I do not believe you belong in that class. I imagine that
you are a keen and live advertiser yourself, and that if you wrote
the letter which you have signed, you are able to write some
pretty forceful advertising of your own.
RETALLER AND NATIONAL ADVERTISING 157
You are one of a large class of dealers who imagine that their
interests and those of the manufacturer who advertises are dia-
metrically opposed. To some extent they are. It is true that
the dealer who exploits the manufacturer's goods in his own ad-
vertising thereby ties himself up with those goods, but it is not
true that he thereby lessens his own importance in the town
where he lives.
The great success of nationally advertised goods in the last
twenty years means nothing, unless it means that the public
is absolutely sold on the idea of advertised goods. Unless
enough of the public were convinced, convinced often enough
and convinced about a great enough number of advertised
goods, to make a large percentage of this advertising successful,
it would never have existed until now. Therefore, if the public’s
attitude toward such goods is favorable, if the public buys them
by preference, then the dealer who boldly proclaims that his store
is filled with advertised goods is advancing his own interests.
The other view is a narrow, petty, and small one—the dog-in-
the-manger, penny-wise-pound-foolish attitude. That is the
view of the dealer who says, “I won’t help any manufacturer
sell his goods, even if I go bankrupt. I will cut off my nose and
spite my face.”
The Crofut & Knapp Company manufactures hats. A sales-
man of this company called on a hatter in a certain town who
A Case i said: “I like your hats and I want to sell them, but I
}., “am much better known in this town than you are. If
you will let me have your hats with my label in them,
I will take twelve dozen.”
The salesmen was a diplomat. He said:
“Let’s make a test case of this. Let me sell you six dozen with
the C. & K. label in them, and I will sell you six dozen with your
Own name and label. Then we will see at the end of the season
whether the C. & K. label or your own label is the better seller.”
At the end of about two months the Crofut & Knapp Com-
pany received a telegram from this dealer saying:
“Please send me seventy C. & K. labels.”
In other words, he had sold seventy-two hats with the C. & K.
label in them and two of the same hats with his own label in
them in the same time. .
Something like this is true more or less of all advertised goods—
not altogether, because I am very far from claiming that only
advertised goods are reliable, or even that all advertised goods
158 RETAILER AND NATIONAL ADVERTISING
are. I believe that there are a great many lines as good as or
even better than the corresponding advertised goods. The
point is just this: that the customer demands a surer ground to
stand upon. He wants to know who makes the goods he buys.
He knows that the dealer does not make them, and he knows that
however good a dealer he may be he cannot endorse the goods
as the manufacturer can. He does not want to buy goods with
a jobber's trademark upon them. He wants the trademark of
the original manufacturer. His demand for such goods is
steadily increasing. It is the interest of the manufacturer who
advertises to see that that demand increases. It is the logic
of advertising. The dealer who fights it will either give in in
the long run or give up altogether. The dealer who appreciates
that he can use this advertising to his advantage and who does
so use it, who discriminates in the lines he carries, who doesn’t
buy a line simply because it is advertised, but who doesn’t re-
fuse to stock a line for the same reason, will in the long run have
a better business and a better standing in his community than
the dealer who follows an opposite policy.
Large stores, especially department stores of the class of
Wanamaker’s or Marshall Field’s, make a practice of avoiding
advertised goods and selling products with their own names upon
them. In some cases these products are identical with goods
that are elsewhere trademarked, and in some cases they are
specially manufactured for them. Orders from such stores are
so large that they frequently take the entire output of a factory.
Frequently the goods so made up for these stores are of the very
best quality. Nevertheless, in both Wanamaker’s and Mar-
shall Field’s, and in other stores of a similar class all over the
country, there is carried a certain percentage—small, it is true,
but still in evidence—of advertised goods. These are the goods
for which the public demand is so strong that even a large and
powerful department store cannot ignore it.
The point that you bring up about manufacturers who ask
you to advertise their goods in your local newspapers is an in-
teresting one. But the manufacturer does not mean that the
dealer’s advertisement is necessary to make his advertising effec-
tive. What he says, or what he should say, to you, is: “If you
will advertise in your own local newspaper that you carry these
goods, you will get the benefit of the advertising I am doing, but
this advertising I am doing is going right on selling goods through
the stores that will carry them, whether you join or not.”
RETAILER AND NATIONAL ADVERTISING 159
The sharp distinction that you draw between magazines and
newspapers exists only in your own mind. The magazines
Different and newspapers are both mediums reaching the pub-
Classes of lic. The difference is, as far as the manufacturer is
Mºdiums concerned, that the magazines as a whole cost less than
** the newspapers as a whole.
A national campaign run in newspapers of the cities where
the manufacturer's goods are sold is unquestionably the ideal
campaign, but it can be conducted only by a manufacturer
whose business is so large that he can spend profitably a very
large appropriation. Magazines offer a less expensive way of
covering the entire United States, covering it not so effectually
as newspapers, but still covering it.
Finally, the suggestion that it would be more effective for the
advertiser to divide his appropriation among the dealers who sell
his goods than spending it in the magazines.
This is sometimes done, especially where there is only one
dealer in a town that carries the goods. As a rule, however,
where unlimited distribution is necessary and where a number
of stores in each town sell the goods, it is impossible for the
manufacturer to do this. His plan is to convince the public that
the goods are desirable, and then to urge each dealer to let that
public know that he carries them. This is sound and right,
and in the long run the most efficient and economic method of
distributing goods.
The last question in the letter is the most astonishing one.
It asks why the manufacturer could not sell more goods if he cut
out national advertising entirely. I cannot take this question
seriously because I have never heard it seriously contended that
advertising reduced the sales of goods, however ineffective it was.
I am reminded of the little boy who fell down a long flight of
stairs into the street. A kindly old gentleman stopped and
asked the usual fool question: “Did it hurt you, little boy?”
The little boy got up, rubbed himself and limped off, saying:
“Well, it didn’t do me a darned bit of good.”
There is one thing more for you to consider, Mr. Hildebrandt.
The contest between advertised and non-advertised goods, as
Two Paths far as the dealer is concerned, is fast becoming one of
Open for relative profit to the dealer. The non-advertising
the Retailer manufacturer, realizing that he can never compete
with the consumer demand created by the advertising of his
competitor, promptly bribes the dealer with the offer of a lower
*60 RETAILER AND NATIONAL ADVERTISING
price. This lower price does not benefit the consumer. It is
a bonus to the dealer to fight advertised goods.
The dealer who will not sell advertised goods and pushes
unadvertised goods lays himself open to the suspicion of selling
not the best for the price, but the thing that pays him best. You
may ask: “Why should I not? Am I not here to make all I can?”
That would be good business if it were good business. But
if the public knows, and it is learning more every day, then it is
a short-sighted policy. It is the policy of a man who would
walk rather thay pay five cents car fare, who would light his
store with kerosene rather than pay the higher price of electric-
ity. The machinery of national advertising is the best method
of selling goods—the best for all concerned—maker, retailer,
user—and the dealer who refuses to ally himself with it and
take advantage of the lower cost of selling and the good will of
the consumer is standing aside and letting the Broadway Lim-
ited go on without him, while he sticks to the stagecoach.
These facts remain and cannot be controverted. The quality
and standard of advertised goods are higher than of non-adver-
tised goods. The advertising of a manufacturer is a contract
between him and the public always to keep up the quality.
The tendency of advertising is to improve the quality. The
retail store benefits by these things. It is enhanced in the eyes
of its customers by their working out. All the objections of
all the dealers to various imperfections and drawbacks of this
method of distribution and sales are outweighed by all its ad-
vantages and ultimate rightness.
Do not, Mr. Hildebrandt, let the injudicious and unwarranted
claims of some manufacturers obscure the truth and force and
logic that are behind the right of every manufacturer to be
known to the consumer by the goods he makes, to be responsible
to the consumer for their quality, and to use your store as the
natural and inevitable distributor of them.
The fifth in the series of articles on dealer help, quoted in the
preceding chapter, contains a description of several methods of
practical co-operation by which the manufacturer helps the re-
tailer solve his most serious problems:
*Joseph Schaffner once said in Printers' Ink: “We have
learned by experience that many merchants are not as well
*Printers' Ink, December 17, 1914, p. 106.
RETAILER AND NATIONAL ADVERTISING 161
informed about their own business as they should be; that they
are lax in watching their stock, in figuring their expenses, profits,
etc.” Since then quite a number of advertisers have turned
their attention to making better dealers, realizing that in so
doing they were making bigger sales. Several plans of that
kind are in evidence this season.
The object of all these plans is to encourage dealers to “trade-
up”; that is, to do business on a higher plane. The old-
fashioned dealers who cling to the policy of few sales and big
profits should be taught that more money can be made by quick
turnovers and small profits; those who are given to slashing
prices should be taught to keep books which will soon correct
the practice; those who are circularizing mailing lists having
too much lost motion should be shown how to get the lost
motion out of them; those doing business without an inventory
system, and who consequently carry stocks out of proportion
with their sales, should be shown how to keep a simple inven-
tory which will release this capital for easy selling material;
those who are letting delivery systems eat up profits which
might be put into merchandise should be shown how to reduce
the delivery costs; those who do not know how to keep tab on
costs should be shown simple ways for doing so, and so on down
the line. Left to himself, the dealer will hardly correct these
bad practices; it is to the manufacturers’ interest to help him
do so. e
One example of real dealer co-operation—the kind that gets
below the surface—is the assistance R. H. Ingersoll & Bro. are
Ingersoll giving jewelers in cost accounting. The book which
Cost is called “System and Cost Accounting for the Retail
System. Jeweler” was prepared, so it states, by the most
competent experts obtainable and thoroughly tested. The
system itself is complete, simple, and requires no bookkeeper.
This is important in recommending cost-keeping methods to
dealers.
The purpose of the system is to show up “leaks,” disclose
where profits go, automatically show results of selling campaigns,
insure charging of credit sales, show each clerk’s performances,
give repair costs and profits, and prevent the accumulation
of old stock. The system is a plan of productive record keep-
ing, displacing old-fashioned laborious bookkeeping. To the
dealer who instals it it means more profits and provides a sys-
tem for collecting information to guide him in the future. To
162 RETAILER AND NATIONAL ADVERTISING
the manufacturer it means a better dealer, fully alive to
the profit from pushing a quick-selling, widely advertised
watch.
The Ingersoll people go a step further, however, than merely
suggesting the system to the dealer. Years of experience have
taught them that while the average dealer will mentally agree
the system or suggestion is fine, unless it is made easy for him
to act he is inclined to procrastinate and forget. So this ad-
vertiser furnishes the material as well as the idea. After read-
ing the booklet, and deciding that his business needs some cost
system, all he has to do is to tell the Ingersoll people so, and
they will provide him with the “tools” as they call the forms
and books used in their system. The dealer, of course, pays
the cost price for the material, which is naturally a good deal
cheaper than he could buy it for himself.
Does the dealer appreciate this help? The many letters
which the company has received from dealers all over the coun-
try show that they not only appreciate it, but it is increasing
their business. Here is one letter from a jeweler in Philadel-
phia which reflects the common attitude:
GENTLEMEN: I have received your “Business System,” also copy of the
explanation book for the same. I wish to thank you most sincerely for your
interest in the trade, as I think this is the best thing ever happened.
I have installed the System, the explanation book making the same more
easy, and in the future, instead of being a “guesser,” I will be able to give a
correct and comprehensive report on my business.
I do not believe there is another jeweler more enthusiastic, or more proud
of having a real good system, than I am, and I was up all night several weeks
ago taking account of stock, and getting the System started.
You will find evidence of my having used Business System in your office
now. Several days ago I sent Purchase Order No. 1 for electros, and Purchase
Order No. 3 for 1,000 Repair Envelopes and 100 Sales Book Slips.
I have aſready seen the benefit of having a good system in taking account of
stock. I found I had more money invested in clocks than I had any idea of,
and in consequence, I am making a special effort to sell clocks.
I have the Ingersoll and Ingersoll-Trenton watches well displayed in show
window, and am making it my aim to push their sale.
Wishing you the greatest success, I remain,
Yours truly, A. WM. F. KIEFER.
An important point about this book is that no mention is
made of Ingersoll watches in the copy. One or two of the forms
reproduced bear the name, but it has been purposely kept out
of the book. It would not do to create a suspicion in the dealer’s
RETAILER AND NATIONAL ADVERTISING 163
mind that the manufacturer had any interest in the plan out-
side of helping him, and thus making a better customer.
This Ingersoll plan is very similar to that being used by Hart,
Schaffner & Marx. This company is furnishing a book known
special as “What Do You Know About Your Own Business?”
Service According to Mr. Schaffner, almost a year was put in
Helpful investigating and perfecting before this book was
sent out to Hart, Schaffner & Marx dealers. Its purpose is to
encourage dealers to spend a few minutes every day in keeping
a perpetual inventory which the company suggests. If dealers
can be made to do this, the company feels that they will be
better dealers and bigger buyers of Hart, Schaffner & Marx
clothes. As such books are issued purely to help the dealer–
at least visibly—and no effort is made to sell him anything, they
cannot help but prove a good-will builder, even if their aim in
other directions fails. . . .
Similarly, Moller & Schumann Company, the varnish people,
maintain a special department to help dealers in problems of
finance and business management. It is under the jurisdiction
of the credit department and has already been described in
Printers' Ink. This kind of co-operation, while expensive for
the advertiser with thousands of dealers, is invaluable to the
dealer, and in the case of Moller & Schumann Company has
proved a great credit aid and good-will winner. Other adver-
tisers have adopted the idea in partial or complete form, and
the plan is one which should help the sales end of a business
materially.
While cost-keeping help and business advice to dealers is a
form of co-operation which they will greatly appreciate, there
are many other ways in which an advertiser can give real help
to his dealers, and at the same time help himself. This is par-
ticularly true in regard to giving advertising assistance.
And the most crying need is to get dealers who are expected
to furnish lists of customers for circularizing to keep these lists
up to date. A Printers' Ink staff investigator went into the
store of a New Jersey clothier handling Stein-Bloch clothes.
The dealer was one of the kind who was his own advertising
manager, head salesman, and merchandise man, as well as chief
bundle wrapper, cashier, and floorwalker.
“What do you think about this idea of an advertiser send-
ing out announcements to your customers?” the dealer was
asked.
164 RETAILER AND NATIONAL ADVERTISING
“Great stuff, especially when the advertiser pays the postage,”
was the reply.
Keeps “Well, supposing I was a manufacturer and was will-
Mailing ing to spend say five cents each on your best customers,
Lists, where would you get the names?”
* The dealer thought a while, and then said: “Oh, I
suppose I would send you the telephone book.”
“Is that what you send Stein-Bloch?” he was asked.
“No, indeed, I have to pay the postage on Stein-Bloch letters.
I have a mailing list which I keep on cards suggested by them
for that purpose; there is too much waste in a telephone direc-
tory, the postage would run up too high to make it pay.”
Asked to show the cards he used, the dealer took down a card
file from one of the shelves in the back of the store, and showed
a list that would be a credit to any manufacturing business—
quite different from the average lists which dealers send in.
This card showed at a glance just what kind of merchandise
the customer would be interested in buying. It showed what
he has bought in the past, whether he is married or single,
whether his last purchase was made by himself or by his wife,
the customer's position, what kind of clothing he is interested
in, the price of suits he buys, and whether he is a cash or credit
customer. All this information is utilized when a circular is
sent out, and the circular is made to suit the different groups.
Metal signal tabs are used along the top of the card to make it
easy for the dealer to pick out those interested in the various lines
handled by the store, or to show whether he buys high-, medium-,
or low-priced suits.
Questioned further, this clothier produced the booklet which
Stein-Bloch had sent him, and which had induced him to put
in this modern card system. Advertisers who are troubled
with having dealers send in wasteful lists, which make this
form of co-operation unnecessarily expensive, will be interested
in a section from this book which shows the dealer how to get
worth-while names:
“First, take names of all charge accounts that you consider
good and fill in cards as far as information on books will help
cutting you—have each clerk in your store go through these
Waste out cards, adding what information he can to cards of
of Dealer's customers whom he knows.
Lists “Take names from club lists, telephone directories,
etc. Check these first against the cards from credit customers
RETAILER AND NATIONAL ADVERTISING 165
and from different lists to avoid duplicating—the most practical
way to make this checking and entering easy is to provide your
card system with an extensively divided alphabetical guide.
This is usually based on one hundred divisions to one thousand
names in list. Have these cards gone over by clerks for ac-
quaintances.
“Do not put metal tabs on cards until the information on card.
is sufficient to make it practical to use as a prospect. The fols
lowing schedules show what information is necessary to start
active card:
Prospective:
Name and address
Approximate age
Business
Position in business
Estimated income
Customer:
Name and address
Approximate age
Business
Position in business
Estimated income
Sales records to indicate class of purchases
Boys and Children:
Name, age, and address
Parent’s name
“Always address mail to home. In sending out letters on
boys’ clothing the letter should be addressed to boy’s own name,
care of his parent.”
This booklet, the Stein-Bloch people say, has caused many
of their dealers to put in the system, with the consequence that
the money spent by Stein-Bloch in circularizing dealer lists pro-
duces greater results.
A simpler plan for encouraging dealers to keep more efficient
lists is to urge them to send to the various addressing-machine
manufacturers for system books. The larger companies issue
special bulletins showing how retail establishments can build
up efficient mailing lists. These bulletins also contain informa-
166 RETAILER AND NATIONAL ADVERTISING
tion which would help a dealer in taking the lost motion out
of his present list. The manufacturer is vitally interested in
his dealer’s lists, and any effort spent in that direction should
prove most productive of good.
But the most appreciated co-operation of the suggestive type
seems to be giving the dealer selling ideas. This is the phase
Selling of business that interests him most, and while he picks
Suggestions up ideas from the salesmen, an advertiser can, by
*** making the advertising department a clearing house
for selling ideas, win a dealer's good will readily in this way.
One advertiser who does this is the Goodyear Tire & Rubber
Company.
A glimpse into the Goodyear methods might be interesting.
Just lately it has issued a very beautifully printed and illus-
trated book called, “New Ways to New Business.” While a
good portion of the book is given over to cataloguing the various
helps and showing how they can be used profitably, several
pages contain suggestions for selling plans. The dealer is
shown how to organize a “mileage club,” in which fobs are
given by the dealer to the rider. When he rides 100 miles he
gets a yellow button, 200 miles entitles him to a blue button,
and when he makes 1,000 miles the dealer presents him with a
fob. This plan, of course, appeals to the boys, and as the but-
tons and fobs are furnished by the company, the cost to the
dealer is slight.
In the same way plans are suggested for various kinds of con-
tests: races that start in front of his stores, coasting contests,
selling the Boy Scouts by getting them to organize bicycle
squads, forming bicycle clubs and other plans of that kind.
Dealers appreciate such suggestions and act on them. By
furnishing them in a book form as the Goodyear people do,
instead of scattering them through a house-organ, they can be
made to serve a double purpose: help the dealer and insure his
keeping the catalogue of selling helps and utilizing the ideas.
The foregoing are only a few selected examples taken from
the newer co-operation plans of manufacturers. There are
many others equally effective, so far as getting down to funda-
mentals and making better dealers is concerned. These have
been mentioned to show the possibilities of the idea. Just how
each manufacturer can help his dealers most effectively is for
the manufacturer himself to solve; but one thing is plain: there
are few better methods of securing and holding the trade's good
RETAILER AND NATIONAL ADVERTISING 167
will than by helping them to become better dealers. It is a
form of co-operation that is comparatively inexpensive, and if
tactfully offered, mighty remunerative.
George S. Louis, of Chicago, Advertising Manager for Paris
garters, who has made a specialty of getting the retailer's point
of view, declares that the securing of the retailer’s co-operation
is largely a matter of tact and of appeals to the motives which
normally control men in their business dealings. He says:
*The retailer is responsive to the same appeal and is spurred
to action by the same motives that influence all other human
beings. The dollar-sign, sentiment, pride, dignity, ambition,
and all the other factors that influence you or me, bear the same
weight upon the retailer.
I only dare to make such apparently idle statements because
of the curiously inverted methods of approach to the retailer that
are employed by the average manufacturer and wholesaler.
The approach that does not inspire friendliness and confidence
is severely handicapped. The present practices of approach
to the retailer are rousing his antagonism; the methods of ac-
costing the merchant that are now in vogue reflect upon his
intelligence, his dignity, and his business ability. The retailer
resents it, and this resentment is making the selling to the retailer
a far more expensive and difficult undertaking than necessary.
During the past six years I have had this fact—the approach
of the manufacturer—discussed and analyzed for me by an aver-
age of 25 retailers in every State. My comments upon this
question are based upon the dealers’ own verdict in addition
to my own experience and experimenting in appealing to the
retailers in behalf of a goodly number of manufacturers.
In the first place, the retailer heartily dislikes being addressed
as a “dealer.” This is the term that is generally employed in
Merchant the literature and letters sent to the retailer. The
Dislikes term “dealer” catalogues the merchant as a mechani-
... Woºd, cal distributor, and implies, according to the interpreta-
” tions of the dealers themselves, that they are not active,
important, necessary selling factors in the course of distribution.
So, as the spokesman of hundreds of retailers, who have ex-
*Printers' Ink, January 8, 1914, p. 98.
168 RETAILER AND NATIONAL ADVERTISING
pressed their dislike to this form of address, I advise its disuse;
address him as “Mr. Merchant,” or “Mr. Retailer,” and you
will have the foundation for an approach that will gain his
favorable attention.
I have made a rather careful study of the letters, circulars,
and other literature and trade-journal advertising that has
been intended to approach, interest, and sell to the retailer.
I am now in constant and intimate communication with one
hundred live, successful merchants, of whom ten of each are
conducting clothing, drygoods, shoe, hardware, jewelry,
grocery, drug, cigar, paint, and oil and general stores. These
one hundred retailers are scattered from coast to coast, and
represent the most intelligent and enterprising of the average
and smaller community storekeepers whom I met in my four
years’ retailer investigation.
From these one hundred merchants I receive almost daily the
literature that is sent them from various manufacturers, with
their comments, whether or not they answered or acted ac-
cording to the approach, and giving me their reason for what-
ever action they did or did not take. Ninety per cent. of this
matter, I find, does not arouse any feeling of interest because
it talks at the merchant instead of to him. This difference in-
volves, first, the use of the pronoun “we” instead of “you,”
and second, the exploitation of the goods instead of their sell-
ing value.
These differences are well illustrated in the following incident:
A prominent shoe manufacturer mailed an expensive, three-color
circular to a large list of shoe retailers. In part, this circular
ead:
#%* º “We have been in business thirty-five years. We
#... began our business in a small two-story frame house;
now we are occupying a ten-story, block square
building. We employ three thousand workers. We spend
$80,000 each year in educating and influencing men and women
to ask for and buy our shoes. In their stylish appearance, com-
fort, and wearing qualities, there are no better shoes made.”
All the copy of this circular was of this trend. A small try-
out order was attached to the circular, which the merchant was
urged to sign and return. I happened to visit this concern, just
as the president and other members of the organization were
discussing the unexpectedly poor results that this circular
produced. After hearing their rather contemptuous remarks
RETAILER AND NATIONAL ADVERTISING 169
about the retailers and their lack of intelligence and energy
(for they placed the entire blame upon the retailer), I suggested
that they experiment with the same copy and circular, as I
would rewrite it, to a limited list of the same retailers. They
skeptically granted my request. Here is how I rewrote that
part of the copy quoted above: .
“You have our thirty-five years of experience at your com-
mand. This ten-story building, which we are now occupying,
is equipped to serve you. There are three thousand employees
here working for you and your interests. The men and women
of your town, and the men and women of other communities,
are being influenced to ask for and buy our shoes; our $80,000
yearly national campaign has made and is making our name
and the quality of our shoes known to many thousands of
possible purchasers. Quick sales, gratifying profits, and pleased
and permanent customers are assured you because of the
stylish appearance, comfort, and wearing quality of our
shoes.”
Although but one thousand names were used, and the circular
was a far cheaper, one-color job, it resulted in more replies than
to the list of eight thousand retailers to whom the original cir-
cular was sent. The second circular talked directly and em-
phatically to the merchant; it told him why he should handle
these shoes in his locality. . . .
In the many discussions I have had about the advantages or
disadvantages of selling advertised goods there were all varie-
ties of opinions expressed by the retailers about the power and
purpose of advertising. But eventually, upon cross-examina-
tion, all agreed that it made selling an easier, quicker, and con-
sequently a more profitable process. I have become pretty well
convinced that the retailer is very susceptible to an approach
through the medium of advertised lines. This is not only so be-
cause the retailer appreciates that the advertised merchandise
he carries is more salable, but because the retailer is also a reader
of magazines and newspapers, and an observer of outdoor dis-
play; he is even more familiar with the advertised goods of the
lines he sells than the average reader, for he is naturally far
more interested in them. Unconsciously, he becomes more
strongly impressed with the article and arguments that con-
front him in advertising than he is aware. * @
If the advertisers would only be content to tell of their efforts
in co-operation with the retailer instead of attempting to influ-
170 RETAILER AND NATIONAL ADVERTISING
ence the merchant by statement of what the efforts will accom-
plish, a marked difference in the effect of the approach would be
experienced. The retailer appreciates what will result locally
from a sound, well-conducted advertising campaign. He knows
this better than the advertiser. He has been sadly disappointed
by the too alluring promises of a great many advertisers of what
would happen if he sold their goods. This form of
*...* approach, the promised reward if the retailer orders
Hijja goods, is received very skeptically. The most favorable
comments upon all the campaigns that the retailers
discussed with me were of a hardware concern which approached
the retailer on the following basis: -
“We are advertising in twelve magazines of wide circulation.
This campaign will be continued throughout the year. This
advertising will surely attract the attention and interest of
many thousands of possible buyers, among whom there will
undoubtedly be a great many in your locality. If by this ad-
vertising we can influence possible buyers to go to your store,
we know you can make them your customers.”
Then followed a detailed analysis of each medium which was
being employed by these people for this publicity campaign.
They did not make any definite statements about what the
campaign would accomplish. They used the terms “possible,”
“probable,” “likely,” etc., when they made any statements
that referred to the results that might be expected. The sen-
tence “If by this advertising we can influence possible buyers to
your store, we know you can make them your customers” was
received with particular favor. This came as a delightful relief
to the merchants who were accustomed to bold, superlative
claims about the “created demand” and its tremendous
power.
To approach the retailer by means of the consumer is a
mighty effective way to gain his attention, if it is properly done.
getting When the advertiser tries to force interest by shouting
Retailer about the “created demand” for his goods, he will
Through receive but scant consideration. The retailer stoutly
Consumer refuses to acknowledge that a created demand means
sales unless he, the retailer, works in conjunction with such a
demand. The retailer does not dispute that advertising will
and does create a demand for goods. He has had too many
requests for advertised merchandise to ignore this fact. But
—don't overlook this—he has been successful with too many
RETAILER AND NATIONAL ADVERTISING 171
substitutions not to realize that the created demand is not neces-
sarily a sale unless he acts in co-operation with it. The man-
date that so many manufacturers issue, “Stock up; we have
created a demand for our goods. If you sell our goods, they’ll
come to your store and buy,” is no longer of very much weight
with the average retailer. One of the most effective approaches
to the retailer that I know of is that of a woman’s garment manu-
facturing establishment, which places the matter before the
retailer in this way: “With your active co-operation, we can be
of tangible service to you in bringing customers to your store.
Our national campaign in the following, well-known, influential
women’s magazines (here follows the list) is arousing an interest
in our garments, and influencing women to go to the stores that
sell them. We sincerely believe that if you have a fair assort-
ment of these garments in stock and advertise the fact in your
local paper and otherwise, and use your best selling effort in
co-operation with us, you will be able to build up a large, profit-
able, and permanent business.”
Two letters and one circular containing arguments of this
nature were sent to twelve thousand prospective dealers. A
little over six thousand replied. This approach gave recognition
of the ability and power of the retailer. The manufacturer
asked co-operation from the retailer; co-operation was not offered
from manufacturer to retailer as is customarily done. The real
burden of selling was placed on the retailer’s shoulders, and it
pleased and flattered him.
Recall, if you will, the approaches that have gained access
to your ear and mind. Were they not of the quiet, but decisive,
straightforward, business calibre that gave recognition of your
ability to handle your own affairs? Did an approach that in-
volved threats, bribes, or flattery ever gain its object with you?
Apply the same methods of approach, to which you yourself
are susceptible, to the retailer, and see how most eagerly he
will respond.
(2) THE EXCLUSIVE AGENCY PLAN
In recent years, since the control of resale prices has been so
sharply restricted as a result of court decisions, the exclusive
agency plan has been adopted by many national advertisers
as a means for securing the active support of the retailers and
for guaranteeing to the retailers of the fullest possible advantage
172 RETAILER AND NATIONAL ADVERTISING
of the publicity which constitutes the main feature of the na-
tional advertiser’s plans. M. Zimmerman, a staff investigator
of Printers' Ink, has made a report on exclusive agencies which
shows how this method is working in some cases:
*In making my visits to the various dealers in their several
lines, such as clothing, haberdashery, hardware, drugs, groceries,
etc., I found that as a general rule the dealer admitted that there
were some advantages in the exclusive agency proposition. I
found that a great many of them went after it and would even
go to the extent of putting themselves in the hands of the manu-
facturer who could throw them over whenever he wanted to.
I also found that some, while they realized the advantages of
the exclusive agency, considered that there were great disad-
vantages as well, and went rather slowly before accepting an
exclusive agency; and these generally tied themselves down with
some sort of a contract which was mutual and usually lasted for
a term of years.
In a great many cases where I interviewed dealers who held
exclusive agencies they begged to be excused from talking on
this subject because they feared that something they might say
might arouse the antagonism of the manufacturer with whom
they were doing business. I remember particularly that the
advertising manager of one of the largest department stores in
the country excused himself from talking on this matter, and
I know that this department store carries a great many exclu-
sive brands. The same thing happened in the case of a small
dealer who carried well-known brands of clothing.
Among those I interviewed was a haberdasher in a city of
400,000. This haberdasher is one of the leaders in his city, and
is one of the agents for Manhattan shirts and Stetson hats. I
broached the question of the exclusive agency to him, and he
said that he was very much in favor of it because it enabled
him to feature the product, for which he was exclusive agent, in
his store.
“In the first place,” he said, “it is so easy to sell that shirt
that I do not have to spend any time convincing my customers
of the merits of the article, for the man who comes in and asks
for a Manhattan shirt is already familiar with its merits. My
*Printers' Ink, April 30, 1914, p. 27.
RETAILER AND NATIONAL ADVERTISING 173
turnovers are quick and the article itself brings people to my
store, thus helping me to sell my other merchandise.
“But,” he continued, “while there are advantages, there is
one great disadvantage which I think the exclusive agent faces,
One Dis- and that is, he is always at the mercy of the manu-
advantage facturer. Now I remember that when I first started
of Ecclu- to handle Manhattan shirts fifteen years ago there
*** was only one other man in this city besides myself
handling them. At the present time there are six others. So
you see that after working hard and putting my own efforts and
time into pushing this particular brand, when I am ready to
reap the benefits of my work, somebody else comes in and shares
them with me. I know that from time to time new agencies are
being opened, and pretty soon the man who always came into
my store to buy the Manhattan shirt will be able to go around
the corner and secure one there also.
“I practically carry Manhattan shirts exclusively. Now,
supposing that any time the Manhattan shirt people should
have a quarrel with me and take my agency away, where would
I stand then? All my years of effort and work will have been
in vain. . . . And I am quite positive if I had been pushing
my own private brand in the fifteen years that I have been push-
ing Manhattan shirts, and had put the same amount of effort and
time into it, while I might not be doing the same volume of busi-
ness, my profits would be about the same, and I would not have
a customer who could go around the corner and get my shirt.
He would have to come to me for it.”
This is not only the argument of one merchant in this line;
it is the argument of a great many. They seem to feel more
or less the same way toward the exclusive agency proposition.
Among others I interviewed was J. Pinto, of Pinto Brothers,
Experience who at present controls four fine haberdasheries and
of Retailers clothing stores in New York City. In speaking
with Both with him on the question of the exclusive agency—
** as to its advantages to the dealer, he said:
“I believe an exclusive agency is a good thing provided you
can make the proper contract with the manufacturer. The
great trouble is that in the case of a well-advertised article
the manufacturer will make a contract to suit his convenience.
I receive many offers for exclusive agencies, but I won’t touch
them. Some time ago I had the exclusive agency to sell E-Z
Belts. My contract was for two years. I knew that the object
174 RETAILER AND NATIONAL ADVERTISING
of the manufacturer was to have me open the market for him
and use my efforts in pushing the product. Then he would
extend the agencies to every dealer willing to carry the belts.
Fortunately, a new belt came out which was an improvement
over the E-Z Belt, and I took in this other line, so I did not care
what the manufacturer did when my contract expired.
“There was a time,” he continued, “when I was strongly
opposed to advertised goods and I never stocked them. While
my views have not changed, still I have been compelled to
change my policy, so that now, if you will look through my
shelves, you will find advertised goods aplenty. And this is
because I am compelled to carry them. I know that if a cus-
tomer comes in here for Onyx hosiery and I cannot give it to
him he will go on the next block to get it. It is to meet these
conditions that I keep Onyx hose. And sometimes, to meet
conditions of the advertiser, I get up an article under my own
brand to compete with the advertised article. For example,
at the time when Holeproof hosiery made its appearance, I
knew that its great value lay in the fact that it was guaranteed.
So I got out the Pinto hose, and whenever a man came in for
Holeproof hosiery I convinced him that the Pinto hosiery was
just as good, and that he could come back at any time and ex-
change any pair of hose with the Pinto label on that was not
satisfactory to him. And I can assure you that we have built
up a fine business in Pinto hose, and many a time I get a tele-
phone call from a small haberdasher uptown or downtown ask-
ing if I won’t sell him Pinto hose. . . .
A buyer in one of the largest department stores in this coun-
try expressed his views on the exclusive agency question in this
way:
“I believe it is a bad policy for any store, including
#. *g. ours, to take an exclusive agency for any article, be-
º;..." cause it puts you practically at the mercy of the
manufacturer. If we were to take on a proposition of
this sort, after advertising and using our best efforts to build up a
fine trade, the manufacturer might for some reason take the
agency away from us and we would have to start all over again.
“The great value of the exclusive agency to the manufacturer
is that it makes him distinctive and that he does not have to
fear competition. And in a great many cases where the ex-
clusive agency is offered it is because the manufacturer wants
to create a demand for his goods. After he has accomplished
RETAILER AND NATIONAL ADVERTISING I75
this result, he takes away the agency and everybody may get
the product.
“Our house does a tremendous lot of advertising and every
article we advertise as a general rule sells in great quantities.
Therefore it pays us to feature our product or a nationally ad-
vertised article in such a way that we are never at a disadvan-
tage.”
To illustrate what the department-store buyer had in mind I
need only cite from an interview which I had with Julius Strauss
of 1200 Broadway. Mr. Strauss is the sole distributor in the
United States for the Imperial Royal Austrian Lace Industry.
He advertises in a department-store trade paper the following
special offer:
“Remember, this offer will be made to one store in each town.
If you accept our offer at once, you can be sole agent in your
community for the sale of Imperial Royal Austrian Laces, and
this privilege probably amounts to a franchise which will grow
more valuable month by month and year by year.”
I asked Mr. Strauss whether he thought it were wise to tie
himself up with one department store in each town.
“Well,” he answered, “the reason that I have to resort to
this method is because of the commodity I handle. At the
present time Dame Fashion doesn’t favor real laces. Laces are
a product which depends upon style, and just now people want
Soft and filmy laces. I must educate them to the value of real
laces. In order to do this I have to make this special offer
through one store in a community.
“But I only make a contract for a season, with the option that
the department store may renew it at the end of that time.
However, as soon as real laces are well known and are appre-
ciated by the public, and a demand for them is created, an
exclusive agency would not be so essential.” . . .
In the hardware line I find that very few exclusive agency
propositions are offered to dealers. Those which are offered
... are gladly accepted. Some of the hardware dealers
Conditions who accept these exclusive agencies say they realize
in Hard- iº
... ºd that they are for only a short time; that as soon as an
article is in popular demand they will lose the agency
and will merely become one of the many who will handle it, and
with this knowledge in view they take advantage of their op-
portunities and feature the articles exclusively.
I interviewed Mr. Ludlow, President of Ludlow & Squires
176 RETAILER AND NATIONAL ADVERTISING
Hardware Company, Newark, N. J. Mr. Ludlow said, in
part: “I favor the exclusive agency and think it a good thing for
both the manufacturer and the dealer. I always try to get the
exclusive agency for any advertised article and I push it to the
utmost while I have it. It not only helps me sell this particular
article, but it sells the others for me. There are not many ex-
clusive agencies in this line, but those which we have are good
because the products are meritorious and stand for quality.
This helps us build up our reputation for our own products, and
one of the most important things about the exclusive agency
is that the price is maintained, so we are able to make a fair
margin of profit. I never accept the exclusive agency with the
idea that I am going to keep it forever. I know that as soon
as the article is in popular demand the agency will be extended.
With this idea in mind, I always make special efforts to push the
article and get the most out of it while I have it.
“We have had several exclusive agencies taken from us.
By that I mean that they were extended to others. However,
we do not lose any sales by this, but, as a matter of fact, our
sales increase normally. I don’t think it harms us in the least
when an agency is extended, but I would rather have it ex-
clusively because, after all, it compels a person to come to our
store alone.”
I talked with another hardware dealer, located in Harlem,
who favored the exclusive agency and said that it is all right as
long as he has it. “The trouble with the manufacturer is that
he always gets you from his end, but you have no recourse
whatever. A salesman comes around and tells me that I will
be the only one in the neighborhood who will keep a certain
article. After I have done all the work in marketing it and
using my personal efforts to create a sale I find that my next-
door competitor has it in the window. When the salesman
comes around again he swears that he had nothing to do with
it. But the exclusive agency has its fine points. It helps us
materially in our own business.” . . .
One of the men connected with Hammacher, Schlemmer &
Co. said: “It is to the advantage of the manufacturer to give
us the exclusive agency. Owing to the fact that we
#. are jobbers as well as retailers of hardware we can get
i.” distribution for an article at much less cost than the
manufacturer himself. We have salesmen who visit all
dealers. Our catalogue of 1,200 pages goes all over the country.
RETAILER AND NATIONAL ADVERTISING 177
If a manufacturer has no money to invest in national advertising
We can get distribution for him through our salesmen, catalogue,
and our advertising and he may not actually lay out one cent.
All we expect is a fair margin of profit.
“Again, it is of value to a manufacturer to have only one
agency for a certain territory, because if several jobbers are
handling the same articles competition arises and the prices are
cut. The salesmen of these various houses will visit the same
dealers, and the result will be that one will try to undersell the
other. It is known in many cases that after one salesman has
quoted a price and a second one comes around and quotes his
price, the dealer will give the impression to the second sales-
man that the first one is trying to quote him a much lower
price.”
*In some particular products it is necessary that an exclusive
agency be operated in order to maintain the standard of the prod-
uct as far as quality is concerned.
This is so in the candy business. I find the Whitman and the
Huyler people maintain agencies in most cities. The reason
for this, as one of the Huyler representatives told me, is that
candy is of such a perishable nature that makers have to keep
in constant touch with the dealers. If manufacturers sold to
everybody in the country they could not keep track of every
dealer, and as a result they would suffer loss owing to the fact
that the product is perishable.
The Huyler system of doing business is not entirely through
exclusive agencies. “Limited” agencies are used—the number
depending upon the town in question. Generally the best
dealers are selected, and when a dealer asks for an agency his
business is investigated. The Huyler people claim that by al-
lowing these special agencies the dealer is in a position to feature
their goods, and they put in their candy with a dealer with the
express stipulation that he feature it.
This does not necessarily mean that the dealer cannot keep
other brands. He can do that, but he must feature Huyler's,
and I am told that in some cases he not only features Huyler's
but carries it exclusively.
The Huyler people claim where a dealer features their candy
exclusively it is not only an advantage to them, but also to the ad-
*Printers' Ink, May 14, 1914, p. 82.
178 RETAILER AND NATIONAL ADVERTISING
vantage of the dealer himself. To illustrate: a certain dealer in
the West had been a consistent buyer and was using a lot of
Huyler's goods. Suddenly the orders began to drop until very
little candy was ordered. Upon investigating the case it was
found that the dealer had from time to time installed various
other lines of candies. Huyler’s wrote to him that unless he was
willing to feature their candies, as he had done previously, they
would be compelled to take the agency away and give it to some-
body else. The dealer asked for a little time to investigate
whether this change had proved of any value to him. Upon in-
vestigating his candy sales for the entire year he found that
during the time he had carried other brands of candy his sales
had dropped off considerably, and he said the reason was that
instead of using his efforts in advertising one, he had not known
which one to feature, and as a result had not featured any.
He promised to throw out the other lines and keep only Huyler's.
A dealer in Atlantic City, located on the boardwalk, offered
to feature Huyler's candy exclusively if he were given a con-
tract for the entire boardwalk, figuring that the advertising of
Huyler’s would bring him enough trade to make up for the loss
in the other lines.
Makers of Huyler’s claim they are able to get greater co-
operation from dealers by this system. The dealers are glad to
use window displays, etc.
Peculiar In the grocery line there are few exclusive agencies
Situation offered. The groceries are of such a nature that an
in Grocery exclusive agency would be at great disadvantage to the
* manufacturer.
I was talking to the advertising manager of a nationally
known grocery product. He told me that his house never
even thought of limiting agencies to its product, because the
output in that line was so large that no matter how great the ef-
forts of these agencies would be they could not equal the sales
required for the amount of advertising done and would soon limit
the distribution.
I asked F. W. Nash, of Arbuckle Brothers, who has been in
charge of the interesting Yuban campaign: “Do you think the
grocery products manufacturer gets any benefit from an exclu-
sive agency?”
“No,” he replied. “I think the manufacturer who is spend-
ing his money in national advertising is limiting distribution
by using the exclusive agency and is not getting the value out of
RETAILER AND NATIONAL ADVERTISING 179
it. Not only that, but in limiting his distribution to exclusive
agencies he arouses the animosity of the other dealers so that
they get a competing brand. As a result one dealer is pushing
your product and nine dealers are ‘knocking’ it. Even if the ex-
clusive agent uses his greatest efforts in pushing your product it
does not offset the other nine. A live retailer cannot confine his
efforts to one brand. He must meet competition. And any lim-
itation that tends to prevent his doing so in the most effective
way will not result to his benefit, and will come to be so regarded
by him in time. Hence the exclusive distributor is a makeshift
and necessarily a stopgap at best as a general proposition. The
kernel of this dealer nut is, after all, salable goods that move
freely with a satisfactory profit irrespective of exclusive control.
Were it not for price-cutting, the exclusive-control idea would
soon die a natural death. Furthermore, such protection to profits
as exclusive control gives a retailer is usually more than offset by
lack of volume in sales of comparatively unknown goods of this
class, and numerous actual experiments by retailers have demon-
strated to their satisfaction the better net profits in the larger
turnover of well-advertised lines.”
In the drug line I find that the agency is a much-sought-after
proposition by the small dealer. He figures that with every
agency he gets a lot of advertising free which helps
#.*... him in his own merchandising. A strong reason
€1)2C6 7.71. © e -
D., ºil why the druggist favors the agency is because there
is always a tendency on the part of the firm which ex-
tends these agencies to maintain the price, and this, to the dealer,
is the greatest thing you can do for him, because in the drug line
price maintenance is merely talk. Very few articles in the drug
line have been able to withstand the slasher’s knife. tº
In the drug line most of the manufacturers who seek exclusive
agencies with the dealers are those who are just starting business,
Good ‘’’ those who haven’t the money to spend in national
a ., advertising; but this is not true of the Nyal line, which
is put up by the New York & London Drug Company.
This line consists of over 150 preparations. Strictly speaking,
this is not an exclusive-agency proposition, but the agencies are
given only to the best dealers in each territory. The Eastern
manager of the company told me that it owes the success of its
business to this agency proposition. By this method, it is said,
the company has been able to obtain the co-operation of over
16,000 druggists all over the country, so that instead of the
180 RETALLER AND NATIONAL ADVERTISING
Nyal line being a secondary consideration with the druggists,
it is a primary one, and is featured to the exclusion of others,
and is at the same time a factor in discouraging the so-called
private brand among dealers.
“For instance,” said this manager, “in a city like New York
we have over 400 dealers handling our line. It is more to our
Wiewpoint advantage to have these 400 dealers handle our line full-
j"; heartedly than to have 1,000 others who would merely
handle the line as a secondary consideration. Of course,
we can at any time increase the number of dealers in each sec-
tion if we desire, but before doing so we always consult the Nyal
dealer who handles the line near where we think of putting in an
agency. If he says he doesn’t want it in there, then we obey
his orders. Sometimes one dealer will ask for an agency for
his friend who is near him, claiming that his trade will not be
interfered with. It happened some time ago that a certain
dealer called up for our goods. We had not been selling that
dealer any goods at all, so we had to turn down his order.
The following day our Nyal agent in that territory called up
for the same goods. We asked him if the order was for the
other dealer and he said it was and that he had no objection if
the man kept Nyal goods, because he knew that it would not
interfere with his line.
“In small towns we use our discretion as to the number of
dealers who will carry our line, and we often find that one live
dealer in a town will be equal to four dealers who will not push
our goods in the manner we wish. . Taking all this into considera-
tion, we find that nearly all the dealers we approach with the
exclusive agency favor it. This applies to every line of mer-
chandise which can be sold. They all claim that the advantages
exceed the disadvantages, and many, knowing they are at the
mercy of the manufacturer, are still willing to take that chance
as long as they can get it.”
Robert Tinsman, President of the Federal Advertising Agency,
had this to say about the exclusive agency: “Exclusive articles,
Hop Ad- exclusive by nature and appeal, such as cloaks, suits,
vertising millinery, furniture, require exclusive-agency repre-
Agency sentation to secure proper featuring by the retail
** Hooks merchant. If an exclusive article is not merchandised
at in this way the result will be that it loses its individ-
uality and distinctiveness. -
“It must be remembered that no exclusive agency can exist
RETAILER AND NATIONAL ADVERTISING 181
without mutual advantage existing between manufacturer and
merchant. It must be good business for the merchant to feature
this line as an exclusive proposition which affords him enough
profit to permit this monopoly of that place in his store. If this
law is not observed, then the exclusive agency will not exist,
and a case in point is Holeproof hosiery, which became a general
proposition after it was started as an exclusive proposition.
“An article of general appeal like Kayser gloves should be
sold through all stores, as an exclusive agency would not permit
sufficient featuring by any one merchant to satisfy the manu-
facturer.
“I think this entire subject can be covered by the statement
that exclusive articles require an exclusive agency, and an article
of general use, with nothing exclusive in its nature or appeal,
requires general distribution. An exclusive agency for an arti-
cle of general demand is a very expensive thing for the manu-
facturer, because it invites substitution. If your wife wants to
buy a pair of Onyx silk hose she may ask for them in a store, but
if they have other silk hose that look as good at a little lower
price, she may very likely accept them instead of going out of
her way to find a store that carries Onyx. On the other hand,
if it is a coat or suit which she is about to purchase, which in-
volves a considerable outlay, she is very willing to go some dis-
tance to get a garment that is guaranteed for two seasons’ wear.
There, you see, the manufacturer who has a general article with
an exclusive agency is the big loser, which fact does not apply
to the manufacturer who has the exclusive article, and therefore
an exclusive agency.
“Experience has proved that the exclusive article with a repu-
tation established by years of advertising can outsell the unes-
tablished article of even superior superficial attraction in the
eyes of the most persistent shopper. It is the reiteration of the
quality arguments of the advertised article on the consciousness
of the shopper which does the work, despite her shopping in-
stinct, and brings her back to the exclusive agency for the ad-
vertised brand.”
The Mark Cross people, who, up to a short time ago, sold
their line through exclusive agencies, have now changed their
selling plan and are supplying all dealers who can handle their
line. P. F. Murphy, president of the company, said that the
reason they had to change their policy was because their line
was so large they found that very few dealers could handle it.

J82 RETAILER AND NATIONAL ADVERTISING
“For instance,” he said, “our former agent in Chicago is merely
a haberdasher. While he could handle a great part of our line,
still he could not carry one of our most important items, which
is ladies’ gloves. The same would apply to a jeweler who could
not handle some items on account of the nature of his business.
With our new system we will be able to sell to everybody and
also to appeal to certain dealers who can handle only certain
articles of our line.”
Mr. Murphy laid special stress on the fact that as a general
rule a merchant with an exclusive agency becomes so sure that a
customer cannot go to any other store and buy the line that he
grows lax and makes no effort to push the exclusive article.
While this may be particularly true in Mr. Murphy’s case,
still in my experience I have found that whenever a dealer gets
a chance for an exclusive agency he used his greatest efforts to
jº his sales owing to the margin of profit there is in it for
IIIl.
CHAPTER VI
THE DEPARTMENT STORE AND NATIONAL ADVERTISING
TS THERE any inherent reason why the interests of the de.
partment store and the national advertiser should conflict?
There are both department-store men and national ads
vertisers who conscientiously think there is. There are others
who do not. There are department stores which virtually refuse
to handle any branded articles unless they themselves control
the brand. There are others who make a feature of carrying
branded goods and advertise them as they would their own. On
the other hand, there are national advertisers who believe depart-
ment stores ought to be driven to handle their goods, while
others believe they can be led into it.
The kernel of the department store as an advertiser’s prob-
lem is the fact that the department store gets its main advan-
tages as a retailer from its power and skill as a buyer. And it
is not always to the interest of the national advertiser’s plans
for building up the widest possible distribution to give to the
department store as much of an advantage in its buying as it
believes itself to be entitled to. Again, it is to the interest of
the department store to keep itself as independent as possible
in planning its purchases and in “developing its sources.” Many
buyers for department stores object to pushing nationally ad-
vertised goods because they believe the building up of a sale for
these goods curtails this independence.
There is abundant evidence that the question of the relations
between the national advertiser and the department store and
the public, while it is a critical one, is gradually working toward
solution. It is a safe prediction that neither the national ad-

I83
184 THE DEPARTMENT STORE
vertiser nor the department store will be annihilated, but both
may be obliged to somewhat modify their present attitude
toward each other. In order to trace the developments of the
past year, suppose we look first at what the department-store
problem really is, and then at some of the steps which have been
taken toward its solution.
(1) WHAT IS THE DEPARTMENT—STORE PROBLEM?
Edward Mott Woolley describes the main features of the de-
partment-store problem in the following terms:
*When the hot weather came on last May a New York man
awoke to the need of some light-weight underwear. He went
to a department store and inquired for a nationally advertised
brand. He had never worn these goods before, but the adver-
tising had got hold of him.
Yes, the store had them. He gavehis size, ordered two sets with-
out bothering to examine them closely, and went back to his office.
Next morning, when he dressed, he discovered that one
of the garments had legs that came to his ankles; the legs of
the other garment came barely to his knees.
“Darn that store!” he said. “Why didn’t the clerk ask me
what length I wanted in legs?”
This sort of thing happens constantly in department stores,
where branded goods are not, as a rule, handled with the same
efficiency that is given them in smaller shops. The customer
gets wrong sizes, wrong patterns and colors, styles that are
unsuitable for the particular use desired, and “seconds” that
are sold at a reduced price but without any reference to the
inferiority of the goods. The result is that branded goods often
get a black eye at the very place where they ought to receive
an introduction to their biggest markets.
This situation suggests the present article, which, however,
is not primarily an article on selling, but on the organization
of department stores. If manufacturers of branded
4.º. goods realized more fully the complications and im-
jaiºn perfections of such great selling organizations, they
might be able to devise better methods of co-operation
for the sale of nationally advertised goods.
*Printers' Ink, August 6, 1914, p. 3.
THE DEPARTMENT STORE 185
Incidentally, they might perhaps help department stores to
improve the all-around efficiency of clerks. A manufacturer
who can perform such a service for a store will surely put his
own goods on a better foundation.
Retail distribution is, in truth, an art that is still crude.
To a lesser degree, the same thing applies to wholesale dis-
tribution. In merchandising volume has developed faster
than the real science of it. Most department stores have
evolved and charted an outward form of organization, but in
almost every pyramid of such a chart you will find a lack of
those refinements that mark the better class of manufacturing
organizations of to-day. There are, of course, some ex-
ceptions. . . .
In well-organized department stores the detail is classified
and distributed. In one large Eastern store, where I spent
several days studying the workings of the organization, the
general manager has under him five executives of co-ordinate
authority. Each of them, too, is a vice-president and stock-
holder. Thus the big merchandising train is run in five sec-
tions.
The members of this managing board of five vice-presidents
do not take orders from each other, nor do they take orders, in
the ordinary sense, from the general manager. In matters re-
quiring special authority they get their powers from an execu-
tive committee. And this committee is made up of themselves.
They meet at frequent intervals—every afternoon during busy
periods—and take up such matters as are presented to them in
typewritten memoranda.
The general manager may or may not attend these meetings,
but the results of them are passed up to him. He has the
. power, but only two or three times in three years has he
used it.
The president, who really stands on the same plane as the
general manager and the treasurer—just one notch higher than
the managing board of five—rarely interferes, but
P *... devotes himself to great creative policies, and to
resident’s e © & e
p. studying the complex subject of merchandising,
a subject which few merchants have really gone
into in a scientific way. But, naturally, his researches and
original ideas have a strong influence on the daily operations
of the store. In fact, he has evolved and put into words
what is probably the most minute and complete system of
186 THE DEPARTMENT STORE
merchandising ever devised. In its larger aspects it is a sort
of philosophy of retail distribution.
Consider, briefly, the duties of these five executives under the
general manager.
Take the store manager first. He pulls the first section of
the train. The cars of his section, if strung along in a row,
would be labelled in part something like this:
Operation, Selling, Expense, Employees, Deliveries, Educa-
tion, Protection.
In other words, he has charge of the physical operation of the
plant. Under him is the superintendent, the floor superintend-
ent, and the clerks, messengers, wrappers, and so on. The de-
livery department is under him, the mail-order department, the
work of marking goods. He controls the building itself and
the supplies. Furthermore, he plans the settings for all the
special sales and various store events. o
The second section of the department-store train is hauled
by the merchandise manager for women’s goods.
Wh This executive, being relieved from all detail of
o the o
Af.h.. plant operation—except the larger matters that come
dise Man- before him as a member of the executive committee—
gger for has free swing with the merchandise itself. While
H.". the store manager has supervision over the routine
of selling, the merchandise manager does the higher
brain work of it.
What sort of gowns are the women going to wear the coming
season? Are capes going to be popular? What quantities
of this, that, or the other line of goods must be planned for?
How are the lines going to be divided and subdivided as to
grades, prices, and so on? How are profitable goods going to
be worked in with those not so profitable, yet necessary to
handle? These are just a few of the multitudinous questions
the merchandise man must answer, almost always in advance.
It is the merchandise manager, too, who puts on the pressure.
A year ago this month the glove department, say, sold goods to
the extent of $12,000. This year he says:
“We must sell $15,000.”
He does some calculating and finds that his average daily
sales of gloves, counting out Sundays and holidays, must be
$525. First he tells the store manager, and this executive
prepares to stiffen up his speed a little. The efficiency of clerks
must be kept from falling off. . .
THE DEPARTMENT STORE 187
As the month progresses the clerical force keeps a daily
record of glove sales. Not only that, but the merchandise
Record, manager has before him a daily sheet, of immense
ºs. proportions, showing the fluctuations of all conditions
bearing on the above department—and on all other
departments, too, each by itself.
The glove records show, for instance, the actual daily average
of gloves sold to date; the daily average to the corresponding
date of the preceding year; the actual sales in the aggregate,
during the month, to date, and the same for the preceding year;
the mark-downs for the month; the goods delivered into stock,
the planned per cent. of mark-up; the per cent. of mark-up On
goods delivered into stock to date; stock on hand each day;
planned stock to be on hand at end of the month; quantity of
goods “open to buy” each day, and so on. . . .
Now, if you were to string out in a line all the figurative cars
pulled by a merchandise manager in his section of the depart-
ment-store train, you would have a showing more
#. * or less like this—although there is a great variation
D., in the detail of organization among different depart-
ment Stores:
Buyers or Department Managers, Assistant Buyers, Heads
of Stock, Goods, Resources, Profits, Shopping, Bargain Base-
Iment.
The buyers are really merchandise managers in a lesser degree.
Each buyer has his own department to pull. He is a sort of
Pullman conductor of one car. But he doesn’t have the loafing
job that the real Pullman conductor has.
When he starts in, the merchandise manager—who has pre-
viously worked out the detailed scheme for all the departments
—allots him a certain area of floor space. On this he is charged
rent, light, heat, and a pro rata of general expense all through.
Then he gets a certain sum as capital.
“Go ahead,” says the merchandise manager, “and make some
money for the store and for yourself. You are really in business
for yourself—only in some ways you are tied up to me and
mustn't try to break loose. I’m the man who ties all the de-
partments together.”
Thus all the buyers make up a big group of merchants, each
running his own store, so to speak. It would be pretty nearly
the same thing if, instead of having all the departments under
one roof, each was a separate store by itself, under a central
188 THE DEPARTMENT STORE
management—only in such case the expenses would be very
much heavier.
Buyers usually get salaries and commission. Salaries run
from $2,500 or less up to $35,000 or more. Perhaps they aver-
age between $5,000 and $10,000. Buyers are ex-
pected each year to show a gain in sales over those of
f. the year preceding. A buyer who stands still isn’t
a good buyer. If he gains $200,000, as the buyer in a
furniture department did last year, he may get, as this buyer
did, a commission of 3 per cent., or $6,000. With his salary,
he earns $15,000 or more. In addition, he gets a commission on
the total annual gain for the whole store. This is a broad in-
centive to help along all departments. . . .
The heads of stock are, in some degree, buyers in theory if
not in fact. Their detailed knowledge of markets and goods
enables the buyers to measure the demands and shape their
policies.
Jump along now to the third section of our hypothetical mer-
chandise train. In this particular instance it is hauled by the
merchandise manager for men’s goods. His duties are identical
with those of the merchandise manager just discussed, so we
can skip him.
The fourth section, however, comprises quite another field of
activity. This section is headed by the publicity man.
& © In most department stores this executive is under
4ºg the control of the merchandise manager—and ordi-
Man’s Re- e ſº tº e
i... . narily there is only one merchandise manager. But in
others the store in question the publicity man is just as inde-
pendent as any other member of the board of managers.
He conducts the advertising department without being domi-
nated by the over-enthusiasm, perhaps, of his associates, the
merchandising men.
One day, for instance, some advertising copy came to him, the
substance of which had been furnished by the buyer in charge of
leather novelties and passed by the merchandise manager. The
publicity man scanned it and sent it back to the place where it
came from.
“You are too extravagant in your claims for these handbags,”
he said. “Tone down the copy in such-and-such respects.”
Again, some neckwear copy came up wreathed in a halo of
admiration for the neckwear.
“It’s all right to admire your own stuff,” said the publicity
THE DEPARTMENT STORE 189
man, after he had sent a couple of experts to report on the goods,
“but please be sure you are telling the literal truth. This store,
you know, stands by the “money back’ principle to the limit, and
we don’t want to make rash statements that we’ll have to eat
later on.”
The publicity man also has charge of window displays. He
has a wide vision in this and in all forms of publicity, and he
stands ready to give such special help to any department as the
good of the whole store demands.
The fifth and last section is made up of the comptroller’s de-
partment. Here are the cars as they stand lined up ready for
their daily run:
Accountant, auditor, credit manager, cashier, correspondent,
librarian.
Thus we have our department store pretty well classified into
its components. But we have seen, too, that mere classification
doesn’t constitute true organization. You can sepa-
M!!!"he rate men into groups and put each group into its groove
#. . and still the store won’t grow very fast. The thing
Round that brings rapid growth is usually that inner organiza-
tion that stimulates all the groups with a common
incentive.
Perhaps I can make this still clearer with another example.
A large annual sale was being planned, and, according to rule,
the store manager made his plans for it and put them into type-
writing and charts. These he submitted to the executive com-
mittee, of which he was one. The two merchandise managers,
the publicity man, and the comptroller also submitted their
plans in typewritten form. Thus all phases of the sale, and the
store activities connected with it, were harmonized and put into
one plan. Instead of hiring 1,200 extra employees, as the store
manager had planned, 1,000 were able to do the work. This
was merely one result.
No executive or employee is permitted to move in his or her
orbit alone. In carrying this principle down to the sales force,
the store conducts an elaborate system of instruction, which,
while theoretically under the direction of the store manager, is
really conducted by all the higher executives and buyers. There
is a school that teaches store salesmanship, along with its allied
branch—a knowledge of the goods the store sells. All clerks
work on a salary and commission.
Now what bearing has all this on the manufacturer? What
190 THE DEPARTMENT STORE
can he gain by a knowledge of department-store organization—
or lack of it, as is often the case? -
Well, one very important thing he can learn is that goods, as a
rule, don’t sell themselves. He can learn that co-operation in a
department store is the thing that gives sales the great-
"...!!!" est impulse. It follows, then, that any co-operation
6. he himself can give a store will help his own sales.
Many department stores, as manufacturers well
know, dislike to handle branded goods because the visible profit
is less. It is not easy, therefore, to force co-operation. Prob-
ably this is the reason why, in many cases, no attempt has been
made to do it.
The manufacturer of a certain branded article had long paid
little attention to department stores. They handled his goods
in a perfunctory way, but buyers sidetracked his article when-
ever possible and clerks were instructed to substitute unbranded
goods when it could be done readily. All the manufacturer's
arguments to the department-store buyers seemed useless.
Finally an advertising agent said to this manufacturer:
“You have been working on the principle that the buyer is the
whole thing. Change your tactics and get after the merchandise
manager. Ask him to let you put on a little series of motion-
picture lectures to clerks, descriptive of your goods, the way they
are made, their points of excellence, and so on. Don’t knock
anybody, but do some real, constructive, educational work on
the clerks.”
To the manufacturer’s surprise, the merchandise managers
proved far more receptive than the buyers had been. Sales
through department stores increased quite notably, and gave
evidence of large possible growth in the future.
This suggests, perhaps, the possibility of co-operation among
manufacturers of different lines of branded articles for the exhi-
bition of series of motion pictures to department-store clerks.
And, carrying the thing out logically, why not motion pictures
for the buyers? At least these executives might have special
invitations.
“I should not have any objection to various series of motion
pictures presented by half a dozen or more manufacturers, in a
combination for that purpose,” says one merchandise manager.
“But of course I should not want a lot of scattering motion-pic-
ture shows, taking up a great deal of time. Incidentally, there
is opportunity for manufacturers, in giving such exhibits, to

THE DEPARTMENT STORE 191
work in a little general salesmanship stuff. In fact, I have been
thinking myself of giving our clerks some pictures of that sort.”
Perhaps there is something of a field here for a man of creative
tendencies to do some good work posing salesmanship pictures.
In other ways, too, a knowledge of department-store organi-
zation suggests lines of attack. Take, for instance, the depart-
ment of profits, which usually comes under the di-
4.ºº rection of the merchandise manager.
... In one great department store that I know about
Goods profits are analyzed down to the last refinement.
Practically every counter tells its own story. Mer-
chandise is departmentized in two or three times the detail that
it is in most stores.
In the average department store, however, it is customary to
lump several lines of goods, often many of them, and reckon
profits on the whole lot. Such stores can tell the gross profit on
any line of branded goods, but not the actual net profit.
Often in the handling of nondescript goods there is a heavy
cost of refilling unsatisfactory orders, patching up complaints,
and things of that sort. I know of stores where the cost of the
adjustment department is charged to general expense. How
much of it ought really to belong to unreliable goods which os-
tensibly show a better profit than some branded goods do?
Then small consideration is often given in department stores
to the indirect benefits of handling and pushing branded goods.
One department-store proprietor, however, said to me:
“I find branded goods the best business getters I have. I
always display them and emphasize them in every way possible.
They give my store a prestige and a caste that I can get in no
other way. It is like surrounding myself with a company of
brilliant and distinguished people. Then the standardized
price of such goods makes it easy to sell them.”
This merchant started only a few years ago with a tiny store,
and now does a business of $500,000 a year—a small department
store yet, but showing a remarkable development. He has
modelled his organization as closely as possible to the best types
in department stores. -
All of which hints at arguments which, if persistently used,
cannot help but have some effect.
Still another benefit to be gained from a more intimate knowl-
edge of department-store methods is this: Anything that helps
the store give the public real service will ultimately find its way
192 THE DEPARTMENT STORE
into the good graces of department-store managers. Take corsets
for instance. Here you see some examples of really fine work
on the part of manufacturers of branded goods. In some
department stores the corset saleswomen are trained and
drilled by representatives of the manufacturer. Without such
trained saleswomen it would have been impossible to introduce
some of the higher-priced corsets that now have large sales.
Many manufacturers spend large sums in dealer work of
various kinds, but devote their attention mostly to the smaller
retail stores. In the department stores there is a large and highly
specialized field for this sort of thing that has scarcely been
touched. One can scarcely go into a department store without
realizing, often with indignation, the crudeness of things and the
apparent indifference of the manufacturer to the people who are
handling his goods.
A tour of one large New York store showed results like these:
Clerks handling a nationally advertised and rather compli-
cated door-spring who knew absolutely nothing about its princi-
ples and could give no advice as to its various uses.
Clerks selling a certain advertised brand of varnish who could
give no information as to its use for specified purposes.
Clerks in the refrigerator section who had no knowledge of the
points of vantage on which a manufacturing house was basing
its advertising. This refrigerator was on sale, but the clerks, on
being questioned, showed themselves to be mere blanks.
Clerks handling an advertised porch hammock who could not
explain how the frame folded or of what the mattress was made.
Clerks in the grocery department handling a very largely
advertised food product put up in glass jars who knew nothing
whatever about this manufacturing house. They could not
even tell, without looking at the label, where it was located,
. had they any clinching little arguments with which to close
Sà,162.S.
This situation suggests to manufacturers of branded goods the
necessity of impressing themselves more emphatically on the
great modern selling agency, the department store. What
branded goods need is to get deeper under the skin.
One of the most pronounced developments in connection with
the working out of the department-store problem is the growth
of specialty stores. In some cases this takes the form of a
THE DEPARTMENT STORE 193
specialization of existing stores in certain narrow lines and in
other cases it takes the form of specialty stores established to
form a particular work. J. F. Beale, Jr., Advertising Manager
of Saks & Co., of New York, formerly of R. H. Macy & Co.,
New York., and of Strawbridge & Clothier, Philadelphia, writes
as follows concerning what he thinks will be the probable future
course of department-store development in New York City:
*If I were a manufacturer I should do some fine commercial
detective work right now in New York. I would determine
which of one, two, or three big stores were most likely to
push hard for leadership in the lines I manufactured, and
I'd tie up very fast to them. Then I’d co-operate, with a
capital Cl
There is much speculation now in ever-widening circles as
to the future of the department store in the United States in
general and in New York City in particular.
It is a topic of great interest to hundreds of manufacturers,
importers, jobbers, and bankers.
Guesses and theories are as plentiful, almost, as snowflakes
in a blizzard.
Unfortunately, those who are in a position to give real in-
formation are strangely silent.
The spirit of uncertainty and unrest cannot be denied, how-
ever. It crops up continuously; in fact, its evidences appear
with increasing frequency.
It is noticeable that merely in the matter of credit and stand-
ing in the market, houses always very careful to discount their
bills are jogging up the buyers to pass through bills even more
promptly than usual and goading their accounting forces to
pay “on the dot.” They want to take no chances with that
sensitive thing “credit.”
They know their credit is good and their standing strong, but
they don’t want to even be discussed on these lines. In these
troublous days they realize that one or two bills not discounted
are liable to be multiplied to one or two hundred “in the trade”
and on the street.
One big store would like very much to know where a certain
*Printers' Ink, July 8, 1915, p. 17.
194 THE DEPARTMENT STORE
rumor, persistently current, originated. It credits the store
with being eight to ten months “behind” in payments on several
large accounts.
Tº #.* Another store is suffering from the widespread
Tºjº report given broad credence, and apparently unde-
nied, that it lost $750,000 in one year’s trading.
Another store suffers from the report that it cleaned a paltry
$12,000 on a business of over $10,000,000 in one year.
And so on down the line. One store is reported unable to con-
tinue owing to recent disclosures and must go out of business.
Various reorganization schemes are proposed, only to meet with
opposition. Apparently shrewdly laid plans to rehabilitate a
certain big New York merchant, whose great interests were
interwoven with Chicago and Boston, do not seem to come to a
head.
A well-known merchant of Brooklyn, whose concern came to
be in distress, is quoted as saying that if he had $20,000,000
capital and a proper rental rate on the Sixth Avenue stores that
have been vacated one by one by failing department stores,
and could reorganize the one big store still remaining in that
district, he could in a few months show the commercial world
some great things in volume of business, merchandising, quick
turnovers, and big profits.
The owners of one of the great stores in New York have been
so persistently connected with a rumor that they were about to
buy a big Brooklyn store that failed that they deemed it neces-
sary to make denial. The denial, commented upon later by
several very well-posted and prominent New York retailers,
was construed as having a tone of “we have all we can attend
to right here just now, thank you!”
Two of the oldest department stores are reported as consider-
ing consolidation to effect reduction of overhead and advertis-
ing expense and fixed charges.
A group of men active in the department-store and large re-
tail field were at luncheon at the Waldorf a short time ago. It
was in the latter part of June.
One of these men, who had seemingly been in a deep, brown
study for a time, suddenly looked up from his plate and said:
“Gentlemen, there are nine of us here and each ought to be able
to give me an intelligent and dependable prediction with regard
to the department-store situation in New York. What is the
future of the department store?”
THE DEPARTMENT STORE 195
There was silence for several moments. To the writer they
seemed very long minutes, indeed. -
Then one man spoke up. He is not a department-store
man, though he once was. His business, a large and growing
predicts one, depends for 90 per cent. of its volume upon de-
That Sir partment stores and the larger specialty shops. This
Will. Sur- is what he said: “I believe that in a few years, mind
* you, I say a few years, there will be in New York
City not more than six department stores, as the name is now
applied, and that their methods will be greatly changed and
improved from the standpoints of advertising and merchandise-
ing methods, service, price-cutting, the sale of trademarked
and proprietary goods and brands, their “overhead,” their
methods of co-operation, the manner of their competition, and
the personnel of their executive forces, as well as that of the
rank and file. I further believe that the desirable specialty
shops, now conducted on lines of high commercial principle,
will grow and their yearly profit increase. As for the chains
of stores—well, I am glad I am in no way concerned with their
multiplying burdens.”
The foregoing is almost an exact quotation.
Every one at the table listened intently. There was another
long silence. Then the original questioner said: “Mr. has
expressed my own views so concretely that I have nothing
further to say.”
Turning to a very successful and well-known advertising and
merchandise manager for one of the stores he asked: “What do
you think?”
“I thoroughly agree with Mr. ,” was the answer.
Then it developed that the nine representative men were
unanimously of the opinion expressed in the above quotation.
Some of the men are directly interested in the stores under dis-
cussion, but which have not been named for obvious reasons.
One man said he desired to give emphasis to the part refer-
ring to the higher tone which must pervade the personnel of the
management of the big stores. As he put it: “The word ‘pred-
atory' must be forgotten; the big stores must be managed by
merchants, not bankers, by practical men, not ‘relatives,” recent
graduates and men of untried fitness; and tremendous salaries
and big percentage ‘rake-offs’ must be abolished.”
Another man, keen on the subject of the development of em-
ployees as units, claimed that there will be a decided advance
196 THE DEPARTMENT STORE
on that line. He pointed out that indications are not lacking
to prove that the best merchants are giving much thought to
the improvement of their service and the decrease of waste and
error by the development of the individual worker. sº a
There is going to be an era of fewer stores but better stores; an
era of specialization, rather than bigness and diversity of stocks
specializa for the mere sake of “impression.” . There is coming
tion, Rather an era of greater honesty in advertising and merchan-
Than Big- dising; an era of increased safety for the consumer.
* “Overhead,” so greatly increased during the last dec-
ade by the impositions of entertainments, by the abuse of
C. O. D.’s, by credits and exchanges and by other causes,
will be decreased. Above all, High Principle will regain her
place on the throne. We shall get closer to the ideal. It must
be so.
Customers weigh points pertaining to value as well as prices.
Style, durability, convenience, appearance, newness, exclusive-
ness are all important in the eyes of the buyer. A store's real
growth and development must come from that satisfaction of
customers which lasts when price has been forgotten.
Service must be the aim of the new kind of store, and service
in its broad sense, the sense in which the customer regards it,
is that which effects genuine economies for the customer and
facilitates shopping. True value exists only where there is the
proper relation of reasonable price and sound worth.
Big retailers of a certain calibre have been rocking the com-
mercial boat at a lively rate for some years past. Several dis-
astrous upsets and grave accidents of one kind and another have
brought men to their senses.
It will be a great day for the people, for the managers and
owners of stores, and for the manufacturer when all big stores
make their bid for business on the basis of building up and keep-
ing a clientele, and do not depend upon “sales” of questionable
merit fast and furiously following each other for their trading;
“sales” in the advertising of which they juggle in the “values,”
do high vaults over truth; flimflam the manufacturer out of a
just profit; play “hob” with the established trademarked arti-
cle of sound merit; take toll of the employee, and end by fooling
themselves worst of all.
For any one of a hundred reasons a certain department may
pay in one store and fail in another.
It is only common sense for a merchant to push and develop
THE DEPARTMENT STORE 197
that in which he seems to be most successful. The day is com-
ing when the retailer will not hold it as of greater importance
to have a large number of departments than to conduct a less
number with profit and satisfaction to all concerned.
In other words, the department store in New York as an in-
stitution has not proved itself an improvement over the specialty
store. The next few years will see the great stores specializing
smore, and the established specialty stores developing greatly.
There will be stores that will achieve leadership unques-
tioned, in linens; others in home furnishings; others in apparel;
still others in piece goods, etc. The people themselves will help
to make the condition and will be glad to assist in maintaining it.
If these prophecies should come true it seems probable that
even after the specialty store development becomes a conspicu-
ous feature of the manufacturer’s distribution problem, many of
the present aspects of the conflict between national advertisers
and department stores will not be materially modified except
as the organization and work of the specialty houses may be
more effective than is the case in the present larger and more
general organizations. The following description of how a large
specialty store attacks its advertising problems contains some
suggestions which will be of interest to any one concerned in the
probable future of national advertising in connection with large
retail store outlets. Louis E. Kirstein, Vice-President of Wil-
liam Filene's Sons Company, Boston, described the advertising
methods of his store in an address delivered on June 22d at
the Chicago Convention of the Associated Advertising Clubs
of the World:
*The chairman of the Retail Department of the Associated
Advertising Clubs of the World has succeeded in convincing me
that you would be interested to hear, from the head of the
publicity department of William Filene's Sons Company, of
Boston, the aims and methods of that publicity organization.
I felt that Mr. Black was better fitted to put this matter before
you, as he is in closer touch with the national field and is ac-
*Printers' Ink, June 24, 1915, p. 26.
198 THE DEPARTMENT STORE
quainted with what a gathering of this kind wants and what
will be of most value to it. On the other hand, it was argued
that the man you really want to hear is one who is spending his
own money for printers’ ink, and so in answer to the persuasive
call of the almighty dollar, I am here to spend twenty minutes
of your valuable time.
The business of William Filene’s Sons Company is, in the
main, to sell ready-made apparel. Since moving into our new
store, almost three years ago, we have extended this business
until it includes all members of the family.
The business is divided into four co-ordinate pyramids. The
head of each pyramid is a substantial stockholder in our com-
pany; in fact, the president, general manager, and these four
men virtually own as well as control the business. Pyramids
are as follows:
Store management, having charge of service and personnel—
Presided over by the store manager.
Finance and accounts—Presided over by the comptroller.
Merchandise—Presided over by the merchandise manager.
Publicity—Presided over by the publicity manager.
These four men compose a board of managers, which con-
trols all the details of the business. The president, general
manager, and the four heads of pyramids constitute the execu-
tive committee of the board of directors. In addition to the six
men before named, the board of directors, eleven in number, is
composed of the head of an important store department and
four representatives nominated by our employees’ organization
known as the Filene Co-operative Association. I shall not at-
tempt to divide minutely the responsibilities of these different
bodies, feeling that you are interested in the matter of pub-
licity primarily.
First of all, the publicity manager of the Filene store manages
the publicity. He is responsible for it all, from the chirp of
Publicity Canary birds in the restaurant to the flaming electric
Mºnº, initial on the roof. Certain laws are laid down for his
Has the guidance, but he alone is responsible for the right
*pºst- enactment of those laws. As somebody put it, “It’s
* up to you to extend the glad hand through the spoken
word—to be the chef of hot stuff in cold type.”
On the official records the duties and responsibilites of the
publicity manager are set forth as follows:
“The publicity department shall direct and be responsible for
THE DEPARTMENT STORE 199
everything printed or displayed, in or out of the store, for the
purpose of attracting public attention and business.
“Make effective the publicity policies of the store as prescribed
by the directorate and management.
“Bring into the store at all times an adequate number of
possible purchasers by arranging for and administering all
printed publicity for circulation or display either in or out of the
store; all displays of merchandise, either in or out of the store,
designed to attract public notice; and every special publicity
device, entertainment, or occasion designed to attract public no-
tice.
“Be responsible for establishing through publicity media
cordial and friendly relations between the store and the public
in groups or as a whole, but not individually.”
Sales volume is to be planned on the basis of the public’s buy-
ing capacity and not in view of the limitations, real or imaginary,
of any department of the store or of the store as a whole.
This means that planning shall always be ahead, pulling the
store up to maximum efforts and results.
My organization has three distinct arms:
1. That which relates to advertising copy;
2. Window and other decorations and displays, outdoors or in;
3. Entertainment.
While these three departments report to me directly, their
work is laid out in conjunction and the aim is to have it in abso-
lute harmony. Almost invariably, when outsiders visit the store
and learn the extent of our advertising organization, sur-
prise is expressed that my staff is so large and evidently so costly.
But the Filene store proceeds upon the theory that nothing is
more important than its publicity. We have learned that it is
not what we think of ourselves that counts, but what the public
thinks of us. It is one thing to offer at $15 each a thousand suits
that actually are worth $25. It is quite another thing to make
the public credit our statement of value. It is one thing to put
back of our merchandise an organization that reduces to the
minimum all chance of misrepresentation or inadequacy. It is
quite another thing to make the public appreciate that organiza-
tion.
This all takes time. The hen was the original advertiser.
Rushing from her nest when the first egg was laid, she proclaimed
that egg enthusiastically and sincerely. The chances are she
was not believed. But as time and cackles rolled around, the
&
200 THE DEPARTMENT STORE
world came to believe the hen. The egg was always there.
And so it is with the modern store. We must persist until the
public has become convinced there is something well worth
while back of our cackle.
To bring this about we have stopped at no trouble or legiti-
mate expense. And we have proceeded on the principle that
to make the truth carry home it must be made as attractive as
possible. We aim at presenting Filene store news so entertain-
ingly that the public will look for it in the newspapers.
This leads up to one of the most important fundamentals of
the Filene publicity department. It is a law of the house that,
Truth- “No exaggeration, no misleading statement, and no
telling half-truth shall be made under any circumstances in
connection with any of our publicity.” Again, “Any
statement the truth of which we do not have absolute proof at
the time it is to be printed will be excluded from our publicity.”
As an aid to this publicity, we maintain a competent com-
parison organization working equally between the publicity and
merchandise organizations and responsible to both, the duty of
which is to see that no exaggerated statements are made with
respect to value, style, or quality, and that everything is sold as
low as or lower than our competitors sell it. This has proved
very effective, but it does not always prevent misstatements or
exaggerations from creeping through. Therefore, to make as-
surance doubly sure, we offer prizes to the public and to our em-
ployees, and regularly advertise the fact in the newspapers, for
the detection and reporting of errors, as follows:
1. A prize of five dollars shall be paid any woman, girl, or man, not an em-
ployee, who first detects an error in our failure to take automatic mark-downs
in the automatic bargain basement in accordance with the rule, etc.
2. A prize of five dollars shall be paid any woman, girl, or man, not an em-
ployee, who first detects any misrepresentation in our advertising, awarded by
publicity manager.
3. A prize of five dollars shall be paid any woman, girl, or man, not an em-
ployee, who first calls our attention to instances in which we are undersold
on regular merchandise in other stores in Boston, awarded by the merchandise
manager. -
4. A prize of 50 cents shall be paid any employee for discovering errors in
any department in the store (outside of his own department) covering errors
in mark-downs, misstatements, etc.
The law that we shall make no statement in our advertising
without having absolute proof in our possession means just that.
THE DEPARTMENT STORE 201
For example, if 500 women’s coats are being rushed over from
New York for disposal on a certain day, we will not print a
word regarding them until we have seen the coats—until our
comparison department, as well as our publicity representatives,
have approved them. The advertisement may have been
written in advance and be in proof form. We may have relied
upon buyer's description for our information. But the adver-
tisement will not be released for newspaper publication until
the merchandise has been shown and approved.
The Filene store differs from nearly all others inasmuch as its
publicity department is placed upon the same plane of authority
and responsibility as other departments. This is in accordance
with our theory that it is bad business to place responsibility
without adequate power. In the Filene store the merchandise
department has no authority over the publicity department—
as no right to force it into exploiting any merchandise or adopt-
ing any method which in the judgment of the publicity depart-
rºlent is not in accordance with Filene store principles. In most
Stores, quite the contrary is the case, the merchandise depart-
ment having authority to force the publicity man into giving it
publicity at the time and after the manner decreed by the mer-
chandise organization.
It is our policy to devote publicity to merchandise which the
public wants rather than to merchandise which the store wishes
to dispose of. This means that the making of mis-
PҼw takes in merchandising is not rewarded by a great
Pºmar flourish of publicity trumpets. It means that the
Iºnes buyer cannot be careless and indifferent and then turn
over and sleep on the other side, secure in the knowl-
edge that his mistakes will be forced upon the public through
the medium of printers’ ink. On the other hand, our publicity
department is fully empowered to plan and co-operate with the
merchandise department toward procuring such merchandise as
is necessary to carry out our policy of being the first store in
Boston to show the season’s newest styles. -
This method of co-operation results in safeguarding our pub-
licity almost automatically. The merchandise department in
our store has come to realize that the merchandise which it offers
must pass the careful scrutiny not only of that department, but
the comparison department and the publicity department as well
or no publicity will be given to it. The merchandise department
has learned that this careful check influences its buying and that
202 THE DEPARTMENT STORE
the merchandise which it offers, bought with this policy in mind,
has a far better chance of selling rapidly and thus avoiding, to a
very great extent, the dreaded mark-downs. The merchandise
department having learned that our publicity policy is of tre-
mendous advantage to it, there is very little or no friction and
almost perfect co-operation between the two departments.
All of this understanding and method is made the more possi-
ble because of the fact that the major part of our advertising is
planned in conference with the merchandise department, far in
advance of actual selling, so that there is ample time and oppor-
tunity for co-operation with the merchandise and other depart-
ments. -
To carry out the plan of showing the newest goods, the pub-
licity department proceeds upon this policy:
(1) That we shall be the first store in Boston to show every reasonable
novelty in each line.
(2) That in our windows and in our departments we shall constantly present
a display of attractively new and novel styles.
(3) That each department shall be required to bring out for window or
newspaper, or both if advisable, at least one obvious dramatic novelty each
week in its season, or as often as is possible.
(4) The function of the novelty is to give style and tone to the department,
help the sale of the regular lines, draw the favorable attention of the public to
the department by reason of the fine class of goods shown and advertised,
and so help directly as well as indirectly the sale of merchandise at every price.
Another rather unusual feature of the Filene store is the fact
that we draw a sharp line as to the responsibility of the advertis-
Respons; ing department at the point where that department
bility of has brought into the store an adequate number of
4dvertising people. In other words, it is not a part of the respon-
*P*sibility and duty of the publicity department to sell
merchandise—simply to co-operate in seeing that the right mer-
chandise is shown and then to exploit that merchandise in such
a manner that sufficient curiosity shall be aroused to bring an
adequate number of people to the store.
As for our windows, here the widest latitude is permitted.
We are showing a thousand and one things in the course of the
year that we do not sell—all of these novelties being aimed at
public interest and public attention. As for the merchandise in
our windows, our tendency is to give a constant exposition of
style rather than mere bargains. In other words, the purpose
is to make the windows so attractive that they will attract the
THE DEPARTMENT STORE 203
public in to inspect the whole store instead of to visit one or two
departments.
On five of our selling floors we have interior streets overlooked
by display windows.
Both in our windows and newspaper advertising we are work-
ing away from the old-fashioned method of talking bargains. In
our basement store we suddenly discontinued the use of compara-
tive prices almost two years ago, without even explaining that
we were doing so. The public did not seem to notice or object
to the change. Our basement business continued to increase.
Four months ago we eliminated comparative prices from our
main-store publicity, and, as matters are now progressing, it
looks as though we would permanently continue that policy.
If, as happens occasionally in certain seasons, one of our own
prices has been reduced, we are privileged to say so—either in
windows or newspapers. But we are careful not to say that the
old price is the present value of the merchandise.
We have indulged in a considerable amount of semi-editorial
publicity. This has been written along rather chatty lines and
its aim has been to make the public look upon the Filene store
as a personal acquaintance. In other words, we have injected
as much of the human-interest element into our publicity as
possible.
In the old days of the Filene store every month was a bargain
month, every week a bargain week, every day a bargain day,
every hour a bargain hour. Now that plan of doing
*::::: business has been relegated almost entirely to our
&#i, automatic bargain basement. Upstairs we plan to
Curbed limit the bargain periods to four months—two in the
spring and two in the autumn—falling between the
regular seasons. Which means that during eight months of the
twelve we are offering a good portion of Filene merchandise at
fair, low prices and at regular profits. Of course, we are still on
the outlook for special purchases. But the latter correspond to
the midnight fire or murder which upsets the plans of a morning
newspaper's first page, but which helps that first page by up-
setting it occasionally. Here we aim at making the unexpected
—the quick purchase—the exception rather than the rule. We
hold that a store which does not have to depend upon the acci-
dental is the store which does not trace its success to accident.
We believe that the importance and power given to our pub-
licity department and its policies are justified by the progress
204 THE DEPARTMENT STORE
made, and we commend it to the careful consideration of our
colleagues who are devoting large sums of money to the exploit-
ing of their business, feeling sure that if the experiment be given
a fair trial it will prove of great benefit to the merchant and to
the public as well. And the public, as you know, will in the final
analysis decide whether any institution catering to it shall fail
or succeed.
(2) METHODS FOR solving THE DEPARTMENT-STORE PROBLEM
The ideal condition from the national advertiser’s standpoint
is that in which the department store adopts the policy of ex-
ploiting the fact that it handles nationally advertised goods.
During the past year or so a number of department stores have
adopted the plan of having what were called “expositions of
nationally advertised goods.” For a given period of time the
store makes a specialty of putting into its window displays and
into its newspaper copy well-known national trademarks, and
other advertising matter concerning the goods produced by
national advertisers. The methods employed in this sort of
an exposition by a department store in Detroit, Mich., are as
follows:
*An exposition of nationally advertised goods has just been
held by the J. L. Hudson Company, a department store in
Detroit, Mich. It was energetically promoted by the store
officials with the result that there was a marked increase in
“charge” accounts and that sales for July—an “off” month—
were higher than July of 1913.
Both the fact of the experiment and the success attending it
are of real significance. If the J. L. Hudson Company is typical
of the progressive element among department stores, manufac-
turers may find easier going in the future in their endeavors to
secure the much-coveted department-store co-operation. The
story is an important one and here it is:
According to E. H. Leonard, Sales and Advertising Manager
for the J. L. Hudson Company, the store was not wholly in
sympathy with the common idea held by a good many merchants
*Printers' Ink, September 3, 1914, p. 24.
THE DEPARTMENT STORE 205
that success in retail advertising hinges entirely on the price
argument. A year before the management had seen great
crowds throng Detroit’s leading stores to look at “Made in
Detroit” merchandise, during the “Made in Detroit Week,”
held under the auspices of the Detroit Chamber of Commerce.
“If the people will turn out in reponse to such advertising dur-
ing the warm weather, they will turn out just the same if we
hold a similar exposition of nationally advertised products and
promote it with the right kind of publicity,” the store argued.
And so it began to lay the foundation of a great nationally
advertised merchandise exposition to be held during the dullest
of the dull season—the first two weeks in July.
The plans for this exposition called for enlisting the co-opera-
tion of the manufacturers whose lines the store carried, but no
advertising allowance was asked. The Hudson Company be-
lieved it was up to it to shoulder the whole cost of the advertis-
ing, inasmuch as it would derive the big profit from the “sale,”
and especially the profit on the new accounts the store hoped
to secure. As the letter to the manufacturers stated: “We
want your assistance. No money for ads. Just hearty co-oper-
ation with displays, demonstrators, or other features suitable to
your particular line which we carry in stock.” .
And the company got the co-operation it sought. Ninety-five
per cent. of the manufacturers approached agreed to help.
Colgate toilet preparations, Bissell carpet-sweepers, Scot paper
towels, Eureka vacuum cleaners, Koh-i-noor fasteners, Hud-
nut perfumes, Indestructo luggage, Fownes gloves, Krementz
buttons, Victor talking machines, Chickering pianos, Buster
Brown hosiery, McKay table pads, American Lady corsets,
Kleinert dress shields, Martha Washington comfort shoes,
Ingersoll watches, Skinner satins, Butterick patterns, Gillette
safety razors, Hotpoint electrics, Stafford inks, Waterman
fountain pens, Dennison crepe papers, Eagle pencils, Taylor
pottery, and other well-known articles were exploited by some
special attraction—a demonstrator, educational exhibit, sam-
pling or souvenirs—and were used as “headliners” in the ad-
vertising.
The publicity campaign, which was planned and executed by
the store's own advertising department, sought to draw the
crowds by an appeal to curiosity. “Come and see the inter-
esting exhibits, demonstrations, and show features,” urged the
street-car cards. “Thousands of well-known brands of goods in a
206 THE DEPARTMENT STORE
new way—with working demonstrations, set displays, attrac-
tively arranged tableau effects, gorgeous color schemes, living
models, etc., etc.,” cried the big double-spread newspaper ads.
“Meet me at Hudson’s. Come and enjoy the exhibition of
nationally advertised goods,” exhorted the thousands of post-
cards mailed by the store’s army of salespeople to their friends
and customers. “Be sure you bring along an extra large hand-
bag to carry home the booklets, cards, catalogues, samples, and
souvenirs of the occasion,” suggested the great four-page, three-
color circulars mailed to the 25,000 Hudson out-of-town cus-
tomers. But nothing was said about bargains; nor were any prices
cut. The few products that were listed with prices were shown
more as a suggestion than an appeal to the bargain instinct.
The same was true with the window displays. Instead of a
lot of the customary price-cards, suggesting great bargains
within, show-cards were prepared appealing to the universal
desire for reliable merchandise. Thus it was hoped to connect
the store permanently in the public mind as the home of ad-
vertised products of unquestioned merit. The ten window dis-
plays featuring Eaton, Crane & Pike writing papers, Bien-
Jolie corsets, Melba toilet preparations, Wilcox & White's
Angelus player pianos, Butterick patterns, Bear brand hosiery,
Kayser’s gloves, President suspenders, Arrow shirts and collars,
and Vassar and Rocking Chair underwear, respectively, were
planned so that any one seeing the advertising of these products
would unconsciously think of the Hudson store as being the
Detroit headquarters for them.
But one of the shrewdest strokes of all was the way the man-
agement tied up the store with the good will which goes with
Tying the all advertised trademarks. Great window cards
Store to were prepared in red, white, and blue, the national
the Trade- colors, and upon them were pasted the familiar ads
” of products being shown within the store. These
ads were clipped from the magazines, and the wording in great
red letters announced that the product was: “Nationally ad-
vertised and sold at Hudson’s.” Naturally after a passerby
had looked at these cards, which were displayed prominently
in the ten windows, he had a high regard for the kind of mer-
chandise the Hudson Company carried, for the reputation of
these products was familiar to her because of her reading maga-
zines carrying that advertising. At the same time, whenever
the passerby reads the advertising of those products in the fu-
THE DEPARTMENT STORE 207
ture, she can’t help but think of “Hudson's,” just as arrows re-
mind us of Coca-Cola.
But, setting aside any future advantage which the store will
gain through thus establishing itself as the Detroit home of
nationally advertised merchandise, the exposition had a decided
effect on immediate business. After saying that the officers and
board of directors regarded it as successful (spelling the word
out), Mr. Leonard concluded: “The show gave us a decided
strategical advantage in that it enabled us to attract the atten-
tion of Detroit shoppers to our new buildings and evident pro-
gressiveness. The attendance was wonderful, and the finan-
cial returns were decidedly satisfactory. We enjoyed a 30
per cent. increase in charge-account patronage during July, and
sales for the month were considerably higher than they were a year
ago. But what we regard as especially gratifying is that our
trade in the well-known brands of merchandise has increased
materially since the exposition, and we feel that the affair has
been a wonderful help to us in maintaining the popularity of
the goods in question.”
But from the advertisers’ point of view this exhibition, to
whose success they contributed, the big gain was the effect on
the salespeople. It goes without saying that an
sº * employee in walking around the store and observing
Eji.e., the various demonstrations and exhibits acquires a
deep regard for such products, and will naturally ex-
ercise that regard in her sales work whenever possible. Then,
too, the educational bulletins issued by the advertising depart-
ment during the exhibition and immediately preceding it helped
to shape an employee’s attitude toward meritorious advertised
articles.
This bulletin service was very comprehensive and reached
even the elevator boys. Altogether some twelve bulletins were
issued. Some idea of the effect of these 'bulletins can be ob-
tained by this paragraph from Bulletin No. 1: “This mammoth
‘show’ will serve a laudable purpose—that of connecting Hud-
Son's with merchandise of national fame and worth. It will
bring to mind in Detroit that certain nationally advertised
goods which pass the censorship of high-class magazines may
be secured at the J. L. Hudson stores.” Here we see revealed
the attitude of the store toward advertised products and the
way it is educating its salespeople to push them because of their
prestige-giving value. -
208 THE DEPARTMENT STORE
The story of this experiment will not be lost upon manufac-
turers who are constantly striving for department-store co-
operation. Here is a compelling concrete example to cite to
lukewarm retailers. And certainly the moral of the exposition
will not escape the notice of those who are connected with the
management of progressive department stores.
Demonstrations conducted in department stores either wholly
or partly at the expense of the national advertisers have been
among the most common methods of co-operation between na-
tional advertisers and stores of this type. M. Zimmerman of
the Printers' Ink staff describes in the following terms the dem-
onstration methods employed by a number of national adver-
tisers:
*When is it advisable for a manufacturer to place his own
demonstrators in retail stores, and when do such demonstrators
cease to be of value to him? Those questions are not the easiest
in the world to answer, but they are occupying a constantly in-
creasing share of attention as the use of demonstrators spreads.
In some departments of big stores, nearly every girl behind
the counter is a demonstrator, paid by the manufacturer. In
toilet goods departments it is frequently the case that the only
clerk on the store’s payroll is the stock girl. That shows how
the demonstration system has grown. Many manufacturers
are investing a great deal of money in this form of publicity,
. is of great importance to find out when it ceased to pay a
profit.
Right at the start it is necessary to distinguish between the
two classes of demonstrators: those who are employed to help
the distribution and to win friends for a new article, and those
who are maintained to protect an established line. Colgate &
Company employ a great many girls for the latter purpose, not
so much to win new users for the company’s products as to keep
old friends from being “switched,” and to maintain the com-
pany’s standing against competition which may vigorously
develop from time to time. Demonstrators of this kind may
be regarded as a permanent feature of the company’s sales
*Printers' Ink, March 19, 1914, p. 94.
THE DEPARTMENT STORE 209
policy, and are not subject to the conditions which govern the
use of demonstrators whose immediate duty is to influence new
Customers.
When a demonstrator enters a department store, she becomes
a regular employee of her department, and must obey the
How Dem- rules and regulations in the same manner as any
onstrators other employee of that store. Her salary is sent
... ºre, to her from the concern which she represents. Other-
*" wise she is an employee of the store and is known
as a demonstrator only to the employees of her department.
She must report every morning at the same time the girls
do and must leave with the other girls. She waits on all
the trade in the regular manner, so that a customer whom she
waits on does not know that she is a demonstrator representing
a special article. During sales, if the girls have to remain over
their regular hours either to arrange the stock or take inventory,
she must remain with them and do an amount of work equal to
the other girls.
As a general rule, the demonstrator has a little display of her
goods on the showcase which covers about one or two feet of
space, all depending on how large her line is. She is always be-
hind her display, and it is in this way, when waiting on a cus-
tomer, that she tries to persuade the customer to buy her
particular brand. Wherever you notice in a department store a
conspicuous display of certain goods on the showcase you can al-
ways feel sure that there is a girl there demonstrating that line.
When a demonstrator is first placed in a department, no terms
Or contracts are made as to the length of time that demonstra-
tion will remain in the store. It generally remains during the
pleasure of both parties and is subject to withdrawal at any
time the manufacturer or the store sees fit. When the buyer of
a department obtains a good girl, he tries to keep her as long
as possible, because, after a while, if the girl shows that she is a
clever saleswoman, she becomes very valuable to the store.
Sometimes when the manufacturer seeks to open a demonstra-
tion in a certain store the buyer will suggest one of his own girls,
claiming that she knows the stock in that department and with
a little coaching will become a good demonstrator. In a great
many cases unless the manufacturer agrees to the buyer's
wishes he will not be able to place a demonstration, but it is a
bad policy to hire a girl from the store. I know of several cases
where it has been done and the right girls were not obtained,
210 THE DEPARTMENT STORE
because the buyer in each case favored a particular girl, who
did not prove up to the standard desired. It is always best
when placing a demonstrator to select a girl who has not in any
way been connected with the store.
The salaries of demonstrators range from $12 to $20 a week
and in some cases higher. In some lines a girl receives a 5 per
cent. commission besides her salary. In these cases it is mostly
where the line consists of perfume, sachet, face powders, and other
articles of that nature, so that girls representing these lines
average from $15 to $20 a week, the commissions generally
amounting to from $3 to $5 a week, depending on the location
of the store. Some firms start their girls with a fixed salary
and it is increased according as their sales increase, so that if
a girl starts with $12 a week and her sales increase steadily for
four weeks over a certain amount, then she will receive an in-
crease of several dollars a week, so that in some cases where a girl
started with $12 a week she is earning as high as $20 inside of a
year. . . .
Take a demonstrator whose minimum salary is $12 per week
and whose maximum salary reaches as high as $20. If she is
selling an article which is supposed to retail for 25 cents, in
order to make that demonstration pay she must sell at least
150 jars a week. Of course, when she first opens the demon-
stration it will be hard to reach that quantity, but after being
in the place several months this is supposed to be her minimum;
she is supposed to increase her sales weekly.
I have been able to obtain the report of a demonstrator who
was demonstrating a cream which was sold at a cut price, the
original selling price being 25 cents. It was sometimes sold as
low as 15 cents, varying from 15 cents to 19 cents. This demon-
strator I consider one of the best I have ever met. She was the
first girl to open up a demonstration for a certain product in one
of the large department stores in New York City. Starting No-
vember 9th and ending April 5th, she sold 1,931 jars of face cream.
Over the period of 21 weeks she averaged 92 jars a week. In the
month of November there was a sale, the price being greatly
reduced, and she sold 151 jars. During the month of January
another sale was held and she sold 222 jars, and in February 392.
Now, if you take out the number of jars sold on these three sale
days, which total 765, you will note that her actual average for
each week was only 64. When she started, the sale for her first
week was 58, second week, 76, and third week, 90. These figures
show that she had good increases every week. The next week
THE DEPARTMENT STORE 211
was the sale and 151 jars were sold. The following week after
the sale there was a decided drop to 61, followed by 67, by 49,
and by 48. The demonstrator explained to me that the reason
her sales were small was that a customer would ask the price of
her cream, and upon being told would say that she could get it
cheaper and would inquire the date of the next sale. The two
succeeding sales proved without a doubt that her statement was
correct. Although her weekly sales did drop off, they increased
greatly when the store had a sale, showing that the customers
would wait until a sale arrived and then would buy several jars
at a time and stock up until the next sale.
This has been the prevailing condition with this article for the
past year. While the reports of the demonstrators would be
very high at the end of the month, still the results were not caused
by their efforts. Three weeks out of the month their reports
would be very small, numbering from 40 to 60 jars a week, and
then the week of the sale it would jump from 250 to 1,000 jars.
Customers would not be willing to pay the standard price, but
would wait for sale days. Some customers would leave an order
that as soon as a sale took place to send them a certain quantity.
These observations proved conclusively that when a demon-
strator reaches this stage, and only sells a large quantity on sale
days and practically nothing is sold through demonstrating, her
usefulness to the manufacturer has ceased. dº gº
A good many manufacturers do not pay as much attention as
they should to securing the right type of girls for particular
stores. Place a demonstrator in one store and she
Płºśng, will be a failure. Put that same girl in another store
% * and she will perhaps be a decided success.
#. One girl I know had been placed in one of the down-
strator town New York department stores which caters to a
cheap class of trade. She was demonstrating perfumes
and face powders. The general method in that store is to hail a
customer as she is passing by and demonstrate to her the value of
the preparation by applying it to her face. This particular girl
was of a refined nature and could not bring herself to employ
these “puller-in” tactics. As a result, she made a poor showing.
The manager, however, knowing that this girl had ability, placed
her in one of the better uptown stores. In this place the girl
Was a success and soon became the best demonstrator for the
Store. -
On a trip downtown to one of the drug stores which had been
212 THE DEPARTMENT STORE
in the habit of accepting demonstrators from time to time, I was
particularly struck by the absence of demonstrators of any kind.
I asked the manager about it. “I absolutely refuse to have any
more demonstrators,” he said. Upon being asked why, he re-
plied: “There is this to say about the demonstrator. Some mer-
chants claim that a demonstrator is of value to you in that you
save clerk hire, and at the same time you get a girl who is intel-
ligent, knows the line well, and will be of valuable assistance to
you. Lately I have found the demonstrator to be a detriment
to me, because the type of girl whom a manufacturer generally
selects is one of these tall blondes who is adorned in the latest
and most extreme fashion, and instead of attracting customers
usually detracts. I cannot afford to have one of those around
my place.” . . .
I have one concern in mind which up to the present time has
employed over fifty demonstrators who were distributed all over
, the country. Before a demonstrator was allowed to
##! go into the store she was first given certain literature
... about the product. This literature contained all the
in Advance facts about the preparation of that product as well as
all the selling points about it. She had to become
thoroughly familiar with all this so that she could talk intelli-
gently and fluently. Every week certain new selling points
were sent to her from the main office. These girls were very
much interested in this method, and soon they were recognized
by the buyers of the department stores where they were em-
ployed as being the best demonstrators in the store. Not only
did they show an interest in the article which they represented,
but also showed an interest in the store as well, and whenever a
girl left that store not only did the other girls behind the counter
express regret at her leaving but the buyer would ask the manu-
facturer to try to send another as good.
In one particular case the demonstrator became so valuable
to the buyer that he placed her in charge of the entire drug and
chemical counter. She had so much to do that it really inter-
fered with her demonstration, and Iremember when the assistant
buyer of that department left that store to become buyer in
another store he tried to induce the girl to go with him to the
other store and conduct a demonstration for him there. e Լ
Much of the demonstrator’s efficiency depends upon the han-
dling she receives from the factory while she is in the field. After
the manufacturer has carefully picked out the right girl for the
THE DEPARTMENT STORE 213
place and has trained her, he must not only keep track of what
she accomplishes, but he must let her know that he knows.
Personal touch with the demonstrator is important; a repre-
sentative should visit her now and then and explain new selling
points. If a demonstrator has made a good showing, it is ad-
visable to send her a letter congratulating her upon that week’s
work. If she has had a particularly bad week, it is wise to write
her a letter of encouragement. One girl recently complained
to me that her firm takes less personal interest in her work now
than four years ago. She does not receive the same friendly and
personal letters that she had been in the habit of receiving. For
instance, instead of being addressed as “Dear Miss Smith,” it is
now “Dear Madam.” This may be only a small matter, but it
serves to show the attitude of mind of this class of workers.
These girls very often complain that their jobs give them con-
stant worry. If they are on a salary, they like to keep up to the
standard required of them. Sometimes it is impossible, and
they do not know how the management feels toward them when
the reports do not show the expected sales. It is in these cases
that encouraging letters are of greatest value, as they relieve the
tension demonstrators are always under, because they feel that
their positions depend upon the manufacturer’s satisfaction with
the results.
In concluding, I want to say that the value of a demonstrator
to the manufacturer lies mostly in the manner in which he gets
his distribution. If he is doing national advertising then a
demonstrator is not so valuable, but where he has not the money
to spend in national advertising and wants to get distribution,
the demonstrator is one of the best methods possible, especially
if the manufacturer is looking for local distribution. A demon-
strator is very valuable where the manufacturer does a great deal
of sampling, for a sample given out by a demonstrator with a
little personal talk to the customer leaves a lasting impression,
and in nearly every case the sample will be used. A demon-
strator generally hands out between 300 and 500 samples a week
so that with several demonstrators working along those lines
there is an immense influence at work which does not imme-
diately appear in the sales reports.
J. F. Beale, Jr., who has already been quoted in this chapter
in connection with the statement of the department-store prob-
lem, is of the opinion that the strategic position in the struggle
214 THE DEPARTMENT STORE
between the national advertiser and the department store is the
department store's clerk. In two recent articles he gives his
ideas about the best methods to be employed by the national
advertiser in securing the enthusiastic support for his product
of the department-store clerk. The following is quoted from the
second of these:
*A few days after the publication in the July 22d issue of
Printers' Ink of my article addressed to the manufacturer
seeking the co-operation of the department store, I received
a letter from a prominent manufacturer asking a pertinent
question.
The reply may properly, I think, be through the same medium
that was the means of inspiring the inquiry. It may be of some
hº to others besides the one who wrote the letter. Here is the
etter:
“I have read with great interest your article in Printers' Ink
entitled ‘What I Would Do as a Manufacturer If I Were Seek-
ing Department-store Co-operation.’ I was particularly struck
with one of your statements which read substantially as follows:
‘And do not forget that the salesperson is the connecting link
between the manufacturer and storekeeper on the one side, and
the consumer on the other. No chain is stronger than its
weakest link. See to it that the salespeople are thoroughly
trained in the merits of your product. A diplomatic manufac-
turer or his representative can effect this readily. One of the
most successful manufacturers of “branded” underwear for
men gives, with the consent of the merchants, five cents on
every garment of his make to the salesperson who sells it.”
“Would I be trespassing too heavily upon your time to ask
your suggestions as to how the training of employees to greatest
efficiency in salesmanship of a given line may be accomplished?”
To answer this question comprehensively would require more
space than was given to the original article from which it is
quoted.
First of all there must be organization for such work. It
cannot be successfully done in a haphazard manner.
Given the sales clerk of only average intelligence and he or she
can be trained to high efficiency by the right methods.
*Printers' Ink, July 29, 1915, p. 26.
THE DEPARTMENT STORE 215
It is first of all quite as essential to give the sales clerk
selling points and facts about the merchandise as to provide
that clerk with the merchandise itself and with prospective
customers.
Let us take as an example Olus underwear for men, now making
such a strong publicity campaign in New York City.
& © zºº （ , , , 39 We will suppose the following case as an illustra-
ºff.” tion of the possibilities of training a clerk to sell a
irº. specified brand. It is taken for granted that the
clerk has already learned the rudiments of selling.
A customer comes into the men's furnishings section of a de-
partment store and says to the clerk, “Let me see some medium-
priced lightweight underwear, please.”
The clerk who is mechanical will probably say, “Yes, sir,
what size? Athletic or with sleeve? Short or long drawers?”
and proceed to show two or three lines of garments.
The clerk who has been specifically trained will say “Yes, sir.
Your size, please?” Or he will measure the prospective cus-
tomer’s waist and chest. He will then take from the shelves
ready to show two grades of separate garments at say one dollar
a garment, but he will open a box of “Olus” coat-cut union suits
of the correct size priced at two dollars.
The customer has not asked for union suits and may say, “I
prefer the separate garments.” Not to antagonize the cus-
tomer the clerk states the price, but deftly returns to the “Olus.”
union suit and says, “Have you ever worn union suits?” or
Something to that effect. “I would like to suggest that if you
try these, the famous ‘Olus’ brand which you have no doubt
seen so extensively advertised, you would find them very much
more comfortable than the two garments. There is no doubling
of garments at the waist, consequently the ‘Olus’ is cooler
and more comfortable. The fit is much better than is the
case with the two garments. They are very easy to put on
and equally easy to take off; much easier than the double
garments, one of which has to go on over the head. They give
absolute freedom of action. We have them in several knitted
and woven fabrics.”
If the customer has become interested in the “Olus” union
suit it is then time to suggest that there are finer suits at $2.50
and three dollars, thus possibly making a sale of higher-priced
goods. The paramount point, from the manufacturer's stand-
point, is to make an “Olus” wearer out of a two-piece under-
216 THE DEPARTMENT STORE
wear user, thus making one blade of grass grow where before
there was none.
Very simple and easy you say. Yes, but the
º average sales clerk will not attempt it, and the average
#.; or better-than-average sales clerk will not succeed in
doing it without instruction.
“So far, so good,” you say... “But how am I to get at the
sales clerk to train him in this very desirable method?”
There are several methods that may be tried. I cannot
mention all that are possible; indeed many will not occur to me,
but following are methods that I have known to be successfully
operated:
1. Let the manufacturer secure the permission of the
buyer of the department, and possibly the general manager
of the store, to give a talk or to have some well-qualified
man give a talk on salesmanship to the sales clerks of his
department or to a group of salespeople of that and allied
departments. Let this talk be on the fundamental elements
of salesmanship, with the specific instance of the “Olus”
transaction above outlined brought in as emphatically as
possible.
2. Induce the buyer to give his sales clerks instructions cover-
ing the “Olus” illustration.
3. Prepare a booklet covering this point and others, and se-
cure permission to distribute them to sales clerks.
4. Induce the store to place a “P. M.” or special bonus on
the sales of your specialty which you cover to them in the shape
of a small special discount—that is if granting such a discount
is not against your policy.
5. Offer prizes to be given weekly or monthly to the clerk
selling the greatest number of your specialty. This should be
done through the buyer and with the permission of the house
only. *
6. Supposing that your line were “Olus” underwear, you
should see to it that the buyer and his assistants and the sales
clerks wear it themselves. If they approve of “Olus” the sales
clerks are likely to take their cue from them.
7. See to it that the display man is enthused. He ought to
wear “Olus,” too, and so should the advertising man. There
need be no “graft” nor even the suggestion or suspicion of
anything irregular about this. It is only intensive salesmanship.
When the sales clerk realizes that the house is pushing “Olus”
THE DEPARTMENT STORE 217
by window displays and advertising they will do their share
more readily and more easily.
Of course, if the manufacturer does not co-operate with the
store fully and freely he will probably not have the opportunity
to put these suggestions to the test.
On the other hand, if he meets the store halfway or more than
halfway on every reasonable requirement and makes valuable
so. Aſ suggestions for, sales, promotion he will find most
ways Rºa- stores abundantly willing to co-operate with him.
sonable in If the manufacturer’s line gives as ample satisfac-
#*g tion as does the “Olus” underwear here taken merely
* as an illustration, he should not find it difficult to
gain co-operation in some phase as outlined. -
And remember the point of approach to the store is not alone
along the line of percentage of profit, though needless to say
that is important. Of great importance to the wise merchant
are the satisfaction-giving qualities of the goods; their power of
trademarking and trade-keeping; whether or not they are good
“repeaters”; the ease with which they may be sold, and how
they stand in the opinion of the buyer and possibly one or more
of his assistants.
Here, Mr. Inquirer, is your answer which I trust will convey
to you, and others who read it, some points of which you may
be able to take advantage.
W. R. Hotchkin, who was for ten years Advertising Director
and Merchandise Manager of John Wanamaker, and who is now
a director of the Cheltenham Advertising Agency of New York,
recently wrote on this question under the title “The Terms of
Peace Between National Advertisers and Department Stores.”
Mr. Hotchkin takes the ground that there is an actual state of
conflict existing between these two interests, and that any
settlements between them must be in the nature of terms of
peace in which mutual concessions are made. Mr. Hotchkin
Says:
*The pretentious subject imposed upon me by the editors
presupposes a state of war, which in the nature of things is
*Printers' Ink, February 11, 1915, p. 3.
218 THE DEPARTMENT STORE
almost unthinkable between two branches of human service
so vital to the success of each other. And yet while a state of
war has not actually existed, there have been waste-
1. The ful battles waged by manufacturers and by mer-
º: chants almost continuously during the past decade
&nji, or two. Friction has been constant; misunderstand-
ing has been the rule; there has been continuous
unfair treatment altogether causing a vast and almost immeasu-
rable waste of sales and profits for manufacturers and store-
keepers.
The trouble grew up during that marvellous transition period
that not only brought the full development of advertising, but
also brought with it the marvellous growth and success of Ameri-
can manufacturing.
A generation ago the manufacturer stood on the merchant’s
doorstep begging him to buy his product. The merchant then
was the King of Commerce, with the manufacturer grovelling at
his feet.
In the old days there was no other method by which the manu-
facturer could present his goods to the consumer than by having
them recommended by the merchant who sold them, and so the
pedestal on which the merchant took his stand grew higher and
higher, and the manufacturer crawled as vermin at his feet.
This condition developed the merchant’s pretentious attitude
of mind which became the chief cause of the friction that de-
veloped later on.
One day a manufacturer conceived the idea of exploiting his
goods to the public for himself. He determined to find a way
to impress people with the merits of his commodity, and make
them go to the merchant and demand it. Soon several other
manufacturers adopted the same course. Results proved the
wisdom of the undertaking. tº gº
These were the days when people who wanted honest mer-
chandise asked for advertised articles and were told by plausible
salespeople that the other articles bearing the name of the mer-
chant were “just as good.”
These were the days when business ethics were trying to dis-
cover themselves; when the honest merchant admitted that
he was not a sneak-thief, but when other people could scarcely
recognize the difference. These were the days of the bunco-
steerer and the green-goods man. Everything was good ethics
and good business if you could get the money and get away with
THE DEPARTMENT STORE 219
it, inasmuch as it was common policy among all stores to sell
people other goods than what they came in for.
Merchants considered themselves clever, sagacious, and vic-
torious when they succeeded in selling one hundred gross of an
article bearing their own trademark to a public that was vocifer-
ously demanding five hundred gross of the advertised article.
Merchants and managers spent days and nights trying to
teach salespeople to sell more goods to the customers who came
into the store, thinking that they were improving the efficiency
of their establishment, while at the same time they refused to
sell people hundreds of thousands of dollars’ worth of mer-
chandise that they came in to buy with the money in their hands,
and they taught these same salespeople to quietly insult and
sneer at the customers who asked for the forbidden articles.
This condition was absolutely illogical, impossible, and un-
thinkable, but hundreds of merchants seemed to get more satis-
faction out of telling people they could not have the advertised
merchandise than they got out of any other feature of their
business.
In thousands of stores from one end of America to the other
for probably ten years the public was insulted and cheated by
having sold to it one article after another that was “just as
good” as the goods they came in to buy; but the green-goods
man and the bunco-steerer had to get out of the game, and “just
as good” in the course of time began to nauseate people who
had the money to buy the goods they wanted.
The continual foisting upon the public by merchants of arti-
cles bearing other names than those of the makers whose prod-
ucts they wanted had its natural development. Every
3. The De- customer who went to a counter naturally knew there
º: was some selfish reason why the merchant would not
à... supply the exact product that he asked for, and a very
great feeling of resentment began to arise all over the
COuntry. . . .
At last the manufacturer had learned that to talk man to man,
face to face, to be open and frank and aboveboard was the way
to win universal patronage. Thus the day came when, instead
of sitting back and waiting for the indifferent merchant to damn
his product with faint praise, the wise manufacturer could talk
face to face with the ultimate consumer. The battle was all
going the wrong way for the merchant. He was putting up a
220 THE DEPARTMENT STORE
courageous but losing fight. Instead of glory, he was winning
dishonor; instead of making a proud name for himself, he was
burying his business under a cloud of suspicion; instead of creat-
ing a bigger value for his trademark name, he was making the
reputation of a crook, and making the public more determined
than ever to purchase nothing but the commodities bearing the
trademarks which they desired.
Hundreds of big merchants are to-day continuing the thank-
less battle. They are still guided by the worn-out superstition
and do not realize that it is the business of a store to supply the
commodities demanded by the public, instead of insisting on the
old-fashioned, out-of-date policy of trying to sell something to the
public that the public does not want.
A few merchants have come to realize that the old adage,
“Quick sales and small profits,” is the soundest business policy,
and that the modern rendering of the old phrase reads “Quick
turnovers make largest net profits.”
A merchant’s private trademark belongs in the attic with the
old days of buying the entire season’s stock months ahead and
having it shipped in on the first day of August for the winter’s
business. Modern merchandising calls for new efficiency to
grease the chutes of commerce—to eliminate everything that
retards quick selling and rapid turnovers.
If the manufacturers of America are spending upward of a
billion dollars a year to send people into stores to buy goods, the
shrewd merchant will have those goods for sale. He will never
be out of stock of anything that is in large demand. He will
never send people across the street to his competitor for goods
that the customer has a right to expect to find in his store. He
will not tolerate any condition that makes it necessary for the
salesperson to say, “No, madam, we do not have those goods.”
The rapidly growing cost of store promotion must begin to
turn the other way. Great department stores are to-day spend-
ing twice as much money as they should spend to promote their
business. Some early day or year must bring advertising dis-
armament. The cost of doing business is frightfully top-heavy.
Such conditions could endure during years of plenty and over-
whelming prosperity, but a far greater efficiency is demanded
Il OW.
The merchant must be amply stocked with goods that sell
easily. He must never be out of goods that people ask for in
large quantities. He must have a complete store and he must
THE DEPARTMENT STORE 221
be ready to receive the nimble sixpence and supply on the instant
the goods which the public demands.
To spend his energy and money in exploiting a private trade-
mark is going into competition with the manufacturer instead of
being a merchant. The realization of this principle is developing
a new kind of storekeeping—one that will come out in the sun-
shine because it has no deception to practise—no customers to de-
ceive—no big-profit goods to foist on an unsuspecting public.
The sympathy of the whole world has gone out to Belgium
because all of her sufferings were caused by reason of her geo-
graphical location, though neutral.
The buying public has no interest in the battle that is going
on between storekeepers and manufacturers, except when the
public becomes the chief sufferer.
The merchant and the manufacturer may be able to protect
themselves, but it has been necessary for the hand of the law to
step in with great frequency to protect the public
###; from being hoodwinked, badly served, or actually de-
Sufferer frauded.
During the transition period deceptive goods were
forced upon the public when they thought they were buying
advertised articles and goods of standard quality.
When the merchants discovered that the law would not permit
them to deceive their customers in this manner they started to
punish their public for their impudence in asking for merchandise
they did not desire to sell by refusing to supply the goods; and
the well-educated salesperson, when asked for the trademarked
article that was not being sold, simply said, “I am sorry, madam,
we do not sell those goods.”
Having learned that it was against the law to give substitutes
they spoke as though the question were closed, waiting for the
customer to say, “Have you any other baking powder?” or
soap, or whatever the article might be; in which case the law did
not forbid them to show their goods and make their sale.
But this method of merchandising was vastly inconvenient to
the public. . . .
Practically all of the acts by manufacturers in opposition to
retailers, and by retailers in opposition to manufacturers, have
usually been against the interests of each. When fighting for
some object that seemed vital at the moment, each has often
partly destroyed a large factor in his own prosperity.
222 THE DEPARTMENT STORE
But neither individuals, nations, nor commercial men, impor-
tant as the latter consider the value of the dollar, can ever see
the uselessness of their destructive efforts when the blood is hot
in the midst of a fight.
Legal restraints have done good in that they have compelled
manufacturers and merchants to reflect, first, on their own con-
ditions of doing business, and, second, upon the rights and ne-
cessities of those with whom they were at conflict.
It was inevitable that in the course of time manufacturers and
merchants would fight out their battle and come to rational con-
clusions; but, because of the extended continuance of the conflict,
legislation and litigation for the protection of the public were
necessary.
The store is to-day recognized as a place of public service, and
the public has won many victories in its fight for consideration—
in reference to the merchandise with which it shall be served, the
prices that it will pay, and the safeguards and protection with
which it shall be surrounded when buying and in being served.
No merchant has a right to call his a general store and obligate
a customer to make a long journey to come to his establishment,
only to discover that the goods wanted cannot be supplied and
that another journey must be made to another store in order to
secure the wanted goods.
And this increase in efficiency, which means so much to the
convenience of the general public, is also vital to the success of
the merchant. It is a fact so obvious that many are already
recognizing it, and it seems incredible that there can exist to-day
hundreds of merchants who are still fighting against their own
good, losing vast volumes of sales and daily destroying public
confidence in their store, aggravating and inconveniencing their
customers because they refuse to sell many kinds of nationally
advertised merchandise which the public has the right to expect
to find on sale in every complete store everywhere.
The very first act toward a peaceful condition will be mutual
recognition. You manufacturers must forget all
*...* quarrels and friction of the past. In your present
#..." condition of strength you must overlook the weaknesses
of temperament and the ravages that superstition has
made on the minds of the merchants.
You must realize that every store in America is a possible in-
creased outlet for your product. You must forget the petty
THE DEPARTMENT STORE 223
aggravations of the past and look forward to the enormously
increased prosperity that will come after a complete state of
peace is secured.
You must have no closed doors to your product. You must
wipe out all antagonisms toward them. You must make your
proposition to the merchant in an absolutely co-operative form.
You must help him to be assured of his profit while he is creating
larger distribution of your product.
There is probably no commodity on sale in America, no matter
how great its success may be, no matter how complete its mo–
nopoly of the market, the distribution of which cannot be enor-
mously increased by the right co-operation on the part of mer-
chants in large and small stores.
You merchants must get out of your minds the illogical
thought that manufacturers are your enemies. You must
remember that yours is not a manufacturing business. There
are troubles enough in retailing without adding to your problems.
The wise merchant is the one who follows the line of least
resistance, who sells the goods that people want, and thus creates
the largest possible volume of sales. Of course, the manufac-
turer loses large added distribution by reason of the stores that
are antagonistic to his trademark, but the merchant must not
forget, in opposing those trademarks and in seeking to make a
few cents or dollars more on articles that are unknown and hard
to sell, that he is losing every day, every month, and every year
a vast volume of easy sales, because he does not take advantage of
the manufacturer’s big national advertising.
What a gripping dramatic allegory could be written about the
short-sighted manufacturer who covets the rich widow’s money
(the storekeeper’s distribution), while the widow (the store-
keeper) is pining for a strong man’s protection (the manufac-
turer's goods, for which there is continuous demand, and of
which there is practically no unsalable stock). But the man
and the widow, having had frequent misunderstandings, are dis-
trustful of each other and thus kept apart, while neither will
attain the fullest happiness and prosperity until they freely join
hands in the wedlock of genuine, whole-hearted co-operation.
With more than six hundred millions of dollars being spent by
national advertisers every year to send people into stores, we
know that this tremendous advertising impels millions of people
to buy the goods advertised, and if six hundred millions of dollars
can be profitably spent in advertising year after year there must
224 THE DEPARTMENT STORE
be billions of dollars’ worth of sales created for the advertised
merchandise. Yet there are hundreds of merchants so blind to
these great modern commercial FACTS that they are still re-
fusing to sell these goods to people that come to their stores and
ask for them. They are still proving to thousands of would-be
customers that they have incomplete stores or that they are not
willing to have any business that does not pay them enormous
profits, and they are driving away hundreds and thousands of
customers every year into the stores of their competitors to
spend the money that might come to increase their own volume
of business, while proving to these customers that they have
a narrow and questionable policy.
If every merchant could realize the suspicion that is aroused
in the minds of his customers when he insists upon showing un-
known goods of indefinite value when they ask for goods of
standard quality at a definite price, I believe he would soon
realize the foolishness of the old-fashioned policy for which he is
still trying to fight, for it must be remembered that customers
who go to a store for advertised goods, and are sent elsewhere to
. them, are going to go elsewhere for their other merchandise
allSO. -
Mutual recognition is the only key to success on both sides.
The merchant must recognize the fact that the big manufacturer,
who produces merchandise that the people want, is necessary to
building up the volume of his business, but he must meet
the modern methods of the big manufacturers with a whole-
hearted business spirit. He must get out of his system the
petty ideas of the past and conduct his business after the modern
principles.
The cost of doing business in a retail store has advanced al-
ready far beyond the point where it can continue. The public
cannot continue to pay 30 per cent. of the price for being served
with the merchandise, and this cost of doing business has been
piled higher and higher simply because merchants have insisted
upon doing business the hard way.
The nationally advertised merchandise costs only a half or a
quarter as much to sell as goods that are not nationally adver-
tised. Most of these commodities are sold to the customer
before they come into the store. Very great quantities of them
are sold by mail and by telephone orders. I am sure that a
thorough analysis of selling costs would show that there is a
larger net profit on a nationally advertised commodity, showing
THE DEPARTMENT STORE 225
a gross profit of 25 per cent., than would be indicated by unad-
vertised merchandise showing a gross profit of 33% per cent.
Nationally advertised goods do not, as a rule, require very
skilled salesmanship, and rarely takes a quarter as much time
to make the sale as when unknown articles have to be shown and
demonstrated. Merchants who have realized these facts are
tremendously increasing their volume of business, and it is to-
day a generally accepted fact that the percentage of gross profit
is º less important than the number of turnovers made in any
Stock.
When manufacturers realize the possibilities of increased
business—when complete peace has been restored and when the
merchants realize how greatly they can increase their volume of
business, their turnovers, and their net profits after a complete
understanding and the establishment of right business relations
—peace will not only be sought, but it will be established on a
basis that cannot soon be overthrown.
No treaty and no contract are worth the paper upon which
they are written unless they provide conditions that are abso-
lutely just and right to both parties to the contract. No ar-
rangement can ever continue without friction unless
5. The every detail is thoroughly understood, recognized, and
#.º... desired by both parties to the contract. There must
tº..." be nothing hidden, there must be nothing that can
be read two ways, there must be nothing that is
unjust to either, or to other parties who make similar deals
with either party to this particular contract.
In the old days railroads could make all kinds of rebates.
To-day such acts are against the law. Why should a thing be
wrong as a railroad policy and right as a manufacturing policy?
The day of one price to all is inevitable as the ultimate outcome.
Until that day arrives the friction will continue. No man can
be just while desiring to get the best of his competitor.
In the old days a man of real honor would refuse to fight an
enemy whose sword was shorter than his. He would refuse to
fight a duel with another man at a distance that his weapon
would shoot while being out of the range of the weapon of his
Opponent.
There can never be a treaty of peace in manufacturing, store-
keeping, and other commercial relations until this sort of honor
exists among merchants and manufacturers.
226 THE DEPARTMENT STORE
The man who is not willing to fight his commercial battle on
equal terms with a competitor is a coward and a weakling, and the
success that he makes in such an unequal fight will always be
held against him by right-thinking people. There is never any
credit in a victory where the opponent has not had an equal
chance, and the treaty of the future that will make peace be-
tween the manufacturer and the merchant, as well as between
all the distributors of merchandise to the public, must be defi-
nitely based on equal opportunities, equal prices, rates, and dis-
counts for all. No other condition is just and no other condition
can permanently endure.
The friction, the misunderstanding, the limitation of real
possibilities, and the deception of the public will continue as long
as unequal conditions, secret rebates, and elastic prices endure.
The whole commercial world should honor and support those
manufacturers who are fighting for the absolutely square deal.
They are knights-errant of twentieth-century commerce. They
are establishing the principles that will bring perfect peace in all
commercial relations. They have the courage to quote the same
price and the same terms to every customer, large or small, and
they will be supported by every merchant who understands the
meaning of justice and equity. It is only the short-sighted
ones, the gamblers, the seekers of easy profit, those who hope to
get the best of their competitors by some longer weapon or un-
derhand method, who have any other idea of doing business.
Just as the fixed price on the part of the retail merchant
brought the day when people could buy freely in stores, knowing
that they were absolutely safe, so the fixed-price policy, thor-
oughly established by manufacturers, will bring the day when
the cost of buying and dickering and haggling will go down and
the time spent in buying merchandise will amount to only a
fraction of what it requires to-day, while every merchant can be
sure that he is not being hoodwinked and cheated by the people
with whom he does business.
It seems strange that the merchants who recognize the fixed-
price policy at retail as the greatest business principle ever estab-
lished in storekeeping should not recognize that exactly the
same principle, applied to their own buying, is their only possible
hope of peace and greatest prosperity.
In considering the policy of any manufacturer the merchant
should ask himself the question: “Is it just, is it equable, am I
getting all that any other dealer is getting, am I going to be able
THE DEPARTMENT STORE 227
to feel secure about the price that I am paying and the discounts
and dating on my bill?” The merchant must not ask himself:
“Have I hammered this man down to a lower price than my
competitor pays, have I gotten a larger rate of discount than my
competitor has secured, have I gotten a longer dating than this
manufacturer is giving to anybody else in the trade?”
Of course, this method seems revolutionary to old-fashioned
merchants, just as the one-price storekeeper created a revolution
when that policy was first presented. But what a marvellous
feeling of relief came to the customer on that day, who began to
realize that he did not have to do an hour's haggling, that he did
not have to go back to the store several times after making a
pretence of buying the goods elsewhere in order to get a lower
price quoted.
Exactly this same feeling of security and time saving will come
to the merchant when he knows that the first price quoted is the
lowest price for which the article can be bought and the lowest
price for which any merchant anywhere can buy the goods;
when he can be absolutely certain that the discounts cannot be
increased by hours or days of haggling; when he realizes that the
dating is definite and that business can only be done on the one
honest basis for all.
The buyer of merchandise then becomes a different sort of
man. He develops different faculties. All of his ability may
be developed along the line of knowing good merchandise and
comparing qualities and prices. He doesn’t have to develop
himself as a horse-trader. g
And so this enormous waste of time is eliminated. The vast
cause of friction is eliminated. The merchant and manufac-
turer can respect each other and deal with each other face to face
without any feeling of suspicion or uncertainty.
The merchant recognizes that he needs the manufacturer's
advertised goods in order to increase his volume of sales. He
recognizes the standard quality of the commodity. He knows
that the manufacturer's reputation is at stake and that the qual-
ity of his merchandise must be always the same, or that the
loss is infinitely greater to the manufacturer than it can be to
the merchant.
He recognizes the fact that thousands of people are going to
be sent to his store as a direct result of the advertising done by
the manufacturer.
He realizes that the sales will be easily and quickly made and
228 THE DEPARTMENT STORE
that he will have a very large turnover of the merchandise, with-
out any obligation to carry a large stock at any time.
He knows that he can get his orders filled promptly and in
whatever quantities he desires. He will then be able to buy just
as cheaply in one-gross lots as in hundred-gross lots. This will
improve the merchandising conditions in his store; he will not
have to carry congested stocks, nor be worrying about unsalable
goods.
The thing that the manufacturer is fighting for and which the
merchant has so long fought against will be discovered to be the
greatest good that has ever been brought about for the store-
keeper.
The manufacturer, of course, will have to recognize his obliga-
tion to pack and ship his merchandise in quantities that will
facilitate efficient merchandising and rapid turnovers for the
store, and he will have to co-operate in the fullest possible man-
ner by providing selling helps of a sort and character to fit the
conditions and the policy of the stores who distribute his mer-
chandise.
Both merchant and manufacturer, seeing the enormous ad-
vantage of whole-hearted co-operation with each other, and
realizing how vital it is to the success of each to co-operate in this
manner, will each endeavor to remove all obstacles or causes of
friction that might interfere with the smooth and continuous
flow of sales and profits.
Mutual recognition and mutual consideration, with the one
constant policy of being just to each other, is fundamental in
creating continuous peace and greatest prosperity, both for
manufacturer and retailer.
CHAPTER VII
THE CHAIN STORE AND NATIONAL ADVERTISING
pendent retailing, or is it an economic advance? It may be
both. Its independent competitors are sure it is the former.
Its friends are sure it represents a gain to society in the form of
lowered costs of distributing merchandise.
We have at hand in material published during the period of
advertising history under review material on three phases of
chain-store development which space will permit us to cover,
out of many which might be treated. These are (1) the present
size of the chain-store movement, (2) some typical chain-store
methods, and (3) some concrete instances showing how chain
stores have modified the distribution problems of manufacturers
covering a wide market.
By far the most comprehensive study of the subject of chain
stores thus far published is that prepared by Charles W. Hurd
and M. Zimmerman of the Printers' Ink staff in the latter part
of 1914.” -
*September 10, 1914, p. 3: “Why Advertisers Must Give Chain Stores
Attention.”
September 17, 1914, p. 63: “Advertisers and Dealers See Danger in Chain
Stores.” .
September 24, 1914, p. 22: “Reasons for Belief in This Danger.”
October 8, 1914, p. 36: “How the Chains Are Taking Over the Retail Field.”
October 15, 1914, p. 71: “Number of Chains in Each Field.”
October 22, 1914, p. 60: “Concentration of Ownership.”
October 29, 1914, p. 72: “Advantages in Organizations and Financing.”
November 5, 1914, p. 58: “Advantages in Financing.”
November 12, 1914, p. 58: “Methods of Picking Sites.”
November 19, 1914, p. 64: “Advantages in Buying.”
I THE chain store a menace to the whole business of inde-
229
230 THE CHAIN STORE
The limit of our space will not permit us to reproduce these
articles in full, but there are certain sections of them which we
shall quote at length.
(1) THE ExTENT OF THE CHAIN–STORE MOVEMENT
In the fourth, fifth, and sixth articles in this series there is given
a summary of the extent of the movement at the time the arti-
cles were prepared. From these the following quotations are
drawn:
*Two thousand and more retail chains, in all lines, of three
stores and more each, with a total of more than 25,000 stores,
is a very conservative estimate, based three quarters on careful
investigation and verification.
This estimate does not take in manufacturers’ agencies, even
where the manufacturers are suspected of being part owner; or
the local units of such public utilities as the railroad, telegraph,
telephone, express, gas, electric light and power, and street rail-
way companies which in some respects embody the same prin-
ciples as do the chains, but are all more or less of the nature of
enfranchised monopolies; or the co-operative combines.
It includes only stores or services in the competitive field
linked by acknowledged common ownership and conduct,
whether operated as retailers’ or manufacturers’ chain—such
as are evidences of a comparatively recent movement toward
actual concentration of ownership and increased centralization
of management.
There has been no attempt to pad the list, nor, on the other
hand, to draw too fine a line. The intent has been to let the
facts speak for themselves.
Compared with the total number of retail dealers of all kinds
in the United States, the figures are trivial. Considered,
however, with reference to the chains’ proper field, the cities,
December 3, 1914, p. 66: “Advantages in Selling.”
December 10, 1914, p. 46: “Reeping up Trained Organization.”
December 17, 1914, p. 20: “Employment of Accounting.”
December 24, 1914, p. 66: “Summary.”
*Printers' Ink, October 8, 1914, p. 36.
THE CHAIN STORE 231
and as the measure of their activity, chiefly during the past ten
or fifteen years, they are highly significant.
Here is the estimate by fields:
Field - Chains Stores
Grocery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500 8,000
Tobacco. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250 2,500
Newstands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200 2,500
5c. and 10c., etc... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I80 2,000
Oil, gasoline, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 2,000
Drug ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200 1,400
Restaurants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 1,400
Pianos and Musical Instruments . . . . . . . . . . . . . . . . . . . . . . . . . 195 1,000
Sewing Machines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1,000
Boot and Shoe. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 700
Automobile Accessories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 650
Clothing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 600
Dairies... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 550
Coal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 500
Miscellaneous, other lines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 500
Butchers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 450
Dyeing and Cleaning... . . . . . . . . . . . . . . . . ." * - - - - - - - - - - - - - - - - 45 400
Saloons. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 400
Shoeblack Stands. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 400
Confectionery... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 315
Lumber . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 300
Laundries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 275
Theatres. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 260
Drygoods, Dep't Stores, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 250
Hats . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 250
Jewelry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 200
Liquor Stores... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 155
Women's Cloaks, Suits, etc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 150
Bakeries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 125
Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 I25
Books. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 100
Furniture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 100
Hotels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 100
Men's Furnishings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 90
Hardware . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 80
Automobile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 70
Florists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 60
Funeral Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 60
Trunks and Bags. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I5 55
Sporting Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 53
Ticket Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 52
Penny Arcades . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I0 50
Plumbing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IO 40
Millinery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 35
Motor Trucks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 35
Stock Feed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 35
232 THE CHAIN STORE
Optical. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 30
Phonographs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I 30
Barbers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 25
Electric Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 20
Corsets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 18
Delicatessen. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 15
Wall Paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 15
Gloves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 10
Furs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 6
Paper Novelties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I 6
Fountain Pens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I 4.
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,788 30,549
If we throw out 20 per cent. for errors in collection and calcu-
lation we shall still have more then 2,000 veritable chains.
It is not practical and it would be irksome reading to present
figures for every line and every city in which the chain is a phe-
nomenon, but it is worth while noting that Greater New York
is headquarters for 330 chains totalling 5,609 stores, more than
one eighth of all the chains and one fifth of all the chain stores.
Here also are figures in four important fields, based on totals
furnished by Boyd’s City Despatch and the National 5, 10, 25
cent Magazine, four large cities being taken for comparison, to
show the relation of the chain stores to independent stores in
these lines in the most congested centres of population:
GROCERIES Inde-
Chain pendent
Total Chains Stores Stores
Greater N. Y. . . . . . . . . . . . . . . . . . . . . . . . . 13,513 I'7 680 12,833
Chicago . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,510 10 130 7,380
Philadelphia . . . . . . . . . . . . . . . . . . . . . . . . . . 5,200 9 1,262 3,938
Boston . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,829 I0 456 2,373
TOBACCO
Greater N. Y. . . . . . . . . . . . . . . . . . . . . . . . . 2,394 9 439 1,955
Philadelphia . . . . . . . . . . . . . . . . . . . . . . . . . . 2,350 5 45 2,305
Chicago . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,100 9 172 928
Boston . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 308 2 16 292
DRUGS
Greater N. Y. . . . . . . . . . . . . . . . . . . . . . . . . 2,281 11 82 2,199
Chicago . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,106 4. 17 1,089
Philadelphia . . . . . . . . . . . . . . . . . . . . . . . . . . 921 12 53 868
Boston . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 314 6 34 280
FIVE-AND-TEN-CENT STORES
Greater N. Y. . . . . . . . . . . . . . . . . . . . . . . . . 225 15 50 175
Chicago . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 3 25 I25
Philadelphia . . . . . . . . . . . . . . . . . . . . . . . . . . 145 4. 20 1925
Boston . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 2 7 25
THE CHAIN STORE 233
In New York City there are some 2,000 variety, notion, and
novelty stores, which are not strictly five-and-ten-cent stores, al-
though they compete strongly with them in the low-priced lines.
Other cities have variety stores in proportion.
There are figures at hand for the growth of independent stores
and chain stores of one field in the metropolis during a period
of eleven years, and nothing better shows the strides of the
movement:
ELEVEN YEARS IN RETAIL GROCERY TRADE, GREATER NEW YORK
Per
I903 1914 Increase cent.
All Stores . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,750 13,513 4,763 54
Chain Stores . . . . . . . . . . . . . . . . . . . . . . . . . 215 985 770 360
The number of retail grocery stores in Greater New York,
that is to say, has added a half in ten years, while the number of
chain stores has nearly quadrupled—grown nearly seven times
as fast! The figures for the specific chains are given on another
page. Against this it is to be remarked that new developments
always show big percentages. Nevertheless, the outstanding
fact is the tremendous growth.
A list of the leading chains in each line of retail business must
appeal to the advertiser and advertising man, not because the
chains are certainly a menace to advertising, but because there
are many people who say they are.
It is a sweeping charge. It would be surprising if there were
not some truth in it, still more surprising if it should be sus-
tained in its full weight. It is not, in fact, meant to be taken
so comprehensively. The opponents of chain stores have in
mind to condemn only one or two of the several kinds of re-
tailers’ chain stores, and not every chain in these, nor yet again
every particular method.
The objectionable methods are several, but they all group
around price-cutting and substitution, one of which directly
and the other indirectly tends to close the retail channels
of trade to the distribution of independently manufactured,
and, above all, branded and advertised products. Inci-
dentally, they are changing the channels from independent
. to chain control—that is the independent retailer’s com-
plaint.
It is hardly safe, however, to generalize in the circumstances.
Not all of the chains are price-cutters. There is all the differ-
234 THE CHAIN STORE
ence in the world, in many respects, between the high-grade
stores like Park & Tilford and the Acker, Merrall & Condit
Company in New York and the popular low-priced grocery
chains. The former cut prices on some articles, like cigars,
when there is a price war on and they have popular brands of
their own to push, but for the most part they base their busi-
ness on service and not on price. And the five-and-ten-cent
variety stores hardly if ever cut prices on standard or advertised
articles, of which they carry a number in five-and-ten-cent
packages.
Again, there are retail specialty chains, like the hat stores of
Truly Warner and Kaufman in New York. Each handles an
... exclusive line, and neither retailer nor manufacturer
s: has any complaint to make of them, any more than he
pecialty tº 5 g e
§.” would in regard to a manufacturer's chain which Knox
the hatter conducts, for example.
Even the chain drug stores, which have been chief offenders
in the past, give indications of a change of heart—and head—in
some directions. The Owl Drug Company, of San Francisco,
built up its business on price-slashing and was cordially dis-
liked and feared by its independent competitors. To-day its
policy is changing. When it goes into a new community
it advertises service and not cut prices. It meets the cuts
º the competitive druggists, but does not often go below
them.
And this partial abandonment of price exploitation in favor
of straight store service is paying in these new communities
it has entered. Mr. Miller, its president, tells Printers' Ink
he believes price-cutting has almost had its day as an attraction
and something else must be substituted, which he believes to
be that almost indefinable but substantial thing called service.
Price will always be a factor, he believes, but it need not be the
factor it has been.
Like other large chains, the Owl company has its own private
brands, manufacturing some of them, and pushes them strongly.
The Owl chain takes in twenty stores.
Nor is it true by any means that chain stores are universally
successful. Many chains have failed to find a place for them-
selves, and even highly successful chains cannot always manage
to make a store stick in a community. It takes more than price-
cutting and substitution to turn the trick, and in the course
of our investigation we shall see why.
THE CHAIN STORE 235
The particular point to be observed is that chains are not
all alike in the methods they employ, and may not, therefore,
in every chain and every respect constitute a “men-
Yºu ace.” It is possible to conceive of them as partly
ſº... good and partly bad, and undergoing within their own
advanced evolution a still further evolution. The case
of the Owl chain, just cited, is one in point. The abandonment by
the United Cigar Stores Company of its former over-aggressive
methods of securing favorable locations for its stores is another.
We have been regarding the chains as peculiarly significant
because of their rapid growth and their relationship to depart-
ment stores, large mail-order houses, and buying combines as
merely differing manifestations of the same tendency toward
concentration in the distributing field that had previously shown
itself in the producing field. There seem to be, broadly speak-
ing, four different kinds of chains:
Retail companies or corporations, like the United Cigar Com-
pany, F. W. Woolworth Company, Owl Drug Company, Great
Atlantic and Pacific Tea Company, Mr. Bowers’ Stores of
Memphis, Childs’ Restaurants, etc. Some small chains, par-
ticularly in the growing field, are said to be owned by jobbers.
Retail buying associations or combines, like the United Drug
Company (“Rexall” stores), American Druggist Syndicate
(“A. D. S.”), Girard Grocery Company of Philadelphia,
United Buyers’ Service for five-cent, ten-cent, and twenty-five-
cent Stores, etc.
Manufacturers’ chains of retail stores or branches, like W. L.
Douglas Shoe Company, Hanan & Son, Browning, King & Co.,
Knox Hat Company, Aeolian Company, etc.
Consumers’ co-operative retail chains, based on the principle and
methods of the huge wholesale co-operatives of Europe. There
are believed to be only two such chains in this country, one with
headquarters in New Jersey and one with headquarters in Cali-
fornia, but the number may be expected to grow rather fast,
and all eventually amalgamate, as they have done abroad.
Some of these chains end by being very much like others.
Browning, King & Co. started out by being clothing manu-
facturers and now handle the goods of other manufacturers, in
other lines, in their retail stores. The Kroger Grocery and
Baking Company began with a small grocery and now manu-
factures its own candy and canned goods of every kind, roasts
its own coffee, and kills its own pork. The American Druggist
236 THE CHAIN STORE
Syndicate and United Drug Company are jobbers and manufac-
turers on a large scale. The Western buyers combines put up
some of their private brands. -
Besides these four general types there are others which do
not fall clearly in any one division, but stride two or more; and
- some, which, while coming under one ownership, are
clearly not chains—chains implying not merely unity
i.ii, of ownership but some unity of management, policy,
practices. The 28 Claflin stores were owned and
financed by the Claflin company, a jobber in the drygoods field,
but they were individual in every other respect. The Claflin
company had to compete for the business of the stores and a good
deal of the time did not get it. It is so with most of the other de-
partment-store chains. Gimbel’s and the May department stores
have local management and buyers, and, to a certain extent,
individual policies. They are too vast to be very closely unified.
In the clothing field there is the Besse System of New Eng-
land, half a straight retail chain and half a wholesale buying
association. The central system takes the local merchant as
partner. Many chains give their local managers a small stock
interest; the Besse plan is on a more generous scale.
In this same field, as well as in others, it is a common practice
for manufacturers to own, control, and operate whole depart-
ments in certain department stores, and also actually to finance
promising young merchants, in order to have assured outlets
for their lines. This is more than a mere extension of credit
and goes far beyond the agency system, although doubtless
having its origin in it.
In some fields, the drygoods field particularly, there are
resident buyers who represent as many as a hundred or more
stores and secure for them, through this policy of pooling their
buying power, the advantage of quantity discounts not other-
wise obtainable. The stores are unconnected; they are not
chain stores in any sense; but they must not be lost sight of as a
germane factor.
President Musher, of the Pompeian Company, importers of
Pompeian Olive Oil, makes an interesting classification of chain
stores in the growing field, which will also apply in
k;º some other lines. After stating that he had never
Cº. been able to decide for himself whether or not chain
stores had been harmful or beneficial in the promo-
tion of the sale of Pompeian Oil, he says:
THE CHAIN STORE 237
“I put chain stores in three classes. One class, which is the
minority, sells all goods, including advertised products, at a
certain percentage over cost. They don’t use advertised goods
as leaders to get people into the stores to buy articles on which
long profits are made, but cut prices on everything, making a
uniform profit on all that they sell. The Mr. Bowers’ Stores
of Memphis are in this class.
“Another class is chain stores that use advertised goods only
as leaders and pay their clerks premiums to switch customers
to private brands or “long-shot.’ goods when they ask for an
advertised brand. -
“The third class is chain stores that never handle nationally
advertised goods, but put up practically everything under their
own brand. While these people are fighting advertised goods
by not handling them, they are really more to be respected
than the class of chain stores who use advertised products only
as leaders.”
This is a vital classification and will be considered at length
under the heads of pricing and selling in subsequent articles.
This disposes of the different elements in the problem, and
we may now consider the various chains in the different fields.
W. H. Ingersoll, who has given a good deal of attention to the
subject, sets the number of chains in the country, roughly, at
10,000. The investigation made by Printers' Ink during the
past two or three months brings to light some 1,500 known
chains of 3 to 1,100 stores each. Possibly half as many again
small chains have been overlooked or not reported. It would
take months more and the expenditure of a far larger sum than
has already been laid out to get an exact record of the number
and names of the chains in each field, no census of the sort ever
having been attempted before. Absolute comprehensiveness
is not necessary, because a list of even such names as are in
hand would themselves occupy several pages of Printers' Ink,
and would be of no practical use beyond calling attention to the
importance of the retail development.
We should, however, be inclined to think that 10,000 is an
overestimate, and that the number of chains might run from
2,000 to 2,500. The exact number is of less significance than
is the rapidity of growth, which, as before pointed out, is nothing
less than phenomenal.
Chain-store concentration is chiefly, of course, though not
exclusively, the accompaniment of concentration in population.
238 THE CHAIN STORE
New York City has a high proportion of all the chains. Phila-
delphia is a city of grocery chains. Drug chains have flourished
in New England. They are not the product of the place and
the times alone, but of the man also. The United Cigar Stores
Company started in a middle-size city, Syracuse. The United
Drug Company started in Boston. The American Druggists'
Syndicate was organized in Brooklyn, but a Western promoter
did it. Penny’s chain of so-called “Golden Rule” stores had
their first headquarters in the West. And there are plenty of
small communities close together, particularly in the East,
served by chains of three or four grocery or drug stores owned
and managed by one merchant. The tendency is rather that
way. Where the old-time merchant invested his savings in
real estate or became a silent partner in other ventures in the
town, he is now inclined to invest his earnings where he can
capitalize his experience and depend only on himself—that is
to say, in more stores.
*The largest number of chains is in the grocers’ field, prob-
ably 500, or a quarter of all the chains, with a total of more than
8,000 stores. This is something less than 5 per cent. of the
171,200 grocers in the United States. But in the cities the
chain stores frequently do more than 25 per cent. of the busi-
ness; in Philadelphia between 60 and 70 per cent.
From another source comes information that 90 per cent. of
all grocers are independent dealers, and that the balance of 10
per cent. is divided between chain stores and mail-order houses.
By “chains” it is perhaps necessary to repeat that we mean
groups of retail stores under one ownership and direction. We
have estimated there are more than 2,000 such chains of all
kinds in the United States, with a total of more than 25,000
stores, exclusive of retailers’ co-operative jobbing of manu-
facturing combines, of which latter there are hundreds, incor-
porated and unincorporated, and exclusive of mere agencies.
We have noted some of the more important of these combines,
but we have not counted them in the figures. For the same
reason we have excluded from our list syndicate ownerships
which are not centrally managed. It is often hard to make a
distinction, but the principle will be recognized as sound, and the
evidences of its operation as significant. As all of the chains are
*Printers' Ink, October 15, 1914, p. 71.
THE CHAIN STORE 239
growing—the larger ones at the rate of one or two stores a week—
the figures were absolute only on the day they were reported;
they are, however, as accurate as it is possible to get them.
A few of the leading chains in the grocery field were named in
the first article of the series. The following list is a larger one,
but is less than one tenth of the whole number, to publish which
would call for too much space.
GROCERY CHAINS
Stores
Great Atlantic & Pacific Tea Co., Jersey City. . . . . . . . . . . . . . . . . . . . . . . . 807
Acme Tea Co., Philadelphia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315
James Butler Grocery Co., New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 238
Childs & Co., Camden, N. J. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230
Grand Union Tea Co., Brooklyn. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200
Kroger Grocery & Baking Co., Cincinnati. . . . . . . . . . . . . . . . . . • * * * * * * * * I82
M. O’Keefe, Inc., Gardner, Mass. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146
Wm. Butler, Philadelphia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
Bell Co., Philadelphia. . . . . . . . . . . . . . . . . . . . . . . s = e = w e s e s e e s = < * * * * * * * * 130
Robinson & Crawford, Philadelphia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
National Grocery Co., Jersey City. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196
Direct Importing Co., Inc., Boston. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
Thos. Roulston, Brooklyn. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
John T. Conner Co., Boston. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
G. M. Dunlop Co., Philadelphia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
Valley Supply Co., Pittsburgh. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Union Supply Co., Pittsburgh . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Voss Grocery Co., Cincinnati. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
C. F. Smith & Co., Detroit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Federal Supply Co., Pittsburgh. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
James Van Dyke Co., New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
S. K. Ames, Boston. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Daniel Reeves, Inc., New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Mohican Co., New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Andrew Davey, New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Standard Tea & Grocery Co., Indianapolis. . . . . . . . . . . . . . . . . . . . . . . . . . 48
H. G. Hill Grocery & Baking Co., Nashville, Tenn. . . . . . . . . . . . . . . . . . . . 48
L. W. Rogers & Co., Atlanta. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
C. D. Kenney Co., Baltimore. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Acker, Merrall & Condit Co., New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Mr. Bowers’ Stores Co., Memphis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
National Tea Co., Chicago. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Sanitary Crocery Co., Washington, D. C. . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
H. C. Bohack Co., Brooklyn, N. Y. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Jas. W. Crook, Baltimore, Md. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
L. J. Christopher & Co., Los Angeles, Cal. . . . . . . . . . . . . . . . . . . . . . . . . . . 30
A. H. Phillips, Springfield, Mass. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Fisher Bros. Co., Cleveland. . . . . . . . . . . . . . . . a s a • * * * * * * * * * * * * * * * * * * * * 28
A. F. Beckman & Co., New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Fisher Bros. & Co., Cleveland. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
240 THE CHAIN STORE
Stores
John H. Kamman Co., Buffalo. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Nelson Company, New Orleans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... 25
Acme Stores, Akron, O... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Eureka Stores, Windber, Pa.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Eastern Estate Tea Co., New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Jones-Hughes Co., Louisville (Quaker Maid Stores). . . . . . . . . . . . . . . . . . . 19
Donohoe's, Inc., Pittsburgh. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Gristede Bros., Inc., New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Foltz Grocery & Baking Co., Cincinnati, O... . . . . . . . . . . . . . . . . . . . . . . . . 18
Red Star Grocery Co., Wheeling, W. Va. . . . . . . . . . . . . . . . . . . . . . . . . . . . . I8
P. Parker, New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I6
Progressive Grocery Stores, New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
E. E. Gray, Boston. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Basket Stores, Inc., Lincoln, Neb. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Park & Tilford, New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
E. P. Nelson & Co., Everett, Wash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
A. B. Flory Grocery & Baking Co., Canton, O... . . . . . . . . . . . . . . . . . . . . . . 10
Cobb, Bates & Yerxa Co., Boston. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Finley Acker Co., Philadelphia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
The Great Atlantic and Pacific Tea Company is the largest
and among the oldest of the chains, dating back almost to the
Civil War. It is practically all owned by George H.
• % § Hartford, of Jersey City, and his sons, and no figures
f est & tº tº te ſº *
bº., are given out as to its earnings; but its capital is
$2,100,000, and, from the fact that it is continuously
expanding, it is believed to be very prosperous. It is not a rabid
price-cutter and does business along rather conservative, although
progressive, lines. It gives out a trading stamp of its own
and advertises locally on a fair scale. It imports teas and coffees
by the shipload and buys up the crops of an entire countryside.
It does no manufacturing.
The Kroger Grocery and Baking Company, of Cincinnati,
is one of the most aggressive and fastest growing of the grocery
chains. Like many another business, it was built up from a
shoestring—in this case exactly $372. B. H. Kroger began with
one grocery and a delivery route. His chain grew gradually;
he took over sixty stores of a rival chain in 1908 and a year or
two ago absorbed the Maurer-Remley Meat and Grocery Com-
pany, of St. Louis. He has, as mentioned in a preceding para-
graph, gone extensively into manufacturing for his chain.
The company’s sales last year were about $10,000,000 on a capi-
tal of $2,000,000. Kroger's success appears to have come most
largely from rapid turnovers, especially on staple goods, which
he cuts way below the market price. Advertised goods like-
THE CHAIN STORE 241
wise suffer. Kroger has always been, from the beginning, a
consistent and persistent local advertiser. He is a wholesaler,
also, to small-town grocers.
Mr. Bowers’ Stores, of Memphis, were described too recently
in Printers' Ink to call for more than a word. Bowers is one of
the greatest price-cutters in the country in the grocery
B*. line. He takes a certain profit above the cost of doing
... businessandcuts remorselessly to that line on allgoods,
advertised as well as others, and has reasons for it,
which we will take up in season. He is a strong advertiser,
dividing the cost among his stores, as do most other chains in
localities where a number of their stores are bunched. He has
a bakery, but no other manufacturing facilities. He owns a
wholesale grocery, but manages the business independently.
James Butler Grocery Company, of New York, is typical
of a large number of grocery chains. It cuts prices, gives trad-
ing stamps, pushes its own numerous brands aggressively. Its
business is conducted on a price basis. The authorized capital
is $10,000,000; earnings not made public.
The Acme Tea Company is the largest of the Philadelphia
chains and has branches not only in that city but throughout New
Jersey. It has apparently prospered very greatly on
off";d- price-cutting, pushing its own brands, which it values
...,"si... highly, and advertising locally in Philadelphia. It puts
out trading stamps of its own. Like other chains, it
buys in huge quantities. It has its own baking plant.
The Childs Company has added 200 stores since 1908. It is
the only chain in Philadelphia that does not give trading stamps.
The Acker, Merrall & Condit Company and Park & Tilford
have been mentioned. They are the highest type of grocery,
carrying large and varied stocks and maintaining prices on ad-
vertised brands, though handling also many lines of their own.
The Girard Grocery Company is the wholesale or jobbing
co-operative established by independent retailers of Philadelphia
to offset the destructive competition of the chains. Philadelphia
is a city of chains in the grocery line. The Girard company held
its business meeting a few weeks ago and showed a total volume
of $2,032,872 business. The capital is $121,453. It has no
private brands but works in harmony with national advertisers.
It is subsidiary to the Retail Grocers’ Association, and was in-
corporated because of the jobbers’ objection to it as a buying
combine. It has a membership of 470 grocers.
242 THE CHAIN STORE
The United Groceries Company, of Pittsburgh, was incorpo-
rated in Delaware last year with a capital of $10,000,000. On
the same day the Pittsburgh Wholesale Grocery Company was
incorporated with a capital of $1,000,000. The former corpora-
tion has now increased its capital to $16,000,000. The general
scheme is to establish a chain of wholesale grocery houses—co-
operative buying combines—across the country with the United
Groceries Company, of Toledo, a grocers’ combine, doing the
buying for all, and eventually to have all articles sold under
their private brand called “Un-gro-co.” The project is ambi-
tious, but thus far the efforts of the incorporators appear to have
been confined to getting the Pittsburgh house under way.
The Federal Supply Company, mentioned in the table as
having 57 stores, is a chain of what is known as “company
“C stores” for the miners, in this case conducted for the
§.” Monongahela River Consolidated Coal & Coke Com-
pany and the H. C. Frick Coal Company. There are
a large number of chains of this sort, among them the 30 Eureka
stores at Windber, Pa.; Consolidated Coal Company, Fairmont,
W. Va., and W. J. Rainty and Dull Mercantile Company, in
western Pennsylvania. - -
Other ventures are announced from time to time. Just now,
in the East, the All-Package Grocery Stores Company, of New-
ark, N. J., is selling stock in its $1,000,000 company, whose
prospectus states that it will go into manufacturing and baking
and start a chain of grocery stores in Greater New York that
“will startle the grocery world.” Prominent business men of
Newark are behind the company.
Another significant development in the field is mentioned by
J. C. Simmons, secretary of the Washington Retail Merchants’
Association, Inc., of Seattle, and editor of the Northwestern Mer-
chant, who writes:
“The hardest competition which the retail grocer of Seattle
has is the so-called ‘public market.’ These are four in number,
the buildings being quite large and owned by private individuals,
the same being divided into very many small stalls and rented to
small dealers. Many of them are running general grocery de-
partments, and many of them are specializing on different food
products. There are restaurants, coffee houses, fruit stands,
vegetable stands, creameries, and, in fact, every kind in the food
line. I should estimate that there are between 600 and 700 stalls
in these four markets operated by individual people.
THE CHAIN STORE 243
“These markets are very well furnished, that is, as to paint
and electric light fixtures, etc., making them very attractive.
They are very extensively supported by the people. Fruits,
and especially green vegetables, are sold remarkably cheap.
“The municipality also has a long shed, most of which is
leased in small stalls daily to the farmers.”
Various municipalities are attempting to revive and make
permanent the public markets of our forefathers. New York
City has four of them. It is possible that some of
#. them will prevail in some form. However they fare,
§. ° and whatever the public benefit, they take out of the
Chains grocer's pocket his profits on green groceries and
lessen his capacity for distribution. As the little in-
dependent grocer needs every small profit more than the large
chain and generally has no private brands on which to make up
his losses, the general effect of the establishment of public mar-
kets is to hasten the decay of the small independent grocer.
In an earlier article figures were given showing the growth of
grocery stores, both individual and chain, in Greater New York
during the period from 1903 to 1913. Below are the figures for
each chain that has buying headquarters in this city:
DEVELOPMENT OF GROCERY CHAINS WITH HEADQUARTERS IN NEW YORK CITY
Name 1903 1914
James Butler Grocery Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 , 238
Grand Union Tea Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 200
Thos. Roulston. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 121
James Van Dyke Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . + . . 55
Daniel Reeves, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 52
Mohican Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . + . . 50
Andrew Davey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 49
Acker, Merrall & Condit Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 45
Oppenheimer . . . . . . . . . . . . . . . . . . . . * * * * * * * * * * * * * * * * * e º e º e s s e 5 33
Bohack Co . . . . . . . . . . * * * * is is & e º e º e g a sº s is is a s r. p = 5 & e º e º e º e s tº e º e 6 33
Beckman & Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 25
Eastern Estate Tea Co... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 21
Gristede Bros., Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 20
P. Parker. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. 16
Park & Tilford. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 10
Thos. Healey. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 10
Progressive Grocery Stores... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 7
f215 985
*Declined to give information, but chains were much smaller.
fEigures for two chains missing.
244 THE CHAIN STORE
The Great Atlantic & Pacific had 200 stores in 1903 and have
807 in 1914. It is the only outside chain operating grocery
stores in New York City.
It is in the grocery field that the buying combines most flour-
ish. The field is probably the least stable of all; store owner-
ships are constantly changing; the loosest practices
%; * frequently and almost generally prevail; in other
uyung d dition where a very little of efficiency will
Combines Words, a COnditio y y
go a long way and where a good deal of efficiency has
produced glittering dividends.
Buying combines, exchanges, or associations are approved
economies to the retailer members, but they call for a strong
sense of organization and solidarity. This sense will doubtless
increase, but at present a large proportion of buying combines
are said to have been unsuccessful. The usual arrangement is
for the combine to acquire a warehouse and hire a manager; and
for each member to place orders with cash accompanying and
take away the goods himself. When the combine breaks down
it is almost invariably because some of the members cannot or
do not pay cash. They either extort credit from the combine
manager or place their orders with the jobbers. The net result
is the same. Sometimes the members quarrel and get to cutting
prices, with the effect of sacrificing the saving made in buying.
But there are, nevertheless, many successful buying combines,
and they must increase in number and efficiency, so long as
present conditions continue and the chains and mail-order
houses flourish.
Conditions in the drug field, where the next largest number of
chains obtain—probably about 200, with a total of approximately
1,400 stores out of a grand total of 45,000 in the coun-
In ſº, , try- different. I t ities th
prº, Field try—are very different. In most communities the
ug store is a more or less general store. In the large
cities it seems on the way to become a department store. So far
as known, all of the chains in this line started as retail stores.
Druggists, being professional practitioners, have not always been
the most progressive of business men, and it is notorious that
many drug stores are practically owned by drug jobbers, which
partakes of consolidation, too. Retail co-operation has taken
place on the largest scale, quite outdistancing corporate chains,
though it is, of course, of a looser description. But the drug
field is destined in all likelihood to see the most powerful chain
in America and ultimately the world.
THE CHAIN STORE 245
The more important of the 200 drug chains, with the number
of their stores, follow:
IMPORTANT DRUG CELAINS
Stores
Riker-Hegeman Corporation, New York . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
Louis K. Liggett Co., Boston, Mass. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Owl Drug Company, San Francisco. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Square Drug Co., Syracuse, N. Y. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Marshall Drug Company, Cleveland. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Sun Drug Co., Los Angeles... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Day Drug Co., Akron, O... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I?
Jacob's Pharmacy Co., Atlanta, Ga. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II
M. C. Dow, Cincinnati, O... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Standard Drug Co., Cleveland, O.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Hook Drug Co., Indianapolis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
May Drug Co., Pittsburgh. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Detroit Drug Co., Detroit, Mich. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Public Drug Co., Chicago. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
E. C. Osborn, New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Kradwell Drug Co., Racine, Wis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Shumate's Pharmacy, San Francisco. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Bentson Drug Co., Fargo, N. D... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Scholtz Drug Co., Denver, Colo. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
T. P. Taylor & Co., Inc., Louisville, Ky. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Acme Association, New Orleans, La. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
S. B. Davis, Philadelphia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
J. Fred Gibson & Co., Providence, R. I. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Bartell Drug Co., Seattle. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Wakelee, San Francisco. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
George B. Evans, Philadelphia... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Buck & Raynor, Chicago. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
W. B. Hunt Company, Boston. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Standard Drug Co., Detroit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
United Drug Company (Rexall), Boston, retailers’ co-operative manu-
facturing and jobbing corporation, about. . . . . . . . . . . . . . . . '• • - - - - - - - - 5,000
American Druggists' Syndicate, New York, retailers’ co-operative manu-
facturing and jobbing corporation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,000
Philadelphia Wholesale Drug Co., retailers’ co-operative jobbing house. .. 550
Greatest in importance is the fast-growing Riker-Hegeman
chain. This is the result of several amalgamations within a half-
dozen years. The presence of John H. Flagler in the old Hege-
man Corporation, and afterward in the new corporation, was
popularly taken as an indication of its control by Standard Oil
interests. The new concern was captured last February by
George B. Whelan and his associates in the United Cigar Stores
Company, who are, of course, closely allied, though perhaps not
246 THE CHAIN STORE
formally, with leading tobacco magnates. The new company
has speeded up its career of expansion and aims to cover the
country, toward which ambitious project its present 105 stores
are no mean beginning. Its capitalization is $15,000,000; its
sales last year equal to the same amount, and the dividend on it
15 per cent. Attempts were made two or three years ago by the
corporation to acquire control of the L. K. Liggett Company,
and the report is renewed from time to time that it is still seeking
to do so. The Liggett Company’s 1913 business was about
$6,000,000.
All of the chains are pronounced price-cutters, all push their
private brands, all are manufacturers as well as retailers. The
two co-operative chains have advertised nationally, and both
Riker-Hegeman and Liggett’s are local advertisers.
There is no question that Riker-Hegeman will become a
national advertiser of its own brands as soon as it secures repre-
May be sentation in a fair number of communities throughout
come Na- the country. This may be sooner than some suspect.
tional The spread of the stores, though limited chiefly by
* the number of trained managers in hand, is neverthe-
less proceeding at the rate of three or more a month.
But it is more than possible that with so good a start the com-
pany will not trust alone to the relatively slow growth of normal
expansion, but will sooner or later take up the special-agency
plan and get representation for its brands in every community,
just as the United Cigar Stores Company is doing. National
advertising would then conceivably follow. This would not
only be logical, but it would be almost inevitable if the chain
stores should, for any reason, legislative, judicial, or otherwise,
lose the advantage of the “inside price.”
Something has already been said about the Owl Drug Com-
pany, of San Francisco, and its progressive policies. It did a
gross business of some $4,500,000 last year on its capitalization
of $6,500,000.
The Rexall and A. D. S. stores are strict co-operatives and are
not centrally directed, as is the case with the chains proper. Yet
with the former and possibly with the latter there is a great deal
of co-operative feeling. Both systems entered the national ad-
vertising field last year, the first of the chains in any field to do
so on a large scale. The A. D. S. ran three or four months at
the time, but the Rexall stores have continued in a seasonal way.
Their first national appropriation was $90,000.
THE CHAIN STORE 247
The United Drug or Rexall system was earlier in the field,
having started in 1903 with some forty stockholding stores. It
... , lost $95,000 the first year, $78,000 the second, but the
**,” third year turned the corner. Its gross business last
sº, year is said to have been about $5,000,000, and its net
profits some 15 per cent. of that. It was started by
Louis K. Liggett, whose Liggett chain is affiliated with it. The
United Drug Company has gone extensively into manufacturing,
and owns the National Cigar Stands, the Guth Confectionery
Company, Liggett Candy Company, Daggett Candy Company,
and other companies.
The American Druggists' Syndicate was started in 1905 by
Charles H. Goddard for the avowed purpose of combining the
retail druggists in order to manufacture a few non-secret prepara-
tions to take the place of the cut-rate patents, on which there was
little or no profit. It has built up a large business, sales last
year aggregating $4,000,000, and has a large manufacturing
plant in Long Island City, N. Y. It is building on the Pacific
Coast. &
The two systems differ. The Rexall stores are exclusive
agencies for the Rexall preparations, the National Cigar stands,
the Guth chocolates, etc., and the agencies are much valued and
sought after by retail druggists. .
The A. D. S., on the other hand, has since last year sold to
anybody, and has consequently become a general jobber. Pre-
vious to last year it sold only to its 18,000 members, but not on
an exclusive-agency plan; any druggist who bought stock in the
Syndicate could buy goods.
The pioneer retailers’ drug corporation in the country appears
to have been the Philadelphia Wholesale Drug Company, which
was organized in 1888 with seven stores and now has 550 for
whom it is buying $1,100,000 worth of merchandise annually.
The cost of running the business is stated to be about 6 per
cent., and the saving to the stockholders 12 per cent. “We
naturally believe in co-operation,” says President F. R. Rohr-
man, “and have demonstrated to the drug trade that this is the
only system which enables the smaller dealer to compete with
the larger one.”
The In the retail tobacco field there are probably 250 or
Cigar-store 300 chains, with a total of 2,500 stores, of which the
9" following chains are the more important:
248 THE CHAIN STORE
Stores
United Cigar Stores Company, New York, over. . . . . . . . . . . . . . . . . . . . . . 1,000
Joseph T. Snyder, Buffalo, N. Y. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
M. A. Gunst & Co., Inc., New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
A. Schulte, New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Edwin Cigar Co., New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Best & Russell Co., Chicago, Ill. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
John J. Dolan, Chicago, Ill. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 .
Harry W. Watson, Detroit, Mich. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
J. S. Pinkussohn, Savannah, Ga. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Albert Breitung, Chicago. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
H. M. Schermerhorn, Inc., Chicago. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Wm. A. Stickney Cigar Stores, St. Louis. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Zibort Bros., Nashville, Tenn. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
The United Cigar Stores’ story is so well known, has been
given at so great length in Printers' Ink, and will be so often re-
ferred to for comparison in subsequent articles, that it is un-
necessary to say much more here. The company does not ad-
vertise regularly, but occasionally uses the local mediums in a
large way, particularly in introducing itself to a new community
or in smoothing over local hostility.
Most of the other chains follow their methods so far as they can.
The 5c, 10c, and 25c variety field has been a tempting one to
5, 10, 25 chain promoters. There are probably about 180 chains
Cent-store of from three stores upward, having perhaps 2,000
Chain stores in all. The more important follow:
Stores
F. W. Woolworth Company, New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 774
S. H. Kress Company, New York, and S. H. Kress & Co., Texas. . . . . . . . I47
S. S. Kresge Company, Detroit, Mich. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
J. G. McCrory Company, New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
G. C. Murphy Co., McKeesport, Pa... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
George Kraft Co., Chicago Ill... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Independent 5-10c Co., New York City. . . . . . . . . . . . . . as g º e º e º e º ºs e º e e s e 19
Mistrot Bros., Galveston, Tex... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Home Stores Co., Milwaukee, Wis... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Morris Co., Bluffton, Ind. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I2
American Five & Ten Cent Stores, New York. . . . . . . . . . . . . . . . . . . . . . . . I9
S. Uberall, Brooklyn, N. Y. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
D. C. Hartzell & Co., Tippecanoe City, Ohio. . . . . . . . . . . . . . . . . . . . . . . . 10
C. A. Kessler, St. Joseph, Mo... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Grand Five & Ten Cent Co., Pittsburgh, Pa.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Trick Bros., Benton Harbor, Mich. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
McClure Ten Cent Co., Atlanta, Ga... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Lee Wolf & Bro., Dayton, O.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Index Notion Co., Shelbyville, Ind. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Banks Bros., Chambersburg, Pa.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
J. W. Tottle, Baltimore, Md... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
THE CHAIN STORE 249
The big four are Woolworth, Kresge, Kress, and McCrory.
All the other stores follow them in general. They do not
advertise in local mediums, but instead “advertise by their
prices.” Advertised goods are rarely handled. In some lines
they have their own private brands. Their buying is close.
Forty-six of the Woolworth stores are in Canada and 40 in
England. The country really controls seven different combina-
tions. Sales in 1913 were $66,220,000 and earnings on common
stock 10.82 per cent.
The Kresge Company did a business of $13,258,227 last year
and earned 14.67 per cent. for its common stock.
Restaurant Probably there are 100 restaurantchains, with a total
Chains of 1,400 stores, of which the larger chains are these:
Restaurants
Baltimore Dairy Lunch, New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
Childs Co., New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
John R. Thompson Co., Chicago. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Waldorf Lunch, Boston, Mass. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Fred Harvey, Topeka, Kan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Horn & Hardart (Automat), New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Exchange Buffet, New York... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Capitol Lunch, New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Hartford Lunch Co., New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Physical Culture Restaurant Co., New York... . . . . . . . . . . . . . . . . . . . . . . 16
Hanover Lunch, Inc., New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
G. W. Armstrong Dining Room & News Co. . . . . . . . . . ‘. . . . . . . . . . . . . . . . I2
White Lunch Co., San Francisco. . . . . . . . . . . . . . • * * * * * * * * * * * * * * * * * * * * * IO
New York Diet Kitchen Association, New York. . . . . . . . . . . . . . . . . . . . . . 10
Bristol’s Dining Room, New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Belmore Lunch, New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Crescent City Lunch Room. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Shanley's, New York... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
3
Foerster Lansten Co. (Kaiserhof Cafés) San Francisco. . . . . . . . . . . . . . . . .
Childs’ Restaurants, Fred Harvey's, Thompson’s, Baltimore
Dairy Lunch, and Automat are the best known. Childs’ is
represented in several States. It has a capital of $9,000,000 and
pays 10 per cent. on the common and 7 per cent. on the preferred.
It has been said to have Standard Oil support. The company
controls several subsidiary companies, one of which looks out
for locations and handles the real estate. The other chains are
supposed to be profitable services. The Automat, which is a
novel nickel-in-the-slot restaurant, is one of the latest comers,
with an expensive equipment but probably low running cost.
Besides restaurants and lunch-rooms, Fred Harvey also runs the
250 THE CHAIN STORE
jºr service on the Santa Fé system and conducts several
hotels. -
It would, as previously said, be deceptive to print a list of
department-store chains without qualifying it by the statement
prºt, that in this field, with units which themselves contain
gg?8ts tº º
ºf many separate businesses in departments, and local
Depart- conditions always differing and frequently changing,
§. it would be impossible to apply what may roughly be
* called and understood as chain-store principles, as a
whole. Nevertheless, there is a single ownership and to some
extent control, and we cannot ignore the field. There are more
than 30 such drygoods and department-store chains, owning
about 250 stores. The leading ones are:
J. C. Penney Co., Inc., New York (formerly Golden Rule Stores) . . . . . . . 71
H. B. Claflin Co., New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Eastern Outfitting Co., San Francisco, Cal. . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Goodnow-Pearson & Co., Gardner, Mass. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
C. C. Anderson & Co., Boise, Ida. (one of Golden Rule Syndicates). . . . . 9
Clarke Brothers, Pennsylvania. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Graham-Sykes Co., El Paso, Tex... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Weiler Syndicate, Hartford City, Ind. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Oppenheim, Collins & Co., New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Consolidated Drygoods Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
G. Newman, Jr., Chicago. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
May Department Stores Co., New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
A. Steiger & Co., Holyoke, Mass... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
United Drygoods Companies, New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Crawford-Plummer Co., Boston... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
Fowler, Dick & Walker, Binghamton, N.Y.. . . . . . . . . . . . . . . . . . . . . . . . . . 4.
Associated Merchants’ Company, New York. . . . . . . . . . . . . . . . . . . . . . . . . 4.
Dives, Pomeroy & Stewart, Reading, Pa.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
Gimbel Brothers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

The men’s clothing field has been referred to. What was said
Men's of the department stores is true of this, in less measure.
Clothing There are probably 45 or 50 chains, with 600 stores, of
Cha” which the leading ones are:
- Stores
Scotch Woolen Mills, Davenport, Ia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
Gateley's Credit Clothing Co., St. Louis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
Menter Co., Rochester, N. Y. (chain of credit clothing stores). . . . . . . . . 31
E. F. Bailey (Glasgow Tailors), Des Moines.. . . . . . . . . . . . . . . . . . . . . . . . . 30
Besse System. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Browning, King & Co., New York... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I7
Levy & Nathan, Inc., New York.................................... 19
THE CHAIN STORE 251
Stores
Ritchie & Cornell, New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Scotch Woolen Mills, Springfield, Ill. . . . . . • - - - - - - - - - - - - - - - - - - - - - - - - - 10
Raab Bros., Cincinnati . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Hilton Co., New York . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
George Tailor Parlors, New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Kennedy Co., Boston . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Benoit System, Malden, Mass. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Capper & Capper, Chicago. . . . . . . . . . . . . . . . . . . . . . . . . . . . a tº gº tº 3 & e e g g g º º 5
Brill Brothers, New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . • * 5
Surprise Stores, New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Plymouth Clothing Co., St. Joseph, Mo. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
Rogers-Peet Co., New York . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Browning, King & Co. are well enough known. They are a
large and successful corporation. The “woolen mill company”
movement deserves particular notice. These are small clothing
specialty shops organized into chains. No figures as to the
amount of their business are obtainable.
Manufacturers’ agencies under one form or another play, of
course, a large part in this field.
The men’s furnishing field is being similarly organized, though
the large cities are the only ones to show large chains. There
, may be 25 in the country, with a total of 90 stores.
rººn, Weber & Heilbroner, of New York, is the only one to
fj" go into two figures, having 11 stores. In New York,
Liberman Brothers and Pinto Brothers have four each,
and in Chicago, Albert Hoefeld and Washington Shirt Company
four each.
In the piano field some manufacturers maintain warerooms
and branch stores in several cities and agencies in others, while
{º other manufacturers have agencies only, some of these
P#..." agencies being under one management. There is a
i. system of consigning instruments by both manufac-
turers and dealers, and many houses regard these
consignment accounts with dealers as creating branch stores.
However, it may be said there are 60 chains exclusive of branch
stores, agencies, and consignment deals, with perhaps 450 stores,
the leading chains being as follows:
Stores
Starr Piano Co., Richmond, Ind. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Grinnell Bros., Detroit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
F. W. Frederick Piano Co., Uniontown, Pa.. . . . . . . . . . . . . . . . . . . . . . . . . . 23
Eilers Music Co., Portland, Ore. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
252 THE CHAIN STORE
Stores
M. Steinert & Sons Co., Boston . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Wiley B. Allen Co., San Francisco. . . . . . . . . . . . . . . . . . . . . • . . . . . . . . . . . . 18
W. W. Kimball Co., Chicago. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Chas. M. Stieff Co., Baltimore . . . . . . . . . . . . . . . . . . . . . . . . . . . . • * * * * * * * * 16
Story & Clark Piano Co., Chicago . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Isaac Bledsoe, Austin, Tex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
F. G. Smith, New York . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
A. L. Bailey, St. Johnsbury, Vt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Sherman Clay & Co., San Francisco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
J. W. Jenkins' Sons Music Co., Kansas City. . . . . . . . . . . . . . . . . . . . . . . . . I |
Conway Co. (Hallet & Davis), Boston. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1()
Field-Lippman Piano Stores, St. Louis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $}
Cable Co., Chicago. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . {}
M. H. Stranburg, Jamestown, N. Y. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Q
Rudolph Wurlitzer Co., Cincinnati . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Steinway & Sons, New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
F. A. North Company, Philadelphia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Baldwin Piano Co., Cincinnati. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
A. B. Smith, Akron, O.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Cluett & Sons, Troy, N. Y. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Jacob Doll & Sons, New York . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Otto Wissner, Brooklyn, N. Y. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Ludden & Bates, Savannah, Ga. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Aeolian Co., New York, 5 stores in U. S., 5 in foreign countries. . . . . . . .
Musical Instrument Sales Co., New York, 9 departments . . . . . . . . . . . . .
*Completing the necessary census of the chains before passing
on to the more interesting and important matter of examining
their methods, we present further evidences of the concentration
of ownership and centralization of management that is rapidly
proceeding in the retail field. Most of it is the work of the last
fifteen years. The bulk of the 2,000, with their 25,000 stores,
have had their beginnings or chief growth in that time. And by
chains, we repeat, is meant organizations of retail stores owned
and managed as a unit. Other manifestations of concentration,
though of scarcely less significance, like retailers’ co-operative
buying exchanges and incorporated jobbers and manufacturing
companies, have been noted, but are not included in the figures.
The boot and shoe field has perhaps 50 chains, with 700 stores,
the more important chains being:
Stores
R. H. Long (Waldorf), Framingham, Mass. . . . . . . . . . . . . . . . . . . . . . . . . . . 82
W. L. Douglas Shoe Co., Brockton, Mass. . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Regal Shoe Co., Boston. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Hanover Shoe Co., New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
*Printers' Ink, October 22, 1914, p. 60.
THE CHAIN STORE 253
Stores
Florsheim Shoe Co., Chicago. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Sorosis Shoe Co., Brooklyn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Hanan & Son, New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I8
Beck Shoe Co., New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
E. W. Burt & Co., East Lynn, Mass. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
S. B. Thing Co., Inc., Boston. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I2
C. H. Baker Shoe Co., San Francisco. . . . . . . . . . . . . . * * * * * * * * * * * * * * * * * 1I
Walkover Shoe Co. (George E. Keith Co.), Brockton, Mass. . . . . . . . . . . . 11
French, Shriner & Urner, New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
I. Blyn & Sons, New York . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I 1
Emerson Shoe Co., New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IO
John Ward Co., New York . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Rival Shoe Co., New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Stetson Shoe Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
O'Connor & Goldberg, Chicago. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
The largest chains, as will be recognized, are manufacturing
chains—Regal, Douglas, Hanan, etc. The Regal has, besides,
1,500 agencies; Walkover 3,500 agencies, etc.
Confection- The confectionery field has perhaps 40 chains, with
ery Chains 315 stores, of which there are best known:
Stores
Huyler's, New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Gates, Philadelphia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Page & Shaw, Boston. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Loft, New York . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Mirror, New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Schrafft's, New York. . . . . . . . . . . . . . . . . . . . . . . . . . - - - - - - - - - - - - - - - - - - - 8
Martha Washington Candy Co., Washington, D. C. . . . . . . . . . . . . . . . . . . 7
F. G. Shattuck Co., New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Robert H. Putnam Candy Co., Cincinnati . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Mary Elizabeth Candy Co., New York . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Chas. W. Miller, Philadelphia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Repetti, New York . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
French Nougat Candy Co., Cincinnati. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
There are about 25 bakery chains, with 125 stores. tº tº
Jewelry Fifty chains, with a total of 200 stores, is probably a
Field conservative estimate for the jewelry field.
There are two recent developments in this field that are in-
teresting. The first is the organization of a co-operative syndi-
cate of jewelers on the lines of the United Drug Company, the
organization of Rexall stores. Louis K. Liggett, the president of
the United Drug Company, is, in fact, chairman of the board of
254 THE CHAIN STORE
directors of the United Jewelers, Inc., though the connection is
declared to be purely personal and not to indicate any rapproche-
ment between the two organizations. Neither of the corporations
is a chain in the restricted sense we are giving it—they do not
own and direct the constituent stores. But the United Drug
Company is powerful in its field, and is growing increasingly so,
and the United Jewelers, Inc., will no doubt aim at the same
thing in its own domain. Mr. Liggett’s experience will be valu-
able to it.
The United Jewelers’ plan is to invite 2,000 of the 22,000
jewelers in the country into the organization, the “upper ten.”
per cent., if it can get them, and it probably will, judging from
the eagerness with which Rexall agencies were sought. These
jewelry agencies become stockholders in the organization; will
handle exclusively the organization brand of “Hallmark” goods,
and will be known as “Hallmark” stores. The company says
in its trade-paper advertisement:
“The United Jewelers, Inc., is not a buying syndicate to make
price-cutting and underselling possible. On the contrary, it is
a bulwark of price and quality and a protection alike to the
high-grade manufacturer, the reputable jeweler, and the appre-
ciative, liberal-minded purchasing public.”
The electro book for local advertising shows a line of Hall-
mark silverware, bracelet watches, gold-filled jewelry, link
Eventually buttons and tie-clips, candlesticks, jam-jars, silver
National picture-frames, hat-pins, scarf-pins, etc. Window-
4dvert”9 trimming helps are being devised and national adver-
tising at a future date is promised.
The other development is the extension of the Brodegaard
plan and the incorporation of the wholesale business with a
capital of $200,000. The Fred Brodegaard Jewelry Company,
of Omaha, has been consigning goods to some 50 small-town
merchants in Nebraska and western Iowa. The goods are
placed out on a percentage basis, the company retaining title,
and the merchant furnishes the showcase.
Brodegaard salesmen make each town every sixty days, con-
duct special and well-advertised sales, display more extension
stock from their trunks. The company plans to take in 250
more merchants. It is not, strictly speaking, a chain in the
sense we are using the word.
Co-operative buying exchanges or associations are common in
the jewelry line, but not conspicuously successful. Some of these
THE CHAIN STORE 255
are not recognized by manufacturers or some manufacturers.
The Jewelers' Co-operative Syndicate is probably the most
prominent of the combines.
In the oil and gasoline field, the Texas Company and some
others maintain retail and wholesale branches or service stations
Oil and in great numbers in different sections of the United
Gasoline States, and even in coast harbors on floats or island
for the convenience of power boats. The Standard
Oil service stations in New York and New York State, for in-
stance, number over 600. There are probably four or five such
groups, with 2,000 stations in all.
Chains in The larger chains in the hat field, where there are
Hat Field perhaps 25, with 250 stores, are these:
Stores
Kaufman Bros., New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Truly Warner, New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Irving Hats Co., New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Sarnoff Bros., New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Reilly Hat Store, Springfield, Mass. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Young's Hat Co., New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Knox, New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
The history of the hat chains is that they came in and re-
established specialty stores after the department stores had
practically wiped out the little individual hat store. Young's
and Knox have each 1,000 agencies.
In the larger centres, particularly the metropolis, laundry
chains have been developed. There are 23 in New York, three
in Chicago, and three in Philadelphia—probably not
more than 45 altogether in the country, combining
possibly 275 stores. The best known in New York are Wallach's,
22 stores, a consistent advertiser; Stancourt, 15; Carolyn-
Heath, 23, and Champion, 17. Munger in Chicago and the
Nonpareil in Philadelphia have eight each.
Seventy-five chains of butchers, with a total of 450
Laundries
Butcher & tº
” stores, is probably conservative. The largest are
these:
Stores
L. Oppenheimer, New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Washington Market, New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I6
A. Andre, New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I5
Schuck & Co., New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I2
Star Beef & Provision Co., New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Rittenhouse Bros., Philadelphia... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
E. Kahn's Sons Co., Cincinnati..................................... 7
256 THE CHAIN STORE
Stores
Frosch & Sons, Philadelphia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Columbia. Meat Market, Philadelphia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Chas. W. Spencer, Philadelphia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Becker Bros. Co., Cincinnati. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
In the dyeing and cleaning field there are some 45 chains, of
which 25 are in New York and 10 in Chicago. Probably there
tº are 400 stores. Many of the chains advertise. The
*}” best known in New York are: Barrett, Nephews & Co.,
ci.ng 35 stores; Paul L. Bryant, 8 stores; Mme. Frances
Dervieux, 10 stores; Eastern District Dye Works, 12
stores; Mme. Obry, 12 stores; Rees & Rees, 14 stores; Schwartz
& Forger, 14 stores; Metropolitan Dye Works, 12 stores; and
Lewando, Boston, 30 stores; in Chicago, Kraus Bros., Lowey
Co., 12 stores; Flynn Cleaning & Dyeing System, Chicago, 20;
Becker & Wade Co., Chicago, 15; Superb Dyeing and Cleaning
Works, Chicago, 14 stores; Consolidated Cleaning Co., 10 stores;
in St. Louis, Lungstras Dyeing & Cleaning Co., 17 stores, and in
Cincinnati, Fenton Dry Cleaning & Dyeing Co., 23 stores;
Footer's Dye Works, Philadelphia, 13.
The consolidation in the dairy field shows nearly 40 chains,
In Dairy totalling possibly 550 stores. The leading ones
Field are:
Sheffield Farms-Slawson-Decker Co., New York. . . . . . . . . . . . . . . . . . . . . . . 87
Borden Condensed Milk Co., New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
N. C. Nelson, New Orleans, La. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
H. P. Hood & Sons, Boston. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Clover Farm Dairy, New York . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Model Creamery, Boston. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Abbott’s Alderney Dairies, Philadelphia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . I 2
Locust Farm Co., New York . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I 2
McDermott Dairy Co., New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
French Bros.-Bauer Co., of Cincinnati, are included under
bakeries.
Borden’s dairy stores furnish an outlet, of course, for the Bor-
den products, besides milk.
Saloons, considering their number, do not happen to have been
very greatly consolidated in retail ownership. Most saloons are
sºn, controlled by one brewery or another, which often ad-
vances the money or part of the money to buy the li-
cense. However, there are some chains, 32 of them in New York,
THE CHAIN STORE 257
indicating that there are probably at least 100 in the country
with an average of between four and five stores each. . . .
There are probably 25 wine-and-liquor-store chains, control-
Liguor ling 140 stores, the best known being the Wine Grow-
store ers’ Association of New York, which has 53 stores, and
(* the Hygrade Wine Company, of the same city, 18
Stores.
. Furniture The furniture fields show probably about 16 chains,
Field with 100 stores, among them these:
Stores
Gateley's, Chicago (and clothing)... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Spiegel, May, Stern Co., Chicago. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
General Furniture Co. Chicago. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Royal Furniture & Carpet Co., Chicago. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
Phillips Bros. & Weil, Chicago... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
N. J. Sandberg Co., Chicago... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
One of these houses writes Printers' Ink: “There are a number
of stores located in smaller towns which are really included
in our syndicate, but we do not advertise them or publish them
as being members of our syndicate because they are in competi-
tion with the company.”
There are easily 25 chains, with 150 stores, in the women's
Cloaks, cloaks, suits, etc., field, among them the follow-
Suits, etc. ing:
Stores
Arthur L. Braus, New York . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Samuel Lewis, Troy, N. Y. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
P. & Q. Shop, New York... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I0
Bedell & Co., New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Klein Cloak Co., New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
The Leiser Co., Chicago. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
Warner Company, Warren, O... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
4.
4.
United Cloak & Suit Co., Milwaukee... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Conrad-Baish-Croehle Furniture Co., Cleveland. . . . . . . . . . . . . . . . . . . . . . .
We cannot overlook the coal business, which, like other
lines, is experiencing concentration. Many concerns now have
Chains of yards in different parts of their home city and main-
Coal Stores tain branch offices at them. We have 28 chains listed,
having three or more branches—there are probably 40 in
258 THE CHAIN STORE
the country, with about 500 stores, the best-known chains
being:
- Stores
Consumers’ Co., Chicago. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Chalfant Brothers, Philadelphia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Colorado Supply Co., Denver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Polar Wave Ice & Fuel Co., St Louis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Burns Brothers, New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Curtis & Blaisdell Co., New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Bank consolidation or extension, as you please, is noticeable.
There are 16 such chains and branch systems in New York and
Bank Con-probably as many more in the rest of the country,
solidations with 125 branches in all. The largest chains are:
Branches
Corn Exchange Bank, New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
New York Produce Exchange Bank, New York. . . . . . . . . . . . . . . . . . . . . . 8
Colonial Bank, New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Henry Clews & Co., New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
German Loan & Savings Bank, San Francisco. . . . . . . . . . . . . . . . . . . . . . . . 4.
The private banking and brokerage field shows many branch
organizations. Some of these are more branch offices or agen-
cies than places where anything is actually sold.
An interesting chain is projected in this field in the shape of
a system of banks having for its object the prevention of usury
by lending money in small amounts to the poor. It will be
capitalized at $5,000,000 and is intended to extend to every large
city in the country. The prime mover is Julius Rosenwald,
president of Sears, Roebuck & Co., and Andrew Carnegie.
Vincent Astor and others are said to be interested.
We are not likely to think of theatres as chain stores, although,
of course, they purvey amusement at retail. Concentration
Theatrical has gone to the extent of perhaps 15 chains or cir-
Chains cuits, 10 of them with headquarters in New York,
and probably not more than 260 theatres. . . .
The concentration in such small but important lines as news-
stands, fruitstands, shoe-blacking stands has been great in the
News- cities. Any estimate must be an exceedingly free
stands, etc. one because railroad, railroad station, subway and
elevated roads, hotels, and public building concessions are
farmed out to individuals or corporations, often at very high
rentals. It would be useless to seek accurate data in these fields
THE CHAIN STORE 259
when the object of this article and series is chiefly to suggest
rather than record the progress of the impulse.
Taking news-stands alone, we select almost at random:
Stands
Union News Co., New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 900
Ward & Gow. New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
Inter-State News Co., New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
G. W. Armstrong Dining Room & News Co., Boston. . . . . . . . . . . . . . . . . . 30
Tyson Company, New York. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Parker Railway News Co., Macon, Ga. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
There may be 100, there may be 200 such chains, with a total
of 2,500 stands; we can only guess.
Bootblack stands in the East are owned chiefly by Italians;
small fruitstands by Greeks. It is impossible to get any reliable
figures on which to base an estimate. Probably they do not
exist outside of the large cities; it is concessions that breed them.
One hundred chains in each line, with an average of four stands,
would be reasonable.
Of its own field, the Farm Implement News affords this in-
formation which might well come from other fields, too:
No Farm “There are no chain stores in the implement trade
Implement so far as we know. There was a time when some of
Chains the jobbers and branch houses of manufacturing
concerns maintained a few retail establishments in their re-
spective territories. In some cases this plan was forced upon
the wholesale concerns through their having to seize certain
stocks to protect chains, but in some cases retail establish-
ments were started in certain towns because the wholesale con-
cerns could not obtain representation they wanted with the
regular dealers.
“Some years ago this matter was taken up by the National
Federation of Retail Implement and Vehicle Dealers’ Asso-
ciation which protested against the system, with the result that
in most cases the retail houses were discontinued.”
The Hardware Age reports:
“The idea of chain stores is growing in the hardware field,
Hardware and we presume there must be fifteen or twenty con-
Field cerns operating anywhere from two or three stores to
as many as a dozen. One of the most prominent concerns in
this field is the George W. Peck Company, whose offices are at
Bath, N. Y.
260 THE CHAIN STORE
“We believe the object of organizing chain stores is mainly
to save on the cost of goods. The buying problem is one that is
very acute in the hardware field, and the merchant who can buy
goods at the lowest price is, to a certain extent, able to com-
mand the trade of his locality on some lines of merchandise.”
The George W. Peck Company operates 10 stores.
In the sewing-machine field the Singer Sewing Machine Com-
pany, Jersey City, N. J., has 1,600 stores, but only 800 are run
direct by the company, the balance being rented by agents who
work on commission. -
The office and store appliance fields have been peculiarly
subject to concentration in some directions. In most of the
cases the business is done by agents who are paid on commission
and who maintain their own quarters. Nevertheless, the con-
nection and control are very close. . . .
Evidences of chains or concentration in other fields may be
summarized as follows:
Concentra- Optical: M. H. Harris, New York," 9; J. Ehrlich &
tion Sons, New York, 6; E. B. Meyrowitz Co., Inc., 5
Elsewhere local and 2 foreign; M. Singer, New York, 4; B. L.
Becker, N. Y., 3; Dachtera Bros., New York, 3; probably 8 to
10 in the country, with 35 or 40 stores.
Millinery: Eugene Frank, Cincinnati, O., 5; Banner Milli-
nery Co., San Francisco, 3; Chicago Millinery & Hat Co.,
Chicago, 3; Mme. Bertha, New York, 3; A. W. Jones Millinery
Co., Boston, 6; Empire Feather Boa Co., New York, 3; Cawston
Ostrich Farm Corp., South Pasadena, Cal., 4 stores; Milkman’s
Millinery House, New York, 3; perhaps 15 in the country.
Gloves; P. Centemeri & Co., New York, 4 stores.
Fountain pens: Waterman Fountain Pen Co., 4 stores.
Delicatessen: Solowey Bros., New York, 3 stores; Rosoff
Brothers, Brooklyn, N. Y., 3 stores.
Barber Shops: New York Barber Co., 8 shops; Terminal
Barber Shops, New York, 6 shops.
Lumber: Boeckler Lumber Co., St. Louis, 3 yards; Hole-
kamp Lumber Co., St. Louis, 4 yards; St. Louis Lumber Co., 6
yards; J. Thomas Lumber Co., Topeka, Kan., 20 yards; W. I
Miller, Topeka, 4 yards; D. Gabriel Co., Topeka, 3 yards—
perhaps 50 chains in the country with 300 yards.
Corsets: W. H. Gossard Company, Chicago, 3 stores; Good-
win, New York, 6; Sacks Corset Shop, New York, 3.
Electric Supplies: Manhattan Electric Supply Co., New York,
THE CHAIN STORE 261
6 stores; S. May, New York, 3 stores. See, also, automobile
accessories.
Florists: five in New York; Warendorf, 5 stores; Fleisch-
mann, 5; Colonial, 3; Christatos, 3; Cardasis, 3; perhaps 15
chains in the country, with 50 stores. -
Funeral Directors: William Necker, Union Hill, N. J., 25
branches; William J. Dargeon, Inc., New York, 20 branches;
Thomas Burton’s Sons, New York, 3 branches; Thomas N.
Flynn, New York, 3 branches; D. Scocozza, New York, 3
branches.
Furs: Clawson & Wilson, New York, 3 stores.
In the book field, the H. B. Claflin Company has some 100
book departments in as many department stores, conducted
under the name of the Syndicated Trading Co. The Inter-
national Correspondence Schools, Scranton, Pa., has three of
its own stores. There are several other correspondence schools
with offices in the principal cities.
In the sporting goods field, A. G. Spalding & Bro., of Chicago,
have 43 stores, including foreign; Wright & Ditson, of Boston, 7,
and Iver Johnson Sporting Goods Company, of Fitchburg,
Mass., 3.
Phonographs: Columbia Graphophone Co., 30 branches.
The Victor Talking Machine Company has none. The Edison
Phonograph Company is building its first retail store on Fifth
Avenue, New York.
Wall Paper: Richard E. Thibaut, Inc., New York, 3 stores;
F. Beck & Co., New York, 3 stores; Robert Griffen Co., New
York, 3 stores; United Wallpaper Store, Lowell, Mass.
Stock feed: Arthur E. Pratt, Albany, N. Y., a number of
stores in the smaller agricultural villages.
Trunks and bags: D. A. Doyle, New York, 6 stores; Schwartz
& Co., New York, 5 stores; Wm. Bals, Inc., Newark, N. J., 4
stores; Weisman Bros., 4 stores; Charles W. Wolf, New York, 4
stores; Crouch & Fitzgerald, New York, 3 stores; Casey Trunk
Co., 3 stores; Emergency Baggage & Repair Co., New York, 3
stores; perhaps 15 chains in all with 55 stores.
Paper tags, novelties, etc.: Dennison Manufacturing Co.,
Boston, 6. .
Hotels: United Hotels Company, Niagara Falls, N. Y., 15
hotels; Statler Hotel Co., Buffalo, 3 hotels; Fred Harvey, Ritz-
Carlton, New York, 3.
There are unquestionably other evidences in these fields, as
262 THE CHAIN STORE
well as in others that have not been noted. The chief purpose
in giving those listed is to show in detail what the average mind
hardly grasps when stated as a generalization. The process of
centralization is significant. It indicates that business men are
coming into a more thorough mastery of the principles of busi-
ness and that standards of practice are taking the place of the
old-time “personality.” Where it took all the time of the pro-
prietor to manage his employees, and those only a few, he now
finds it possibleby system to supervise many. And he is elimi-
nating the wastes that ate up his mental capital.
(2) SOME TYPICAL CHAIN–STORE METHODs
In the seventh article these investigators group under twelve
heads the main features of chain-store organization, which
served as a basis of comparison between them and their inde-
pendent rivals so far as their operating efficiency is concerned.
These twelve heads are as follows:
Financing - Advertising
Organization Selling
Locating the stores, fitting, etc. Delivery
Buying Accounting
Display of stock Adjustments
Pricing Supervision and improvement
These various lines of activity are traced one by one through
the particular trades in which chain stores have become con-
spicuous. The investigators make clear, for example, the power
which large capitalization gives to such concerns as the Wool-
worth Company, with $65,000,000 capital; the United Cigar
Stores Company, with $35,000,000 capital; the United Drug
Company, with $20,000,000 capital; the Riker & Hegeman
Company, with $15,000,000 capital, and the Childs Com-
pany with $9,000,000 capital. Among the twelve groups there
are two, however, which deserve particular attention from the
standpoint of the advertising man: buying activities, and selling
operations.
These, of course, are no more important than some of the
THE CHAIN STORE 263
others. For example, there probably is no single field in which
such a concern as the United Cigar Stores Company has se-
cured greater advantage over its independent competitors than
in the ability which it has displayed to pick for itself the best
retail sites. This, as is well known, has become one of the most
important activities of the company, and there are students of
the question who attribute the United Cigar Stores' success
as much to the operations of its real estate department as to
any one cause. Again, in the matter of accounting and in the
keeping of records, the chain stores have a great advantage over
their independent rivals. It will be necessary, however, for us
to confine our attention to the two heads which we have already
mentioned. From the section of these articles describing the
buying activities of these concerns, we quote the following:
e Լ *We are considering the buying habits of the chains
as compared with those of the independent retailers to discover
Is the which has the advantage and whether there is any-
Buying thing of unfair competition in it, as independent re-
*** tailers and manufacturers charge there is. Most of
the 2,000 chains, with 25,000 stores, which Printers' Ink’s
investigation has shown existing in the country, are retailers’
chains, which handle, as in the grocery, drug, and tobacco lines,
a large variety of goods, including trademarked and nationally
advertised articles. Is their buying fair—putting aside for a
º the question of cash discounts at thirty, sixty, or ninety
ays:
Take, for instance, the four examples given above, where the
leading drug chain of the country bought cheaply and passed a
large part of the saving on to the public—is there anything
basically wrong about that? We cannot see anything wrong in
it, even though the independent retailer is injured by it, as
much injured, perhaps, as if, indeed, it were morally wrong.
It is not the chain's fault if independents cannot buy so cheaply
in this way. And the independents generally do not complain
of this kind of quantity buying, but only of the “inside price,”
the secret extra discount on staples and standard brands, which
is another thing entirely.
*Printers' Ink, November 19, 1914, pp. 67-75.
264 THE CHAIN STORE
There is no question that many manufacturers have been
running after the chains with quantity-price offers and “free
deals,” just as the jobbers were running after the retailers. It
reacted on the jobbers and it is reacting now, and will react more,
on the manufacturers, though the latter do not seem to realize it.
It seems to have been the jobbers that have the chains in most
lines their start. This was in the early days before there was
any suggestion of a “menace.” The jobbers, not looking beyond
the minute, kept the discount for quantity before the pro-
gressive dealer’s eyes and helped to nurse the big buying along.
The history of most chains is, however, that as soon as it paid to
do so they threw over the jobber and bought direct of the manu-
facturer. It has not always worked out that way. The West-
ern grocery chains, for example, generally find the jobbers too
strong at present to eliminate.
The jobbers are now alive to the danger, but are still short-
sighted, or caught in the grip of circumstances. They are, ac-
cording to the testimony of the chains, “secretly and more or
less unlawfully combining to use their influence on the manufac-
turer to prevent his selling direct to chains, even though they
are buying in jobbing quantity.”
“The jobbers may deny this all they please,” says a chain
official, “but dozens of manufacturers have frankly told us they
could not afford to antagonize the jobber. Most of us do not
even try, but buy of the jobber on a brokerage basis.
“But in the end this very trouble caused by the jobber will
prove his undoing, because the chain system will finally get a
* foothold, and when it does, the corner grocer can’t
"...º compete, simply because he is under the jobber's iron
tº..., hand and must pay an average of 15 to 20 per cent.
profit to get his goods, which is exorbitant and a crime
for which the jobber shall certainly pay.
“Of course, the jobber claims he is performing an economic
service, charging but 10 per cent. for his work. But extrava-
gance in management, strenuous competition, and, most of all,
cupidity (since the grocery business has simply belonged to the
jobber—the retailer being little more than a distributing unit),
have caused him to exact 25 to 50 per cent. profit in numerous
cases, and 100 per cent. is not unknown.
“It is said that even if the jobber loses the city he still has the
country. But to-day Kroger, out West, is doing a big wholesale
business selling at cost, plus 3 to 5 per cent. How does that
THE CHAIN STORE 265
please the wholesalers? What Kroger is now doing in a pioneer
way many chain systems will do, and the jobber just simply can-
not compete.
“The chain system is most prosperous here in the East, of
course. But it is getting a foothold in the West, and the same
manufacturers who are selling the Eastern chains because com-
petition forces them to do so, while refusing to sell the Western
chains, will eventually have to sell them, too, there is no doubt
about it.”
This is the one-sided view of a chain official, but there is truth
in it. The chains are not only displacing the jobber's former
Chains customers in the city and buying direct for their own
Taking supply, but they are beginning to take the jobber's
Jobber's place with respect to the rural grocery. The independ-
* ent rural grocery is beginning to do its buying from
the chains. How much independence this is going to leave
the rural groceries would seem to depend on the chains.
The picture, however, is not complete without a reference to
the fact that the jobbers are forming their own chains in order to
have an anchor to windward in the time to come and that the
independent grocers are organizing in greater and greater num-
bers to get the buying advantages enjoyed by the chains.
The next step after this for the chains is manufacturing. It
is a step some of the chains and retailers’ corporations have
already taken and one that the jobbers’ chains are likely to take
before many years under present conditions.
No manufacturer can regard these developments with in-
difference. Whether or not the independent dealer saves him-
self is surely an important question to the manufacturer if one
of the alternatives is for the market to become consolidated into
chains or combines, with an attendant shrinkage of buyers to
compete for his product. . e
The little independent retailer cannot possibly make such a
saving because the chains often sell cheaper than he can buy, and
his efforts to balance the advantage by taking up
"..." “free deals” often plunge him into deeper difficulties.
#.” But if he combines with others, he betters his buying
chances. Perhaps the jobbers will not sell the com-
bine as a mere buying association, though some such associations
are able to force concessions from the manufacturers, but to a
corporation in which the individual storekeepers are stock-
holders the jobbers can have nothing to say. The Girard Com-
266 THE CHAIN STORE
pany, of Philadelphia, which is such a buying combine composed
of members of the Retail Grocers’ Association, owns its own ware-
house and carries a stock as high as $275,000 at times.
Nevertheless, there is this important difference. The retailers’
combines deal almost exclusively in staples and standard brands
and buy as wholesalers. The retail chains proper not only do
this, but they buy also like merchant princes, going outside of
the beaten track and taking what look like speculator's chances,
such as the Riker-Hegeman buyer took, but since they seldom
fail to gauge their market correctly, generally pocket a specula-
tor's profits. The Childs Grocery Company, for example, which
roasts its own coffee, has ten or fifteen tons of raw coffee on hand
at this minute, which, if it wished, it could resell at wholesale
at an advance of seven cents a pound profit, coffee having gone
up that much in price since they bought it.
But the real reason why the chains have increased their ware-
house facilities so enormously and sell cheaper, as they do on
many items—one of the biggest reasons of all reasons for the
growth of chains—is that the chains afford a large and sure
market for manufacturers with a surplus which their jobbers
cannot absorb, and which they must turn into cash. The chain
has the cash and will always consider a proposition if it is at-
tractive enough.
The combine seldom gets a chance at this sort of offer because
the manufacturer is not anxious to have his retailers and jobbers
know about it. Besides, it generally takes too long to get a
definite answer from the combine, whose members have to be
canvassed on the proposition, and they are slow pay compared
with the chains. The manufacturer can go to the chain, get an
answer in five minutes and have his money in ten days.
“I could do an excellent business on my saving in buying
alone,” a grocery chain-store proprietor told Printers' Ink,
g “even if I did not make a cent on my retail stores!”
º, The corollary of this is that the nearer a chain cares
wy???g tº * * tº º tº
j." to come to sacrificing profit in its retail stores, the
greater opportunity it will have to buy cheaply. It can,
if it pleases, put its prices down so low that it barely clears the
cost and yet do such a volume of business in consequence that it
will more than make up the difference. There is no evidence
that any chain actually is at the present time carrying out such a
policy in any radical way. It has been said that the United
Cigar Stores Company earns its dividends not out of its stores,
THE CHAIN STORE 267
but ovt of its buying, its real-estate operations, etc. The chains,
at all events, are perfectly willing to have the public believe it
gets its purchases at cost. Nevertheless, entirely apart from the
advertising aspects, it is patent that the plan has great possibili-
ties both from the executive and strategical points of view.
In view of these conditions, there is no particular significance
in the fact that in the grocery field, for example, the cost of buy-
ing ordinarily is 6 per cent. for the jobber, 5 to 6 per cent. for the
chain, and only 2% to 5 per cent. for the buying combine or asso-
ciation. No significance, that is, that is favorable to the co-
operative combine at this time. Its saving in the cost of doing
business may offset the chain’s buying advantage on some staples,
but that is only because it stops at these staples and does not go
on to the bigger deals. It takes large capital and a man respon-
sible for the large capital to swing these big deals. A hired
manager representing a group of grocers who have staked only
$500 or $1,000 apiece never will take the chances under present
conditions.
But present conditions may not last; will not do so, in fact,
because they cannot. Competition and publicity are changing
... them. However it may look now to the independents,
Cºº" the chains are not speculative plungers in their buying.
St e * & tº
They are betting, as the saying is, on a sure thing.
They know their market. They know values. They
anticipate the wants of the seller and provide capital in the
shape of cash or credit. And their capacity to absorb and sell
brings sellers to them. e
QM,
Change
From the eleventh article in the series, which covers the selling
activities of the chains, the following quotation is taken:
*The average grocer turns his stock less than ten times a year.
A better grocer will turn it fifteen or twenty times. Several
grocery chains probably average twenty times in their established
stores. One chain, Mr. Bowers’ Stores, in Memphis, is said to
get the high average of forty turns out of its older stores. And
forty-five turns are claimed for one store of the Progressive chain
in New York City. This is almost up to the average of one turn
a week Uneeda Biscuit is said to make in a great many stores.
The matter of turnovers is something well worth looking into.
*Printers' Ink, December 3, 1914, p. 66.
268 THE CHAIN STORE
The average grocer wants a gross profit of 25 per cent. On a
sale. Some chains want 25 per cent., also. The Bowers chain
is said to take only 12% to 15 per cent. gross.
The average grocer counts on 5 to 8 per cent. met. Bowers is
said to take only 2 per cent. This, with four times as many
turnovers, would enable him at least to equal the average gro-
cer's earnings.
The turnover is, of course, that of the stock, not the whole
capital. Nevertheless, the comparison of stock turns for chain
and independent is significant. There are some considerations
that qualify the difference. The average grocery chain store,
especially one of the cheaper type, carries a smaller stock than
does one of the average independents. Moreover, the stock
which the chain carries in its enormous warehouse must be figured
as reducing the apparent number of turnovers. Again, every
chain is constantly opening new stores, few of which pay in a
large way from the start, while some do not pay at all. The
grocery chains do not plan to lose money on stores. They do not
wish to resort to ruinous price-cutting and manipulation if they
can help it. They are careful in selecting the location, but if the
manager cannot make the store pay in a certain length of time,
sometimes 30 days, sometimes six months, it will be closed.
These misadventures pull down the average number of turnovers.
Against this set the buying and storage advantages. The cost
of buying may come to 6 per cent., as mentioned, but the saving
... is often 15 to 20 per cent., and sometimes more. The
A Chain independent h took and
Adºnian average independent may carry much more stock an
a month’s supply of it, but rental space in a warehouse
is cheaper than in a store. That is a chain advantage.
The grocery chains in general are probably not so forbearing
as the Bowers chain seems to be. They take a larger percentage
of profit and make up what they sacrifice in profit on standard
brands by large profits on their own private brands—often an
abnormally large profit, according to the reports of investigators
engaged by a charitable society in New York City, who reported
that tea, coffee, etc., priced at different figures, all came out of
the same box and was of one quality! But this might almost be
called a trade custom, so honored is it suspected to have been
in much retail practice. . . .
In the drug field the situation is somewhat different. The
average druggist turns his stock three or four times a year.
Compare this with the stock turn of twelve times which the
THE CHAIN STORE 269
Riker-Hegeman stores are said to average. Conditions here are
very different from what they are in the grocery field. The
drug chain store is certainly far better stocked than the average
independent, and carries more clerks, even from the beginning.
It would be out of the question to expect a new drug store to
pay in 30 days. It would take months and perhaps even a year
or two. The other stores of the chain have to carry them.
Tobacco-store independents average four turns a year. Alert
independents quadruple and even quintuple that. Some United
Cigar Stores are said to have turned their stock fifty times! And
here again the history is one of rapid extension of stores, some
of which may not pay for months and which the rest have to
carry.
In the 5, 10, and 25 cent field the average turnover is eight to
ten times a year, and the average Woolworth, Kresge, Kress, or
McCrory store ten to twelve times. The average is high here,
and the independents and chains are closer together as to records
because of the exceptional education which the independents get
from the jobbers, like Butler Brothers, for instance, who leave
no excuse for a retailer’s not making good.
As in nearly all instances the extension of chain stores is fi-
nanced out of the earnings of the chains, it is evident, from the
rapid growth of the system, that report has not exaggerated the
rate of turnovers. There is a great gain, as we saw previously,
in delaying payment 30 and 60 days—though taking the cash
discount just the same—when the turnover can be made in that
time. That amounts not only to getting an extra discount from
the manufacturer, but to using his money to do business on.
And the advantage is all the greater if the turnover is several
times a month.
The turnover is, of course, merely a result, of which the causes
are reputation for low prices, service, advertising, and other
things, but it is an objective the chains have before them all of
the time. They would have us believe that its rapidity is due
wholly or largely to the famous principle of “small profits and
quick returns.”
It is obvious that the chain does price very low on a score or
more of nationally advertised brands in its line which have
standardized values and known prices, and also on certain goods
whose costs are more or less known to custom, but it is possible
for any one to satisfy himself by shopping around and inquiring
of any retailers, jobbers, and manufacturers that the majority of
270 THE CHAIN STORE
chains do, as a matter of fact, in many instances price higher on
other goods and get a larger profit on their own private brands
than do the independents in their neighborhood or in similar
neighborhoods.
It is the advertising of the drug chains, the better stores, the
better locations, the greater variety of stock, the service, that
draw the custom. The public may think it cares a great deal
about price, but it will not, except for some extraordinary in-
ducement, go two steps out of its way to buy in a shop that is
dingy or unprepossessing. A few individuals may, but the
public as a whole will not. . . .
Pricing seems to have three methods. The first method is to
fix the price of all goods at a certain percentage over the cost of
goods and cost of doing business. This margin or percentage
is apt to be high in the little independent store, particularly out
of town, where there is little competition. It tends to be low
where the live independent or chain-store executive has grasped
the principle of rapid turnovers. Mr. Bowers’ Stores, of Mem-
phis, apply this system inexorably to every product that gets
into their hands. The United Cigar Stores probably keep ex-
ceedingly close to it much of the time.
The second method of pricing is to apply the first system of
pricing to unbranded goods, but maintain the price on all na-
tionally advertised brands and on their own brands.
M* Many of the better class of independent stores and
H." some chain stores in different lines still do this. They
aim at quality and service and get fair prices on all
their products.
The third method of pricing is one that is based largely on
competition. The district manager of a Philadelphia grocery
chain, for instance, may see eggs priced extra low on a rival
store’s bulletin, and at once order a corresponding cut in his own
store’s stock. Department stores employ shoppers to tab the
prices of goods displayed in other stores. Drug chains and in-
dependents watch each other and cut on all proprietaries in
competition. When buying is irregular and speculative and
competition is brisk, it is not always possible to price in the same
way that goods are priced at other times. Special sales and
all special inducements fall into this third class. They are
often combined with the first method.
Actually these three different systems simmer down to two, a
system of pricing branded goods and a system of pricing un-
THE CHAIN STORE 271
branded goods. Most price-cutters, as stated, cut standard
brands for the purpose of attracting custom, but sell most of
their other goods at a good profit. It cannot be denied that the
chains have helped to bring prices to a lower level, especially
those of the staples. All druggists, for example, once sold
certain salts at 5 cents an ounce or two ounces for 5 cents, when it
cost only 1% cents a pound. They now have to sell it at 5 cents a
pound, because the chains do.
The pricing of unbranded or relatively unknown goods seems
to be generally on the theory of charging about all the traffic will
bear, unless a special drive is being made. Ordinarily
*:::..." the chain store will take 50, 75, or 100 per cent. on
Wºffº., rubber goods, toilet goods, or other sundries just as
quickly as the independent will do it. When one of
the chains recently changed hands the new management is said
to have marked prices up 10 per cent. all along the line. The
fact is, chains and other price-cutters cut prices on established
brands, that is where the cut shows to the public, and do not cut
prices where they do not have to.
The average chain does not want to cut any lower on standard
brands than it has to. It will take a profit when it can, but the
effect of the competition on standard brands is to drive their price
lower and lower, and at length the chain is willing to take a loss
for the sake of the advertising and the effect cut-throat competi-
tion has on its competitor. But it will drop the brand quickly
as a leader when the profit has been squeezed out. It may keep
it to supply the demand already created, but it will not push it.
Nor will the independents push it, nor carry it if they can help
it. . . . The chain theory of merchandising is to give the
public exactly what it wants. If it can satisfy the customer and
bring him back again and again, it will make many profits that
will outweigh the one large one that might possibly be secured
from substitution. Aggressive substitution, besides risking the
customer's possible dissatisfaction and the waste of the clerk’s
time, involves the great expense of maintaining clerks able to
ºte. It is cheaper to serve the public as the chain claims
it does.
The Owl Drug Company, of San Francisco, has a sign posted
on its stores threatening with dismissal any clerk who shall sub-
stitute. President Miller says he has actually discharged clerks
for doing so. This is contrary to the general impression of
chain methods, but it is thoroughly in line with modern mer-
272 THE CHAIN STORE
chandising principles. The Owl clerk is instructed to give the
customer exactly what she or he wants. After the money has
been paid and the standard goods wrapped up, the clerk is ex-
pected to ask if the customer has ever tried the private brand of
the house and if she would not like to try it next time, or if he
cannot sell her something else in the line.
So far as the national manufacturer is concerned, this is sub-
stitution just as much as if it had been effected in the first place.
It can make no difference to the manufacturer whether the sub-
stitution is practised before or after a given sale. If his goods
are being displaced at the point of sale by the man he depends
on to sell them, that is enough for him. The existence of the
retailer’s private brand is evidence that he intends to sell it,
and is the first step in substitution.
It cannot be alleged that there is any moral obliquity in the
chain or the independent handling private brands of its own.
It is proper that the public should have the fullest experience
it desires in brands and that standard brands and private brands
be allowed to compete to the fullest extent. The unfairness
consists in allowing stores which are largely though not in a legal
sense in the nature of “common carriers” to discriminate in favor
of their own brands and by price-cutting to transfer to their own
brands the good will of the nationally advertised brands. . . .
It has been necessary to deal at such length with so importan
a part of selling as pricing is that we can only summarize the
comparison of chain and independent methods in other respects.
The chains in general have developed standards in every de-
partment of selling. And the standards represent the best way
of doing the particular thing at the least cost. It is a whole-
saling of method. The appearance of the stores, the fixtures,
the selection of stock, its display, the advertising, selling, adjust-
ment of complaints, perfection of service, the training of sales-
men—all have been studied and systematized into as near auto-
matism as it is possible to get it. This cuts out waste and re-
duces costs of operation.
The principle is the same, whether it has to do with cheap
grocery chain stores on side streets, or high-class drug stores
occupying the best corner locations in the city and employing
high-grade help. The Philadelphia grocery chains hire immi-
grants at low salary, just as our traction systems do, because the
work has been methodized to the point where it requires the least
possible amount of instruction, supervision, and personal initia-
THE CHAIN STORE 273
tive. The 5 and 10 cent stores employ girls at $3 and $4 a
week, rarely more.
The Owl Drug chain on the Pacific Coast enables its sales-
people to make relatively high earnings and places a high re-
sponsibility on them, but they are by no means abandoned to
their own devices. On the contrary, they are more carefully
supervised than the low-paid immigrants. The standards are
there: they have only been set higher.
These, of course, are by no means all the lines in which the
chain stores have been able to work out for themselves advan-
tages in their selling operations as compared with their inde-
pendent rivals. In the training of clerks in the organization of
the store and in the standardizing of the selling processes, they
have achieved remarkable results.
The fourteenth article, which is the last in the series, makes a
summary of the findings of the investigators:
*The facts elicited by Printers' Ink’s investigation of chains
point, we feel safe in asserting, to only one set of conclusions:
First, that the leading retailers’ chains enjoy at the present
time many and important advantages over the independent
retailers, even when the latter are organized in co-operative
associations and corporations.
Second, that they will enjoy these advantages and possibly
new ones in addition, in greater or less degree for an indefinite
period (which may perhaps be eight or ten years), if no legisla-
tion is enacted or judicial decision handed down condemning
º practices as “unfair competition” or “against public
policy.”
Third, that many new chains will rise to compete with the
older ones, but that the more significant phenomenon will be the
still more rapid development of organization among the inde-
pendent retailers.
Fourth, that the independents and their combines will pro-
gressively adopt the generally superior methods employed by
the chains, and that such independents as do not do so will be
eliminated and their place will be taken by other merchants.
Fifth, that the eventual supremacy of the independents in
*Printers' Ink, December 24, 1914, p. 66.
274 THE CHAIN STORE
co-operation will be established and the chain-store movement
checked and perhaps reversed. Whether this shall be the res-
toration of the middleman or jobber system of distribution,
now passing, though of course on a higher plane of organization,
or whether it means a new form of compact organization will
depend upon whether the necessity for it continues. -
It should be obvious that the fate of national advertising and
even national trademarks will be profoundly affected either
way, and also that they are being affected now, and were being
affected before the war in Europe and before the recent de-
pression set in; in fact, ever since the chains and department
stores began to cut prices and derive encouragement in it from
the decisions of the Supreme Court. It is impossible to separate
the question of what will become of the chains or the independ-
ents or of national advertising from the question of whether
price-cutting and “inside” prices will continue to be held legiti-
mate.
But before we touch upon these relations, let us briefly sum-
marize the findings of our investigation into chain stores.
It has taken several months to gather the facts. We have
seen that, speaking conservatively, there are more than 2,000
chains, both retailers’ and manufacturers’, comprising in all
25,000 retail stores. We have shown the rapid growth in each
important field. We have noted the increasing alarm of the in-
dependent retailers, an alarm which has now begun to seize
upon the manufacturers, as the independents in turn have begun
to organize and ask for the same buying privileges which the
chains and department stores and mail-order houses have en-
joyed.
By chains we particularly mean retailers’ chains under one
ownership and direction and have in mind chiefly those which
& cut prices on trademarked goods. There are also
#º retailers’ chains which do not cut prices and there
Trace-cut- 5 e de
jº., are manufacturers' chains. We have considered
these and counted them in as evidences of con-
centration due to quantity buying at quantity discounts, and
often “inside prices” as well, but we have paid special attention,
as noted, to the retailers’ chains, particularly those in the drug,
grocery, and tobacco fields, which are the storm centres of much
competitive merchandising.
We first compared the financing of the chains with that of
the independent stores and found that there is an advantage in
THE CHAIN STORE 275
favor of some of the chains, due to the fact that their stock can
be, and is, dealt in by the public, and that the stores derive
some advertising benefit from that. Also to the fact that the
stock ownership may be scattered and the public thus be taken
into partnership. Shares in the Whelan enterprises are put out
in five and ten dollar denominations for that purpose. This is
also the standard practice with the chains and big industrial
corporations in England. The independent store has no such
opportunities. It has to go it alone. But if the independents
organize and incorporate, the chains’ advantage in this respect
can be neutralized.
In organization, the chain has had the great advantage of
being able to do business on so large a scale that it can support
men of large experience and talents who can divide
º: #. the work and specialize. The independent man, on
*...* the other hand, finds it difficult to be at once a
general executive and a specialist on every point.
Nevertheless, the chains' advantage is one that cannot extend
indefinitely. What the chains have found out about business
is being passed along to the independents.
In the locating of stores and operation of renting and handling
real estate, the present advantage again must lie with the chains
which often save store rent, and make a profit on their realty
operations. But this can be, and is certain to be in time, copied
by the combines.
The chains did in the beginning have great buying advantages,
and still do, over most independent retailers; but the co-operative
organizations are already not far behind the chains on staples
and can with better organization meet them on an even basis.
The chains' advantage of getting “inside prices” as they do at
present will be nullified by the combines’ competition. Dating
abuses will be abolished or balanced. Evolution is driving the
chains into manufacture, and the combines will probably do the
same even though many of them are now loyal to the manu-
facturers.
The present selling advantage of the chains over most inde-
pendents is shown by the much greater rapidity of their turn-
overs. In some lines and in some respects these advantages
Chains are due wholly to legitimate buying, selling, and pric-
Selling ing. In others it is due to manipulation of stores or
4dvantages departments so as to carry some at small or no profit,
and discourage competition. They push their own brands.
276 THE CHAIN STORE
When they have many stores in a locality they can advertise
locally, which independents cannot do, alone. Premium ad-
vertising is a strong feature with most chains. But all these
are temporary advantages which the independents can neutral-
ize, and already are beginning to neutralize, by organization.
National advertising has been started by the combines before
the chains.
When we come to sales management and personnel, we find
the glaring weakness of the chain. Inadaptability of salespeople
who can with difficulty be handled in the mass give great advan-
tage to the independent storekeeper who has only a few people
to control and educate and those under his personal supervision.
Lack of competent managers limits and delays extension. Graft-
ing is a great occasion of loss.
The chains are seeking to overcome these disadvantages, but
they can never in the nature of things get the same kind of serv-
ice out of cheaply paid employees that independent proprietors
can give, particularly when the profits now going to chain-store
proprietors shall be going into the pockets of the independent
proprietors. While the independents are short-sighted and in-
capable, chain-store automatic selling will rout them. They have,
ºr. begun to learn, and through organization will learn
a.Ster.
In accounting the chains have no natural advantage over the
independent retailer, although at present they utilize the best
methods while the independents generally do not.
X. * The chains’ cost of doing business is generally reputed
ccounting tº & 5 © º
... as being greater than the independents’. This is a
mistake. The total overhead of the chains is often
very much larger, but when this is divided into a large number
of stores doing business, it often shows surprising figures. But
this can hardly go on. The greatest savings by system in the
chains’ organization have already been made. They can hardly
be repeated, except in the organization of other chains and the
independents. Competition will bring the costs up.
There is, in short, apparently not one advantage the chains now
enjoy which cannot and will not be cut down in time by the in-
dependents. Even the manipulation of stores and departments,
and in cutting prices and carrying stores and departments at a
loss in one locality in order to kill off competition, is not solely
their opportunity. The retailers’ co-operatives could easily
meet it by supporting a local member in fighting back. It is a
THE CHAIN STORE 277
mere detail of organization. But there is likelihood this kind of
competition will be declared unfair and penalized. Although
the courts have not yet passed on it directly, it was one of the
condemned practices of the old Oil Trust.
The real superiority of the chains over the independents, even
when combined, is a superiority derived from the past. They
were first to develop combination of resources and co-operation
of personnel on a large scale, and are still profiting by it. They
have standardized organization and selling methods and cut out
wastes. In common with nearly all retailers, they have been
guilty of unfair competition, but they do not owe their success
entirely to it as many observers think. They have made a great
contribution to American business.
But against this present superiority set the highly important
fact that these standard practices to which the chains owe their
rapid growth are no longer their exclusive possession, their in-
valuable trade secrets. They were developed at great cost over
many years by high-salaried and profit-sharing executives; but
they are now known to all live independent dealers. Men are
continually going out from the chains and opening stores and
chains of their own. Trade papers in each line explain and dis-
cuss every detail of their management. The result is that the
methods have become public property, the recognized standard
ways of doing business at retail which good executives are ex-
pected to know and practise, and which ultimately all will prac-
tise.
Thanks to the chains, all retail business is being standardized,
and in consequence the chains are losing, even if slowly, the
enormous advantages they started with. Unless
Retail they can find new advantages to take their place, they
* will find it harder and harder to shake off even the
º, little fellow.
Standard- * W
*zed Can they find such advantages? They have already
found one. The only big outstanding improvement in
method the United Cigar Stores have made in the last five or
six years is their recent decision to open agencies in cities and
towns where they have no stores. A smaller chain claims this
was its idea first. It is a big idea anyway, for this reason: that
agencies will enable the United Cigar Stores to blanket the coun-
try as it could not otherwise do for years and then advertise its
own private brands nationally, as well as locally.
The first chain to get national distribution and begin national
278 THE CHAIN STORE
advertising will have an enormous potential advantage over its
competitors.
Faced by two kinds of combination, that of co-operating retail-
ers and co-operating manufacturers, and possibly a combination
of the two, we do not see how the chains can prevail.
*...* Their weakness, as said, is in their employees. They
facturers e * e Լ g
Č.ie must give them exceptional training to become reliable
machines, and yet training qualifies them for higher
compensation which the chains will be unable to give in most
instances. The same thing will not be true of the co-operative
retail movement, unless the retail proprietors practise the same
methods. If they share their earnings with their employees in a
larger way than the chains do, they will get the better employees
and the better business.
But what of the manufacturers? It must be said that our
conclusions as to the chains, which might also be applied to many
big department stores, are not shared by these latter.
“All of these price-maintenance suits, appeals to Congress, and
declamations in the press and trade journals are the last frantic
struggles of the manufacturers to retain their power,” said a
leading department-store merchant the other day. “The time
is close at hand when there will be no manufacturers’ brands,
but the public will walk into our stores, look over the stock and
choose goods on their merits as they appear to them. There will
be no national advertising to bias their judgment. We ourselves—
the retail trade—will do all the advertising.”
A chain-store proprietor might have said the same thing.
That is the way it looks to him.
Some manufacturers see a menace in the growth of the co-
operative combine.
In either case, why? Because they see that, whichever has
the power, the temptation to insist on buying cheap and substi-
tuting its own private brands for the nationally advertised brand
will be the same.
The power, as pointed out, is being secured, chiefly though
not exclusively, through quantity purchases at quantity prices,
as well as “extra discounts.” The cutting of prices may not
be general, may concern only a few brands, but it conveys the
idea of relative cheapness and starts the custom toward the
chain store. But the danger, of course, is not so much in the
fact that the chain cuts the price on merely twenty or thirty
items now, but that the chains or combines will, if their growth
THE CHAIN STORE 279
continues and they transact an ever-larger volume of the business
of the country, have it in their power, as it certainly will be to
their interest to stop spending their money in advertising the
national brands, and push their own brands more and more ex-
clusively.
It will be time enough to cross the bridge, however, when we
come in sight of it. Many things may happen in the meantime.
The restoration of price maintenance by contract or notice would
unquestionably hurt the chain-store movement. So would the
curtailment of “inside prices,” whether forbidden by law or
carried out by the manufacturer. The whole manufacturing
and advertising world is still dazed by the decisions of the Su-
preme Court, which have so powerfully aided in the revolution-
izing of business. When it recovers, there will be a new chapter
written.
(3) CONCRETE INSTANCES OF THE EFFECTS OF CHAIN STORES
TJPON SELLING PFOBLEMS
A striking example of what large-scale selling operations may
mean to a large-scale producer is found in the case related in the
following unsigned article which tells how a cotton mill used to
contract with the Woolworth Company to tide over a slack
period in business:
*A cotton mill up in New England recently made an arrange-
ment with the F. W. Woolworth Company for the latter to take
its entire output of mercerized crochet cotton and sell it, under
the name of “Woolco,” in the company’s syndicate of five- and
ten-Cent Stores.
This was real news to the trade when it first learned the fact
through the forty-two-inch advertisement appearing over Wool-
worth’s name in a woman’s magazine. Ordinarily, there would
have been no heart-burning over the arrangement, but on ac-
count of the European war, the lot of the cotton mills, as every-
body knows, has not been an excessively happy one. Cotton is
low, the demand is slack, and few mills have been looking for
business in advance of a general business recovery. Conse-
quently, this forward drive of one mill in a rather unexpected
*Printers' Ink, April 1, 1915, p. 1.
280 THE CHAIN STORE
direction has set other mills, advertising agencies, and publica-
tions to thinking.
Markets like the five- and ten-cent stores are not common.
They are not open to all manufacturers. Thousands of the
readers of Printers' Ink have no interest in them whatever, but
there is one thing at least that these store syndicates stand for
that is of the most vital interest to every distributor in the
country: they know their market, they know what the public will
buy, or if they do not know that in every case, they know how
to find out.
The manufacturer who goes to Woolworth can learn, without
expense, almost as it were by pressing a button, what they can
and what they cannot sell in the 750 or 800 Woolworth stores,
located in practically every city of 25,000 or more throughout
the country, and in many other stores in cities as low as 5,000
population.
A manufacturer, we will say, has a product he wants to
market, but he hesitates and is uncertain about the extent
of the possible demand. Will people really buy it at the
price? Does it look too cheap? If he were sure of the market
he would put more value into it at the beginning, and dis-
courage possible competition. But he is not sure. If he could
only get a line on what the popular demand is for, on what people
will buy!
Well, if he can sell in the five- and ten-cent field, the problem
is already solved for him, as it would be solved for others if the
Public principle were extended to other fields. No other
“Wants” field has been so organized and systematized as this,
Revealed and in no other is it possible to find out with so little
* * expense and so much assurance of the correctness of
the answer.
You send your salesman, or go yourself, say, to one of the
25 or 30 Woolworth buyers. You await your turn in a tremen-
dous crowd outside the door. When it comes, you state your
proposition. If it comes in the class of old propositions, it is
accepted or rejected on the spot. The buyer is expert and knows
values. When the article is a novelty, that’s different. It may
be tentatively accepted. “Send samples and I will look them
over,” you are told. You do so. Two or three weeks elapse.
Meanwhile the system is working. Then comes the decision.
The proposition is turned down or, presto! the suction power of
nearly 800 stores is clapped on to your plant.
THE CHAIN STORE 281
It is all done. You are paid in cash, but there would be no
doubt about the sales in any case. Everything from buying to
selling is almost perfectly automatic. You drop the
. goods into the buying hopper, they run out into the
A.io retail chutes, fall into place on the five-and-ten-cent
tables and are automatically appropriated by the
public. Mistakes are just about impossible, and we shall pres-
ently see why. The goods may stick in a few stores, but they
ji soon bundled out of there and moved along to where they do
sell.
The goods actually sell themselves. There is a point there:
no selling pressure whatever is exerted. The salesgirls are autom-
atons. The big windows and the counters show nothing but
goods. Big values at low prices match up with the wants of the
crowds that come in to browse and buy. You get an absolutely
accurate picture of what the people uninfluenced and uneducated
in any way will buy. -
The truth is that the big five-and-ten-cent syndicate like Wool-
worth’s is a buying rather than a selling machine. And yet
that is not strictly accurate. It sells through its prices, its
values, its display, the store location. Only not through what
we call “sales effort.” All the effort there is is at the buying end,
which is the big end, and day by day the round-up of effort
goes On.
It is hard to see how much more automatic the buying could
be made, but you never can tell. Already it is so systematized
that the old-time buyers, who have grown up with the business,
and taken part in getting up steam for the organization, and
cutting out the wastes, and who are earning $25,000 and more a
year under the profit-sharing system, will soon retire and leave
everything in charge of younger buyers, who inherit the system
and whose earnings are consequently much less.
And what is the system which can cut a buyer's earnings per-
haps in two, and yet get equal results? How can you system-
atize taste, choice, and all that sort of thing?
sº It is the simplest thing in the world—now that it
# §. has been done—and more trustworthy than if they
had had a corps of $50,000 buyers.
The system consists in finding out what the public habitually
buys in the stores and then comparing every new proposition
with it. The $25,000-a-year men are not valuable so much
because of their extraordinary knowledge of values and ability
282 THE CHAIN STORE
to buy cheap as for their ability in perfecting the system which
has now rendered a large part of such individual knowledge
useless. ę
Neither salesgirls nor stock clerk were required to know prices
or values, or anything more than the place of the goods. This
made it possible to dispense with all but the cheapest help and
to replace them without friction.
Above these cash-girls there were floor-walkers and above
them the store manager.
In the beginning these store managers were highly important
in the Woolworth organization; so important that the man at the
head yielded them 49 per cent. of the net profits and treated
them as partners. The inspectors who afterward became a
part of the system visited these managers, and discussed im-
provements in the most tolerant way. Managers often re-
mained for years in the possession of a given store, and made
$5,000, $10,000, $15,000, and some even $25,000 or even more
a year. Many Woolworth managers used to come down to
work in their own cars.
The importance of the managers appears to have continued
great during the formative period and practically up to the
time of the merger; that is, until the system had been
*†. developed to something almost self-operating.
... But after the first few years and while the managers
were still important, it was realized that they were
too important to be allowed to remain long in one place.
They were needed for organizing and systematizing more than
they were for running the system. That work might be turned
over to less important men.
Their contracts therefore ran for a year, and they rarely
stayed more than two years in any one place, but were moved
on into new territory and given the task of building up new
outlets. Sometimes they had a chance to make even more than
they made before, but generally it had to be less, because the
company naturally picked out the best cities and best locations
first, and expanded progressively into less and less desirable
territory.
Under the earlier régime, these managers carried most of the
store experience under their hats. But gradually the organiza-
tion of the stores, the systematization of reports and the develop-
ment of buying sense and buying power made the functions of
the manager less important. More and more initiative went
THE CHAIN STORE 283
from him to headquarters. Methods were standardized and
inspectors dropped in at all times to see that the methods were
observed and that the stores were being kept up to the standard.
They did not so much “consult” the managers as lay down the
rules and spy out the land.
With the merger and the new economies to which it gave rise,
systems became more self-sufficing, and the profit-sharing per-
, centage of the store managers was cut from 49 per
"gº ° cent. to 35 per cent. and 25 per cent. and even 15 per
6.” cent. With many stores it is now 8 per cent. Some
managers yet made $5,000 or more a year, but few if
any now come down to work in automobiles.
That which made this saving possible, that diminished the im-
portance of the store managers, were the elaborate reports on
the stores’ condition, amount and kind of stock, receipts, ex-
penditures, etc., which the managers were obliged to make daily.
This went up to headquarters and occupied a large corps of
bookkeepers and clerks in reducing the order that was desired.
The system was ponderous but it enabled the company to
know just how many spools of thread, pieces of lace, screw-
drivers or nutmeg graters were being sold day by day and in
what places, how much was in stock, etc. In other words, it
furnished a daily inventory that showed what the people were
buying, and how much, and where.
As there was no problematical element of “sales effort” to
consider, it is evident how much this simplified the buying.
Every buyer knew to a dot what the demand was for a given
article the week before, the month, year, and decade before.
He knew what rate of increase to allow for new stores. Varia-
tions in good and bad times were the only dubious things that
had to be considered.
There seemed to be an incalculable factor in the novelty, the
article the company had not bought before, with which it had
no experience. Perhaps you think that here at last
*#. “ſ was the nut that would not crack. As a matter of
Rºjº, fact, the buying of novelties proved no more difficult
to systematize than the buying of staples.
Novelty propositions, looking from the inside out, were
of two kinds—those that had to be snapped up quickly and those
that could wait for the system to work. The buyers were on
tiptoe to snap if they had to snap, and if it were worth while
to snap. Otherwise they passed it up.
284 THE CHAIN STORE
But with every other kind of novelty proposition, the rule and
practice was to put it up to the store managers. Their verdict
was not necessarily final, but it was formed on the firing line
and it counted.
When the proposition was presented the buyer asked for
samples, and those samples went out to every one of the store
managers. As this was a matter of almost daily occurrence, a
blank form was provided for the answers, and on this the man-
agers told what they thought of the sample and its sales possi-
bilities in their stores; how many of them they could sell in a
given time, whether it would subtract sales from something else in
stock, whether it would be good for window display, whether
it was too late for the season, and many other questions along
this line. t
The sales managers filled out the blanks at once and sent
them back. The returns were compiled and compared at head-
quarters, the tenor of the answers noted and reported to the
buyer.
That was the buying system. The buyers who stand at the
head of it are all men who have been drilled in it from the stock-
Buyers room up. They have watched the stock, the sales
Graduates force and the crowd, as floor-walkers. They have
of 89* made out reports, handled help, kept in touch with
headquarters as managers. As inspectors they have studied
many stores and dealt with all types of store managers. And
when they got into the buyer’s office and had a half-dozen or
dozen lines to buy they knew every item, every value, every
house that sold them; they knew the company’s policy and its
buying power, and they had the elaborate system to test and
back up their judgment as well as keep them in touch with the
market of the day.
That is the Woolworth buying system, and it differs very little
from that of other big five-and-ten-cent store chains. It is
almost humanly impossible to make any buying mistakes with
such a system as that. One would have to be peculiarly gifted
to break through the cordon of safety devices and involve the
house in any disastrous venture. There is no room for any-
thing of the sort.
There is, to be sure, an element of chance. Conditions do
change and the voice of even 700 or 800 store managers is not
the voice of Providence. But minor discrepancies can be ad-
justed. “Stickers” in one store or locality can be shifted to
THE CHAIN STORE 285
another where they have gone better. There is always a way,
and the system takes note of it.
The manufacturer who comes to the syndicate has this certi-
tude, that everything he could possibly do to test out his propo-
sition will be better done for him.
And the manufacturer who does not sell the five-and-ten-
cent store trade can draw some excellent suggestions from the
sumnestions?” It is an advantage to know what is the very
| * last notch in buying efficiency. It might be possible
to pass the knowledge of it along.
There is one more important buying point to mention, which
illustrates the trend of the times and shows what people buy.
Most manufacturers who do not sell the five-and-ten-cent syn-
dicates doubtless are not aware of the point.
The Woolworth company expects to buy the articles of a
certain line it retails for 10 cents at $8.50 a gross. A manu-
facturer calls on the buyer, shows his sample, and says:
“I can make up these for you on a large order at $8.25 a gross.”
If he has not had any experience with the stores, he expects
to have a long argument on why he can’t sell them for $8 flat or
at least $8.15. The buyer surprises him by telling him:
“We don’t want them any cheaper. We want them better.
Here are some other samples of goods like yours. Can you
put better value into yours at $8.50 so that it will show 2 If you
can, we will do business with you.”
The syndicate, you see, is looking not for long profits, but for
the rapid turnovers which not only represent healthy trade for
the minute, but are the surest gauge of the same kind of pros-
perity in the future. Taking a long profit would mean stand-
ing still, whereas putting more and more visible value into the
fixed prices is continual publicity and attraction for the store.
It is the fixed prices which made this buying policy inevi-
table for the more or less staple goods with which people are fa-
miliar, and any improvement in the appearance of which they
are quick to note.
With novelties the case is, of course, different. Quality is
then a secondary consideration, and there is no reason for the
chain's neglecting to buy as cheaply as possible. And the same
is true with trademarked goods, whose value is already known
and fixed. -
So there is the system. Before it was perfected everybody
said it was impossible, it could not be done. Now that it has
286 THE CHAIN STORE
been done, they say it is over-systematized and cannot last. But
the earnings of all of the big ones go on increasing, with the
possible temporary exception of one or two which are said to be
sharing the misfortunes of certain districts where, for local causes
purely, business generally is in a stagnant condition. All the
other syndicates are flourishing in spite of the war, and Wool-
worth’s, of those reporting, shows the largest earnings per $1
invested.
The cash basis on which the syndicates operate puts them in
the advantageous position, expecially during dull times, of
eliminating bad debts and being able to discount all their bills.
Woolworth sales, for example, totalled $69,619,669 last year
and accounts and bills receivable amounted to but $146,818,
or two tenths of 1 per cent. of the sales. Accounts payable
amounted to but $179,486, as against inventories of $10,491,040.
Thus, on the whole, it would seem pretty safe to trust the
syndicates’ buying experience as being sound.
There is a suggestion of an opportunity for co-operation be-
tween national advertisers and well-conducted chain stores in
protecting the interests of the public in a circular which was
issued in 1914 by the Owl Drug Company of San Francisco.
This company operates a large chain of retail stores on the
Pacific Coast, and, while at one time it was reputed to employ
both price-cutting and substitution, it has, in recent years,
adopted a somewhat different plan. It has based its appeal to
the public more on the quality of its services than on its ability
to undersell. This fact gives to the circular particular interest.
The circular is as follows:
*For some time manufacturers have resorted to conspicuous advertising to
warn the public against the practices of those firms which offer “something
just as good” when standard products are called for. We wish you to know
that we are in perfect sympathy with these manufacturers, and we hope that
the time is not far distant when a firm making a false statement regarding
another’s product will be subject to the extreme penalty for libel.
The Owl Drug Company, operating 20 retail stores on the Pacific Coast,
instructs its salespeople to sell without adverse comment any proprietary article
called for. This policy of The Owl Drug Company means that we give manufac-
turers unhampered opportunity for the sale of their products, and without calling
*Printers' Ink, June 18, 1914, p. 32.
THE CHAIN STORE 287
on the manufacturer to make good our loss we have for years made exchanges
or given refunds to customers dissatisfied with their purchases. We now
intend to broaden our policy, and to announce in the newspapers that if any
article offered for sale in our stores proves to be unsatisfactory in any particular,
we will refund the purchase price.
To be able to adhere to this policy, which we believe to be only fair to the
public and parallel to what the manufacturer is asking of the distributor, we
must have the approval of your judgment and your cordial co-operation.
W. M. Berg, secretary and general manager of the Owl com-
pany, writes Printers' Ink in further explanation:
“This means that any patent medicine or toilet article must be
guaranteed to the extent that we will promptly refund the pur-
chase price if the merchandise is not as represented by the manu-
facturer or ourselves. This policy should appeal to the manu-
facturers who are honest with the public.
“One of our circulars is being mailed to every manufacturer
with whom we do business, and it will be interesting to see how
they receive it. One thing is certain: we are in earnest and
intend to see this matter through on the lines indicated in the
circular.
“It is just possible we will find some manufacturers who will
not protect us on this “money back’ proposition, and after we
have used all the moral suasion in our power, if they are still
refractory, we intend to label their preparation with a sticker to
the effect that such preparation is not sold on a ‘money back.’
basis because the manufacturer will not stand behind his product.
We believe that almost every manufacturer will prefer to stand
behind his goods rather than have them labelled this way when
they leave our stores.”
CHAPTER VIII
THE WHOLESALER AND NATIONAL ADVERTISING
least a portion of his trade by means of a brand or
brands which he owns. When this can be done, it
gives the wholesaler two advantages in conducting his business.
It “ties” his trade to him, and it makes him feel more
independent in the matter of sources than when he de-
pends on the makers of products whose brands he does not
control.
When a wholesaler develops his own brand its success puts
the national advertiser of similar lines into direct conflict with
the wholesaler in two ways. It tends to reduce the whole-
saler’s value as a distributor of the manufacturer’s lines, and it
makes him a direct competitor of the manufacturer in those
lines.
Two phases of the wholesaler’s place in the problems of
national advertising present themselves conspicuously among
the developments of the past year. (1) There has been some
advance in the definiteness of opinion on the part of wholesalers
in regard to national brands. (2) Some new and successful
methods employed by national advertisers in getting the support
of wholesalers.
Nº. every wholesaler has visions of controlling at
(1) wholBSALERS’ VIEWS OF NATIONAL AND PRIVATE BRANDS
H. M. Hughes of the firm of Blair & Hughes Co., wholesale
grocers in Dallas, Texas, is somewhat more favorably inclined
toward nationally advertised brands than most wholesalers are.
In a recent contribution to Advertising and Selling he gives very
288
THE WHOLESALER 289
clearly his reasons for preferring national brands to what are
generally known as private brands owned by wholesalers.
*It is an indisputable fact that all forms of deception must
necessarily be discontinued in merchandising in order to retain
and increase trade.
There is no reason for the existence of private labels unless
those putting out goods under private labels want to secure a
sufficient distribution to monopolize the business on certain
products by getting them into consumers’ demand and favor
in order that they may eventually raise the price, making an
abnormal profit. In case they cannot make this profit by
raising the price the first inclination then is naturally to cut the
quality.
The manufacturing interests, I have reason to believe, are
fast realizing that there is nothing to be gained by packing goods
Wh which lose their identity as soon as they leave the
3/ fact d this is the case when they are put out
Should Ia CUOry, an S y are p
Manufac- under the jobbers’ private label.
turer’s Every manufacturer of importance in all lines real-
%; #º izes that an established business in his products
entity ? e º * - tº
means increased business from year to year, and it is
impossible to establish his goods unless they go out under the
factory’s name.
It is perfectly natural for a manufacturer who is manufactur-
ing some goods for his own label and some for private labels
to put the best goods under his own factory labels, and there
are scarcely any goods manufactured that run uniform at all
times. This is especially true in regard to canned vegetables
and fruits, for if the early crop is good and weather conditions
or other things occur to damage the later crop, it is impossible
to can as good an article out of the later crop as you can out of
the earlier.
However, granting that in a few isolated cases the manufac-
turers may furnish to the jobbers for private labels as good
quality as they put under their own labels, what is there to be
gained by the manufacturer? If a manufacturer packs a su-
perior quality of goods for private labels one year and the jobber
goes out and distributes them, when the jobber gets ready to
sell the same brands another year he effects sales on the quality
*Advertising and Selling, June, 1915, p. 12.
290 THE WHOLESALER
of the goods that the manufacturer has packed for him the pre-
vious years and cut samples out of this manufacturer's pack to
effect sales. However, when the jobber gets ready to make his
contract, if this manufacturer will not make the price, he will
place his business with some other manufacturer, possibly in a
section where nature’s provision does not enable the growing of
such commodities as well as it does in the section in which the
goods were formerly packed.
The retailers and consumers who buy these goods the second
year do not get value received. It is along the same line as a
salesman using a sixteen-ounce package of goods as a sample and
shipping a fourteen-ounce. This would be considered sharp prac-
tice, in fact, would not be tolerated. However, this is no more
wrong than to use samples of the highest quality and ship grades
which are not equal.
The fact that a jobber wants to put goods under his own label
is an open admission that he has not the marketing ability to
take open factory brands and compete with others in his line,
I believe that every jobber should have sufficient self-confidence
in his marketing ability to be willing to go out after business
on open brands which the retailer and consumer have opportu-
nity to know about and know what others handling the same
goods are getting for them. This is the proper basis on which
merchandise should be handled and the only one that will stand.
It has come under my observation during the last six to eight
months that a number of the largest and most reliable manu-
Manufac- facturers who have been packing private brands have
tji, discontinued them entirely, preferring to be benefited
continuing with the retailers and the consuming trade by the
#.. superior quality of the goods they are packing.
7"O!??, I believe that it is only a matter of a short time until
the jobber who packs private labels will either have to manu-
facture his own goods or go back to factory labels, for it is im-
possible for a jobber to divide his attention between jobbing
and manufacturing and put up the quality of goods that a
manufacturer can who gives his time and attention to manu-
facturing. e tº
A number of jobbers of private labels have pursued a course
of going into certain towns and cities and giving the retailer
control of one of their private labels. This has resulted in the
retailer trying to buy everything in the grocery line under this
one label. -
THE WHOLESALER 291
It was not a question of whether the packages contained
fourteen or sixteen ounces or of the quality, so much as it was
that the products were under the jobber's private label and no
other retailer could get it in the city.
The consequence was that the jobber naturally raised prices
on the goods from time to time. Having given control of this
label to one local merchant, the jobber was prevented from solic-
iting business under this brand from any other retailer in that
town, and the shortage in volume had to be made up by a long
profit. The retailer in question would feature this private
brand to the exclusion of all other goods, and when a manu-
facturer came along with another piece of goods of better quality
or lower price, on which there was possibly national advertising,
the retailer would refuse to buy it, as he wanted everything
under the jobber's private brand, which he controlled.
A number of such retailers prospered in the past, but investi-
gation now shows that the better class of retailers have discon-
tinued this custom entirely and are buying open brands of
goods, which can be secured not only in every store in the city
in which they are in business, but over the entire United States,
as their former action has stifled competition, and many times
kept them from buying goods under the manufacturers’ label at
more attractive prices, thereby giving the consumers better
value for less money.
Another reason that retailers cannot afford to buy private
iabels is on account of the shifting population in the United
States, especially in the West and Southwest. Practically every
jobber who puts out private labels localizes them by coining
Some word which is derived from cities in which the brand is
sold, or the name of the local retail firm. When a consumer
moves into a new section he buys goods from a retailer who is
handling other localized private brands, and the retailer nec-
essarily has to explain each item to him, as he has been accus-
tomed to some other brands.
If the dealer were handling a manufacturer’s brand which was
sold over the entire United States, and, in a great many cases,
nationally advertised, he would have no trouble whatever in
selling the brands the consumer wanted and would not be forced
to make substitution, which is so distasteful to consumers.
As an example, 75 per cent. of the consumers are familiar
with such brands as Cottolene, Welch’s Grape Juice, Carnation
Milk, Eagle Brand Milk, Hunt Bros. Quality Fruits, Karo
292 THE WHOLESALER
Syrup, Quaker Oats, Cream of Wheat, Price's Extracts, Price's
Baking Powder, Royal Baking Powder, Snider’s Pork and Beans,
Beechnut products, and Spearmint Gum. They will not question
the retailer in regard to quality, as they have been accustomed
to buying the goods wherever they lived.
It is the policy of my own concern to adhere strictly to fac-
tory labels, and I know from our own experience that we are
gaining ground every year. We would like to see more jobbers
in the private label business, so far as our own interests are con-
cerned, because it enables us to get more good lines under fac-
tory labels and to sell a great many more goods than we could
otherwise.
Our position is that we have no one to favor and will not stand
behind any manufacturer who does not put up a good quality;
we are always free to handle the products of any manufacturer
who can show us better goods for the same money. This places
us in an enviable position with the retailers to whom we sell,
as they know that it is not to our interest to stand behind any
piece of goods that has not the merit of both price and quality.
I believe that the next five years will place the distributors of
factory label goods in even a better position than they now
occupy, and I am glad to see the tide change, which is giving
the consumer better goods for less money under factory labels
than they can secure under private labels.
The national advertisers of well-known brands are, of course,
positive that the national brand is much sounder in principle
than any private brand can be, and that wholesalers would do
well to give their whole-hearted approval of such brands rather
than to undertake to develop trademarks of their own under
ordinary circumstances. In an address before the National
Wholesale Dry Goods Association in New York on January 21,
1915, Alvin Hunsiker, Vice-president of the Standard Oilcloth
Company of New York, outlined the manufacturer's position
in the following terms:
*It is to be presumed that if all the distribution machinery
was equipped with anti-friction ball-bearings the great problem
of annually distributing in this country the many million dollars'
*Printers' Ink, January 28, 1915, p. 70.
THE WHOLESALER 293
worth of merchandise would be simple. There is greater effi-
ciency in everything these days. The waste in time and money,
the lost motion and extra operations have been eliminated.
Why should not the same principle apply in the service that is
to be rendered to the purchasing public? . . .
Modern merchandising is a scientific problem, and the most
successful merchant is he who adjusts his business to the con-
Jobbers ditions that confront him from day to day. Time
And brings its changes, and men conducting business must
Advertised recognize the modern factors that are entering into
* the conduct of business. The wonderful growth of
advertising must be taken into consideration. This is a day of
large business and large advertising appropriations. Advertis-
ing is an investment, not an expense. The essence of success
in the manufacturing business is production. In a fairly large
business an increase of 10 per cent. in production will take care
of a large advertising appropriation, whereas a large advertising
appropriation usually adds from 25 to 50 per cent. increase in
production. The advertising appropriation, even a large one,
therefore, eventually results in lowering, not increasing, costs.
This problem has been so satisfactorily proven that many con-
cerns have become national advertisers to great advantage with
regard to their cost sheets.
Every reputable manufacturer these days trademarks his
goods and guarantees the quality. He takes pride in his prod-
uct and educates the trade to the merits of his goods and en-
deavors, as far as possible, to standardize his selling prices.
It is obvious, if a dealer is convinced through the still-hunt
salesman, advertising, that a certain article has merit and is the
best for him to sell that he naturally wants to know where he
can secure it. For this reason it would appear that if the whole-
saler who wants to increase his business would advertise the fact
that he carries a full line of nationally advertised articles, nam-
ing them in turn, and that he renders exceptionally good service,
he would be linking together a pulling proposition—the pro-
ducer's ready-made demand and the wholesaler’s easily dis-
tributed supply. After all, the supply and the demand is the
answer to all merchandising propositions.
Occasionally a wholesaler may be found who does not handle
articles of merchandise, well advertised, and sold to the trade at
a uniform price. He reasons that he can do better by purchasing
other lines at less money and sell them at or near the estab-
294 THE WHOLESALER
lished price of the advertised line. This sort of merchant for-
gets that in every industry usually some one particular line
fixes the standard and becomes, so to speak, the governor for
that industry. It steadies the market, keeps the average price
more nearly on a level during extreme fluctuations in the raw
material market. It sets the pace in style and in quality. It
is, in fact, the barometer for the trade. The merchant who
religiously, persistently, and with premeditated forethought re-
fuses to purchase quality lines and sells less desirable and less
dependable ones at the quality line price does not seem to realize
that if his line of action was followed by many wholesalers it
would result in “killing the goose that lays the golden egg,”
for the established selling-price plan contemplates the co-opera-
tion of the producer and the distributor.
An article of acknowledged merit, well advertised and uni-
formly sold, should not be expected to serve as an umbrella
for less desirable lines. Every article should be sold on its
merit, and the selling price should be regulated accordingly.
A wholesaler who operates in any other way will lose out in the
end.
The established or fixed selling-price plan, which a few years
ago was frowned upon, especially by the political demagogue,
jobber, is suddenly, in these hard times, becoming popular.
jwho We predict it will soon be legalized and firmly estab-
Paddle lished, for it is not only the safest but by far the wisest
* policy to pursue if business methods and business prof-
its are to be standardized and merchants are to operate on sen-
sible and sound business principles.
Some wholesalers also refuse to push trademarked goods on
the ground that, instead of helping themselves, they are helping
the trademarked goods. The man who is inclined to paddle
against the stream instead of running with the current is very
apt to reason this way. He would, on account of his peculiar
point of view, rather sell $1,000 worth of unadvertised goods with
great effort and perchance a little more profit than to sell $10,000
worth of well-advertised goods with much less effort and a regu-
larly guaranteed, and, by virtue of the larger sales, a greatly
increased profit. He is ignoring the old law of supply and de-
mand. He is probably losing time and wasting the patience
of his customers in trying to convince them that he has some-
thing “just as good” when they ask for the advertised and well-
known article. The dealer who reads convincing advertise-
THE WHOLESALER 295
ments week in and week out, year in and year out, advertising a
reputable article, is not fooled by unwise merchandising meth-
ods. The wholesaler who tries to fight against well-directed
advertising instead of tying fast to it by securing the advantage
that it will bring to him in the increase of his business is not
working along the line of least resistance, but is paddling against
the stream. The wise wholesaler will follow the currents of
modern business and not buck against them. He is up against
a condition and not a theory.
Some wholesalers have their own trademarks, thereby ad-
mitting that the principle of trademarking is correct. The
difficulty and risk of a wholesaler standing behind his own trade-
mark on goods manufactured by some one else is necessarily
great. As he changes from one manufacturer to another, he is
changing from one grade to another, and this is always dan-
gerous, for in the case of inferior style or quality he is hurting his
Own reputation and not the reputation of the manufacturer
who is entitled to be hurt. In the case of poor quality it is
much easier to adjust claims under the manufacturer's guarantee
than under his own. tº ſº
One of the greatest stumbling-blocks in the way of a more
perfect distribution of merchandise is the absence of a fixed
policy. Some manufacturers, for instance, are utterly at sea
with regard to a proper selling plan. Instead of a capable and
long-headed executive fixing the selling policy, it is often left
to the judgment of a salesman on the road, who, no matter how
energetic and painstaking he may be, often lacks the discretion
that is necessary. He, therefore, meets conditions as he finds
them, and in many, if not all instances, sells his product at
varying prices and on fluctuating terms. If salesmen of the
same manufacturer on other territories operate on the same plan
it is obvious that the selling plan of such a manufacturer is like
a moth-eaten garment. A selling policy of such a nature is un-
skilful, unwise, unfair, and ruinous in the end. On the other
hand, some wholesalers have no fixed policy, but permit the
head of each department to fix his own policy. This plan per-
mits of as many different policies in some wholesale businesses
as there are departments. As heads of departments frequently
change, the policy of that department changes.
The trained executive frequently takes no part in fixing the
policy of the departments under him, except to hold the head of
each department to strict account for a good showing. In this
296 THE WHOLESALER
way department buyers very frequently are compelled to figure
for one season only, instead of for the long pull. They do not
work along the line of the “best for the long run.” They have
no definite policy for building up a business that will grow from
season to season. They have but one idea and that is the profit
they can make for this particular season.
This sort of policy results in switching from one line to another.
If the necessities of one manufacturer compel him to sell his
product some season under the average price of other manufac-
turers, the buyer jumps in, throws out the line that he has been
running for some years, and puts in the new line for the purpose
of temporarily making a few additional dollars. Such a buyer
is tampering with the good will of his firm and very likely is serv-
ing its customers with an article they have not been accustomed
to receive, an article they do not want, and an article which they
take temporarily in protest. Sooner or later a dissatisfied cus-
tomer will go to a house where he receives what he wants and
what he is accustomed to receive.
The plan of having leaders to attract trade is wrong in princi-
ple, for, if carried to its last analysis, it must be apparent that if
each large wholesale house had three or four leaders it would
not be long before most everything wholesalers sold would be
leaders and the profit on the entire business would disappear
entirely. . . .
The live wholesaler who preserves his own reputation and that
of his trade and who renders real service must have a positive, a
regular, and a dependable source of supply. Some one
Thé, Price has said “90 per cent. of the success in business is
cutter an • 53 * g tº
#... service.” The price-cutting manufacturer is an un-
Reliance certain quantity. He is dependable only for a short
period of time. The price-cutter usually postal cards.
more than he sells. He is a grand-stand player. His methods
are like the devil shearing the pig–more noise than wool.
It should require no great business judgment to definitely de-
termine that to cater to the multitudinous wants of practically
200,000 department stores and dealers in this country, 75 per
cent. of which are general stores, that the services of the whole-
saler are necessary. It naturally follows that the wholesaler
who has the best organization, who sells the goods that sell in the
largest quantity, with the least selling effort, who renders good
and especially quick service, who carries live stocks, who sells at
a fair price, who reduces his expenses to the minimum, and who
THE WHOLESALER 297
has an ever-increasing volume of business with a profit attach-
ment, is on the map to stay. The same arguments apply equally
as well to a manufacturer who operates on the same plan. The
firms who have failed usually have operated under business
methods that were antiquated and unscientific. They probably
belong to the old school. It is safer to beat your competitor
with brains rather than with merchandise sold at a loss. The
suspense account of many unwise merchandisers would pay their
dividends for years.
Business has been passing through a period of liquidation and
fundamentally is on a sound basis to-day. Some time in the
near future business will be very much better, but this big busi-
ness, however, is going to be secured by big business men—men
who are broad-gauged; men who will not stoop to little petty
methods in conducting business; men who will co-operate with
each other and thereby place the foundation of this country’s
business on a basis that will cause it to expand and grow. There
will be no place for the little man, be he producer or wholesaler,
who will grasp at a dollar now and lose a hundred later on.
Among the most notable successes of private brand develop-
ment by wholesalers is that of the “Reen Kutter” trademark,
which is owned by the Simmons Hardware Company of St.
Louis. The “Keen Kutter” business has grown to be so large
that the Simmons Company has in some cases obtained a con-
trolling interest in manufacturing establishments, and has in this
sense become an actual producer of nationally advertised goods.
In connection with the meeting of the Pennsylvania Retail
Hardware Association in Philadelphia in the early part of 1914
the Simmons Hardware Company had a “Keen Kutter” display
which supplied some interesting side lines upon some of the ad-
vertising methods of the company. Printers' Ink, in writing
of this exhibition, says, in its issue of February 26, 1914:
The feature of this display was a long roll of advertisements
cut from magazines and newspapers by the children of Hillsboro,
Ia. Hillsboro is a town of 325 population. The Simmons
Hardware Company offered a prize to the boy or girl who could
collect the largest number of advertisements printed by that
298 THE WHOLESALER
company in the magazines and newspapers of the country. The
result was that 1,150 advertisements were turned in. The larg—
est number of these advertisements were submitted by an
eight-year-old boy, who received a chest of first-class tools as
compensation. The advertisements were pasted together and
were on exhibition at the hardware show.
J. A. Carroll, of the “Keen Kutter” company, stated that
prior to 1905 the firm had only Western offices. In that year
an advertising campaign was started and it was found necessary
not only to open Eastern stores, but manufacturing depots as
well. He stated that Philadelphia was now the second city in
the amount of “Keen Kutter” business being done, St. Louis
being the first. Mr. Carroll declared that one of the greatest
fallacies the public labors under is that the cost of advertising
is charged up against the goods sold to consumers. He said that
it would be quite impossible to distribute equitably the money
expended for publicity, there being 79,000 patterns of goods
bearing the “Keen Kutter” brand, which were sufficient to
necessitate bringing the increase for ad purposes down to a mill
or fraction of a mill on each article sold.
Mr. Carroll declared that a $3,000,000 business was done in
Philadelphia last year, and that the increase directly due to
advertising was 35 per cent. last month. “We have found,”
said Mr. Carroll, “that the man who advertises has the people
with him. Ads make immediate markets for goods. This was
why we were forced to establish branches in the East in order
to meet trade increase that our campaign brought us.”
(2) NATIONAL ADVERTISERs’ PLANS FOR SECURING THE WHOLE-
SALERS’ suPPORT
Several months ago a manufacturer appealed to Printers' Ink
for information as to how advertisers secured the active co-opera-
tion of wholesalers. He reported that he had tried all sorts of
arguments and various methods, including the sending of
letters to the wholesalers’ salesmen, and that his results had
been very unsatisfactory. Printers' Ink put the question
to a manufacturer who has been particularly successful in
securing the co-operation of the wholesalers, and the following
article resulted:
THE WHOLESALER 299
*This question is put to me: “Do you believe in jobber co-
operation?’
My reply is: It depends upon the goods. If the line runs
into money rapidly, work on the jobber can be made to pay.
If the average sale per retailer is small, don’t devote much time
and effort in securing the jobber's co-operation, because jobber
co-operation can be successful only to the extent that working
together affects the self-interest of the jobber. You had better
turn your attention to consumer demand and to the retailer.
Twelve years as salesman and fifteen as an advertising man
have taught me that the consumer, the retailer, and the jobber
respond more readily to an appeal that has self-interest as a
basis, and the closer you stick to this policy the more certain is
SUICCéSS.
Take my own line for example. The goods retail for 50 cents.
The annual sale per retailer will average two or three dozen.
Our output is enormous because we have a distribution of be-
tween 85 per cent. and 90 per cent. This would seem to be an
attractive proposition to the jobber. But let us dig under the
surface and look at it from the jobber's point of view.
In selling through the jobber, we have three factors to deal
with: the policy of the jobber, the buyer, and the salesman.
It must be remembered that in spite of the fact that the jobber
must recognize the power of advertising, there are still many of
them who are not favorable to advertised lines. They wish to
control their lines or brands. They object to being told where
and how they shall sell the goods. Some jobbers will not voice
their objections, but the scarcity of advertised lines in their
stocks is sufficient evidence of their attitude. Others come out
into the open, as, for example, a jobbing house which within a
week cancelled an order given one of our salesmen. The letter
said, “We have decided that we will not handle advertised goods
of any kind.” j
Other jobbers have private brands which the salesmen are
instructed to push and to substitute wherever they can.
Still others carry our line because there is an insistent demand.
They know that orders for other goods almost invariably go
with orders for ours. These jobbers do not want their customers
to go to a competitor, consequently they stock our goods, but
the salesmen do not push them, never offer them, never ask for
*Printers' Ink, January 15, 1914, p. 82.
300 THE WHOLESALER
orders for them, and will not carry our sample cards. If a cus-
tomer asks for our goods the salesman will book his order, but
that’s as far as he will go. He makes it a policy to follow the
policy of the house.
Now take the buyer's view. His standing with his house
depends upon volume of sales and profits. He favors goods that
run into money rapidly and pile up his gross sales. An increase
in his department means an opening to ask for more pay. No
matter how loyal and conscientious he may be to his house he
has both eyes wide open for Number One.
The salesman’s interest is along the same line as the buyer's.
Gross sales count with him. He wants his sales to show an
increase each year because his income is based on volume of sales.
It is unreasonable to expect the buyer to interest himself in
pushing articles that swell sales by inches. It is just as unrea-
sonable to expect a salesman to spend his time selling eight or
ten dollars’ worth of our goods when in the same time he can
book an order for fifty or one hundred dollars’ worth of shirts or
underwear.
The You wouldn’t do it, neither would I, so we must not
Demands lose sight of the personal equation and expect results
of Self- from these men unless it is for their advantage or ad-
* vancement to push the goods.
Let me give you three concrete examples of how great a part
self-interest plays in the selling game.
A manufacturer offered a valuable prize to every salesman who
sold fifty dozen of his product. His sales increased rapidly up
to a certain point—a point about equal to an average sale of
fifty dozen per salesman.
To further increase his sales he offered a more valuable prize to
each man selling one hundred dozen. Again his sales took a
jump, but not as fast as before. It was easy for the average man
to sell fifty dozen, only the top notcher could reach one hundred,
and right here the jobber stepped in and objected to having his
salesmen subsidized by the manufacturer.
To get the interest of the buyers a manufacturer a year or two
ago offered an unusually valuable premium to the buyer who
showed the largest increase in sales of the manufacturer’s goods
as compared with sales of the previous year. It worked well,
and the increase in sales paid a fine profit above the cost of the
premium.
You can interest the jobber by offering extra discounts on
THE WHOLESALER 301
quantities, an extra case of goods with a ten-case order, rebates if
he will sell a certain quantity within a year, and by other stunts
that put more dollars in his pocket.
I simply offer these examples to show that the word co-opera-
tion is a misnomer. Self-interest is the correct term.
There is no fault without its remedy. This article would be
incomplete if an outline of how to counteract the jobber's lack of
interest were omitted.
When a doctor treats a patient for debility he begins by giving
stimulants. The best tonic for the jobber is orders. Repeat
orders for goods will wake up the most indifferent
How to jobber. They prove the demand. They are tangible
* evidence that cannot be passed up.
Jojº, To bring repeat orders the interest of the retailer
Selfishness must be enlisted. It’s much easier to get the dealer
to push a line. He is an entirely different proposition
from the jobber. He is susceptible to suggestions to push our
line. He knows better than any jobber what it means to handle
a live line of extensively advertised goods. He knows that
advertising pays because he sees the proof every day in the de-
mand of his customers for advertised goods. He sees it in the
people he gets into his store through his own local advertising.
No need to tell him how he benefits. There is no more argument
in his mind against advertising than there is against fire insur-
ance. In fact, I believe the dealer has been the prime mover in
actually starting many manufacturers to advertise through in-
sisting that a demand for the goods be created.
I asked a retailer a few days ago whether he favored unadver-
tised goods paying a large profit or advertised lines paying a
smaller profit.
His reply was: “I will answer your question by telling you of an
incident that happened in my store. I carry a certain line of
advertised underwear. It costs me $4.25 per dozen. It is as
good as gold, the demand is steady. When I stock ten dozen
of the line I know absolutely that I will sell every suit. I know
about how long the stock will last, how many times I can turn
Over the money invested in it. I can figure within $10 of how
much profit I will make on this underwear during the year.
“A few months ago I bought a stock from another maker. In
my opinion, it is just as good value as the line I’ve just mentioned.
It is made by a thoroughly reliable house, but it doesn’t adver-
tise. I bought because the price was fifty cents per dozen less.
302 THE WHOLESALER
“When showing this underwear to my customers I guaranteed
it to be just as good as the other line. Some customers bought it
and I never had a complaint, but most of them would say, ‘I
guess I will take the brand I know by name.’
“I finally sold the stock, but it took a long time to do it, and
every sale took time and talk. My conclusion is that it may not
take good salesmanship to sell advertised goods, but it’s a mighty
sight more profitable and better business to follow the line of
least resistance and sell my customers what they ask for.”
Just as he finished telling me his story, a man came in hur-
riedly. “Wrap up a suit of Blank underwear (naming the ad-
vertised line we had been discussing), size 38,” he said, and was
gone. My friend smiled and remarked, “Didn’t cost much to
make that sale. I make dozens of just such quick sales on ad-
vertised goods.”
This retailer is, I believe, a fair sample of the country and
small-town retailer. He is fine timber for the manufacturer to
work on who seeks co-operation.
Interest the retailer in your goods and he will do more toward
putting the jobbers’ names on your books than all the talking,
writing, or persuasion you can bring to bear. Orders talk to the
jobber in a language he understands.
While the retailer will give more real practical co-operation
than the jobber, you have two factions to consider, the retailer
himself and his clerks. If you can interest the clerk in your
product you will make rapid strides to increased sales. It is the
clerk who is the last link in the chain between factory and con-
sumer. It’s the clerk who actually passes your goods to the
consumer. It is just as easy for the clerk to knock your line as
to boost it. He is actually in a position to hinder or quicken
your sales.
Take, for example, the clerks in stores like Riker’s, of Boston
and New York. This concern cuts prices on proprietary medi-
cines and trademarked toilet articles to draw trade.
On nearly every article it has something similar under its own
brand on which it makes a good profit.
The clerks are specially instructed to sell the goods made
by the house if possible. The policy is, push our goods to the
limit, sell the other fellow’s only if you have to.
Riker’s must pay good dividends for they are constantly add-
ing new stores. I’m pretty sure they don’t make their profit
on the cut-price goods. It must be admitted that the Riker
THE WHOLESALER 303
preparations are usually just as good and effective as the articles
they imitate, and they back their goods with a clean-cut guaran-
tee of money back if not satisfied. Riker's is an example of how
much ice the clerk cuts in a customer's final decision on what he
wants to buy.
Another point about the clerk is this. It is human nature to
recommend an article that one personally uses or wears. The
clerk is no exception, and many an article has a large sale in some
stores because the clerks use it themselves.
We have got a long way from the jobber in this article. I had
to ring in the retailer and his clerk to show jobber co-operation,
provided you get it, may be of the least importance.
Remember, it is the clerk who makes the real sale, the sale that
takes the goods off the shelf and rings down the curtain, for an
article is never actually sold until it is in the possession of the
COILSUID1621”.
In my opinion the jobber is simply a distributor. He is a
helpful factor in many lines. That he is not always an absolutely
Price is necessary cog in the wheels of many lines of trade is
the Appeal shown by the hundreds of manufacturers who sell di-
to Jobber rect to the retailer and build enormous businesses.
Take the collar and shirt industries, for example.
Cultivate the jobber as a distributor. Gain his good will by
showing what there is in it for him. Put your co-operative work
on the retailer and his clerks. But before all else get the con-
Sumer—get the public to ask for your goods, and you need not
worry but that the retailer will buy from the jobber to supply the
demand and the jobber will come to you for the goods.
For in spite of the middlemen that stand between you and the
final sale, don’t forget the consumer is the last word.
I hope the readers of this article will not interpret it as knock-
ing the jobber. That is furthest from my thoughts. The job-
ber is a helpful medium in the distribution of goods. He earns
his profits deservedly, and gives in exchange convenient and well-
scattered points of distribution that facilitate the quick delivery
of merchandise. His men visit every town and every dealer in
the country, towns so small that no manufacturer of a single line
could afford to send his salesmen to them. -
But you must not expect him nor his selling organization to do
unreasonable things. You must not hope to gain his co-opera-
tion unless you can show him absolutely that there is money in
it for him—enough money to appeal to his self-interest.
304 THE WHOLESALER
One of the methods for securing the support of the wholesaler
which has been most frequently tried and which, on principle,
seems to offer as good a chance for success as any, provided it is
properly done, is to stimulate consumer demand of the right
kind. W. W. Garrison reports in the following article the meth-
ods employed by three national advertisers in bringing this
about:
*Passing along Lake Street, Chicago, on the Oak Park Elevated
Railroad, you can see a little one-story machine shop. It isn’t
visible from the street level because it is screened by another
frame building on the front of the same lot.
This was four years ago. Since then a large national business
has grown out of the back-lot machine shop through a change of
products from one that was sold to manufacturing concerns to
one sold to the consumer masses—and the addition of national
advertising.
The machine-shop proprietor was netting about $20 a week.
He hit on a machinery idea that had possibilities. A patent was
secured. The product, however, was not one that appealed to a
large class of trade. Its market was tiny.
The field of goods into which the invention fitted was dom-
inated by two great companies which did 95 per cent. of
the business. Two friends and a few hundred dollars were
interested in the invention. The business was a hand-to-mouth
proposition. They built the product as buyers paid their bills.
On two occasions efforts to steal the invention were made.
The machine-shop proprietor happened to be a native of a
small Iowa town, and in the course of time he succeeded in in-
teresting some money there in the business. He secured
$10,000 upon the stipulation that he move the business to the
Iowa town.
At the end of a year there the product showed a book profit.
There were no dividends. Competition in the field occupied by
the product precluded any monumental success. The big stick
of competition seemed to have just about marked out a certain
distance that small fry could go, and there sales stopped.
But finally, out of the original idea, the machine-shop proprie-
tor evolved an article that had for its market the masses rather
*Printers' Ink, February 18, 1915, p. 34.
THE WHOLESALER - 305
than the restricted field of manufacturers. To the inventor it
looked salable. But the financing parties laughed at it because
of the peculiarities of its construction, even though it did have a
function in almost any home and filled what was believed to be a
real want.
“Stick to the original goods,” the stockholders said. “Fight
it out on that basis.”
But as a test, the inventor made up a model and went to a big
New York jobber, who by reputation is the oracle in his line.
He, too, laughed at the goods. “They won’t buy that,” he said.
“We’d be idiots if we took a chance by stocking any of them.”
In spite of this turn-down—and while the original product was
being made—the inventor worked out the copy for a small leaflet.
He spent $25 getting the cuts made and the printing done. It
described the goods, painted the picture of the possible sale.
He mailed it to a number of dealers. There was some re-
sponse, a few sample orders which were filled through jobbers
Changing the dealers named, in spite of the apparent attitude
the Jobber's of that avenue of trade. This little encouragement
*nd stimulated the stockholders into the expenditure of a
little over $100 for an advertisement in one national medium.
The ad brought back $165 in cash and a few over one hundred
inquiries.
One of the more imaginative stockholders saw possibilities in
those results. In another business he had been a small national
advertiser. “Get into big space with this. These results,
though secured on a tiny scale, prove beyond question the sala-
bility of the goods. Then get the dealers and jobbers as quick
as demand is evidenced.”
The factory then was a two-story building of 50 feet wide and
150 feet deep. At that time that was ample space.
The recommendation of advertising counsel was for fair-sized
space in mediums which could be used with the appropriation
allowed by the stockholders.
A letter that purported to be semi-confidential was written to
the jobbers informing them of the decision to create consumer
demand by the use of copy in national media. They were told
of the article, the uses and how it had been refined. The picture
of demand was impressed upon their minds. A leaflet accom-
panied the letter.
Jobbers were apathetic. No orders came.
Then a circular was prepared for dealers. National ads were

306 THE WHOLESALER
reproduced. It was a simple affair. Space was left for the
jobbers’ names. The post-office address of the company was
gºtted It was ostensibly a circular printed by the job-
€I’.
Jobbers were asked the number of names of dealers on their
mailing lists. This number was printed with the jobbers’ names
inserted in the blank space. The circulars were shipped out.
Jobbers sent them out in letters, in packages, and with other
circular matter. This was three weeks ahead of the first appear-
ance of the advertisements.
Within a week orders began to come from the jobbers in quan-
tities. By the time the first advertisement appeared the cam-
paign had been paid for six times over the orders. Dealers fast
stocked the goods.
When the copy appeared dealers pasted it up in their windows.
They were new goods, nationally advertised, and they were push-
ing them.
The New York jobber, three days before the appearance of the
first ad, telegraphed for 1,500 of the articles to be sent by eacpress.
The very first ad, too, paid a cash profit from mail-orders from
towns where the goods were not then on sale.
The business forged ahead. Capital was easy, then, to get
interested. There was no drawback to expansion. It had
caught on with wonderful fashion with the consumer. Within
six months factory floor space was quadrupled. Practically
every worth-while jobber in the United States and Canada could
fill dealer orders for the goods.
The jobbers’ names in connection with the manufacturer’s
announcement—and the fact that the jobbers sent out this cir-
cular matter to dealers—actually forced them to handle the
goods. In reality, jobbers themselves forced the goods on their own
shelves! ſº
Business authorities express the belief that hundreds of good
products are never given a chance with the consumer because
Overcoming of jobbing apathy, which is a perfectly logical condi-
Jobbers’ tion bred of turning down yearly thousands of offered
4pathy articles which have not the sales possibilities. But
with good products there is always a means, if the manufac-
turer will find it, to edge in through the narrow jobbing lane.
In the drug line, as an instance, prices represent the service the
goods give the consumer, usually. Cost of manufacture ordi-
narily is insignificant.
THE WHOLESALER 307
In this connection is brought to mind a famous product, which
since has made over a million dollars for the man who marketed
the formula. It ran the gauntlet in rapid fashion some years ago.
And incidentally this manufacturer never bowed before the
jobber or dealer. In fact, it is related that the head of this busi-
ness has never been inside a jobber's place of business. Nor has
he, indeed, ever solicited dealer business.
That sounds mighty strange and there are few manufacturers
in the United States who can say the same thing. But this was
his method:
The product sold for 25 cents. It was not one which drug
dealers are likely to substitute on. The price is too small, the
effort not worth while. Neither was it one which attracted
price-cutters.
The cost of manufacture was insignificant. Great quantities
could be made up at small cost. So the manufacturer planned a
great national campaign. It was replete in pages, quarters and
halves. It was scheduled to start on a certain day.
He described the campaign in a dealer’s circular. He showed
the drug-store gap which his goods filled. He told the profit the
dealer would make. He showed how national demand was ab-
solutely certain. He told how his goods were repeaters.
And as a clincher he enclosed an engraved card, which when
returned to the dealer's jobber entitled the drug dealer to the
The Final first half-dozen packages on consignment—they could
Argumen; be paid for in 60 days. And if the dealer did not
in Setting want to pay for them then, if they had not been sold,
“P "Hº" they could be returned to the jobber and credit
on Jobber given.
Understand, in the carrying of accounts later, the jobber was a
vital necessity. He was necessary also to carry stock to dealers.
Coincident with the mailing of the dealer’s circular containing
this consignment offer—which tied up less than 10 cents in each
offer made to dealers—the manufacturer consigned stocks to
each jobber in proportion to the number of cards the manufac-
turer expected each jobber might receive from dealers in his
territory. The jobber, too, was given 60 days’ dating. If at
that time his stock had not been sold and paid for, he could return
the goods.
In a little over three weeks after the double offer was made
the national campaign swung into action.
Dealers generally had cashed their consignment-offer cards on

308 THE WHOLESALER
the strength of the generous profit and the national campaign.
There were few breaks in the distribution chain.
It is related that several weeks before the 60 days’ dating had
run out there was scarcely a jobber in the United States who had
not reordered—and that was the occasion for billing him for the
goods that were consigned.
Thus distribution was almost instant—the jobbers were
stocked adequately and the money came in in plenty of time to
take care of the advertising expense and other expenses of the
business. The original investment in this particular business
was small in comparison with the money it has made since.
And as a matter of fact it is virtually impossible to sell the
jobber anything. It has got to be sold to the consumer, via the
dealer. Then the jobber will fill the orders. And he has the
double function of carrying thousands of small accounts and
maintaining a close-at-hand supply.
The instance told above would have been utterly impossible
without the stimulus of heavy national advertising to move the
goods from the dealer’s shelves and bring about his reorders and
the consequent jobber's reorders. Without strong consumer
bombardment the plan would have been a dismal flivver, and
with men of less courage than this manufacturer skimpy thin-
spread advertising possibly would have brought about the col-
lapse of the plan.
Is it any wonder that this man has never scraped before any
jobber?
When you see a man who “has the jobbers pushing the goods,”
ask him how long that “push” would continue if it were not for
the pull at the other end. On the other hand, the jobber has
a double function that it is well-nigh impossible to dispense with
on ordinary retail propositions. But any man who depends
solely on jobbing salesmanship ultimately will drop out of busi-
ness existence. There is no such thing, ordinarily.
PART II
ADVERTISING METHODS
CHAPTER IX
ADVANCE IN METHODS OF ANALYSIS
|HE value of unassailable facts in planning sales cam-
paigns is beginning to receive something like its due
recognition. This is one of the most marked evidences
of advertising progress. For years a few large corporations,
such as the Standard Oil Company and the American Tele-
phone and Telegraph Company, have had departments whose
duty it was to accumulate and to put into shape for use the de-
tailed facts which were considered necessary for properly con-
ducting the business of these concerns. The painstaking
methods of the United Cigar Stores in forming their ideas of
the value of a site have become well known. More recently
still the Curtis Publishing Company has surprised the textile
and the automobile and other trades with the intimacy of its
knowledge of how its advertising clients’ business is and should
be run.
These methods are now being applied to purely advertising
problems. Among advertisers the gathering of data and the
application of analytical methods to them have become a rec-
ognized necessity. The story of how Procter & Gamble
worked out the details of the Crisco campaign is familiar.”
Printers' Ink gives the following statement of the employ-
ment of analytical methods by some leading concerns:
fThe use of centralized data departments, while still slighted,
is by no means uncommon among the more progressive ad-
*Printers' Ink, January 9, 1913, p. 3.
fBrinters' Ink, April 2, 1914, p. 56.

3II
312 ADVANCE IN METHODS OF ANALYSIS
V
vertisers. The National Cash Register Company, the Ameri-
can Sales Book Company, E. I. Du Pont De Nemours Powder
Company, Burroughs Adding Machine Company, W. H. Mc-
Elwain Company, and other prominent concerns find such data
of much help.
The most comprehensive department of this kind we know
of is conducted by a large Chicago food-product advertiser. A
special room is used for the data and is in charge of a librarian
and two assistants. Besides a carefully indexed library dealing
with the industry and business affairs in general, special locked
cabinets are used for filing a vast array of different comparative
statements and a confidential file in which data are collected
dealing with peculiar trade situations and conditions in every
community of importance in the country. These data take the
form of special reports from salesmen, carbon copies, or para-
graphs from letters, personal observations by officials in memo-
randum form and newspaper clippings. This file makes it pos-
sible for any official to secure at a moment’s notice inside in-
formation regarding any desired territory. Scrap-books are
also kept, in which are pasted important newspaper clippings
commenting on the firm or the industry. These scrap-books
are carefully indexed according to the name of the paper as well
as the subject, and serve to give the house an insight into the
editorial attitude of the various newspapers and how they should
be handled, should occasion demand.
Another Western manufacturer finds it profitable to gather
data regarding a wide variety of subjects for use of the sales
force in selling to different lines of trade. For this purpose two
papers in every case are subscribed for, and the articles to be
filed are pasted on cards and indexed by vocation with metal
tabs. It is also understood that the National Lead Company
has worked out a method which makes it possible for it to col-
lect various kinds of selling data pertaining to its business, but
instead of centralizing the department the data are distributed
among the different branches where they may be needed.
Some manufacturers find their salesmen invaluable for gathering
this kind of data, one concern even going so far as to use its
salesmen to size up and report on the local newspaper situation
in each town. Several such instances have been cited from
time to time in Printers' Ink, the attitude of John Wykoff
Mettler, president of the Interwoven Hosiery Company, on
this matter and his account of how he gathers and uses such data
ADVANCE IN METHODS OF ANALYSIS 313
should be of help to the above correspondent. This article ap-
peared in the October 23, 1913, issue of Printers' Ink.
It is perhaps not looking very far into the future to predict
that a data department, in charge of a man with a real mastery
of the practical science of compiling and interpreting commercial
statistics and other data, will soon be regarded as an absolute
essential in all selling or advertising undertakings of any appre-
ciable size. The large corporations and other concerns with
ample capital have had a temporary advantage over their
smaller rivals in this respect. But this advantage already is
being overcome. Some of the local and national associations
have clearly shown that joint bureaus if adequately supported
by their members can do this work in some respects as well as
the data departments of large concerns. It is possible, more-
over, that the Federal Government may find occasion to enter
upon work of this kind.* Colleges also will find many ways in
which they can be of service in this sort of work.
In short, it may be said that, as a step in advance in the de-
velopment of advertising, the spread of respect for, and the
ability to use, analytical methods is one of the most important
lines of growth.
It is difficult to make a choice among the many important
articles showing this progress which have appeared during the
past few months. The articles selected for use at this point, how-
ever, fall into three chief groups: (1) Organization and methods
of data departments, (2) Analytical methods in selling prob-
lems, (3) Analytical methods in advertising problems.
1. ORGANIZATION AND METHODS OF DATA DEPARTMENTS
The Curtis Publishing Company a few years ago organized a
research division which since that time has conducted a number
of investigations into the buying and selling methods of various
*The plan for a Federal Bureau of Business Research proposed by A. W.
Shaw, the editor of System, has been well received in many quarters.
314 ADVANCE IN METHODS OF ANALYSIS
industries. The agricultural implement industry was covered,
and then there followed a detailed investigation into the methods
of marketing textiles. The automobile industry was investi-
gated next, and, in the meantime, work was started on an investi-
gation of the methods of selling various food products. Other
work is now in hand and the bureau has established for itself
an enviable reputation as a source of specific information on
marketing matters.
C. C. Parlin, who has had charge of the work of this bureau,
recently gave some interesting suggestions about the organiza-
tion and methods of conducting a bureau of this kind, in a maga-
zine article under the title, “Why and How a Manufacturer
Should Make Trade Investigations.” The following quota-
tions are taken from Mr. Parlin’s article:
*One of the amazing things in industry is the fact that vast
sums of money are being risked in enterprise undertaken upon
guesswork. While some manufacturing enterprises have been
started only after a careful study of conditions, others have been
instituted after a few inquiries and upon a decision to take the
chance.
Much of this attitude is a legacy of the past when conditions
were essentially different from to–day. In the earlier period of
our manufacture the markets were clamoring for goods. The
manufacturer had but two problems: first, to make the goods,
and second, to get them within reach of the consumers.
To-day the supply in most lines has caught up with the de-
mand and a third very important function develops upon the
manufacturer; namely, to develop his markets. This function
involves first of all a thorough knowledge of his existing markets
and of all those influences which are operating to affect them.
It seemed natural enough in the earlier stages of industrial
development for the manufacturer to confine his attention to
the making of goods and to entrust to an outside sales organi-
zation the second function of getting the goods to the consumer.
It is still advantageous in many lines for the manufacturer to
reach the retailer through jobbing connections, but no manu-
*Printers' Ink, October 22, 1914, p. 3.
ADVANCE IN METHODS OF ANALYSIS 315
H
facturer, however efficient and honorable the middlemen han-
dling his product are, can afford to be without first-hand knowl-
edge of his markets. Every manufacturer should know where
his goods are sold, who buys them, and why they are bought,
what type of men are selling his goods to consumers, what
influences are affecting them, what their sales methods and
sales costs are, to what extent they are real factors in making
sales and to what extent they are only order-takers. . . .
A certain manufacturer in the Central West was interested
primarily in breaking into the New York markets; research
showed him that totally neglected at his own door there lay a
larger market easier to get and likely to prove more profitable
than the coveted New York market; research showed another
manufacturer that his distribution was far from uniform, an-
other that he was restricting his line to jobbers when the pos-
sible sale for his goods was almost confined to those stores which
aimed to buy direct—another who sold only direct that a major
portion of the opportunities in his field could be best reached
through jobbing channels. . . .
Commercial research work involves three distinct phases:
First, library work; second, field work; third, formulating con-
clusions.
The first step, naturally, is the study of printed sources, such
as the census reports and other government publications. The
research department may often throw light upon a business by
merely graphing census figures. Often we have found a manu-
facturer with the latest census reports at his elbow, but deeply
interested in maps and graphs of the same census material as it
applied to his own business, indicating that while he had per-
haps read the figures, they came to him in a new light as he saw
them graphed. This phase of the work is listed first, not be-
cause of its relative importance, but because it is naturally the
first step in making a study; for the investigator should, of
course, take advantage of all the information which has already
been gathered, so that he may waste no time in duplicating work
already done. Besides, he needs a fund of trade information be-
fore he begins the field work; for in no realm of human endeavor
is there found a clearer exemplification of the truth of the Biblical
statement, “To him that hath shall be given,” than in gathering
commercial information. The man who is already informed
and can talk the language of the trade soon inspires confidence
and becomes a welcome visitor; but on the uninformed the
316 ADVANCE IN METHODS OF ANALYSIS
business world is too busy to waste time. It is particularly
necessary for a student approaching an industry with which he is
not familiar to get a fairly comprehensive statistical and trade-
journal knowledge of his subject.
Then begins the field work.
For successful research work in commercial lines it is neces-
sary that first-hand information be gathered by interviewing rep-
resentative persons connected with every phase of the industry.
Individual industries, of course, need different treatment. In
one industry the fundamental tendencies of the trade may be
learned from manufacturers and wholesalers, while in another it
may be necessary to make exhaustive study of retail conditions.
Men should be interviewed in every phase of the work; for
each particular phase has its own problems and furnishes its
own particular light on the industry. Furthermore, it is neces-
sary to talk not only with important and intelligent people who
are filled with ideas, but also with comparatively unimportant
people who often appear provokingly stupid. The man who
gets all his information merely from those who have made suc-
cesses has missed an opportunity; for while it is often depressing
to talk with those who have made failures or who are stupidly
plodding along unconscious of the broader problems, it some-
times happens that the man who has stumbled at the very
threshold will throw light on some elemental problems which the
successful man has long ago mastered and forgotten.
In general, the saying of the old fisherman that “It takes all
the people in the world to know everything that is known,” is a
good precept for a research department. The wider the scope
of the inquiry and the more extensive the number of interviews
the safer are likely to be the conclusions.
A research department can hardly proceed leisurely, because
the field is so vast and interesting and the portion that can be
accomplished seems so infinitesimal in comparison with the vast
amount to be done. On the one hand, a research department
is preparing a doctor's thesis requiring calm thought and care-
ful analysis; on the other hand, the material must be handled
with something of newspaper promptness to have it out while it
is fresh. Often, too, directors’ meetings or factory require-
ments make the preparation of material for specific dates neces-
sary. But while commercial research must to some extent ac-
commodate itself to time demands, the best results can only
ADVANCE IN METHODS OF ANALYSIS 317
be attained when sufficient time is allowed for extensive investi-
gation and thoughtful consideration of material obtained.
Incidentally, it is probably not desirable that the research
man in the early stages of his work should receive any con-
siderable information from the men of his own organizations.
He is likely to give too much weight to these opinions, and when
he comes to start in with his field work is likely to have some-
thing of the same handicap which retards the man who has been
brought up in the industry. But when he has made sufficient
progress that his ideas will not be too much shaped from within
the organization, the suggestions and criticisms of his colleagues
will be of very great value. In fact, the success of the research
department in the end will depend very largely upon the en-
couragement, support, and assistance of all those within the or-
ganization.
The third step is formulating conclusions.
While mere tabulations of material may be valuable, yet even
when material is gathered and tabulated it is still only raw
material. A very important function of a research department
is to convert this raw material into finished product. The
manufacturer can, of course, draw his own deductions from
the data furnished, but the one who gathers the material is in
the best position to interpret it and show its relation to the
business, and the highest value of the department is likely to
come from its ability to show the vital relation of its material
to the business of the company.
Since industries vary widely, it is obviously futile to attempt
to formulate any definite program of procedure to be applied
to the study of an industry. The problems are numerous and
varied, and methods well suited to one phase of the work may
have to be quickly changed when applied to another. The
very nature of the work requires that something new be learned
everyday, and the problem of always wrestling with the unknown
demands versatility rather than fixed method. -
It is, of course, impossible in a compilation of this kind to go
into the science of statistics as applied to methods of analysis
for advertising and selling problems. In case of many manu-
facturers, an analysis of this kind is unnecessary, but in case of
others it would be vital at the very outset to have a thorough
knowledge of the science of statistics. John Winsell, statistician
3.18 ADVANCE IN METHODS OF ANALYSIS
and business investigator, recently wrote an article on how to
study the “per capita,” which contains some suggestions of
value not only to the large analyst, but to the small concern in-
terested in applying analytical methods. In the course of this
article he said:
It has been said over and over again that the advertising manager’s
business is to know his firm’s situation with the final consumer better
than any one else. There is no more thoroughly accurate means
* * *, *
of getting at this than to make a study of per capita conditions. It is
the heart of an accurate study of mass averages which advertising
must meet to succeed. This article concerns the technique of per
capita study. [Note by Ed. of A. &. S.]
*The population of the United States is now approximately
100,000,000. To be exact, if the Government estimate of the
population on July 1, 1914, be used as a basis, we will pass the
hundred-million mark on April 2, 1915, as the daily increase is
4,433 persons.
All national business enterprises—whether a commodity
having national or partly national possibilities, whether chewing
gum or crockery, baking powder or leather belting, may find a
study of actual field conditions on a per capita basis of vital im-
portance. Business and sales pivot on population.
The first and most essential step toward this end is a com-
parison of the per capita consumption of the product in different
localities. In cases where the exact national volume of business
is known, it is extremely simple to figure per capita. For exam-
ple: as 50,000,000 pounds of laundry soap are sold throughout
the country every week, it does not require much mental effort
to estimate that the per capita consumption is one half pound
per week.
When it comes to estimating the per capita consumption for a
commodity not so staple, or if it is desired to get a localized per
capita consumption in any state or group of states, or county or
city or class of city or town, the process is much more compli-
cated—100 per cent. accurate results are naturally impossible,
*Advertising and Selling, January, 1915, p. 12.
ADVANCE IN METHODS OF ANALYSIS 319
but it is usually immensely valuable to get the best estimates
possible, and in such work the need for a new kind of practical
business statistical work is demonstrated.
When some one recently informed the president of a large
soap concern that 664,000 pounds of laundry soap had been sold
in the state of Connecticut in one week, it set him thinking.
Like other executives, he had never stopped to closely analyze
the statistics of his own industry—or, what is more likely, had
never seen any or made any effort to compile them. He natu-
rally asked whether this amount was above or below the average.
The next intensely interesting question was: what proportion of
the total had his company sold? When his accountants had
matched against the total state figures the firm’s sales figures,
it “made him sick.” It also gingered up him and his sales staff
as nothing else could have done. -
Incidentally, it took a great deal of scurrying on the part of
his subordinates to obtain data about his own total sales in the
state—a fact which had its own little lesson for him. Why
should so fundamental a factor as his statistical position in rela-
tion to soap in general, and to his competitors’ sales, be so buried
in the mêlée of daily routine? Why shouldn’t it be the most
conspicuous factor in the records and in the minds of the sales
force?
Resentment against his own poor showing in Connecticut
made this manufacturer wonder what the normal per capita
consumption of laundry soap was. Taking 664,000 pounds of
laundry soap for Connecticut and dividing it by the population
(1914), 1,202,000, he found that the per capita consumption was
.55 of a pound per week—or more than 10 per cent. above the
average for the United States.
This incident so interested the manufacturer that he deter-
mined to do the difficult work of making locality analyses of the
consumption of laundry soap, covering the entire country, state
by state, and dividing the population by grades of town. He
began by working in his “sick cities.” A crew of trained investi-
gators was put on the job of canvassing the city. They went
from house to house, taking the pulse of the town. Some of the
questions asked were:
(1) What brand of laundry soap do you use?
(2) How much laundry soap do you use per week?
(3) Why do you prefer brand?
320 ADVANCE IN METHODS OF ANALYSIS
(4) Which other brands have you tried?
(5) Why did you reject — brands?
(6) What various uses do you make of laundry soap?

:l 2 3 4. 5 6 7 8 9 #10
U.8. lood | 2000 || 3000 | 4000 || 5000 6000 7000 8000 || 9000 10000
Ala. 23 46 69 92 || 115 || 138 161 | 184 - 207 || 230
Aris 2 5 12 14 l 18 20
k. 17 34 51 68 85 102 ll.9 || 136 53 || 170
Cal 28 56 84 || 112 || 140 | 168 196' 224 2 O
Col 18 36 45 54 72 8]. 90
Conn. 12 24 36 48 60 72 84 96 || 108 || 120
l LO 12 l6 18 20
D.C., 4. 8 12 16 2O' E4 28 32 256 40
Fla l6 $24 32 40 48 56 64 72 80
Ga 28 56 84 l 140 l68 || 196 || 224 252 || 280
Idaho 12 16 2O 32 36 40
Ill 6i | 122 | 183 305 || 366 || 487 || 488 549 || 61O
d 2 56 84 || 112 140 | 1 196 224 || 252 || 28O
Iowa 46 69 92 llā 138 || 161 184 || 207 || E30
Kang 18 36 72. 90 108 || 126 || 1 162 | 180
24 48 72 94 i2O l44 168 || 192 || 216 || 240
La 18 36 54 72 90 108 || 126 144 162 | 18O
Me • 8 16 24 32 40 48 56 72 80
Mòl 26 39 52 65 78 91 | 104 || 117 | 130
Mass 37 74 ill 148 || 185 222 9 || 296 || 333 370
Mich 62 93 || 124 i55 l86 217 8 || 279 || 31Q
Minn. £3 46 69 92 || Ilf 138 l8l 184 || 207 || 230
Miss, 19 (58 57 76 95 | I].4 152 || 171 || 190
Mos 68 102 || 136 17O | 204 || 238 272 306 || 340
Mont 4 12 16 2O 24 28 32 36 40
Meb. l2 24 36 48 60 72 84 96 || 108. 12O
Rev. l 2 3 5 6 7 9 1O
M.H. 4. 12 16. 2O 24 28 32 36 40
R. J . 29 58 87 lló | 1.45 -iº/4 || 203 || 232 261 ; 290
H.Mex. 4 12 16 2O 24 28 32 36 40
•Y. 100 200 || 3OO 400 500 6OO || 700 800 900 10OO
N. Car 24 48 72 96 || 120 || 144 168 192, 216 240
N.Dak 7 14 21 28 35 42 49 56 63 70
Ohio 51 || 102 || 153 || 204 || 255 306 || 357 | 408 || 459 || 510
Okla 2O 40 60 804 100 I?Q || 140 160 | 180 200
Ore., l6 24 32 40 48 56 64 72 8O
Pa. 83 || 168 || 249 || 332 415 || 498 || 581 664 || 747 830
R. I. 18 84 30 36 42 48 54 60
S. C&r 15 32 48 64 8O 96 || ll? | 128 || 144 l60
S. 7 14 21 28. 35 42 49 56 63 70
Tenn. 23 46 69 92 llf 138 lé]. I 1.84 || 807 || 230
Texas 43 86 129 l?2 215 || 258 || 3Ol 344 387 || 43O
Utah 4 12 16 2O 24 28 32 36 40
Wit. 4. 8 +2 16. 2O 24 28 32 35 40
Wa. 22 44 66 88 || 110 || 132 154 || 176 || 198 22O
Wash. 14 28 42 56 70 84 98 || 112 || 126 || 140
W.W8. 13 26 39 52 65 78 91 || 104 || 117 | 130
J. WiBO 25 5O 75 10O | 125 | 150 175 || 200 || £25 250
2 6 8 1O 12 14 16 18 2O
Fig. 1. State “percapitarithms.”
The investigators were required to report on the general condi-
tions, such as neighborhood, type of house, class of people living
in that vicinity, etc.
One interesting feature brought out was the territorial pref-
erences for yellow or white laundry soap. Yellow soap was
preferred wherever the water was soft, and white where the
water was hard.
As the consumer investigations progressed, variations in-
numerable in local conditions were disclosed, many vitally affect-
ing the success of an advertising campaign which would not be
brought to the firm’s attention ordinarily. The difference in
local pay-days, average income, nationality, predominating
ADVANCE IN METHODS OF ANALYSIS 321
occupations, standard of living, and many other facts useful in
determining the fertility of a given section—all these factors are
charted on a huge wall map in the sales manager's office, by
means of confidential symbols.
This manufacturer now has a mental picture of the consumer
mind in each section of the country. He no longer surmises,
guesses, thinks, or assumes. He knows. He knows not only his
own position in the field, but the relative strength or weakness
of every competitor. What is more he uses the information in
setting quotas for the sales staff, and in bringing backward dealers
to realize their position in ratio to other places of the same size.
In addition, it forms a partial check to over-selling credit.
This method gradually builds up a complete statistical analy-
sis of the laundry soap industry, and brings the once gambling
occupation of soap selling closer to the ideal of the insurance busi-
ness, where death averages, etc., are accurately known.
The manufacturer now has a bird’s-eye view of the entire
country, or detailed statistics of any section thereof, so that he
can put his finger on a sore spot with magic infallibility, and
quickly discover whether the trouble is due to any local condi-
tion which affects per capita consumption, or is the result of an
energetic competitive campaign. As a result, competitors get
black and blue in the face trying to beat him, but he is possessed
of so much greater breadth of view and basic understanding of
his industry that it’s like trying to push over an old oak tree to
beat him to a market he held.
For the benefit of those who desire to arrive at the state per
capita consumption of any given product, with the minimum of
The Tech effort and calculation, once the total quantity is known,
nine of the writer has prepared tables (see Fig. 1), which
“Per Ca- might be called state “percapitarithms.”
Pilº. Fºg: A “percapitarithm” of any state may be defined as the
“” number of units which would be assigned to that state if a
specified number of units were divided among all the states of
the Union, according to their several populations. To illustrate:
Let us say 1,000 units represent the United States population.
As New York state has approximately 10,000,000 population,
or 10 per cent. of the entire population of the United States, its
share of units would be 100. Pennsylvania, 8.3 per cent. of the
population, her share would be 83, and so on for each state,
until we reach Nevada, whose share would be 1 per cent.
If 4,000 units were to be distributed, it is evident that the share
322 ADVANCE IN METHODS OF ANALYSIS
of each state would be four times as great as it was for the 1,000
distribution. *
For the purpose of rough approximations, however, it will be
found that the ten tables shown in Figure 1 are sufficient. These
have been prepared for 1,000, 2,000, 3,000, etc., up to 10,000.
If an article has a national consumption of 90,000, the consump-
tion for California, in logical proportion, should be at least 2,520,
as is seen by referring to column 9, which gives the “percapitar-
ithms” for 9,000 and adding a cipher to 252—the number which
is opposite California. In Illinois the consumption should be at
least 5,490, and in Maine 720.
Even a national periodical finds it useful to study per capita.
A very interesting result was obtained recently by applying the
“percapitarithm” principle to the circulation of a small class
magazine (see Fig. 2). The appeal was universal, and there
were subscribers in every state in the Union. The circulation
had just turned the 10,000 mark, and the statement that there
were 110 subscribers in Iowa, or that there were 765 subscribers
in Massachusetts, conveyed little information as to whether
these figures were very high or very low as compared with the
average for the country.
In order to show more clearly the exact situation, the graphic
chart (shown in Fig. 2) was prepared. The shaded part repre-
sented the “percapitarithms” for the states in the order of their
size, and of the divisions in their geographical location. The
black lines represented the circulation of the magazine in that
state or division.
From the chart it was very apparent that New York, Con-
necticut, Massachusetts, and New Jersey were the strongholds
of the magazine's circulation; and that several other places,
notably the District of Columbia, had very much above the
average circulation for the whole country.
In the section of the chart giving the divisions the strength
of New England, the Middle Atlantic, and the Rocky Mountain
States is at once apparent to the eye. In this chart the figures
following the names of the states or divisions are the “percapi-
tarithms” and have no connection with the circulation figures of
that locality.
A glance at the chart shows the situation much better than
columns of figures or pages of typewritten reports could do.
Suppose the circulation had been 85,000 instead of 10,000. The
“percapitarithm” for the different states would be numbers
ADVANCE IN METHODS OF ANALYSIS
323
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midway between columns 8 and 9 in Figure 1, with, of course,
the addition of a cipher. These can quickly be estimated by
adding one half of the “percapitarithm” in column 1 to the
SOME ESTIMLATED PER CAPITA COMSUMPTIONS IN UNITED STATES
Percent.
Increase
Consumption or Decrease
Per Capita
Wheat. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.48 bu.
Corn. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.3 bu.
Sugar. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79.9 lbs.
Wool . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.32 lbs.
Cotton . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.8 lbs.
Coffee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.33 lbs.
Tea. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.89 lbs.
Rice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.24 lbs.
Bread. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.7 loaves
Flour and Meal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142. 13 lbs.
Fresh Beef . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73.1 lbs.
Salt Beef . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.5 lbs.
Fresh Pork. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.7 lbs.
Salt Pork. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.1 lbs.
Other Meat. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.2 lbs.
Poultry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.1 lbs.
Fish. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.6 lbs.
Pggs... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.7 doz.
Milk... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74.1 qts.
Butter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.4 lbs.
Cheese . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3 lbs.
rd... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.5 lbs.
Molasses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.75 gals.
Potatoes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. 1 bu.
Fruits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4.26
Men's Clothing (per adult male). . . . . . . . . . . . . . . . . $27.77
Women’s Clothing (per adult woman) . . . . . . . . . . . . $20.37
Children’s Clothing (per child under 10) . . . . . . . . . . $ 3.05
Fuel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8.01
Lighting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2.03
Furniture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8.33
Books and Papers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2.05
Life Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6.67
Malt Liquors . . . . . . . . . . . . . . . . . . . . . . . . . . . e = w e a e 19.75 gals.
Tobacco. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8.44
Automobiles and Accessories (1911) . . . . . . . . . . . . . . $ 4.67
Diamonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.43
Works of Art . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.21
Cigarettes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124.6 cig.
Whiskey and Rum . . . . . . . . . . . . . . . . . s & s - - - e º me • e 1.4 gals.
i
—H 86.
—H 52.
—H·107.
—— 59
—H144.
—H 28
—H 38.
— 21.
— 41.
—H 54
:
;
i
:
i
+185
—H 85
–H 0.
—H285.
—H320
–H530
—H226
since 1875
I
5
Some of these figures are several years old, but are quoted because conditions
then were more nearly normal than now.
ADVANCE IN METHODS OF ANALYSIS 325
corresponding one in column 8. To illustrate: In Missouri,
add one half of 34, which is 17, to 272, and we have 306. Then
add one cipher, and 3,060 is the result desired. If the circulation
had been 82,000, one fifth of 34, or 7, would have been added to
272.
The mention of magazine circulation “percapitarithms” is
interesting in another way—because of the possibility of match-
ing up sales per capita with the circulation per capita of the
magazine or magazines to be used for advertising the article.
There are, of course, a majority of articles which are not uni-
versally used, but that does not in the least affect the fact that
per capita is the logical measure of consumption. It is only
necessary—if a net per capita is desired—to eliminate the unde-
sirable and inaccessible population and use the remainder as the
population unit. The negroes, the Indians, the illiterate, the
foreign born, the rural, the semi-rural, the minors, the women—
any or all of these and other factors may be removed—if it is
beyond dispute that they should be removed. Inaccessible
population means that population which cannot be reached
directly by railway. There is 1,778,000 of such population in
the East alone.
Wherever the per capita figures concerning an industry have
been used they have awakened the management to greater alert-
ness and creative, educational work upon consumption, and also
stimulated the entire sales organization. Per capita knowledge
concerning all industries should be known everywhere, but it
isn’t; mainly because of the expense of compilation which few
individual firms have been willing to bear. It is so simple to
figure the per capita for tea or cigarettes, from official figures,
but when it comes to an article like paint, where many kinds of
material in many forms are sold, it is a most difficult matter.
The only way to secure it is by representative national dealer
canvass, well checked up and cautiously analyzed. Yet in
many cases it is not at all expensive to secure such vital informa-
tion.
2. ANALYTICAL METHODS IN SELLING PROBLEMS
The use of analytical methods in the study of selling problems
necessarily must progress slowly if its development is to be per-
manently satisfactory. It will be a long time before work of
this sort has been formulated with sufficient completeness to
326 ADVANCE IN METHODS OF ANALYSIS
make it possible to standardize methods. It will be necessary
to develop certain forms of technique in collecting and using
figures quite different from those employed by statisticians in
other types of investigation. But the work has been com-
menced, and year by year marked advance is shown in the skill
with which available methods are applied to problems of this
kind. J. George Frederick recently contributed to System an
article under the title “More Time to Sell,” in which he showed
some of the methods available to practically any type of concern
for making an analysis of selling problems to save the time and
energies of the sales force.
v. *By the time that John Smith, representing a big machinery
house in New York, walks for the first time into the office of the
head of William Jones & Company of Denver for a personal
conference concerning a prospective order, half of the work of
selling has been done. And it has been done from the sales
manager's office in New York.
The bigness of this country, and the efficiency of broad na-
tional advertising mediums, has made big sales problems and
big sales territories. The modern sales manager is finding it
increasingly difficult to sit in a little office and plan out a sales
campaign for a country 3,000 miles broad, in which every class
of people, every climate, and every degree of wealth and occupa-
tion are represented. He must have specific facts on which to
base his campaign. V. He cannot rely upon his personal estimates
and upon rule-of-thumb computations. He has been forced to
find better and more efficient means of knowing what is going on.
He must gather together facts and figures from representatives
in the field; he must tabulate these data so that he can compre-
hend the conditions that may make or break his campaign; and he
must employ trained men who act in accordance with these plans.
The live house has long ago broken away from the old-fash-
ioned “hire-and-fire” plan of sales work. Instead of putting a
line of samples and equipment into the hands of some salesman,
of dosing him liberally with “ginger” and of sending him out
into a territory with instructions to “make good or be fired,”
a steady grist of sales is now brought in by a very different plan,
*System, February, 1914, p. 178.
ADVANCE IN METHODS OF ANALYSHS 327
A large part of the work of selling is done before the salesman
leaves the office. And when he does leave he goes with a
definite purpose to see a definite prospect. In other words,
v that salesman is aimed at a specific sale. It is a long cry from
the salesman of to-day back to the salesman of yesterday who
was literally turned loose in a territory and instructed merely to
sell. Such wastefulness of energy and time is now being reduced
by more scientific practices.
One of the most important phases of the new science of man-
agement that is being put into operation in sales work is the
compilation of accurate data and records about the essential
details of the selling work in the field. These data are collected
by the salesmen, reduced to written reports, and transferred to
the sales manager's files for use.
This general reform in selling methods has been developing for
a long time. One of the problems has been to get salesmen to
render more than the most rough and casual reports on local
conditions. Salesmen are not hired or trained to be investiga-
tors, and report-makers—they are trained to meet men and
convince them about the goods. As a result, perhaps ten or
fifteen years have been wasted by large concerns in the effort to
bring their sales force to help them in getting more accurate and
v full data about local conditions.
. To-day business men recognize that it does not do to mix
jobs; that a salesman should be put on the road to sell, and that
when investigation work is necessary, it should be undertaken
by special investigators, whose task it is to investigate and noth-
ing else. It is both an expense and a hardship to require a
six-thousand-dollar-a-year salesman to spend any considerable
portion of his time in investigating conditions which a two-
thousand-dollar-a-year man, or a special investigator could do at
much less cost. The actual time that the high-grade salesman is
really in action, working on his prospects, is surprisingly small
when it is carefully computed.
One firm, not long ago, made a study of this sort and found
that its six-thousand-dollar-a-year men were spending on an
average but two hours a day in talking to the trade and present-
ing the company’s sales arguments. The rest of the time was
spent in travelling, in arranging for sample displays, in making
out reports, and in other routine work.
How are the efficient sales generals of to-day getting their
field reports which are so vital?
328
ADVANCE IN METHODS OF ANALYSIS
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ADVANCE IN METHODS OF ANALYSIS 329
In the first place, many of the most thorough-going have
greatly increased the importance and scope of the sales mana-
ger's functions at the home office. The average sales manager
used to be little more than a man handy at writing “ginger”
letters and at filling out system forms. To-day, however, the
sales manager is a vital factor in the business. The new type of
sales manager knows too much to trust to salesmen’s reports.
He has learned, for instance, that the salesman has not analyzed
the cessation accounts with anything like accuracy. In other
words, the salesman’s eyes are always on the prospect he is going
to get; he is rarely able efficiently to analyze why he failed to get
a customer which the house has lost.
One house has found that it had lost eleven hundred dealers
in three years although it had gained even a larger number of
new ones, and its business had gone forward. The salesman
could make no satisfactory explanation of this matter and sought
to minimize its importance. But the sales manager, who was a
real sales general, sent special investigators into the field to call
on an extended list of the cessation accounts, well distributed
geographically, and he learned exactly and in detail just why
they had stopped buying from the firm. The result was de-
cidedly interesting. It showed:
(1) That 12 per cent. of cessations were due to unreasonable
actions on the part of the credit department.
(2) That 15 per cent. of the goods were found to be really un-
satisfactorily manufactured.
(3) That the shipping department had been grossly slack in
the case of 20 per cent.
(4) That the salesman had been inattentive and even imperti-
nent in the case of 11 per cent.
(5) That the salesman had made misrepresentations which he
was unauthorized to make in the case of 7 per cent.
(6) That indeterminate and casual factors were responsible
for 35 per cent.
LOCAL CONDITIONS
1. What class of people live in this locality and what is their source of in-
come? (Rich, medium, or poor.)
2. What important industries are located here?
3. Are the people here mail-order buyers?
4. What is the number of rural free delivery routes?
5. Do housewives ask for articles in our line by name or trademark?
6. What kind of advertising is most successful locally—an offer of “some-
thing for nothing,” seasonable articles, bargains, price displays?
$.
*
330 ADVANCE IN METHODS OF ANALYSIS
V
7. Is our product most in demand? Name competitive articles sold in
order of preference.
8. Do local dealers make good window trims, store arrangements, or have
special features to attract crowds?
9. Do surrounding crop conditions affect local business? If so, report on
crops.
10. What prices are competitors making to local dealers?
11. What local advertising is done by competitors?
12. What is the total number of dealers who sell our class of products?
13. How many sell our goods?
14. Estimate the approximate annual consumption of our class of goods locally.
When the sales manager got these data laid out in front of him,
some radical changes were made in the methods of the house.
The experience was the final demonstration to this sales man-
ager that it was important to get information from the field from
some other source rather than the salesmen themselves.
He arranged with a firm of investigators to make reports regu-
larly every three months in a certain selected group of cities, to
fit the particular situation at the time. He also planned that
these periodical investigations should gradually build up his
sales information at the home office in a way that would make
him prepared with the viewpoint to analyze almost any situation
which might arise.
The first step that this sales manager took was to rearrange his
entire sales organization. Instead of laying off on a map a group
of arbitrary districts, based on no particular consideration, he
went to work scientifically to arrange his sales districts. These
he now calls “sales blocks.” He bases these districts upon:
(1) Travelling considerations.
(2) General unity of character of prospects.
(3) Competitive conditions.
Next he began to compile information of a very exact sort
about each one of these blocks. He secured seven standard fac-
tors on which to base an analysis of results in these sales blocks.
These factors were as follows:
(1) Population.
(2) Area and distance.
(3) Competitive conditions.
(4) Ground estimate of possible consumption.
(5) Ground estimate of character of people and wealth.
(6) Trade and special factors.
(7) The degree “of saturation,” or sales made prior to date,
The sales manager refused to recognize any extraordinary
9
ADVANCE IN METHODS OF ANALYSIS 331
merit or amount of sales made in any district unless it was
matched up against these test factors. When a salesman makes
a seemingly phenomenal sales record it is matched up against
these factors; sometimes the phenomenal sales record tones
down very considerably in comparison with the smaller sales
in another territory, because in the first territory a single sale
was about as hard to make as three sales in the second. This
kind of analysis solved a number of puzzles which other sales
managers had met in past years—such a puzzle, for instance, as
that of a high-grade salesman who had a splendid record in a
certain territory only to make a marked failure in another terri-
tory shortly afterward.
Such investigations mark only the beginning of the modern
methods of field reporting which many capable sales generals
are compiling for their home office. In order to secure the basis
for efficiently applying the seven standards, these sales managers
were obliged to have some thorough local investigation work
done. The manufacturer of a special device actually had a
canvass made throughout the country of every firm who used
any kind of product of the type he made and sold. These data
were compiled by his men on the spot; the sales manager was
then able to figure out a per thousand prospect average for each
competitive make, as well as for his own, in any vicinity. By
periodically revising this tabulation he was able to tell with
some degree of accuracy to what extent his sales force was
efficient in any territory. Such a course is not possible with all
classes of business, but a great deal of such investigation work
can profitably be done with almost any business.
HIS ATTITUDE TOWARD ADVERTISED GOODS
. What trade papers does he subscribe to?
. Which paper does he prefer, and why?
. Does he read trade paper advertising?
What general magazines does he subscribe to?
. Does he read advertisements?
. Does he order as a result of trade paper or magazine advertising?
. Has he ever advertisied, and how? Secure copies of his ads.
. Has he a mailing list which he circularizes regularly?
. Does he do any window-trimming and how?
10. Does he read the advertising literature he receives?
11. Does he give preference to trademarked goods?
12. What does he do to co-operate with advertisers?
13. Does he believe in advertising, or look on it as a tax?
14. How does he feel toward advertisers who sell catalogue houses?
332 ADVANCE IN METHODS OF ANALYSIS
For instance, a tire manufacturer has now made it a plan to
investigate periodically the kind of service which his branch
houses are giving the retailers. An outside firm of investigators,
whose minds are absolutely free from any prejudice in the busi-
ness, call upon both retailers and consumers in the automobile
field and learn to what extent the branch houses are rendering
service and whether it is satisfactory. In this way, and in this
way alone, can this house keep a good local check upon the work
of the rank and file in the district offices. The home office rarely
gets into touch with any but the district managers and assistants,
and it desires to know more intimately how the men these people
hire carry out the spirit of the company’s policies.
THE DEALER's PRACTICE
1. What is his attitude on Parcel Post?
2. What is he doing to meet catalogue house competition? -
3. What is the average number of letters and circulars he receives daily?
4. How many clerks does he employ, and what does he pay them? Does he
take time to educate them in salesmanship?
5. Does he work up sales schemes to increase business?
6. What class of people does he sell—rich, poor, or medium?
7. What kind of location has he?
8. Is the store well kept, stock attractively arranged? Does he mark his
goods in plain prices or blind figures?
9. What does his stock amount to?
10. How much in our lines does he carry?
11. How often does he take inventory? Does he have special sales for
closing out stock, and how often?
12. Does he maintain prices, or is he known locally as a price-cutter?
13. Does he prefer buying from jobber or manufacturer?
14. What percentage of profit does he require, and what is his cost of doing
business?
15. Has he a delivery system? How much business does he do by mail or
telephone?
h 16. Does he prefer giving orders to a representative or mailing them to the
ouse?
17. How often do salesmen in our line call? How often does he see our sales-
men? What comments does he offer on our representative?
18. Does he prefer an F. O. B. price?
The concern that is going into business for the first time is
most particularly in need of field investigation. It cannot scatter
its shops widely across the country. Its limited resources nat-
urally compel it to concentrate, and just where to concentrate
is a matter of dollars and cents of difference. The makers of a
new line recently had field investigators determine who were the
best possible buyers for such a product and where they were lo-
ADVANCE IN METHODS OF ANALYSIS 333
cated. These investigators, unknown to each other, and in
points scattered all over the country, reported in such a large
number to the effect that the factory operatives and mechanics
were seemingly the easiest and most numerous buyers, as to
make it evident that by far the most efficient plan to get sales
started at least cost was to take the fifty principal manufactur-
ing cities of the country and concentrate upon them.
This was done, and the business is going along very well indeed.
In another case an entirely new product, which had not before
been trademarked, was put out. It was important for the
manufacturer to know how the trade felt about it, what profit
he could expect, what were the possible points of resistance and
competition, and what particular channels of selling would prove
easiest. All these points were discovered by local field investi-
gation. Reports were made throughout the country and brought
together and analyzed at the home office of this company.
In still another case a large company was about to put out a
new product. The field investigation showed that the con-
sumption of this article was so small, the headway which the one
or two others already in the field had made was so discouraging,
and the loss which they were suffering so definite, that it would
be impractical for some years to push the article. As a conse-
quence of this report from local field investigators throughout
the country, the company decided not to go into the manufac-
ture of this article at all.
The method of field investigation has now been carefully
developed. Thorough-going sales generals are demanding not
only the more obvious kinds of information from the field, but
also very minute and detailed information. Among the items
they are looking for are: -
(1) Information as to whether the dealer has a good, medium,
or bad location.
(2) Just exactly what kind of a business he does; whether he
does any jobbing or has any country or outlying trade.
(3) What kind of windows he keeps; what degree of alertness
his clerks display; what kind of bookkeeping system he uses.
(4) What kind of policies he has; what kind of advertising he
does or is going to do; what his average yearly advertising and
stock turnover amounts to.
(5) Exactly what class and character of trade he caters to.
These are but a half-dozen of something like a hundred ques-
tions which are put to dealers by the most careful of modern
334 ADVANCE IN METHODS OF ANALYSIS
sales generals. In fact, the information desired is so thorough
that it is recognized as manifestly impossible and impractical to
ask mere salesmen to collect it, as they would be devoting all
of their time to such work at the expense of their selling.
New and interesting methods are used to systematize and
economize in the handling of these many points of information
about a local dealer. One method is to apply a symbolic system
of letters, or numerals and letters mixed, to indicate by a sort of
shorthand the answers to the questions, so as to save the time
of the investigator or salesman.
The other is by far the more efficient and modern way, as yet
but little practised, although at least one house has already used
it successfully. It has put all the questions on a single sheet.
The investigator checks up these questions, and then passes
them in to the home office where an operator of a punched card
tabulating machine takes a special card, laid out with “fields”
to fit the case, and punches these cards according to a code sys-
tem. Thus, whenever it is desired to know, for instance, how
many and who are the retailers who have corner locations, it
would be necessary only to dump all the cards into the hopper,
and this card tabulating machine (the type of machine which
has reduced the time of government census-taking from ten years
to ten months, has the job finished, and the information is fur-
nished.
HIS ATTITUDE TOWARD OUR PRODUCTS
. How long has he handled our line?
. Is he satisfied with treatment received?
. What is his opinion of our products, as compared with similar goods?
. Is his profit on our goods as much as on other goods he handles?
. As much as on competitive lines?
. What class of trade does he sell our goods to—rich, medium, or poor, or
any specific class (like professional persons, etc.)?
7. What talking points does he use in selling our goods?
8. Are our goods best sellers for him? Name competitive lines he carries in
order of demand.
b 9. Does he push our goods in preference to others? What goods does he
oost?
10. What is his opinion of our advertising?
11. What are his recommendations?
12. Does he co-operate by displaying our advertising material?
13. Is he willing to do any local advertising?
14. What co-operation is he receiving from our competitors?
15. Is his demand for our class of products decreasing or increasing?
16. Why?
17. Has he sold our goods and later dropped them? Why?
:
, ADVANCE IN METHODS OF ANALYSIS 335
Also by putting the names and addresses of the dealers on
these special punch cards, a continuous ready card-filing system
is had, with all the punches required to indicate the answers to
the many questions. If information is desired regarding any
one or more of them, it is merely necessary to dump all of the
cards in the hopper and they can be segregated according to any
grOup.
In the same way, and by the same means, the sales of any con-
cern may be analyzed in order to provide more interesting and
significant data. Marshall Field & Company can, by the use of
these machines, tell the next morning just how many sales were
made C. O. D.; how many were made by any one salesperson;
how many were delivered within the city and how many in the
country, and other additional details. Similarly, a great dry-
goods house is able to tell which classes of fabrics in a day's
business were given the greatest preference. Indeed, a hundred
and one angles, which are of vital interest in the more modern
plan of closely analyzing sales problems, can be secured by means
of such records.
In the large variety of information which business concerns
are laying themselves out to get in order better to analyze their
fields these are the most important:
(1) Finding out and listing the competitive brands in their
order of preference in any part of the country.
(2) Checking the work of branch houses or salesmen in their
districts in order to discover reasons for unusual conditions.
(3) Sounding out dealer sentiment concerning new proposi-
tions; studying the retail and local situation generally.
(4) Finding out the name of the jobber with whom the retailer
deals; finding out the dealer handling your goods if you sell
through jobbers; finding out the name of the kind of retailer to
whom you most desire to sell.
(5) Studying local consumption; calling on consumers for Sug-
gestions; trying out a line of argument.
(6) Securing general information regarding the character of
the people, pay days, local wealth and industry; the local news-
paper poster, street-car or moving-picture situation.
With all this information at his side and thoroughly indexed
and systematized, the modern sales manager is really like a sales
general with his maps before him and the field definitely charted
and plotted, so that the various elements cannot get away from
him. He is a commander of sales forces in a sense the old type
336 ADVANCE IN METHODS OF ANALYSIS
sales manager never was. He can, with some semblance of
accuracy, picture the conditions in any city in which any fluctu-
ation in sales occurs. A national sales organization has too
many thousands of dollars at stake in office and field, to “take
a chance” on guesswork. It cannot go far wrong with the new
program: First find out, then sell.
A short time ago the ice-cream manufacturers of Chicago
undertook a joint plan which was based on an analytical study
of the capacity of Chicago to consume ice cream. Cameron
McPherson describes as follows some of the points in connec-
tion with the campaign:
*During the last week of April 50 per cent. more ice cream
was eaten in Chicago than during the same week last year.
Since the opening of the season the normal consumption has
increased over 20 per cent., according to manufacturers’ figures,
and it is believed that before the warm weather disappears
Chicago’s per capita consumption of ice cream will exceed the
two-and-one-half-gallon mark of other centres. In this case the
three-million-gallon output of last year will, through newspaper
advertising, jump 600,000 gallons in one season.
But even if the early average shouldn’t hold, and the expecta-
tions of the manufacturers be not realized, the advertising
campaign is none the less interesting. As an example of what
can be accomplished by the proper use of facts obtained from
a preliminary market analysis or survey it is suggestive to
advertising men in every line of business. But the story of
the campaign will be especially helpful to those who are inter-
ested in getting together competitive advertisers with a view
to starting co-operative trade-extension work. -
Theoretically a co-operative campaign is simple. As a matter
of fact it is very complex, as any one who has ever tried to
promote one knows. There is always that troublesome problem
of getting together conflicting and warring interests. It is
hard to show a pro-rata gain, and usually difficult to prove
profit in proportion to investment, for in co-operative work the
prestige and good-will value of the advertising is usually lost.
But all these obstacles, as well as others brought about by the
*Printers' Ink, May 20, 1915, p. 33.
ADVANCE IN METHODS OF ANALYSIS 337
nature of the product and market, seem to have been overcome
by J. R. Hamilton in this ice-cream campaign. -
Mr. Hamilton was at one time Advertising Manager of
Wanamaker's. His training under Mr. Wanamaker taught
him to observe certain principles which many of us
overlook in planning campaigns. First, it should be
determined if the product will respond to advertising,
hen a survey of the market should be made. Mr.
Hamilton realized that facts and figures were the only things
that would influence the type of men he must approach and
cause them to invest money in advertising. These figures must
absolutely prove that the consumption of ice cream could be
increased to a point where it would pay these manufacturers to
appropriate a certain percentage of their gross for a year's
campaign. Unless the matter could be put before them in that
light it was better to discard the idea at the outset.
“The first thing to investigate,” said Mr. Hamilton to a
representative of Printers' Ink, “is the advertisability of the
product. The rule for that at Wanamaker’s is to gauge the
natural demand. It is usually safe to figure that a product
which people come into the store to buy voluntarily in ever-
increasing numbers is a good article to advertise. It is the
old maxim that it costs less to sell the people something they
want than to sell them something you want them to buy.
“The government figures showed that the natural increase
in the consumption of ice cream in the last four years had been
500 per cent. This increase had not been forced,
**, * because with a few scattered exceptions ice cream
for Adver- tº * º
isdiji, had not been aggressively advertised. So, then, in
ice cream we had a product which answered to the
merchandising rule so far as advertisability is concerned. Now
what was the market condition in Chicago? -
“Here again government figures helped me. I found the
per capita consumption in Chicago about one and one half
gallons as compared with the two-and-one-half-gallon average
of other cities. I also found that the percentage of increase of
consumption in Chicago had been less than in other cities. So
evidently the market was right. But there must be a reason
for everything; why had Chicago fallen behind in the con-
sumption of ice cream?
“To find this out I undertook a trade investigation and called
on several hundred druggists and dealers. This survey devel-
Getting the
Basic
Figures
338 ADVANCE IN METHODS OF ANALYSIS
oped the fact that there was a general lack of knowledge as to
the food value of ice cream by those who sold it, and that instead
of being sold and eaten largely as a food it was marketed in
Chicago as a luxury. This took me to the offices of the Illinois
State Food Commission, which gave me much valuable data
about the food value of ice cream. For example, it prepared
an analysis which proved that a quart of ice cream has the
same food value as a pound and a half of round steak, as a
whole gallon of oysters, as four pounds of potatoes, or eleven
pounds of cabbage. Further analysis developed that ice cream,
being rich in proteins and caseins, is a great tissue-builder,
while its sugar and cream furnish heat and energy to the body,
thus making a well-balanced ration. This was all interesting;
all ammunition which would come in mighty handy later on.
“In getting around among the housewives I gathered figures
as to the percentage which allowed their children to have all the
ice cream they wanted. This line of questioning brought out
another important reason for the hindered increase in consump-
tion of ice cream—the average mother labored under the de-
lusion that anything the child liked was bad for it. It was a
hand-me-down from the old Puritan theory that there should
be no joy in life; that what we liked to do we should carefully
refrain from doing. Here was a consumer condition that
needed correction.
“Armed with these facts about Chicago trade conditions, I
secured an interview with the larger manufacturers. I pointed
Home out to them that their present sales methods were
Makers incomplete. They were simply switching portions of
Were 4p– a stationary demand from one to the other. They
P” were engaged in a price war that was taking them
down instead of up. Price-fighting, I argued, was akin to
prize-fighting in that somebody always got knocked out. It
usually led to cutting prices and then cutting quality, repeating
the process until the inevitable happened. A more logical way
was to get together and increase the local per capita consumption
of ice cream. My figures proved that Chicago was not eating
its share of ice cream, and the investigation showed that the
reason it was lagging behind was due to ignorance. Educational
methods of selling must take the place of price-cutting, and then
the rest would come easy.”
Six of the leading manufacturers, making 80 per cent. of
the possible output, fell in with Mr. Hamilton’s plan. The six
ADVANCE IN METHODS OF ANALYSIS 339
who carried the load were McBride Brothers & Knobbe, Clover-
dale Creamery Company, Hydrox Company, John T. Cunning-
ham, Thompson & Company, and Anderson & Goodman
Company, all of Chicago. These manufacturers appropriated
$10,000 for a newspaper campaign, using all the Chicago papers.
This initial appropriation was to be increased to $50,000 if
results were forthcoming.
“The first difficulty which we met after getting under way,”
continued Mr. Hamilton, “was that the manufacturers on the
outside—the “twenty-per-centers’ we call them—attempted to
steal our thunder. One of them went so far as to send out
letters to the trade telling dealers to paste the ads in their
windows. When we became aware of this the question came up
of signing the ads, something which we had not done for fear
it would create a wrong impression with the public, and because
we did not want to unnecessarily antagonize the other manufac-
turers. But the difficulty was met in an even more effective way.
“A window-paster was designed and furnished to dealers
who sold the ice cream of manufacturers participating in the
shutting campaign. This window-paster was copyrighted and
Out the a notice was printed on it forbidding the use of the
Twenty- card or design without authority. Then space was
P” bought in trade papers with large local circulations.
In this space the names of the six concerns which were footing
the bills were published, with a request for co-operation. Of
course, this was a delicate thing to do, without giving the
impression that we were a combination of big manufacturers
out to “get’ the little fellows, but the copy used not only
accomplished its purpose so far as preventing the “twenty-per-
centers’ from capitalizing our efforts, but also brought a marked
response from the druggists.” The copy was as follows:
These are the firms who are spending ten thousand dollars in the ice-cream
advertising campaign which you see running in the newspapers.
They are spending it to build your ice-cream business, and they are willing to
spend forty thousand dollars more if the druggists and other ice-cream dealers
of Chicago will co-operate.
Be sure that you buy your cream from one of these six firms. It is the only
fair thing to do. -
If this campaign continues a year, it will double your ice-cream business.
But it won’t continue unless every druggist co-operates.
Don’t wait to be solicited. Pick up your telephone and call up one of these
six firms now. Tell them, as a member of the C. R. D. A., that you appreciate
what they are doing for the druggists of Chicago and want to show your appre-
ciation by giving them your business.
340 ADVANCE IN METHODS OF ANALYSIS
In the newspaper copy itself the facts which were used to
line up the manufacturers were put to work lining up the
consumer. The opening ad, which took up fifteen inches across
three columns, exploited the fact that over 250,000,000 gallons
of ice cream were eaten in the United States last year. Then
it went on to show why. Considerable space was given to its
food properties and also to the improved sanitary conditions
under which it must now be made. “And after you have
eaten all you can because of its food value and its cheapness and
digestive quality,” urged the copy, “then order another plate
because you like it. Here is one case where that which tastes
good is good.”
The following ads—smaller in size—reviewed the situation,
capitalizing the same facts. Throughout the campaign the use
of concrete argument was most noticeable, and therein un-
doubtedly lies its effectiveness. In fact, the whole undertaking
is a striking demonstration of what can be done through a
careful digging for facts and then using them to best advantage.
There are any number of other products about which equally
startling facts might be obtained, and which might be exploited
through a similar co-operative campaign. There is no question
that the modern tendency in business is along co-operative
lines, and business men are coming to realize that co-operation
will accomplish more than destructive price-fighting. This con-
dition lends itself to campaigns designed to increase the per cap-
ita consumption of a product, such as Chicago’s “Eat More
Ice-cream” campaign here outlined.
3. THE USE OF ANALYTICAL METHODS IN ADVERTISING
PROBLEMS
Rollin B. Custer has written the following exposition of some
of the ways in which the plotting of sales curves may be em-
ployed by the advertising manager in laying out his work:
*When the advertising manager engaged in general publicity
work ceases to consider as highly important the number of
coupons and keyed replies received, and rivets his attention on
the daily, weekly, or monthly sales reports, he has taken a long
step in advance.
*Advertising and Selling, June, 1915, p. 8.
ADVANCE IN METHODS OF ANALYSIS 341
His business is solely to increase sales and his work is a
failure if he has not done so, even though the correspondence
department is working overtime answering the inquiries he has
created. .
Hence the advertising manager should give the sales of the
lines he is advertising careful and minute study. He should
know from week to week whether they are increasing or de-
creasing; whether there are definite seasons for their rise and
fall; what conditions have an effect on them; and, especially,
to just what extent the various methods of advertising at his
disposal can influence them.
A study of this kind is greatly facilitated if the weekly or
monthly figures are plotted into curves. The significance of a
whole column of figures is very difficult to grasp, as only three
or four can be comprehended at a time; the mind is confused
by the inevitable variations between consecutive items, so that
general tendencies, and especially periodic or seasonable move-
ments, are quite apt to be obscured.
This point is well illustrated by the experience of the adver-
tising manager of an agricultural implement manufacturer.
In September, 1914, he had conducted a campaign on a
machine used by city milk dealers, and although he had watched
results carefully, he began to feel by January, 1915, that it had
been a failure. Nowhere could he lay his finger on returns
sufficient to justify the expense incurred. Direct inquiries had
been too few to mention, and the salesmen were neither en-
thusiastic nor encouraging.
And yet the line had appeared to offer possibilities. It was
new and would only be bought after the prospect was thor-
oughly educated to its advantages. It had never been adver-
tised, but the salesmen had been disposing of fair amounts for
nearly a year. It seemed certain that an educational campaign
would be profitable.
Circular letters were used, because no magazines would
reach this restricted class of prospects without large waste
circulation, while, on the other hand, their names were easily
secured from business directories. The campaign consisted of
two letters: one described the usefulness of the machine, and
contained a booklet giving full details of operation, economies
effected; the other letter emphasized the merits of the particular
make of machine being advertised. Each salesman was pro-
vided with a list of persons to whom letters were sent in his
342 ADVANCE IN METHODS OF ANALYSIS
Chart Showing Sales Record for 18 Montha
X Indicates Point at
which Advertising Campaign was Begun
O
:
;
The chart shows clearly the steadying effect of advertising on the commodity
sales of a single article after the point X was passed.
'Sales
$2,500
l,500
500
# 3 # 3 3 H = f; ; ; ; ; ;
; ; ; ; ; ; ; ; ; ; ; ; ;
ă ă ă ă ă ă ă ă ă ă ă ă ă
Sales curves over a period of years. The letters A, B, C, etc., indicate dif-
ferent types of advertising effort which are explained in this article.


ADVANCE IN METHODS OF ANALYSIS 343
territory, and was to follow them up in person. To establish
leads each letter contained a return postcard requesting a
salesman to call.
As has been said, very few of these cards came back, and the
salesmen were pessimistic in their reports as to the value of the
advertising. The disconcerted advertising manager turned to
the sales reports, but these gave him little comfort. In round
numbers the figures were as follows:
Date Sales
October, 1913. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $500
November . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
December . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 350
January, 1914 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500
February. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000
March . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,600
April . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 900
May . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300
June . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,100
July . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 750
August . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 350
September . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000
October . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J. 600
November . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,900
December . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 900
January, 1915 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,350
The campaign, it will be remembered, was run in September,
1914, and in October the sales fell off. November was a good
month, but there was nothing remarkable about either Decem-
ber or January, each having been previously exceeded.
Later reports showed:
February, 1915 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,900
March . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,200
These figures were very much better, but the advertising
manager felt he could hardly claim credit for results obtained
six months after his work was done. It occurred to him,
however, to draw a curve from these figures, and its revelations
literally astonished him.
Fig. 1 shows this curve with the date of the campaign indicated
at the point ac. It is at once evident that, prior to the adver-
tising campaign, sales were tending to fall off, but that after-
ward they were abruptly increased, and that sales in February
and March formed part of the general upward movement—a
344 ADVANCE IN METHODS OF ANALYSIS
fact that an inspection of the figures themselves failed to show.
That the advertising campaign was the actual cause of the
increase is not proved by the curve, but a careful investigation
revealed no other factor competent to produce this result.
Hence the following interpretation of the curve seemed justified:
The advertising campaign, while powerless to cause action
by itself, had either made the salesmen’s work much easier for
them or had stimulated them to greater efforts—in either case
it was worth while, and probably both effects had taken place.
Since it took some time for the salesmen to cover the ground,
more than one call was necessary in many cases; several months
were required before the full benefits of the campaign were felt.
The peak in November is probably due to the clearing up of
prospects who had previously been hanging fire.
Curves such as this enable the advertising manager to form a
clear conception of what his advertising is doing. He can note
the effect of each campaign, the time required to produce results,
and the time during which results continue to be produced.
The active and dull periods for seasonable goods are clearly
marked, and the date to begin active advertising is exactly
indicated. An unusual sagging of the curve is a danger signal,
and if persistent is a warning—the publicity must be increased
or its character changed.
Curve No. 2 shows how the advertising manager can keep his
fingers on the pulse of a commodity’s sales and administer stim-
ulants as required.
The article in question is a small machine made by a hardware
ºtecturer. sold by dealers, and used by women in household
WOTK.
The manufacturer devoted most of his publicity to establishing
his trademark, which covered a very extensive and varied line,
so that the individual items received little consistent treatment,
as the history of this particular one shows.
This drive was placed on the market in December, 1908, and
for several months was sold to dealers without advertising. In
May, 1909 (point A on the curve), an attractive folder was pub-
lished, which was given to dealers for distribution to their cus-
tomers. That this method of advertising was effective is shown
by the fact that the sales promptly rose above the $1,500 mark
and stayed there for over a year and a half. It is a fair inference
that this period represents the useful life of the folder.
In June, 1911 (point B), after a slump in the sales, a half-page
ADVANCE IN METHODS OF ANALYSIS 345
advertisement was run in a large national weekly. An increase
in the sales promptly followed, which lasted for four months.
After the sales had remained below $1,500 for about six months
another boost was made in June, 1912 (point C). This consisted
of a new dealer folder and advertisements in several of the
women’s magazines. Up went the sales again, but after a year
and a half all virtually became lost, and the sales slid rapidly
down toward extinction.
There is no doubt but that further publicity would have
brought the curve up again, but the manufacturer decided to
abandon this item in favor of an improved model, so it was left
to its fate.
With a curve such as this before him, the advertising manager
is in a position to predict with some degree of accuracy what
results can be expected from a given form of advertising, and he
is also able to compare his advertising cost with the results se-
cured, and thus determine the efficiency of his methods.
He must, however, constantly remember that an increase of
sales following an advertising campaign is no proof that the
campaign caused the increase. He must, therefore, keep thor-
oughly informed on all other factors that might affect sales—
general business conditions, competition, etc.—and determine
as far as possible what effect these have had on his curve.
Otherwise his attempts at prophesying for the future may prove
disastrous failures. .
It would be impossible to discuss in a compilation of this sort
more than a few of the more suggestive methods by which analy-
sis can be employed in handling the advertising end of sales
campaigns. One of the uses to which it is being put with great-
est success is in testing demand, and the variations of this use
suggest large possibilities for its profitable employment as
methods of analysis become perfected. The following discussion
from Printers' Ink shows how the method has been used in one
or two cases recently:
*The manufacturers of a cleansing and polishing compound
had always put it up in cakes. After some years of success they
*Printers' Ink, April 8, 1915, p. 92.
346 ADVANCE IN METHODS OF ANALYSIS
decided to add a powdered form of the product to meet a sup-
posed demand for it. They would have liked to know, before
. . committing themselves to an advertising campaign,
Alºu just how much demand. Incidental but quite as im-
#. portant was the question of where the demand would
* come from, whether from a latent interest in cleansers
and polishes in general, or from competitive products, or from
their own cake. -
It made a difference, certainly, which of these was the real
source, and touched the heart of the business’s good will. Sup-
pose they went out and advertised the powder heavily, only to
find that the powder market was a harder and no more desirable
one than that they already had. Perhaps it would cost more to
get new business there than the same expenditure would get for
the cake. It would be a serious thing if the effect of the adver-
tising should be simply to transfer a large part of the demand for
the cake over to the powder, and run the chance of having it
stolen away by other cleansing powder manufacturers who had
occupied that part of the field longer. In that event, the new
product would be a leak instead of a business getter.
That evil result would not follow if the demand were allowed
to develop naturally, or if the powder were advertised in the
right way in connection with the older product, showing for
what purposes the cake was better or handier, and for what the
powder was best. It would save a lot of time, money, and dubi-
tation to find out at the start. But how?
The Bon Ami Company may not have had precisely these
questions in mind, but its problem was the same. And it set
out to find out the answer. It has always been a great believer
in putting a question up to the consumer. It has advertised
for “new uses” and knows what an interest the housewife takes
in such questions. It is still paying two dollars for every new
use and has paid as much as $50 for an unusually good suggestion
of a new use.
With this experience the company decided to offer a series of
prizes, $2,250 in all, for the best uses, not necessarily new uses,
of the two kinds of products. The best uses of the cake and the
best uses of the powder were sought, in the order of their useful-
ness. The advertisement appeared in the April magazines, and
the deluge of replies has begun. -
Already the importance of the investigation by publicity is
being demonstrated. The office had been in a quandary about
ADVANCE IN METHODS OF ANAEYSIS 347
the sifter hole in the top of the can of powder, as to whether it
was not too small or properly placed. It seemed a point of great
practical moment and there were expected to be a good many
complaints about it. But none of the first thousand or so letters
have mentioned the sifter hole, and it appears to be nothing to
worry about; it can be dismissed from attention. Other sur-
prises are probably in order when the 25,000 or 30,000 lists that
are expected shall be classified and the uses compared.
v. Consumer investigations of this sort, through publicity, are
much rarer than they might be. There is no end to the contests
for an appropriate name for a product, for a slogan, catch-phrase,
or trademark, either with a view to publicity or to get names of
dealers, or to distribute samples. But there seems to be an
opportunity in the idea for straight investigation on a larger scale
than has been done before. Trying it out on a few dozen or hun-
dred people cannot compare for certainty with a test on 25,000.
When we come to the more strictly advertising problems, we
find the value for the use of analytical methods even more
specific than it is in the case of market studies, because here it is
possible to work out results with a comparatively high degree of
certainty. The following articles present various sides of the
question of using analytical methods in determining the amount
of advertising appropriation. This is one of the favorite grounds
for dispute among advertising men, and these articles illustrate
something of the variety of opinion which prevails as to what
figures and what other data are best and safest to employ as a
basis for calculating the appropriation. This variety of opinion
serves as a good illustration of how far analytical methods in
advertising still are from being completely codified:
§
[EDITORIAL NoTE: It goes without saying that advertising
results cannot be bought at so much per unit. An appropriation of
$100,000 will buy a certain definite capacity in horsepower or kilo-
watts, when invested in a power plant, but when it is to be invested
for advertising no man can tell just eacactly what it will buy in terms
of results. For that reason an advertising appropriation is often
determined by compromise rather than by agreement. The lack of
a definite basis upon which to figure the amount makes one man’s
348 ADVANCE IN METHODS OF ANALYSIS
guess seem as good as another's, and unless somebody comes forward
with a logical reason for basing it upon a percentage of the gross sales
or upon the population in the territory to be reached, or upon some
other definite object, the appropriation is likely to be the result of
pure compromise.
“Printers' Ink” has believed for a long time that some logical basis
for determining the advertising appropriation could be worked out
in any business. That is not to say that the same basis would be
satisfactory for every business, nor that any definite “rules” can
be laid down. Two concerns in the same line of business might find
tt advisable to base their appropriations upon totally different con- .
siderations. Changing conditions might necessitate a change in
the whole method of figuring the appropriation for the same concern.
But we firmly believe that the appropriation can be—and should be
—based upon agreement instead of compromise. That implies,
of course, a definite basis which shall be determined according to the
eacperience and to fit the needs of each individual advertiser.
Though it is manifestly impossible to lay down any hard and
fast rules as to what the basis shall be, it is possible to point out the
process of reasoning by which the basis is to be arrived at, and to
cite, by way of illustration, the ea:perience of advertisers who have
worked out the problem for themselves. To that end a number of the
leading advertising agents have been questioned, and their views are
tncorporated in the discussion which follows. We have also collected
a large amount of material from articles which have been published
in “Printers' Ink” and elsewhere. The following articles are an
attempt to reflect, in workable form, the best thought on the subject
of fiasing the advertising appropriation—Ed. Printers' Ink.]
*Some advertising appropriations are based upon a fixed per-
centage of last year's gross sales. Others are based on a per-
centage of last year’s profits. Some are based upon the number
of possible buyers in the territory which is to be reached. Others
are based upon the saving which is effected through increased
volume of production. Still others are determined with refer-
ence to the decrease in selling cost through salesmen alone. Yet
others are fixed by the sales quotas for next year. And some,
alas, go according to the idiosyncrasies of the board of directors.
Excepting the last named, there is every reason to believe that
each of those methods works well under certain conditions and is
*Printers' Ink, February 11, 1915, p. 17.
ADVANCE IN METHODS OF ANALYSIS 349
fully justified by its results. The advocates of any one of them
(except the last again) can give you any number of good and
sufficient reasons why it is exactly the method which ought to
be followed in the particular case which is under discussion. So
there is no opportunity to hold one system up as better than the
rest. But it is worthy of special emphasis, right at the start,
that every one of those methods has been evolved from a study
of actual marketing conditions. As J. J. Geisinger, of the Federal
Advertising Agency, New York, puts it:
“There can be no fixed ratio of advertising investment for all
lines of business, or even for similar lines of business. There are
too many determining factors to be considered, weighed, ana-
lyzed, and dissected, such as:
Quality of the product.
Cost and marketing price.
Necessity or luxury.
Trade conditions affecting the product.
Existing competition or possible competition.
The necessity of acquaintance advertising.
Possible per capita sale.
Life of product.
Rapidity of consumption.
Change of fashion or condition.
Seasonable or constant demand.
Intermittent or regular demand.
Sales support of the advertising.
Territory boundaries controlled by shipping expenses or other conditions.
Whether there is a general line that would derive benefit from the advertis-
ing of a single specialty, as there is with Keen Kutter Pocket Knives and
Heinz Ketchup.
A subsidiary sale to depend upon as in Talking Machines and Safety Razors.
The necessity of maintaining demand already created as well as creating
new demand.
/ “It is, therefore, my contention that the basis of an advertis-
ing investment for each business must be determined by an actual
study of that business and that all set rules are superficial.”
Perhaps Mr. Geisinger's list would not be complete for every
case, but it serves to show the sort of analysis which must precede
the adoption of any method of figuring an advertising appropria-
tion. Neglect of this fundamental analysis often involves con-
cerns in trouble, as is pointed out by Robert Tinsman, president
of the Federal Agency.
“It needs no analysis,” says Mr. Tinsman, “to show why
Postum, which is made of roast wheat and molasses, can afford
350 ADVANCE IN METHODS OF ANALYSIS
\
a gigantic appropriation; and a natural coffee campaign, based
on a raw product subject to market fluctuations, must, by com-
parison, afford only a very small appropriation.
‘First, let me say that I agree that the time is coming when
manufacturers of trademarked goods will divide the dollar more
scientifically. In fact, I have preached from the beginning that
the only way to gauge advertising results is on the basis of met
profits per dollar spent. -
“For example, I had a conference some time ago with a manu-
facturer who is supposed to have made a tremendous ‘put over’
in the jewelry trade.
“All advertising men agree that his campaign is clever beyond
comparison. Advance distribution was secured to the tune of
7,000 jewelers before the advertising appeared. The advertising
was apparently a big ‘put over’ because the article secured uni-
versal demand almost as quickly as it had secured universal
distribution. But the manufacturer soon found he had developed
a tail to his business dog that soon threatened to wag the dog.
The part of his business developed by his advertised article
was only a specialty part after all, and the cultivation of this
specialty business was at an expense that did not permit distri-
bution over his entire business, because the other unadvertised
part of his business did not show consequent results.
“In a word, the increase in business of the advertised specialty
made him overlook the fact for a minute that the increase in net
surface profit for his entire business did not agree with the
Indications showing of his sales sheet—that is, there was not the
Are Mis- proper increase relation between the sales and the net
leading profit.
“Consequently the stockholders were not ready to agree with
the advertising manager that the campaign was such a huge
success after all.
“The thing he should have done at the beginning of the cam-
paign was to have provided for an increase all along the line and
the distribution of the advertising expense among other articles
—not on a single specialty. If such had been the case then this
campaign would not have to undergo a reorganization now at this
late date.
“Surface indications in advertising are very often misleading.
For example, an account came to our attention recently that was
a model apparently for copy and appearance, but investigation
proved that the trade relation end of the campaign had been
ADVANCE IN METHODS OF ANALYSIS 351
ignored and that all the trade or salespeople knew about the
line was that it was an advertised line and therefore supposed to
be better.
“No idea of the selling arguments had been cultivated. It
was a case of blind leading the blind when a customer would ask
a clerk why she should buy that particular advertised article.
It needs more than clever copy and good art to reduce the neces-
sary percentage of appropriation to a point within reason.
“I do not believe that it is possible to lay down any set rule
for percentage of appropriation. It varies with the merchandise
and the conditions as illustrated in the Postum case.
“Even in one field the percentage of appropriation will vary. "
A staple silk, for example, will afford a very small margin, while
a novelty silk on which the profit is much larger will permit a
liberal percentage. “It all depends’—that is the only rule that
can govern this question.
“At the beginning of the campaign, however, this point should
be discussed and as soon as possible a percentage of appropria-
tion fixed. At the beginning, when it is necessary to establish a
brand in the face of competition, the percentage must be neces-
sarily larger. As the demand begins to be larger this percentage
will decrease as the volume increases. I have in mind a clothing
account which started on a 5 per cent. appropriation basis and
took five years to get down to the right 3 per cent. basis,
which is the legitimate percentage in its particular field.
“If this question is firmly settled in the advertiser’s mind,
then advertising will come to be considered as a legitimate part
of the cost of doing business—an investment in good will as
necessary to the dividend power of the business as selling expense.
That is what we are trying to do all the time, and as we succeed
we find the necessity for continuous canvass for increased appro-
priations diminishing. When we succeed, the advertising appro-
priation automatically increases with the percentage, and that
is an end mutually desirable with the advertiser and the agent.”
Most advertising men seem to agree that the most convenient
way of designating the relative size of an appropriation is by
means of its ratio with the gross sales. That, however,
Fººtage is a very different thing from the statement that an
%.; appropriation should be fia:ed at a definite percentage
Comparisºn of the gross sales. Mr. Tinsman states that 3 per
cent. is a legitimate basis in the clothing field. By
that he means that under normal circumstances a well-estab-
352 ADVANCE IN METHODS OF ANALYSIS
lished clothing concern should not need to appropriate more than
3 per cent. of its gross sales in order to maintain its standing
in the trade. He does not claim that 3 per cent. is any limit
in fixing the appropriation for a new concern, or for an estab-
lished concern under exceptional circumstances. The percent-
age of gross sales is a convenient method of comparison, rather
º a hard and fast rule for determining what an appropriation
shall be.
This point is more clearly illustrated, perhaps, by the following
letter from a prominent agent who asks to remain anonymous:
“The percentage of money devoted to advertising should de-
pend entirely and directly upon the precise nature of the job to
be accomplished, and one of the biggest helps that a real adver-
tising agency can give to a client is on this very point; if the agent
has had proper experience and is honest and applies to the situa-
tion the same tests that he would apply if he owned his custom-
er’s business, his advice should be of incalculable worth to the
advertiser.
“I could cite scores of instances of how we arrived at certain
appropriations, but the conditions governing each case would
be highly individual and would furnish no basis for a conclusion
as to any proper specific percentage to be spent by the general
advertiser.
“I know of a baby-carriage manufacturer who, in his first
year, spent 10 per cent. of his sales in advertising, but in his third
year was required to spend only 7 per cent. to do practically
three times as much business. I think that the intelligent
spending of the 10 per cent. the first year has a great deal to do
with the fact that he is only spending 7 per cent. and still
pushing his business forward so vigorously in the third year.
“I know of a quick-repeat product, used by practically 75 per
cent. of the adult male population of this country, where 2%
per cent. is considered necessary for a proper and adequate ad-
vertising budget; but I know of another product in an exactly
similar class, sold to the same class of trade, but confronted by
such entirely different selling conditions, that an advertising ap-
propriation of between 5 and 6 per cent. is required.
“I have in mind a ‘quality’ product, finding its sale only
among the very intelligent and well-to-do, which has an adver-
º expenditure of between 25 and 30 per cent. of its gross
Sa, 62.S.
“In the main, I agree that the time is not only coming, but
ADVANCE IN METHODS OF ANALYSIS 353
that it is here, when more and more makers of trademarked
goods are adopting the habit of looking an advertising dollar in
the face and demanding of it a real dollar's job. This will, in
my opinion, be done more mathematically and more scientifi-
cally in the future than is now the case.
“It is possible in this advertising business to prove almost
anything that one sets out to prove, but within the limitations of
my experience I have not found that you could lay down very
many rules concerning advertising, unless you are equally willing
to revoke them and put in force others where the rules have been
proved wrong.”
Of course, it is obvious that the percentage of gross sales is a
perfectly rational method of expressing the work which the ad-
vertising has done. The gross sales are the sum total of the
energy, and the ratio of the advertising appropriation to that
total is a more or less accurate estimate of the efficiency of the
advertising. But it seems that the fixing of an appropriation
to cover a future period must depend upon many considerations
besides the mere bulk of last year’s gross sales. That point will
be discussed further in the article which is to follow.
In the issue of Printers' Ink for the week following that in
which this article appeared there was printed the following
further discussion of the question, in which the ground was
taken by some of the writers that the percentage of gross sales
is an unreasonable basis for determining the appropriation,
although it has value as a means of keeping track of normal
expenditures.
*As was stated in a preceding article, the ratio between an
advertising appropriation and the gross sales is to be regarded as
... a means of measuring the energy put into the ad-
The Ratio tº wº * - & g
É..." vertising rather than a criterion by which future ap-
the Appro- propriations are inflexibly to be fixed. ... Even in the
priation department-store field, where appropriations are most
an. $º severely judged in comparison with sales, we find that
ales * $ sº tº tº
outside conditions frequently exert most profound in-
fluence upon the ratios. W. R. Hotchkin, of the Cheltenham
Advertising Service, New York, and formerly Advertising Man-
*Printers' Ink, February 18, 1915, p. 78.
354 ADVANCE IN METHODS OF ANALYSIS
ager of Gimbel Brothers’ and Wanamaker’s New York stores,
writes: -
“The advertising of a retail store can be, and really must be,
very carefully controlled, and kept within a definite percentage
of the gross sales, and so far as I have any knowledge, this per-
centage is always figured on gross sales.
“At Wanamaker’s for many years we took a pride in keeping
the percentage of advertising cost down very close to 2 per cent.
of the gross sales. Of recent years I know that it has very greatly
advanced at Wanamaker's, and I should judge that to-day it
was not less than 5 per cent.
“At Gimbel Brothers, being a newer store where the promo-
tion had to be more aggressive in anticipation of business that
had to be made, the percentage was still higher than at Wana-
maker’s, part of the time being considerably over 6 per
Cent.
“I find that most stores try to keep their percentage of adver-
tising cost down to the neighborhood of 3 per cent., and I under-
stand that Marshall Field is able to accomplish the supreme
achievement of doing his advertising on 1 per cent. of gross sales,
and within this amount, which would be $500,000 on a business
of $50,000,000, in round figures, is included everything that is
chargeable to advertising, including printed matter of all sorts,
and all promotion expenses.
“When we consider the advertising appropriations of manu-
facturers, an entirely different condition exists. A great many
manufacturers figure their advertising as a very large part of the
cost of the article. Take a tooth paste, for instance, the list
price of which would be 50c. and the wholesale price $3.50 a
dozen, or about 29c. each. The actual cost of the article perhaps
is 5c. to 7c. This item is representative of many articles bearing
a trademark and nationally advertised, and it would admit of
the manufacturer spending 25 per cent of his entire receipts in
exploiting it.
“Other merchandise of a more staple character, such as rugs,
shirts, petticoats, and dress fabrics would have to spend a very
much smaller percentage. In fact, I should judge that in the
neighborhood of 5 per cent. would be as much as most of them
could afford, so I do not see how a percentage rule could be ap-
plied generally. Each manufacturer would have to be guided
by the gross profit which he could make on his commodity, and
this gross profit would be determined by the cost of producing
ADVANCE IN METHODS OF ANALYSIS 355
the article, and the retail price which competition would enable
him to secure.
“Many food products can easily afford to spend 20 per cent. of
their receipts for advertising, and I should not be surprised to
find that some spend considerably more.”
Now if it were possible in any line of business to base adver-
tising appropriations strictly upon a ratio with sales, it would
seem that the department store would be the most
Gross, promising place to find the system in operation. The
Nº. department store serves a limited territory which can
jº be studied at first hand; it sells direct to the consuming
the Facts public without the intervention of agents or middle-
men; it handles a wide variety of goods of different
grades and prices; the seasonable fluctuations in demand can
largely be offset by skilful buying; it can keep in constant touch
with what its competitors are doing, and can get the quickest
possible action in meeting competition. Yet even the depart-
ment store does not find a fixed percentage of the gross sales a
sure guide to an adequate advertising appropriation. As Mr.
Hotchkin points out, the new store which breaks into the market,
as Gimbel Brothers did in New York, must spend more money
for advertising. When the “shopping centre” shifts still farther
away from Wanamaker’s, the latter must spend more money in
proportion to its sales in order to persuade people to travel the
extra distance. Thus we find that market conditions make
themselves felt quite as surely in the retail field as they do in the
case of the manufacturer. Gross sales, taken by themselves, do
not furnish all the necessary facts.
It is a fact, however, that the ratio between advertising expen-
ditures and gross sales, when it can be obtained in the form of
an average for an entire industry or the major part of an indus-
try, may be very useful. The concern which is able to approach
the subject of an advertising appropriation with the knowledge
that the normal or average advertising expenditure in its field is
7 per cent. of the gross sales will find its problem materially
simplified. Its analysis of the market with respect to its own
product will indicate wherein that normal average must be ex-
ceeded, and wherein it may reasonably be expected to prove
adequate. The normal department-store expenditure, for ex-
ample, is known to be somewhere between 3 and 4 per cent. of
the gross sales. Exceptional circumstances require some stores
to spend more, and equally exceptional circumstances enable
356 ADVANCE IN METHODS OF ANALYSIS
other stores to prosper with less. The normal expenditure does
not by any means fix the individual appropriation, but it furnishes
a starting-point. It supplies a tentative ratio which is to be raised
or lowered according to the analysis of the individual conditions.
A table of the average percentages of sales devoted to ad-
vertising in certain retail lines has been compiled by the A. W.
Shaw Company, and published in a book entitled “Keeping Up
With Rising Costs,” by Wheeler Sammons, of the editorial
staff of System. The figures were obtained from several thou-
sand retailers in all parts of the country, and when averaged give
the following result:
Per Cent.
Groceries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .83
Hardware . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. 19
Vehicles and Implements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.22
Variety Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. 52
Shoes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.65
Drygoods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. 67
Furniture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.72
Jewelry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.85
Clothing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. 16
Department Stores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.01
Mail-order Houses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.21
Those figures may be regarded as typical of present-day prac-
tice, and the retailer, by comparison, can determine whether
his own expenditure is abnormal, and if it is, whether or not it
is justified by abnormal conditions. For many reasons it is
doubtful whether a similar table could be compiled for manu-
facturers which would not be entirely misleading. But any
manufacturer ought to be able to arrive at a pretty close esti-
mate of the average ratio between advertising and sales in his
own line of business, and such an estimate will give him a good
point of departure when he sets out toward the determination
of his own ratio.
But the greatest objection to the use of the ratio between ad-
vertising expenditure and sales as an inflexible standard for
Danger in future appropriations lies in the fact that it bases fu-
Jºãºing ture progress upon past performance. . Last year’s
the Future sales are water which has gone over the dam, and ad-
by Whº'ſ vertising looks toward the future. The point is aptly
** illustrated by G. C. Sherman, president of Sherman
& Bryan, New York, who writes:
“The man who would hazard a guess as to what percentage
ADVANCE IN METHODS OF ANALYSIS 357
of past gross sales a manufacturer should appropriate for ad-
vertising, to produce a certain percentage of future sales, could
claim close kinship with the individual who would attempt to
tell how much money a sick man ought to spend to get well.
“One reason why so many businesses are inefficiently adver-
tised to-day is because manufacturers and advertising men too
often base their advertising appropriations upon past perform-
ances instead of upon faith in their product and faith in the fu-
ture. Experience teaches me that advertising appropriations
which yield the best results are those that are based each year
upon the anticipated sales of the next year—never on past sales.
“Past performances are past. They teach us what not to do
rather than what to do. They serve as signals but not as the rails.
“When I am asked to answer the question as to what per-
centage of gross sales a manufacturer should appropriate for
advertising, I am content to place myself on record as answer-
ing ‘I don’t know.’”
W. C. D’Arcy, president of the D’Arcy Advertising Company,
St. Louis, elaborates the same idea still further.
“One thing that makes the advertising business such an in-
teresting field,” he says, “is the fact that there are so many
people engaged in it who take the matter seriously, and are con-
stantly endeavoring to solve all sorts of problems and thereby
increase the efficiency of space and the money devoted to the
promotion of good goods.
“However, as regards the matter of fixing appropriations, I en-
tertain the opinion that it will never be possible to establish a
rule of thumb that will enable any manufacturer, or any adver-
tiser, to state beforehand and with definite assurance that he’s
correct in his premises that a certain percentage of his sales will
represent his advertising appropriation.
“There may be from time to time cases where my contention
would be subject to a severe jolt, by virtue of some manufacturer
having solved his problem after that fashion, but still these ex-
ceptions can’t prove the rule.
“It’s true that the department-store or retail-store adver-
tiser can very largely determine his expenditure on the basis of
sales, because his sphere is very limited; it’s directly opposite
to the kind of field that confronts the national advertiser.
But even in the case of the retailer, his first year's advertising
expenditure, if he’s a big man and thinking of big business, will
in all probability be wholly out of line with his first year's sales,
358 ADVANCE IN METHODS OF ANALYSIS
at least so far as a nominal per cent. which has been devoted to
advertising is concerned.
“We have a concern who, for the present, at least, is basing
its advertising appropriation on the number of customers it has,
How Some and it allows a dollar for each for use in the advertising
Manufac- department. The sales aggregate over twelve million.
turers Rea. Personally, I think it is working on the wrong basis.
* * * “We have other manufacturers whose sales run into
big figures, and who have in the past been allotting 10 per cent. of
their gross sales as their appropriations for publicity, and it
seems in at least one instance to be working satisfactorily.
“We have other manufacturers who don’t analyze their ap-
propriation on the basis of their total sales, but who apply money
for advertising on the basis of their deductions as to what con-
ditions are generally, and which may interfere with or make for
business in their particular field. In other words, they apply
the charge in sufficient quantity to accomplish results in a given
season, without regard to what the previous sales have been.
“Personally, I am convinced that every advertiser has such a
different problem before him for solution that no cut-and-dried
rule can be followed, either as to the media he uses, the size of
space that he employs, and the actual story he tells, or the amount
of money that he appropriates for promotion.
“Two competing manufacturers can succeed and market
their products in totally different ways. Each will contend that
his is the only way to success. So it really in our minds is purely
a matter of an advertiser, through the aid of others, or by him-
self, finding out the human side of his package, or his product,
and building a dress of publicity to fit its peculiar form. It may
be a lean figure, or it may be a fat one. It may be old, or young.
It may be an individual who performs every day, once a week, or
once a month, and the publicity must be designed to suit the
needs of that individual, or, if you please, product.
“The ready-made clothiers have, through scientific methods,
figured the average man’s measurements and adopted sizes for
Pheroin their garments that allow them to sell them, pretty
“Ready generally, over the counter of the retailer. But the
made” advertising business is so personal with a product that
caſiºn, measurements must in each instance be obtained.
“ A ready-made campaign might fit conditions in 90 per
cent. of the cases, but the 10 per cent. guesswork, or loose-fitting
ideas, might spell ruin.
ADVANCE IN METHODS OF ANALYSIS 359
* “Advertising, to succeed to its fullest possibilities, must be de-
signed to hit the mark each time the trigger is pulled. There-
fore, percentages as the basis of an advertising appropriation
are theoretically good, but practically unsound.”
It may be interesting to manufacturers of different lines of
goods to note the percentages of gross sales spent by a represent-
ative department store in advertising the goods of each depart-
ment. If, for example, it costs the department store 3 per
cent. of its gross muslin underwear sales to advertise that depart-
ment, it may indicate to the underwear manufacturer that he is
himself spending too small a percentage for his own advertising.
The following figures were given in a recent issue of the Dry
Goods Economist, and represent the expenditures for each depart-
ment of a well-known Pacific Coast store whose entire advertis-
ing expenditure for the period covered, amounted to 2.5 per
cent. of its total gross sales. Of that amount, 1.9 per cent.
was used in direct newspaper advertising for specific lines of
goods, and could, therefore, be charged to the proper depart-
ments. The other 0.6 per cent. represents the general adver-
tising expense (headings, tail-pieces, booklets, novelties, salaries,
etc.) which could not be charged to any specific line of goods,
and was distributed as a general overhead charge on all depart-
mentS.
The following figures, then, represent the percentages of gross
sales of each department which were actually expended directly
to sell the goods of the department, plus a general overhead
charge of 0.6 per cent:
Per Cent.
Art Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.7
Beds and Bedding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7
Books. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.5
Cameras . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 .. 6
Carpets, Linoleum, Mattings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.9
China, Glassware, Lighting Fixtures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7
Clothing (Boys') . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.8
Clothing (Men's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4
Corsets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.7
Domestics (Wash Goods, Flannels) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2
Embroideries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.8
Gloves (Women's and Children's). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.5
Groceries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.7
Hair Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7
Hair Dressing and Manicuring (including switches made to order). . . . . .9
Hats (Men's and Boys'). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.8
Hosiery and Knit Underwear (Women's and Children's). . . . . . . . . . . . . . 1.8
360 ADVANCE IN METHODS OF ANALYSIS
Per Cent.
2.
House Dresses, Wrappers, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Housefurnishings (inc. Hardware) . . . . . . . . . . . . . . . . . e tº e º e º e º e º 'º & © & © & 2. 1
Infants’ Wear. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2
Jewelry, Clocks, Silverware . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.8
Laces . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.0
Leather Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.92
Linens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
Linings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2
Men's Furnishings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.0
Millinery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . • * * - - - - - - - - - - - - - - - - - - - - 2.6
Muslin Underwear. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.0
Neckwear, Chiffons, Veilings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.0
Notions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.6
Patterns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2
Pictures, Frames, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3
Ribbons. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.4
Sewing Machines. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3
Shoes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6
Silks and Velvets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. 1
Sporting Goods, Trunks, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. 6
Stationery. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2
Suits and Coats (Misses'). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.9
Suits and Coats (Women's). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2
Toilet Goods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.7
Toys, Baby Carriages. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4
Umbrellas and Women’s Handkerchiefs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2
Upholsteries, Lace Curtains. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5
Waists, Petticoats, Sweaters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.0
White Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.5
Those figures are useful chiefly as showing what a wide varia-
tion there is in the percentages of the gross sales required to move
different kinds of goods in the same market. They indicate as
well as anything can the fallacy of attempting to draw conclu-
sions as to what is a “fair” percentage of the gross sales to spend
for advertising. A future article will discuss some of the meth-
ods whereby an appropriation is based upon an analysis of the
possible market.
Another series of letters and other discussions of the question
of fixing the advertising appropriation appeared some months
later, and brings out the opinions of various other advertisers,
some of whom incline to the view that the decrease in selling
costs ought to be the basis for estimating appropriations, rather
than the relations of gross sales or the other factors commonly
employed:
| ADVANCE IN METHODS OF ANALYSIS 361
*Sometimes the amount which a concern can invest in adver-
tising is strictly limited by the extent of the bank account, and
Anoma, in that case it is necessary to make the best of it. . But
Mij of under ordinary conditions, the appropriation ought to
Approach be big enough to do what is expected of it—which state-
to the , ment is definite only in that it indicates the necessity
* of finding out what is expected. It directs attention to
a study of the market rather than to the past performances of
the concern itself.
“I never have believed in the percentage method of fixing
appropriations,” says John O. Powers, president of the John O.
Powers Company, New York. “It costs more in percentage to
build a business up than it does to keep it going. It costs less
in percentage to keep a big business going than it does to keep
a small business going.
“Some articles are different from others and situations differ
also. It seems to me a percentage basis is a lazy way of doing
it or, let us say, an easy way of getting the advertiser to spend
money, when what ought to be done is to study the situation
thoroughly and apply the necessary selling force which is pref-
erably composed of a mixture of nine tenths brains and one
tenth money.
“The only advantage that I see to be gained out of the per-
centage method is that it accustoms the advertiser to the idea
of considering advertising as a regularly to be applied force to his
business.”
While it is probably true that the method of figuring the ap-
propriation as a fixed percentage of last year's gross sales is fol-
lowed by the great majority of concerns which have become
established, more and more advertising men are taking the view
set forth by Mr. Powers. They regard the percentage basis as a
good test of the efficiency of the advertising which has been done,
but when it comes to meat year's appropriation the only fair
comparison is a comparison with meat year's sales—which are,
of course, unknown.
At the November, 1912, meeting of the Technical Publicity
Association of New York, 21 prominent advertisers of technical
products made reports showing the methods by which their
appropriations were arrived at. Eight of those advertisers
declared that the business they expected to get or the business
*Printers' Ink, May 6, 1915, p. 8.
362 ADVANCE IN METHODS OF ANALYSIS
they ought to get, was not considered, but that their appro-
priations were figured largely upon past performances. The
other 13, however, took a different view. Past performances
were important, certainly, but market conditions were even
more important. They still figured their appropriations upon a
percentage of sales, but future sales were an important factor in
the equation.
F. R. Davis, of the General Electric Company, Schenectady,
N. Y., said that his company set apart an annual sum for gen-
Breaking eral periodical advertising, covering all of its varied
Away from products, which sum was to be used “if needed.”
Tradition. The appropriations for other forms of advertising
were arrived at separately for each product. The market for
each type of machinery was analyzed, the probable sales esti-
mated, and an amount designated which should be ample for
the work required. Those amounts, however, did not represent
absolute limits, as an emergency in any part of the business
might demand money quickly.
Those instances indicate a breaking away from the traditional
method of basing advertising expenditures upon a fixed per-
centage of last year's gross sales. In some cases that tendency
has progressed to the point where the appropriation is not di-
rectly based upon sales at all. The present writer has been per-
mitted to read the report to the Board of Directors of an ad-
vertising manager for an established concern doing a national
business in goods appealing to women. A substantial increase
in the appropriation was requested, and granted, but the ques-
tion of sales percentages was nowhere touched upon. By means
of his map-and-tack system the advertising manager had com-
piled a list of towns within certain limits of population, where the
sales fell below a certain minimum. The list was a formidable
one, and contained all the facts, including dealers’ names and the
amounts of their purchases during the past year. It was an
effective showing of the weak spots in the company’s distribu-
tion, and the advertising manager asked for a certain amount
per dealer, to be divided up in accordance with a submitted
plan including catalogues, window-display material, electros,
etc.
As a matter of fact, the new appropriation represented a large
increase when based upon a percentage of the past year’s sales, as
we privately figured it for our own information. But that ques-
tion did not come up in the directors’ meeting. They wisely
ADVANCE IN METHODS OF ANALYSIS 363
considered that they were making an investment for a particular
purpose—to strengthen sales where it was most needed.
Probably, as Mr. Powers suggests, the system of basing the
appropriation upon a percentage of the sales has been so widely
adopted because it is the easiest way to dispose of a vexatious
Question. The new concern, which has no past record of sales
to fall back upon, will start out with an appropriation based upon
the number of possible buyers in the territory to be reached, let
us say. At the end of the first year it has made some progress,
and extends its territory, still keeping its appropriation within
the limits of so much per buyer. After a few years its manage-
ment considers that the concern has “turned the corner,”
i. immediately the appropriation is figured upon a different
8,Se.
For example: in Printers' Ink for March 23, 1911, the figures
were given for the first three years’ campaign of the Howard
Dustless Duster Company, Boston, as follows:
Advertising
Appropriation Sales
1908. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,161.70 $ 1,041.04
1909. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,314.16 66,235.65
1910. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,521.23 112,740.01
Assuming that the appropriations were based upon some defi-
nite market conditions, and that they were not simply arbi-
trarily decided upon, there would seem to be every reason for
continuing the system. Instead of that, we find that the com-
pany, in 1911, began to base its appropriation upon the ratio
between advertising and sales which obtained in 1910. Evi-
dently the earlier system, which had worked well, as the figures
show, was abandoned, on the theory that the rate of increase
shown in 1910 was a normal rate. Perhaps it was. There is no
intention to criticise the company here—the case is cited simply
as an illustration of the tendency to get on the percentage basis
as soon as the profits begin to show.
Of course the concern which is just commencing its business
career cannot base its appropriation upon last year's sales.
Finning Some other basis must be found, and very frequently
the “Advar- it is discovered in the number of possible buyers in the
tising, field which is intended to be covered during the first
* year. The margin between the manufacturing cost
and the selling price of the goods must include selling cost and
364 ADVANCE IN METHODS OF ANALYSIS
profit. A certain proportion of the total selling cost must be
devoted to advertising.
Suppose we have a breakfast food, in the class which can be
sold at retail for 15 cents per package. It costs two dollars to
produce a case of 36 packages, which are to be sold to the con-
sumer for $5.40. The jobber pays $4.15 per case, and sells to
the dealer at $4.50. Thus, out of our gross margin of $3.40, the
jobber absorbs 35 cents, and the dealer gets 90 cents, leaving
$2.15 for our own selling cost and profit. We set aside a ten-
tative 10 per cent. for our profit, which amounts to 41% cents
on the jobber's price of $4.15, and we find there is left for selling
cost, including the advertising, the magnificent sum of $1.73%.
Now the experienced breakfast-food men in the company tell
us that it is not safe to allow less than a dollar per case for the
direct selling expense, exclusive of the advertising; so that we
have left 73% cents which may be spent for advertising to sell a
case of 36 packages to the consumer. In other words, we have
arrived at the conclusion that we can afford to spend for advertis-
ing during the first year, 2.04 cents per package or, to put it a bit
differently, we can spend 2.04 cents per family in the territory
we are to reach. Assuming that there are an even million fami-
lies in our market, our first year's appropriation will amount to
$20,400.
It will be noticed at once that this hypothetical concern is be-
ginning in a small way, covering perhaps a single state the first
year. At the end of that year it finds that it has sold 15,000
cases of the goods. Its gross sales amount to $62,250, and its
expenses have been $62,400; a net loss. But when it comes to
analyze its selling cost, instead of finding that the sales force
has absorbed a dollar a case as was anticipated, it finds that this
item has been reduced to 80 cents. It is only fair, and quite
reasonable as well, to credit that saving to the consumer ad-
vertising which has made it that much easier to stock the jobber
and dealer. So, for the following year we have a margin for
advertising of 93% cents per case instead of 73% cents. We
can spend 2.59 cents per family instead of 2.04 cents. Our
Original territory would command an appropriation of $25,000
for next year. . -
But we have already reached upward of half of our million
families in that territory, and they present a nucleus of good will.
Many of our jobbers sell to dealers outside of the restricted
territory. We have earned no profits yet, but our selling cost is
ADVANCE IN METHODS OF ANALYSIS 365
coming down, and we can see daylight ahead. So we take on an
adjoining district containing a million families more, and our ap-
propriation for advertising becomes $51,800 for the second year.
Next year we sell 35,000 cases. Our gross sales are $145,250.
Expenses are $148,050. Still the balance sheet shows a net loss,
but the selling cost is down to 75 cents. We have a margin per
case of 98% cents now. We can spend 2.75 cents per family.
We spread out still farther, and on a basis of 3,000,000 families
our third year's appropriation is $81,900.
The third year shows a profit on sales of nearly 100,000 cases,
and the selling cost comes down to a fraction above 71 cents.
Our advertising margin is now better than a dollar per case, and
is approaching three cents per family. There is no need for
further illustration, for the system should be perfectly clear.
The appropriation is based upon a certain expenditure per possi-
ble customer, and that expenditure is determined by the actual
reduction in the selling cost through the sales force.
The method outlined above represents an actual system which
is in use by a manufacturer—not of a breakfast food, however.
Of course the question at once arises as to what is to be done
when the selling cost reaches the point below which it cannot be
reduced, or what would happen if the selling cost were to in-
crease suddenly, due to business conditions, for example. The
only answer is that the manufacturer would use his judgment.
No system of figuring appropriations will take the place of com-
mon horse sense. As an aid to good judgment, any system
may be valuable, but no man has ever yet succeeded in finding
a substitute for it.
Thus far we have made no mention whatever of any forms of
analysis except those relating to commercial statistics and others
of a kindred character.
The use of analytical methods in the psychology of advertis-
ing is an enormous field of itself. Prof. H. L. Holling-
worth of Columbia University is among those who have done
valuable work in this field, and the following summary which
he makes of the results of his analysis of ninety-nine successful
advertisements is illustrative of the way in which psycholo-
gists are learning to apply laboratory methods to a study of the
actual problems of business men:
366 ADVANCE IN METHODS OF ANALYSIS
*Here are ninety-nine advertisements which have been sub-
mitted to me for psychological analysis. Each of these adver-
tisements is known or believed to have been unusually success-
ful. By success in this case is not meant conformity to any
esthetic, typographic, literary, or psychological principles. At
least this is not the primary meaning of the word. These ad-
vertisements were successful in that they actually sold goods,
produced inquiries, provoked replies, or attained publicity. If
they are psychological in structure, content, or principle, at
least we know that they were not selected beforehand on this
basis. It has been interesting to work over this very hetero-
geneous mass of advertising material in the attempt to classify
each specimen under the various categories and principles which
the psychologist uses when he studies or talks about advertise-
mentS.
A complete analysis would have been an indefinitely pro-
longed task. I have chosen to take seven rather different psy-
chological aspects, to classify all the advertisements
Seven wº wº e tº
Psycho- on these bases, and in this way to inquire what are
logical the leading psychological characteristics possessed by
Clºſed these advertisements as a group. The seven aspects
* chosen are suggestive of only a few of the many points
of view from which the nature of an advertisement may be re-
garded.
A familiar classification is one which has been made in terms
of the general type of the appeal, the task which the advertise-
ment sets itself. It may proceed by presenting a deliberate set
of arguments, in a logical way appealing to the intelligence of the
reader. Then we call it “long-circuit” copy if we are psycholo-
gists, and “reason—why” copy if we are advertising men. Or
it may quite ignore the reader's intelligence and appeal rather
to his instincts, his feelings, his emotions, and prejudices. Then,
if we are psychologists, we call it “short-circuit” copy. To the
advertising man this is human-nature copy. There is a third
type which is merely indeterminate or mixed, and often con-
sists of mere assertions and dogmatic statements. Classified on
this basis the results are as follows:
Long-circuit, or reason-why copy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Short-circuit, or human-nature copy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Mixed or indeterminate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
*Advertising and Selling, August, 1915, p. 19.
ADVANCE IN METHODS OF ANALYSHS 367
Obviously these successful advertisements have made their
major appeal to the intelligence, the calm, deliberate reflection,
of the readers. They have on the whole not been satisfied with
bare and unsupported assertion, nor have they made merely a
sentimental and emotional appeal. How far this tendency has
been determined by the character of the products advertised
it is difficult to say. There are certain types of commodities
for which the short-circuit appeal is especially appropriate.
But taking these products as a total group, the greater propor-
tion of them have not used this type of appeal. -
Thirty of these ninety-nine advertisements constitute an
interesting group by themselves. They are what I may call, for
. ... want of a better term, “rationalization” copy. One
* of the striking tendencies of human beings is to act,
2dtion & tº g º * ſº tº
Č. judge, believe, or vote on strictly instinctive, emotional
grounds, and then, after the act is committed, to try to
justify or defend it by intellectual and logical reasons. First of
all we believe in immortality, just because we feel like it, want it,
or have an instinctive yearning for it. Then having formulated
our belief, on these purely non-rational grounds, we search and
search for arguments which we can give to our neighbors in
justification of our belief. We would like them to think that we
ourselves believe on the grounds of the logical arguments. But
in our heart of hearts we know that we first believed, and only
when our belief was challenged did we search for logical proofs or
reasons. Men buy automobiles in the same way. I buy my
car because my neighbor has one, because it is the fashion to have
one, because of my pride, my jealousy, my vanity. Then, hav-
ing bought the car, I look about for logical justifications which I
can give for my conduct. “It saves time,” “It entertains the
family,” “It gives us needed relaxation,” “It saves car fare,”
etc., etc.
Now the advertising man is beginning to understand this
human tendency and at least thirty of these ninety-nine adver-
The Eno tisements begin with a distinctly emotional, short-
tionai, circuit appeal, thus persuading and seducing the reader.
Short. Then the ad-writer hastens to add a series of logical
º: reasons, which probably exert but little influence on
* the prospect's own decision, but they fortify him
against the objections of his mother-in-law, his employer, his
banker, and his conscience. This is a distinct type of adver-
tisement which is coming more and more into prominence, and
368 ADVANCE IN METHODS OF ANALYSIS
it takes advantage, in a very clever way, of the “rationalizing”
tendency of all of us.
What devices do these advertisements rely on in catching the
reader’s attention as he skims through the medium? Here we
may classify them according to whether they rely mainly on
mechanical devices, such as size, contrast, position, intensity,
repetition, etc.; or whether they rely mainly on interest incen-
tives, such as color, illustration, the comic, the novel, ornament,
suggested activity, etc. Classified on this basis the results are
as follows:
Relying mainly on mechanical devices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Relying mainly on interest incentives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Mixed or indeterminate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
As the psychologist would expect, the interest incentives are
the more prominent. The fact that they are not more promi-
Interest nent than they are is quite certainly one of the reasons
Incentives why these advertisements were not still more suc-
Most cessful than they are said to have been.
*” Having caught the reader's attention, what effort
is made to hold his interest? One of the effective factors in this
second task is what we call the “feeling-tone” of the advertise-
ment. Does it produce a general reaction of agreeableness,
pleasantness, and satisfaction, or, on the contrary, a general at-
mosphere of strain, unpleasantness, and discomfort? Many
factors will contribute to this effect—the esthetic arrangement,
the legibility, the ornament, literary quality, the illustrations,
the images and associations provoked, etc. I have endea-
vored to classify all the specimens on this basis. This classifica-
tion will be somewhat less reliable than most of the others, since
what pleases me may affect others somewhat differently. But
as they affect me, they are classified as follows:
Distinctly agreeable feeling tone. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Distinctly disagreeable feeling tone. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Indifferent feeling tone. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
It is clear at once that those who had in hand the prep-
aration of these advertisements took pains to avoid distinctly
disagreeable content, form, arrangement, typography, and
association, or else they did it just as matter of course. About
one third of them succeeded only to an indifferent degree,
ADVANCE IN METHODS OF ANALYSIS 369
while over half of them succeeded in producing a distinctly
agreeable effect. However successful these advertisements
may have been, it is clear that they might have been made
more efficient at the hands of more discerning illustrators,
printers, and copy-writers. At least there is no evidence
here that pleasing copy militates against the primary purpose,
which is to sell goods.
Another important task of any advertisement is that of fixing
itself in the reader’s mind, so that he may carry away its mes-
sage, or, in general terms, that he may remember it. Two classi-
fications were made on this basis. One question was, “Is the
copy well unified?” Unity is one of the prime requisites of an
advertisement that is to make a permanent impression on the
reader's mind. Unity may be achieved by artificial, struc-
tural, or logical means. Classified on the basis of their unity, I
arrange the advertisements roughly as follows:
Well or fairly well unified . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Indifferently unified . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Wretchedly unified . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Once more it is apparent that these advertisements conform,
on the whole, to the psychological criterion. There are but a
few of them that are distinctly of the unco-ordinated, piecemeal
variety which used to be so common, and over half of them stand
out in the field of view and also in the memory as co-ordinated,
unified wholes.
Another factor which is important in determining the memory
value of an advertisement is what I have elsewhere called its con-
formity to the “forward law” of thinking. The natural se-
quence of ideas in any moment of need is—first, the general need
or the general type of article required; second, some specific
brand, name, trademark, firm, etc. The advertisement should
train the reader in this sequence by presenting first the general
situation or need of quality, and then following this up by nam-
ing the brand, the firm, the specific name, etc. It was formerly
the custom for advertisers to begin with a bold and magnified
headline which gave the firm name or the special brand. Then
this was followed by the description of the need which the brand
or the firm could supply. This is an absolutely unpsychological
and ineffective method, and fails to conform to the “forward
law” of our ordinary thinking. It is gratifying to note that a
real change is being made in this matter. Classified on the basis
370 ADVANCE IN METHODS OF ANALYSIS
of whether or not the arrangement and sequence of ideas con-
forms to this law, the results are as follows:
Number conforming to the “forward law”. . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Number not conforming to the “forward law”. . . . . . . . . . . . . . . . . . . . . . . . . 37
Finally, I have classified all the advertisements on the basis
of the selling-point most prominently made, the interest, in-
stinct, need, or value which is most emphasized. Where more
than one selling-point is advanced, as is often the case, I have
chosen the most prominent one. The results are as follows:
Selling-point, or interest, to which the Number of
appeal is directed Cases
Mere assertion of value. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Time saved, efficiency increased. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Scientific construction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I0
Durability and lasting quality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Economy, bargain, and profits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reputation of the firm. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Modernity and fashion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Personal comfort and ease. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Health and cleanliness, sanitariness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Imitation of others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Appetizing, and appeal to the senses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Specific recommendations of others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ambition and pride. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sporting instincts, play . . . . . . . . . . . . . . . , is e º 'º e < e < e < e e s s e s e a sº e º a s is e e s e is
Guarantee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Family affection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Medicinal value. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Hospitality and courtesy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Civic loyalty, patriotism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Used by social superiors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Beautifying qualities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Imported. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Warning against substitutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sympathy for others. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Several points are to be made out from this table. It is to be
seen at once that some of these successful advertisements still
tend to take the old-fashioned blatant and unsupported tone,
merely asserting the value of their wares without even sug-
gesting the reason for this assumed superiority. But it is con-
soling to find that only thirteen out of the total of ninety-nine
make this their most striking note. The appeals that are repre-
sented by at least ten of the advertisements (aside from the
ADVANCE IN METHODS OF ANALYSIS 871
bare assertions of value) are those of time saved and efficiency
increased, scientific construction, and durability or lasting
quality. Standing midway in the scale, represented by at least
five of these successful advertisements, are the appeals to econ-
omy, reputation, personal comfort, health, and cleanliness, and
the imitation of what others are doing. All the other appeals in
the table are represented by very, very few of these advertise-
ments chosen on the basis of their actual success, and four of
them are not represented by a single specimen.
On the whole, if one ignores the class of mere assertions and
considers actual selling-points, by far the larger number of these
successful advertisements, at least half of them, present strictly
relevant descriptive statements of actual values, and the re-
mainder make their appeal to strictly personal interests and in-
stincts. The vague, generalizing appeal, the appeal on social
lines, the appeals to civic and imported interests, medicinal de-
sires, the warning against substitutes, come in for very little
representation. If the reader will consult the “Table of Per-
suasiveness,” presented in my books on phychology and adver-
tising, he will observe that this Table of Persuasiveness,
formulated on the basis of laboratory experiments solely,
predicts with striking accuracy the order of these selling-points
as here made out.
In spite of the roughness of the analysis which the hetero-
geneity of this material entails, numerous interesting and prac-
tically valuable points seem to me to have emerged. Of special
interest to me as an applied psychologist is the correspondence,
on the whole, between the formulated principles of the “psy-
chology of advertising” (and here I bow before the scorn of the
“practical man”) and the actual results of the analysis of this
set of successful advertisements.
CHAPTER X.
DEVELOPMENTS IN ADVERTISING MEDIUMS
cipal advertising mediums any single event or group of
events indicating advance or change, and yet advance and
development are constant and unmistakable.
In the appendix to this compilation will be found the “stand-
ards of practice,” which have been developed in the case of
some of the mediums as a result of the effort to codify the ethi-
cal principles underlying the progress of these mediums in re-
cent years.
In addition to these there are a few articles and statements
which have appeared during the year, which indicate some of
the lines in which progress is being made. None of these can
be taken as reflecting the actual growth in the field, but
each of them indicates the sort of activity in which those en-
gaged in developing these mediums are most vitally inter-
ested. -
There would be no particular profit in going into the advan-
tages of different mediums at this point. But there might be
some advantage in repeating a series of terse statements of the
purposes and aims of some of the principal mediums made at a
meeting of the League of Advertising Women held in New York
City on October 20, 1914. At that time the representatives of
various mediums were given ten minutes each in which to pre-
sent arguments in favor of their various methods of advertising.
The following excerpts from some of the speeches summarize
the presentations made:
I' IS difficult to pick out from the year’s history of the prin-
372
ADVERTISING MEDIUMS 373
*“The farmer is the only class enjoying continued prosperity—
there are two million farmers to-day with incomes over $2,500
Agricultural per year; and 75 per cent of the thirty-five million
Press: people residing on farms are subscribers to agricul-
Wallace tural papers. The agricultural papers have an ideal,
* and as long as they have been published their main
purpose has been to give the readers real service. The farm
papers were the first to guarantee subscribers against loss from
accepting advertised offers.
“Not only the farm population, but the country dealer who
serves the farmer, is reached through the agricultural papers,
and that valuable small-town trade has been considerably neg-
lected by the advertiser. There are 495 agricultural papers,
and the use of fifty, well selected, will enable an advertiser to
reach every possible sales prospect in the rural districts with.
whom he would care to do business. The farm papers offer the
advertiser a chance to build a second line of defence against the
day when competition, substitution, and the increased cost of ad-
vertising for city trade will make it imperative that the sales man-
ager have other fields to fall back on to help produce dividends.
“There are six million farm families worth over $6,000 each;
and two million of these are worth over $15,000 each.”
“The value of magazine advertising is simply illustrated by
the experience of the largest manufacturer of powders, per-
M fumes, soaps, etc. Seventeen years ago his entire
Qga- gº tº tº a tº © tº
2. D. advertising appropriation went into the magazines
E. Evans, –$25,000. To-day he is spending $250,000 yearly on
Curtis magazines alone. Last year $33,000,000 was spent on
º magazine advertising. The magazines automatically
” eliminate for the advertiser the unprofitable public illit-
erates, foreign-born, and negroes, because these are not included
in the magazine-reading class, and there are to-day between six
and seven million magazine-reading homes.
“Other mediums should be used to supplement magazine
advertising, but you must use magazine advertising to keep
Ayour market sold. It is the magazine that keeps on ever-
lastingly telling your story to the public, and no matter
what medium you begin using, it is the magazine that will
permanently remind your public and support your distribution.”
*Advertising and Selling, November, 1914, p. 32.
374 ADVERTISING MEDIUMS
“The newspaper is the one medium in which you can change
your copy and your style of appeal every single day. The news-
News paper carries with it, through its editorial matter,
papers: A. the Do it now’ atmosphere. It forever suggests
J. Haskell, rapid action to the readers, and that thought extends
Yºº Jºſé to its advertising columns and to your advertise-
*" ment. It may take five years of intermittent appeal
from other media to get action from a reader, but five separate
appeals—every single day continuously—are dynamite to your
newspaper reader.”
“A good advertiser once recommended that you:
O “(1) Put your advertisement where it can be seen.
widoor & 6 * - ſº º ę
Display: (2) Write it so people will read it. e
H. J. “(3) Tell the truth so people will believe it. That
Mahin, O. is what outdoor advertising does. You don’t have
J. gºd. to buy anything to read an outdoor sign. You’ve
e got to read it whether you will or no, because it’s
written so conspicuously that it can’t be passed by. The best
advertising is condensed information, and outdoor advertising
always is brief. You can place your outdoor ad in the kind of
atmosphere to hit your prospect at the psychological moment.
You can place your biscuit ad near the neighborhood grocery
where the housemaid sees it on her way to market for the day.
You can reproduce illustrations of your product or your package
in the exact size, the exact shape, the exact color, and without
restriction as to the artistic effect you can achieve.
“And finally, outdoor advertising is the place to reach the
bulk of the buying population—the 85 per cent. who won’t or
don’t deliberately read ads. Outdoor advertising is the black-
board which aggressively forces your story on the Great Indiffer-
ent—and they read it without knowing they are being taught.”
“The premium is your method of substantially showing the
public that they share in your profits. The merchant who takes
premiums. Your cash is able to give you a cash discount. Since
ºf..." ... that cash discount would be too small if carried out
bard, to the five-and-ten-cent purchases, the only way to
Riker- give it is to give the ‘coupon’ for the small sum, so
*}” that when enough coupons are collected the worth-
while discount on all purchases is obtainable. The
fact that one hundred million dollars’ worth of premiums
ADVERTISING MEDIUMS 375
are manufactured and distributed annually is proof of the
advertising and general commercial value of the premium
method.”
“The street-car ad is unescapably persistent. It meets you
in the morning, travels around with you during the day, and
Street Cars: follows you home at night. It’s the Pinkerton de-
Bert Moses tective of advertising. Moreover, you don’t have
to consider readers’ editorial prejudices as you may in other
mediums. There are no Republican or Catholic or vegetarian
street cars. Also you’re never overshadowed by a bigger ad-
vertiser than you. Everybody gets the same sized ad—and it’s
just a question of matching your wits against the other fellow’s
so that your ad can have a more attractive layout, colors, etc.
And you can reproduce your own trademark or package or
colors to the life.”
“If you don’t use the trade papers there’s little use of your
using other media. For the local merchant whose good will
Trade Y9" haven’t secured through trade papers, and whom
Pgº. you haven’t educated to the quality and uses of your
J. E. kºs- product through trade papers can undo all the influ-
mer, “Mer-ence you have been at such cost to build in the com-
Chanº' munity. Sell the merchant first. He will push and
Trade d and build confid in d
journº, recommend, and puld conſidence in your goods.
Moreover, by using trade papers you know you are
getting to the right type of merchant. The dealer who pays
anywhere from $2 to $5 per year for his trade paper is the pro-
gressive type of merchant whom it’s worth while for you to
reach.
“But remember this one thing. The retail merchant is not
a pawn. Don’t try to coerce him, for it won’t work. He's
getting to a higher standard of merchandising every day and
he’s demanding more, and unless you meet him on a high level
and co-operate intelligently, you’ll never get the benefit of his
influence with the local public.”
The remaining articles which we shall quote in this chapter
may be gathered into two separate groups: (1) A summary of
the year's progress in certain mediums, and (2) A consideration
of some disputed medium questions.
376 ADVERTISING MEDIUMS
(1) A SUMMARY OF THE YEAR’s PROGRESS IN CERTAIN MEDIUMS
The year's advance in newspaper advertising usually is
1. News summed up very compactly in the annual and direc-
paper Ad- tory covering this field issued by N. W. Ayer & Sons,
* Philadelphia.
*The total number of publications of all kinds in the United
States listed by the Annual and Directory is 22,977, a gain of 122;
and in Canada, 1,550, a gain of 24. The total number of pub-
lications of all kinds in both countries, including territories and
dependencies, therefore, is 24,527. Of these 1,574 are new pub-
lications. The suspensions and consolidations during the year
make the net gain 146. There were started every working day,
that is to say, more than five publications, but the net gain was
only two a week.
It may interest our readers to compare these figures with
those for Great Britain given in the new 1914 edition of Mitchell’s
Newspaper Press Directory. This shows that at the present time
there are 2,540 newspapers in the United Kingdom, London
possessing 468, 27 of which are morning dailies and seven evening
dailies; the English and Welsh provinces account for 1,578, of
which 46 are morning and 81 evening papers; Scotland has 252,
including eight morning and ten evening dailies; and the British
Isles 17, of which five are dailies.
The number of daily newspapers listed in the United States
is 2,483, a gain of seven. The gains were in the New England
States, three; New York, four; Southern States, three; Pacific
States, five. The Middle Atlantic States lost five and the West-
ern States three. The Middle West and the outlying territories
stood still.
Canadian figures for the dailies are a total of 163, a net gain
of six.
The weeklies stand 34 greater in number than for the previous
year, the total number being 16,266. All of the gains were in
New York, 43; Southern, 21; Pacific Slope, 54, and outlying ter-
ritories, three. The losses by sections are: New England, 16;
Middle Atlantic, ten; Middle Western, 36, and Western, 25.
*Printers' Ink. February 12, 1914, p. 46.
ADVERTISING MEDIUMS 377
Canada and Newfoundland gained four and now have 1,057
weeklies.
The monthlies now number 2,879, a net gain, as stated, of 27.
The gains show in New England, eight; New York, 23; Middle
Atlantic, one, and Pacific slope, 13. The losses are sustained in
these sections: Southern, eight; Middle Western, four; Western,
four; outlying territories, two. In Canada and Newfoundland
the total number of monthlies is 227, a net gain of ten.
It is interesting to note that the smaller classifications as of
semi-weeklies, fortnightlies, semi-monthlies, and quarterlies have
reversed their tendency to diminish in number. The semi-
monthlies registered the large net gain of 34, practically all of it
being made in the Southern, Middle Western, and Western States.
The quarterly gains, on the other hand, were made chiefly in
New York, the Middle Western, and Western States. The only
loss in the ten classifications was that of the bi-monthlies, a net
of eight. -
Each of the 24,527 newspapers and periodicals listed is de-
scribed in ten distinct items, including the circulation rating and
the population figures for the town where it is published. The
towns covered are 11,629, an increase of 100. This includes
both countries.
The corresponding figures covering the year 1914 are as
follows:
*The 1915 edition of N. W. Ayer & Son’s American News-
paper Annual and Directory lists 24,724 publications of all
sorts. For the first time in its history this standard list of
American and Canadian publications appears without any
advertising. The new publications are 1,688, but against this
number must be set off suspensions and consolidations sufficient
to bring the net gain for the year down to 197, of which 7
belong in Canada. Canada’s total number is 1,557.
The number of daily newspapers in the United States is now
placed at 2,502; of weeklies, 16,323; and monthlies, 2,981, an
increase in each instance. The only classes to lose are in
fortnightlies and semi-monthlies, which now stand at 57 and
291, respectively. *
In Canada the dailies number 159, the weeklies 1,057, and
*Printers' Ink, January 7, 1915, p. 56.
378 ADVERTISING MEDIUMS
the monthlies 243. There was a slight loss in the number of
dailies.
The number of dailies by sections is as follows: Middle
Western States, 635; Western States, 450; Southern States,
405; Middle Atlantic, 291; Pacific Slope, 283; New York, 211;
New England, 182; outlying territories, 45. The Middle At-
lantic States were the only sections to lose in number; the loss
was slight.
In the field of the weeklies, the Western States have 5,259;
the Middle Western States, 3,316; the Southern States, 3,154;
Pacific Slope, 1,414; Middle Atlantic, 1,258; New York, 1,117;
New England, 759; and outlying territories, 46. New York
made the considerable gain of 43, and there were small gains
or losses in the other sections.
The Middle Atlantic States, which lost in the number of
dailies and weeklies, made the largest gains, 49, in the number
of monthlies, which total 866. New York has 628 monthlies;
Western States, 372; Middle Western States, 323; Pacific Slope
227; New England, 195; outlying territories, 18.
'The number of towns in which newspapers are published
now reaches 11,817. The classified lists number 222, and
include such up-to-date divisions as aeronautics, moving pic-
tures, Esperanto, woman suffrage, and anti-suffrage.
Magazine advertising recently has been going through a
transitional period and there seems to be a variety of opinion as
2. Maga- to how serious and permanent some of the changes
*** which have taken place really are. In some quarters
these changes are referred to as “the slump in magazine adver-
tising.” But many advertising men protest vigorously that
there has been no slump and that what looks like a slump is
merely a readjustment. The Advertising Affliliation recently
conducted a symposium on the question, “What is the status of
Magazines and Magazine Advertising?” A stenographic report
of this printed in Advertising and Selling contains the following
views expressed by various prominent persons: -
For a year or more it has been apparent that the magazine field has
been going through a transition period. Conjectures and predictions
ADVERTISING MEDIUMS 379
have been rife, and it was natural that competitive mediums should
be willing to view the transition period pessimistically.
Recently the subject has been taken up analytically and authori-
tatively, and there is now no further eaccuse for failure to clearly
wnderstand eacactly what the situation is.
At the recent Affiliation Convention of the Rochester, Cleveland,
Buffalo, and Detroit Ad Clubs, Erman J. Ridgway, of “Everybody’s
Magazine,” was invited to speak on the subject, and a discussion
following the address was participated in by advertising managers,
agents, and others. This was reported in shorthand for “Advertising
& Selling Magazine.”
To complete the authoritative presentation of the facts, “Advertising
& Selling Magazine” invited the Quoin Club to publish data which
it had recently compiled, and present its analysis of the situation.
Since the transition is quite evidently editorial in character, rather
than advertising, there is also reproduced here a portion of a thought-
ful study of “Magazines and These New Times,” by Robert Sterling
Yard, well known in magazine editing.
Taken altogether, them, this article may well be regarded as a final
and complete study of the status of the magazine, and as such should
be carefully read by advertising men. [Ed. Note by Editor of “Ad-
vertising & Selling.”
*Some misconceptions about magazine advertising have gained
unwarranted credence during the past two years. Where have
they come from? Probably from the published figures
#. % of lines of advertising carried, which show a “slump.”
£º/* But ding to my figures there has been no slump.
Talk ut according to my Tig p
The published figures simply show lines carried, but
they completely ignore the consideration that the rate per line
may have been very substantially increased during the year in-
volved in the comparison. If I have been running a hundred
pages at four hundred dollars a page and I raise my rates to five
hundred dollars a page, I can lose 4,500 lines a month and yet
receive as much money as I did before. If an advertiser has an
*Advertising and Selling, June, 1915, p. 9.
380 ADVERTISING MEDIUMS
appropriation of two hundred and fifty thousand dollars a year and
the magazinesheisusing increase their rates 20per cent., the adver-
º will have to increasehisappropriation or cut down the number
of lines.
You see how completely without significance the number of
lines is, except when taken in connection with the rate per line.
For a long time before the war began the total magazine circula-
tions were increasing rapidly. The advertising rates were being
raised and in the process of readjustment, the number of lines,
as was inevitable, were going down, but according to my figures,
and I believe they are right, the total amount of actual money
spent in the magazines, so far from slumping, was jumping.
Take the published figures for the first four months of 1912.
In these four months the weeklies carried 1,570,215 lines of ad-
vertising. Now, in the first four months of 1914, the same pub-
lications carried 1,354,609 lines. That is a slump in the number
of lines carried by the weeklies of 14 per cent. in two years.
Now, let us look at the dollars. In the first four months of
1912 the amount of money paid by the advertisers to the week-
lies was $3,994,940. For the same four months in 1914, with 14
per cent. fewer lines, the advertisers paid the weeklies $4,213,687.
That is a jump of 5% per cent. in the cash. Notice that while
the number of lines carried went down 215,606, the number of
dollars in four months went up $218,749.
When you look at the records and notice that in four months
the weeklies have lost two hundred and fifteen thousand lines,
on the face of it, it looks bad for the weeklies, but when you dis-
cover that the advertiser actually paid two hundred and eighteen
thousand dollars more to the weeklies for the smaller space,
instead of the space in the weeklies losing caste with the adver-
tiser, the exact reverse is true.
Space in the weeklies has greatly enhanced in value in the eyes
of the advertiser. Why? Probably because of the increased
circulation. A significant factor completely ignored by those
relying on the published figures.
In arriving at the dollars in this comparison and in all the other
comparisons I shall make, I have used the line rates of all the
magazines, the line rates quoted for the months and years com-
pared. In the time I had it was impossible to get the exact
amounts from all the publishers of all the magazines. The
amounts are not important. It is the comparative showing we
are after, and using the line rates for both periods seemed to me
ADVERTISING MEDIUMS 381
to be the quickest and fairest method. If there is any unfairness
it would probably favor the earlier periods.
I am using the first four months of 1914 for my comparison
instead of the first four months of 1915, because it is impossible
for any one to even estimate how much influence the war has had
on advertising. According to the published figures the number
of lines of advertising carried in all magazines in the first four
months of 1915 is about 10 per cent. under 1914. If that is all
the effect the war has had upon magazine advertising, it would
seem to me that magazine advertising has established a new
record for stability and merit, for what other business not feeding
directly on the war is there in this whole, broad land that has
lost only 10 per cent. of its trade?
Unless I am the victim of a misconception even greater than
the misconception about magazine advertising, the slump in
general business due to the war is more than 10 per cent. If it
is more than 10 per cent., and every man here knows what the
facts are in his own line of business, magazine advertising makes
a splendid showing in the comparison.
I am comparing 1914 with 1912 instead of comparing 1915
with 1912, because the period in 1914 immediately before the
war permits of a fairer comparison, unaffected by the war.
In the first four months of 1914 the women’s magazines car-
ried 1,205,543 lines, while in the same four months of 1912 they
carried 1,154,317 lines, a gain in 1914 of 51,226 lines. The cash
received for the first four months of 1914 was $3,885,274, while
in 1912 it was only $3,660,594, a gain in lines of fifty-one thou-
sand over 1912, and a gain in dollars of two hundred and twenty-
four thousand over 1912; in other words, the women’s magazines
not only increased the rates and dollars, as the weeklies did, but
increased the number of lines. Surely a remarkable exploit.
The gain in actual cash by the women’s magazines for the first
four months in 1914 was something over 6 per cent.
The published figures for the class magazines show that they
carried in the first four months of 1914, 1,266,229 lines. In the
same four months of 1912, 1,365,924 lines. That is ninety-nine
thousand less lines in 1914 than in 1912, showing a percentage of
about half the slump shown by the weeklies. The dollars re-
ceived for the first four months in 1914 were $1,017,581. For
the first four months in 1912 the dollars were $1,011,928. A
gain of $5,600 in 1914 as compared with 1912.
The published figures of the general magazines showed for the
382 ADVERTISING MEDIUMS
first four months of 1914, 1,239,284 lines. For the first four
months of 1912, 1,367,075 lines. That is one hundred and forty-
seven thousand fewer lines in 1914 than in 1912. In dollars the
general magazines received in the first four months of 1914,
$2,149,251. In 1912, $2,178,537. That is twenty-four thousand
dollars less in 1914 than in 1912.
One hundred and forty-seven thousand fewer lines and twenty-
four thousand fewer dollars, showing that the rates had advanced
considerably in the meantime, with a loss of practically 1 per
cent. in cash. So that this great slump in magazine advertising
which you have asked me to come up here and explain resolves
itself into a huge slump of 1 per cent. in the actual cash received
by the general magazines. A gain of # per cent. in the cash
received by the class magazines. A gain of something over 6
per cent. in the cash received by the women’s magazines, and a
gain of 5% per cent. in the cash received by the weekly maga-
ZIIleS.
Summing up, the published figures show that in the first four
months of 1914 all the magazines carried 5,116,691 lines. For
the first four months in 1912 all the magazines carried 5,528,557
lines. A loss of four hundred and eleven thousand lines, or
something over 7 per cent.
According to my figures the dollars received by all the maga-
zines in the first four months of 1914 were $11,265,775. For the
same four months in 1912 the dollars were $10,841,559. A gain
of $421,416, or 4 per cent.
Which means that if the same ratio between cash and lines
continued for the full years of 1912 and 1914, and they did so
continue, that this so-called terrific slump in magazine advertis-
ing amounts to an actual gain of approximately $1,264,248 in
magazine advertising in 1914 over 1912.
There has been no slump in magazine advertising. Therefore,
there can be no causes back of the slump in magazine advertising.
TABLE SHOWING RELATIVE FLUCTUATION OF BUSINESS CONDITIONS
AND MAGAZINE ADVERTISING
Lines TJ. S. Steel New Bonds Traded
Magazine Bank Building Unfilled Securities on Stock
Year Advertising Clearings Operations Tonnage Issued Exchange
1909 12,812,656 $165,838,191 $615,342, ooo 3,542,595 $2,439,656,870 $1,317,15o,ooo
191o 14,862,784 I64,095,229 539,745,466 5,402,514 I,678,147,570 634,722,850
IQII I5,705,505 I6o,230,773 537,862,637 3,319,588 I,329,616,845 890,210, Ioo
I912 I5,539,851 I73,952,915 554,209,785 5,379,578 I,786,986, I70 675,213,500
I9I3 I5,4OO,979 I69,815,701 498,572,309 7,651,013 968,788,315 SOI,57I,O2O
I9I4. I.4,545,242 I55,241,126 462,780,833 4,764,648 964, I57,2Oo 461,522,00c
(See chart on next page.)
ADVERTISING MEDIUMS 383
ſq}LLIONS
fo, Coo
Jooo 3
e
2 oo
woo.
f O
£909 £ 4/0 49//
£0/3. fº/3 #9/4,
Compiled for the Quoin Club,
By The Business Bourse, Int, Inc
*
Therefore, your committee has asked me to give the causes for a
condition which does not exist.
You all know how trying business conditions were for many
months previous to the war. You all know how business men,

384 ADVERTISING MEDIUMS
before we knew there was to be a war, hoped and prayed that
business had touched bottom, and yet at the very time when
business seemed in the worst condition it could possibly be in,
the magazines were carrying more business than they were carry-
ing two years before, more business than they had ever carried
before. Your committee might well have asked me to come
here and discuss the magnificent showing the magazines were
making, showing, as it did, actual and substantial gains in the
teeth of acute, and almost universal, business depression.
The condition of a magazine and its prospects can never be
determined simply by the number of lines of advertising it is
carrying, nor even by the cash it is receiving, nor by the circula-
tion alone nor by the contents alone, but by all these taken
together, plus the personality or personalities back of it. The
same thing is true in very nearly, if not every kind, of business.
Edgar G. Criswell, Executive Manager of the Quoin Club, at-
tended the Affiliation meeting in Rochester. After his return
to New York he gave Advertising & Selling Magazine
T% %;" the following statement, as giving a more extended
2. view of the opinion of the magazine publishers:
“Looking over the whole magazine field it seems to
me there are still other considerations than number of lines car-
ried worth thinking seriously about. The experienced buyer of
space these days cares little whether a particular magazine he is
using has more or less lines of advertising at a certain time. He
didn’t buy the space because of the showing in lines, but because
of his belief in the magazine’s popularity with and influence upon
the people who read it.
“The amount of money he pays for the space is in direct pro-
portion to the number of copies sold, and the number of lines of
his and other people's advertising is unimportant. The pub-
lishers got this idea a number of years ago. They used to talk
Quantity of circulation only, but they came to realize that quan-
tity is only one of the dimensions of the value which the adver-
tiser bought, so the publishers investigated to find the kind and
location of their readers, and developed quality and distribution
as characteristics that meant more than mere quantity of cir-
culation. It is so with lines of space. As a basis for selection
of a periodical as an advertising medium, it is only one of three
or four considerations.
“After all, though, the really important consideration is just
View
ADVERTISING MEDIUMS 385
this: Are the magazines as a general class rendering a service
to readers that warrants their use as advertising mediums? The
answer is certainly, ‘Yes.” Editorially, artistically, and typo-
graphically the magazines of to-day are better than ever. They
render a greater measure of service to readers than ever. They
are intrinsically more valuable.
“Run over the various classes a moment. The women’s maga-
zines are immensely important in the home life and work of
hundreds of thousands of women. They reach homes along
every rural mail route, and in every village, town, and city in this
country. Our purely literary magazines are fresh and vigorous.
The Atlantic occupies a place of increasing influence. The
North American Review is lustily celebrating its 100th anniver-
sary right now. The fiction magazines, both in low and high
priced classes, are reaching a widening circle of readers, and are
giving as good stuff as ever, much more interestingly presented.
“The review type of magazines are unquestionably stronger
and more influential than they have ever been. The weeklies
are being printed faster and are more timely. The strictly
class magazines lead the publishing world for beauty. And so
it is all through the field of periodicals—they are doing their
jobs more efficiently, more broadly, and are interesting a steadily
increasing number of people—men, women, and children.
“Those are the really great reasons for magazines as advertis-
ing mediums. No publication lives on advertisements alone.
It is the service it renders in conveying interesting and valuable
information which causes people to become its devoted readers,
and through that relationship arises its value to the advertiser.
“In the gradual broadening of the area of influence of maga-
zines in America there is every reason to feel that they are closer
to the people than ever, and that really is the answer to any
questions of slump in advertising. If there is any slump in lines it
has its own local cause—the war, for instance. Fundamentally,
the magazines are better, saner, stronger, more helpfulthan ever.
“But even along the line of figures, following Mr. Ridgway's
lead, there are still more interesting facts. The Business Bourse
reports to us a very uniform showing for magazine advertising
covering the six years 1909–1914, contrasted with other stand-
ard business factors (see chart, page 383), inclusive, demonstrat-
ing that in volumes it has a very unusually even course.
“Those are figures that make you feel glad that you are in the
magazine business, rather than to envy the man who has a seat
386 ADVERTISING MEDIUMS
on the Stock Exchange, which, by the way, has declined in value
in recent years from $95,000 all the way down to $34,000.
“The latest report of gross railroad earnings from July, 1914,
to March 31, 1915, show a decrease of 5% per cent.
“No magazine has failed and the banks have not kept open
after 3 o'clock looking after their needs.
“So, you see, it would be mighty strange if magazine figures
did not show a decline when so many other lines of business are
falling off for very good and sufficient reasons.
“As it is, magazine figures are a remarkably straight line on the
chart of business.”
My company is deeply indebted to the magazines for what
measure of success we have attained; but I speak in no spirit of
W. W. crusade for the magazines, but of suggestion. .
Wheeler An examination of the advertising data compiled on
Advertising 100 leading magazines for the last five years reveals
Manager, little indication of a slump. Here are figures on 100
*†. leading magazines, weekly, general, women's, and class
%.” magazines: 1910, eighteen and one half million lines
of advertising; 1911, nineteen million lines; 1912, nine-
teen and one half million lines. Those figures unanalyzed
spell increase, not slump.
The magazine figures for 1913, 1914, and 1915 show a decrease,
but perhaps no greater than the ratio of decrease in general
business conditions. Why, then, was I assigned to a topic that
seems questionable in its major premise? -
In the kindling wood of our magazine advertising records there
is an Ethiopian gentleman. In the past five years he has grown
from a child to a giant in advertising circles. His name is Mr.
Automobile Advertiser. He and his great family of tires, tops,
chains, horns, starters, axels, bearings, oils, etc., etc., have cre-
ated a great problem of new and special advertising, which con-
ceals in the total figures an undeniable slump in general magazine
advertising.
So, back of the cold figures and behind the scenes, there must
be many a story of general magazine advertising kept up to a
fair volume at an excessive cost to the publisher and by a deal
of prodding of the ribs of the advertiser. I know. My ribs
have been sore for five years.
Whatever decrease in magazine advertising there is may be
due to the law of diminishing returns. If there were 50
ADVERTISING MEDIUMS 387
dreamers five years ago who thought they could capture a na-
tional market over night with much space and big spreads and
little distribution, then there are only 200 left to-day, and they
are harder to find and less susceptible to the misguided enthu-
siasm of many advertising agents, many magazine solicitors, and
many advertising managers, who know as much about merchan-
dising a product as a layman does about building a submarine.
A well-conceived, economical, and rapid-fire plan of distribu-
tion prevents untold thousands of dollars of publicity wasting
off into the blue sky. The goods must be there when Mrs.
Consumer asks for them.
I know a national advertiser who put out a product which had
distribution in 22,000 stores (about 50 per cent. of his possible
market) before he had allowed himself to spend more than
$5,000 in publicity. He tells me that the remaining 23,000
dealers will come much harder because he has won the live ones
first, but further states that he will have 80 per cent. distribution
before he has spent $10,000 in publicity. -
Until more national advertisers plan their work and then
work their plan as did the above advertiser, the law of diminish-
ing returns will leave less and less dreamers for the magazines
to tease into becoming big space users while the advertisers are
still in swaddling clothes.
The law of diminishing returns is also leaving fewer advertisers
to take those big one-time spreads in popular magazines to fool
the trade. The trade is wiser now than it was. It does not
stock up when it sees the proof of a flash-in-the-pan insert in
colors.
The passing of the big-space dreamer and the big-space bluffer
leaves less money for the magazines pro tem, but leaves the ad-
vertising world with a sounder digestion for future labors.
Don’t understand me to say that all the magazines are all to
blame. Most of the magazines are much to blame; most of the
agents are much to blame; conditions are much to blame. Most
Americans want to get rich to-day; they cannot wait till to-
morrow, and advertising is chosen as the lightning goat.
A second cause is competition. There are far too many maga-
zines for their own good or for the good of advertisers. It is
almost as disgraceful to-day for a rich man not to have his string
of magazines as it was years ago for him not to have a string of
two-minute steppers.
Too much magazine advertising means over-selling. Over-
388 ADVERTISING MEDIUMS
selling of space means another job for the advertising casket.
maker. That means another little slump in the volume of ad-
vertising. Too many magazines in the field mean too many on
the consumer's table. If you have one or two magazines a month
you will undoubtedly give them more attention, read the ads
more closely than if you have six or eight. The average maga-
zine-reading family takes a fraction less than four magazines.
A third and closely kindred cause for the slump in magazine-
advertising strength is the wealth of poor circulations produced
largely by competition among magazines. Advertising managers
are much to blame for these weak-kneed, inflated circulations.
We advertising managers share the common American size-
delusion. Bigness rather than quality is our constant demand.
The magazines respond nobly. By the signing of a check a
magazine can add a hundred thousand circulation. Several
circulation-getting bureaus can deliver a 100,000 circulation
almost over night. Needless to say, such circulation is worth
about 25c on the $1. I buy it. You buy it. Some day we
will wake up. I have got one eye open already.
Other factors are (1) the movies, (2) the automobile riding
habit, and (3) price-cutting. To show how important is the
latter factor, it is only necessary to tell you that in one city alone
price-cutting reduced the sales of Ingersoll watches $30,000 per
year. In another city a five-block section where price-cutting
was active reduced sales $2,500.
To sum up. For the good of the magazines themselves, as
well as the advertisers, there must be fewer magazines, less
forced circulations, better merchandising, less of big space
mania, better audits, and price maintenance.
For the past five years I have handled advertising which has
shown a regular annual increase, both in lines and expenditure,
and that never less than $100,000. .
Lee An- The most rabid critic of the magazine does not claim
derson, ex- a falling off of more than 18 per cent. in magazine
President lineage in the past five years. We have heard the
cíº. assertion that there has been an increase of 84 per cent.
... º. in outdoor advertising in the same time. Meanwhile,
tising Man-there has been an ever-greater increase in direct-by-
ager, Hupp mail advertising, and nearly as great an increase in
* street-car advertising. To-day the advertiser has a
division of interests—more mediums. And at the same time
ADVERTISING MEDIUMS 389
appropriations are still made on the basis of the total volume of
business just as they were five years ago. While mediums have
been increasing in efficiency and number, appropriations still
remain about the same or with only moderate increases.
Something has been said about circulation. I assert confi-
dently that the time is not far distant when the advertising
manager who knows his job will not ask a magazine simply,
how much circulation have you, but rather, “How much have
you; where have you got it, and how did you get it?”
Personally I shall never again buy space in a magazine which
has more than 15 per cent. clubbing circulation. That is, I shall
never consciously buy it. I place the figures at 15 per cent.,
because the rates usually give that much excess, and if there is
15 per cent. clubbing it costs us little or nothing.
I shall never consciously buy any magazine which has even 1
per cent. of circulation secured on the deferred payment plan.
That I consider next to valueless.
In a word, I shall never buy any magazine whose circulation
I am convinced is secured on any forced basis.
I do commend such moves as has recently been made by
Everybody's. And I feel that no advertiser should wilfully lessen
the income of magazines already on his schedule when they take
steps such as Mr. Ridgway has taken—for such moves all make
for the improvement of the quality of magazine circulation and
for more honest statements of the quantity of circulation.
In conclusion, slump or no slump, I am convinced that as long
as goods are sold the magazines will always be the foundation of
any wide national distribution. They always have been, they
are to-day, and they always will be. Meanwhile, the develop-
ment of advertising, the ramifications of general business, and
the growth of the country are bringing up new mediums right
alongside the magazines, and as time goes on all of them are
bound to show increases unless we all suddenly decide to stop
advertising and go out of business.
The advance in standards from almost every angle has been
as marked in the case of trade journals as it has been in any field.
3.Techni- Whereas a few years ago the number of really valuable
cal trade journals was comparatively few, to-day the field
Journals is occupied by a number of publications which are re-
garded, throughout the trade which they represent, as being in-
390 ADVERTISING MEDIUMS
dispensable reflections of the growth of the trade or industry.
Not only has this evidence been marked in the case of the edito-
rial side of the publication, but the advertising columns have risen
to the same high standards in many instances. Some of these
journals have not been as swift as others to respond to what
might be called “the new development” in this field, but the
betterment is going on at a rapid rate. Trade journals may
be said to be receiving more serious study by advertisers than
ever before.
Arthur F. King, Advertising Manager of the Marion Steam
Shovel Company of Marion, Ohio, has worked out a formula
for deciding the value of space in trade and technical journals.
This formula he describes in the following article:
*If some evening you will take home with you an armload of
trade and technical papers and study them for an hour or two
you will surely arrive at the conclusion that advertising in
these mediums is being done according to a set of very loose
standards.
Every advertising man, doubtless, recalls many instances that
prove this. I recall having seen in a supposedly good paper a
page containing three different advertisements. One half of
the page advertised a steam roller, a quarter advertised the
products of a nurseryman, and the other quarter was used by a
steamship company. Certainly two of those three advertisers
were wasting money.
The current issue of one of the papers coming to my desk con-
tains two advertisements for tires for pleasure cars—both big
advertisers, too—and the whole paper, editorial and advertis-
ing pages, is devoted to the work of the highway engineer and
road contractor.
Trade and technical paper space must be used to stimulate
sales; and to do this the paper should be favorably read by the
greatest number of persons who are a real authority in purchas-
ing. When we are fishing we do not cast just anywhere in the
lake; we hunt up a place that looks “fishy.” In other words, we
investigate, then we concentrate.
*Printers' Ink, June 3, 1915, p. 58.
ADVERTISING MEDIUMS 391
It is impossible to discriminate intelligently in buying space,
however, unless judgment may be based on a thorough analysis
Amalusi of trade papers. The very term “trade paper” im-
malysts © * * * * - *
ofº.splies specialization—a medium aimed, concentrated,
Is Required if you please, on a relatively small group of firms or
of Trade- individuals who together make up a distinct trade or
*...* division of business.
Sér Accordingly, if the advertiser is to secure real value
in the space he buys, he must first carefully analyze the factors
that govern value of circulation. They are: first, the field
covered and the relative standing of the paper in the field;
second, the quantity of circulation; third, the quality of circu-
lation; and fourth, the distribution of circulation. Let us ex-
amine these four factors more closely, since they determine the
kind and amount of circulation data we will require.
In order to determine the field a paper serves and its relative
standing in the field we must make a first-hand investigation.
In this the advertiser must draw largely from his own knowledge
of the field, using as a supplementary aid a reliable directory.
The further points to be covered in an analysis of this first
factor are the competing papers in the same field, their distin-
guishing characteristics, their editorial policies, their advertising
policies, their development during a period of, say, five years
immediately foregoing.
A more or less complete list of competing media is usually to
be found within the advertiser’s own knowledge. In determin-
ing the distinguishing characteristics, however, we encounter
more difficulty. For example, physical makeup plays an im-
portant part; the ratio of editorial and advertising pages, the
amount of illustrative material used, the kind of paper, press-
work, etc., all have a share in governing the strength of a paper
in any particular field. Such data, although easy to secure, are
rather difficult to compare. Their importance, however, should
not be overlooked in our analysis.
The editorial policies of the media in any field certainly war-
rant careful investigation, for they are vital in determining rel-
ative strength, since the strength of any trade or technical paper
lies not so much in the size of its subscription list as in the inti-
macy of its editors with its readers. Editorial matter should be
studied from two angles, one as to comprehensiveness, forceful-
. and accuracy, and the other as to its “human-interest”
SIOIC.
392 ADVERTISING MEDIUMS
A good trade or technical paper should mean more to its
readers than an extra hour or two each week—more than mere
business.
Mºſhan Papers with nothing in them but business get dull
p.s., and wearisome. They should be kept alive and read-
able through proper editorial handling.
They should contain more pertinent humor, biography, etc.
They should be edited from the field and not from a dusty desk
in one corner of the publisher's office.
All of these points make or break the strength of business
journals and their advertising value.
Few advertisers consider the advertising policies of the media
they use. The reader’s confidence in the advertising pages is
directly proportionate to the logical, truthful, advertisements
in the paper. Advertisers should determine definitely, there-
fore, just how publishers view boastful, extravagant advertising;
patent, trademark, or copyright controversy, and all advertising
that works against the best interests of advertisers as a whole.
On tracing the history of the development of a medium the ad-
vertiser, again, has to draw largely from his own knowledge and
observation. It is only logical to assume a paper showing a
good, healthy development in past years will be a good, healthy
medium for your advertising, and, by the same token, a paper
showing a gradual decline will represent a potential danger and
waste. It is rather essential that past records be investigated
if we are to discriminate wisely in buying space.
The second factor that governs the value of circulation is
quantity of circulation. Generally speaking, total paid circu-
lation is all that advertisers should consider of value, although
in many publications a part of the unpaid circulation may be
valuable.
For example, the better grade of papers have a number of
regular contributors of current news items who, although they
are of the same class as the paid subscribers, receive the paper
free of charge. Many publishers follow the practice of sending
regular copies of their papers without charge to trade or pro-
fessional societies and libraries. Also, a certain percentage of
the sample copies sent out by the better-grade publishers in
their subscription work is valuable to the advertiser. Aside
from these, however, there is little else of value to the average
advertiser.
After an analysis of quantity has been made we are concerned
ADVERTISING MEDIUMS 393
with quality, the third factor, which is perhaps the most impor-
point, on tant among the entire four, for without quality the
Judging quantity does not count for very much.
Quality of The elements which underlie the factor of quality
* may roughly be classed under four heads: First, the
paper's relation to trade or professional associations; second,
its percentage of subscription renewals; third, its percentage of
subscribers in arrears, and fourth, its methods for securing sub-
scribers. These warrant brief consideration.
Let us consider first the relation of a trade or technical paper
to an association in the same field.
It goes without saying that all media are more or less related
to the associations in their respective fields; but we are not
particularly concerned with that phase of the subject. The
official organ of any association is typical of the class I have in
mind. Generally speaking, journals in official relation to an
association are edited by the scissors and paste-pot method,
and accordingly have no weight with their readers. As a mat-
ter of fact, there is almost always some paper better than the offi-
cial organ in the same field. Then, again, the official organ is
usually sent free or its subscription price is included in the asso-
ciation’s dues, which means that the circulation is virtually in
the unpaid class. And generally what a man does not pay for
he is not interested in. There are exceptions, of course, but
they are few and far between.
The second element—percentage of renewals—can scarcely
be emphasized too much. An advertiser is quite safe in assum-
The ing a large percentage of renewals to indicate the
“Heart paper's relative hold on the readers, which in terms
Test ºf of advertising means relatively high value; and, by
* the same token, a low percentage of renewals indi-
cates a relatively low value as an advertising medium; and, what
is more, a constantly changing audience, which defeats the whole
principle of persistence in advertising.
Percentage of subscriptions in arrears—the third element—
indicates much as to the strength of a paper among its readers,
and is to be judged by the same standards as percentage of
renewals. These two make up the “heart test” of circulation,
and it is to the advertiser’s profit if the papers on his list have
“strong hearts.”
The quality of circulation is to be determined very largely,
also, by the paper's method of securing subscriptions. All of
394 ADVERTISHNG MEDIUMS
us have listened to a great deal of discussion about forced circu-
lations. In the case of some advertising media, “forcing” has
little relation to advertising value; but with trade and technical
papers such methods are almost sure to decrease it.
The very term “forced” seems to imply a subscription se-
cured at sacrifice of quality. The publisher of a trade or techni-
cal paper, no matter how beneficial his editorial matter may be,
can never build a circulation of real value to the advertiser un-
less he secures his subscribers on the basis of what he really is—
or should be-selling, namely, editorial contents. The use of
premiums in subscription work generally indicates one of two
weaknesses: either the editorial contents alone are not of suffi-
cient value to sell subscriptions, or the circulation is so low as to
require forcing. In either case the advertiser “pays the freight.”
Subscription solicitation by mail, by canvasser, by agency, by
contest, etc., are much-discussed topics. To my mind, however,
it is possible for publishers to get quantity at a sacrifice to quality
by any method. The advertiser should concern himself not with
the method, but with the motive behind and the results of the
solicitation.
The fourth factor in determining the value of circulation is the
distribution. Distribution includes and is divided into two
. . . . classes: (1) geographic, and (2) according to business
º: or relative position in business. Geographic classifi-
" ..." cation of distribution may be made in a great number
of ways. For example, by section, by state, by cities
of certain size, etc.
The second form of classification—that is, according to busi-
ness or position in business—leads to a division of papers into
two classes. Publications that are trade papers in every sense
of the word, and which confine their circulation to only one
business or trade, can make their classification only on the rela-
tive position of subscribers. Such a classification would run
somewhat like this: owners, managers, buyers, etc.
A great many publications are not confined to one single busi-
ness or trade, however, and therefore their classification must
be made in two parts: First, according to different lines of work
served; and, second, according to relative position of sub-
scribers in those lines. A classification of this nature would be
in the case, let us say, of an iron and steel paper, first, by busi-
ness, as iron mines, blast furnaces, manufacturing concerns,
railroads, etc.; and, second, as to position, such as managers,
ADVERTISING MEDIUMS 395
engineers, buyers, master mechanics, etc. In cases of the latter-
named papers, where there is a considerable diversification of
circulation, there is a tendency among some publishers to classify
several weaker trades under a single group and thus make an
apparently strong showing, when, in reality, the trade or line
of work in which the advertiser is most interested may be but a
small proportion of all that is included in one group. Here the
advertiser may be easily misled.
Having now analyzed circulation, we must next determine
the sources from which data may be secured.
Jyhere to . In my work I have found eight sources from
Look for which data may be obtained and verified. I shall
Circulation outline them one at a time—not necessarily in the
Pała order of their importance, however.
Naturally, the first source is in the field itself where the num-
ber of firms or individuals limit the circulation of the field’s
media. This enables us to make a definite check on circula-
tion figures. Second is the Post-office Department. Through
the post office we are able to verify much of the data secured
through other sources. As a carrier the department requires
publishers to submit semi-annual statements regarding their
publications; and their value and relation to the advertiser may
best be determined by a brief outline of its requirements. It
requires the following conditions upon which a publication shall
be admitted to second-class postage rate:
It must be regularly issued at stated intervals, as frequently as
four times a year, bear a date of issue, and be numbered consec-
utively. It must be issued from a known office of publication.
It must be formed of printed paper sheets without board, cloth,
leather, or other substantial binding. It must be originated and
published for the dissemination of information of a public char-
acter, or devoted to literature, the sciences, arts, or some special
industry, and have a legitimate list of subscribers. It must not
be published primarily for advertising purposes, or for free cir-
culation. -
The Post-office Department insists that publishers mail only
10 per cent. of their circulation sent to paid subscribers as free
sample or sample copies. A publisher is allowed to send
and Ex- copies of his paper to subscribers who have not paid
change subscriptions for one year; that is, he is allowed one
* year to collect his money for a renewal or from a new
subscriber who has signed a legitimate order for his subscription.
396 ADVERTISING MEDIUMS
Exchanges are considered legitimate copies, as they are a rate
of pay. Advertisers’ copies are considered as paid copies, be-
cause a publisher must be permitted to send copies of the paper
to his advertisers, so they may be able to verify the insertion
of their advertisements, although the department does not look
upon the sending out of a promiscuous number of copies to
advertisers with favor. It says that only enough copies should
be sent to the advertisers to enable them to check up and verify
the insertion of their advertisements.
If the Post-office Department is furnished information that
a publisher is misrepresenting the number of copies he is sending
out to paid subscribers it will investigate the matter, and if it is
found that the publisher is misrepresenting and is not furnishing
a true statement to the post office of his sample copies and his
paid subscriptions, his paper is excluded from the second-class
privilege.
These things happen in rare cases, of course, because it is hard
to prove such things against a publisher; but it has happened,
and the department pushes it pretty thoroughly when given in-
formation that can be investigated and verified. Of course, the
department does not voluntarily go out and investigate things
in regard to publications. It goes under the assumption that
the publisher is honest, unless he is proved otherwise; and very
much depends upon the local postmaster. It is possible to get
things through with postmasters in some cities and towns that
could not be passed at all in others.
Every six months publishers have to report to the post office
who the editor and the business manager of the paper are; also
the stockholders in the company and their post-office addresses.
The third source of data is to be found in the solicitors for
competing journals. Many times these men unconsciously drop
remarks that may throw light on a point the advertiser has
been trying to get for weeks. Fourth, letters to the names on
the advertiser’s mailing-list often help to secure a lot of data.
Fifth, if not colored by personal prejudice, data from non-
competing advertisers may prove of help. Sixth, the firms
who print trade or technical papers can often throw light on
circulation figures—at least total circulation. This recalls an
instance of a publisher making a claim of 12,000 total circulation
when his printer’s bill showed 6,500 to be the average press-
TULIl.
The seventh source of data is to be found in the Audit Bureau
ADVERTISING MEDIUMS 397
of Circulations, of Chicago. We all have heard a great deal of
favorable and unfavorable talk about the A. B. C., but the fact
that it is supported by some of the broadest and keenest adver-
tisers, agents, and publishers in the country would seem to indi-
cate that it might soon become the standard for every one. In
a number of cases at the present time, however, advertisers find
it expedient to use certain papers not members of the bureau–
and it must be admitted that there are several good papers in
that class. This necessitates the use of a data sheet prepared
by the advertiser—the eighth source of data.
The tendency these days seems to be largely toward data and
not the intelligent use of it. In the case of some advertisers,
securing data has developed into a kind of ceremonial to be in-
dulged in at the expense and inconvenience of the publisher.
But data—just plain data in the files—are worth absolutely
nothing unless they can be made to assist in a more logical se-
lection of media. Accordingly, an advertiser’s data sheet should
be prepared only after a careful analysis of requirements has
been made—an analysis similar to the one made in the first part
of this paper. If this is done the essential points will be cov-
ered, and neither the advertiser nor the publisher will be incon-
venienced unduly.
In the sheet with which the writer has worked, sixteen spe-
cific questions are designed to secure all the essential data on
circulation, subscription methods, distribution, etc.
§: Aside from these several other questions furnish us
ata from T. & º e e
fj. with information as to discounts, closing dates, etc.
Space is also provided for an affidavit to be made by
the publishers, and in no case is any statement given con-
sideration unless the affidavit is made.
The sheet is sent to publishers from four to six weeks before
the list is made up, and with few exceptions it is returned
promptly. Among those returned a few are not properly filled
in and they are resent in order to give the publisher a fair
chance to bid for business.
After the sheets—or rather the majority of the sheets—are
returned the data are tabulated and graded, according to a
definite standard, in much the same manner as a college in-
structor would grade his examination papers. The standard of
grading is based on the analysis made previously.
To illustrate, let us take the case of two papers in a certain
field (this is an actual case, although the names are withheld
398 ADVERTISING MEDIUMS
for obvious reasons) which, for convenience, we shall designate
&S “A.” and “B. 5 *
“A” is the older of the two papers and it has undergone no
changes in ownership or policy during a number of years. Its
total circulation is 5,833 and its paid subscribers number 4,375.
Ninety-five per cent. of its subscribers are renewals, and its cir-
culation is 60 per cent. among owners, 30 per cent. among
managers, and 10 per cent. among superintendents. No geo-
graphical distribution of circulation figures is given, however,
which makes it hard for us to determine where the paper cir-
culates.
Subscribers are solicited both by mail and by personal call,
and premiums are extensively employed. The paper is the
official organ of the trade association in the same field, although
the dues in the association do not include a subscription. A
surprisingly large number (40 per cent.) of subscribers are in
arrears. For years “A” was the only publication in the field,
and for a long time was a thoroughly live and reliable paper;
but during recent years it has shown a marked decline both edi-
torially and in point of advertising carried.
Typographically it is bad, and the paper used in it is of very
poor quality, as is also the presswork. Illustrations are the ex-
ception rather than the rule; and the editorial pages are coming
more and more to contain a lot of “write-ups” and “free
readers,” rather than strong, forceful, constructive matter per-
taining to the business it serves. “A’s” grade, figured for the
1915 list, is given below. -
“B” has a total circulation of 4,695, and its paid subscribers
number 3,286. Ninety-five per cent. of its subscribers are
renewals; and its circulation is 90 per cent. among plant-
OWIlêI’S.
Geographically, the circulation is distributed proportionally
as to centres of the industry. Subscribers are obtained only
through mail solicitation and no premiums are used. “B”
is in no way connected with any association in the field. Be-
tween 2 and 3 per cent. of subscribers are in arrears.
Typographically, the paper is very poor, but as to illustra-
tions, presswork, paper, etc., it is far above the average. Edi-
torially, “B” is coming to hold a high place, for its matter is the
kind that will be read and studied. It is a comparatively
young paper, but its development has been healthy and appar-
ently substantial.
ADVERTISING MEDIUMS 399
The grades for both “A” and “B” are given below. Before
giving them, however, it might be well to say that a paper fail-
ing to make a grade of 75 per cent. is not given a place on our
list:
PoſNTS COVERED (“A”) (“B”)
Makeup . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . O t
Standing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . e is tº e º ºs e º ſº tº gº tº tº e & tº º 3 3
Editorial policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 8
Advertising policy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... 3 3
Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 2
Total circulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 4.
Paid circulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 15
Percentage of renewals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 10
Percentage in arrears . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 5
Trade relations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . O 10
Subscription solicitation methods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 20
Distribution (geographical) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 5
Distribution (relative position). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. 5
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 91

In cases where there are a number of high-grade journals in
the same field an elimination may be made, if it is necessary,
either by dropping those of lowest grade or by determining rela-
tive value through advertising rates.
We are compelled to do this in the engineering field, where
there are a number of really good papers. The formula—which,
as is known, is used by a number of advertisers—is v = c X P; V
R
being value, C being paid circulation, P being percentage of
purchasing-power circulation, and R being current page-rate.
For one engineering paper the formula would work out like
this: Value equals 18,681 multiplied by .24 and divided by
65.00 (which equals about 69). By figuring the “V” for all
engineering-field papers and eliminating the lowest, we are able
to trim our list as is found necessary.
And now as to the results of this selective process: First, the
advertiser gains a more positive knowledge of the field and may,
accordingly, prepare and run his copy more intelligently.
Second, he is able to eliminate waste to a large degree, placing
his business where it will really bear fruit. Third, he does not
have to plan his campaign along the same lines as his competi-
tor's, for his course is already plotted along safe and sane lines.
400 ADVERTISING MEDIUMS
If the competitor is using space in a paper that has not shown
up well under investigation all the better, there will be just
that much less money to spend in good media. Fourth, the ad-
vertising manager can meet his superiors with the knowledge
that he is really spending his appropriation in trade journals
wisely—as if it were his own.
All of these things, and more, come as the result of choosing
trade papers intelligently. It means a lot of work, of course,
but the results well justify it.
For use in connection with articles bought by the consumer in
small units and for many lines of specialties, the street-car card
4. Street has come to have an accepted place of large importance
car Adver- among the advertising mediums. The following un-
*g signed article gives some idea of how the street-car ad-
vertising business is conducted under modern conditions:
*When an advertiser is using publications, it is a simple mat-
ter for him to secure proof of insertion. The checking depart-
ment of his advertising agency or his own advertising
department merely checks up the date of insertion, size of ad-
vertisement and position. That ends that.
But for an advertiser who is using the street cars to secure ab-
solute proof of insertion is “something else again.” Not that
the proof isn’t there, but that it isn’t quite as easy to unearth
it as it is with magazines or newspapers, especially if one is of
the disposition that has to be “shown.”
The matter of size is simple enough, all cards being of the
regulation size, 11 X21 inches.
“Position” is seldom, if ever, requested by advertisers, so
that matter scarcely ever comes into question. “Position” is
purely a matter of judgment on the part of the “carders” (the
men at the car barns who insert the cards in the cars), their in-
structions being that light and dark cards shall alternate as far
as possible.
Street-car advertising in New York and other large cities is
sold on the basis of “runs”—a “full,” “half,” “third,” “quar-
ter” or “eighth run * on all the lines operated or on any in-
dividual line or lines that the advertiser may choose.
*Printers' Ink, January, 21, 1915, p. 99.
ADVERTISING MEDIUMS 401
Mr. John Doe has just signed a contract for street-car adver-
tising in New York City. His contract calls for a “full run”
on Broadway and a “half run” on the Fourth and
#. Madison Avenue lines—which is to say that a Doe
ð... card will appear in every car operated on the various
ranch lines which make up the Broadway system
and in one half of the number of cars operated on the Fourth
and Madison Avenue line, as long as the contract has to run.
After Mr. Doe has O. K’d the text matter and design for his
cards, they are printed or lithographed, as the case may be, and
then delivered to the stockrooms of the street-car advertising.com-
pany at the car barns, where they are assigned to the “Doe bin.”
Mr. Doe may write his own text matter, he may originate the
design and have his own artist execute the art work; and he may
have his cards printed by a printer of his own choosing. Or the
street-car advertising folks will attend to all of those matters for
him. In either event, Doe pays the bill.
About 25 per cent. more cards are printed than are actually
required in accordance with the terms of the contract. That is
done for a threefold reason: first, to take care of the matter of
cards that have to be replaced through becoming soiled or torn;
secondly, to provide cards for Mr. Doe's own use; and thirdly,
to enable Doe to take advantage of the custom prevalent in
street-car advertising, whereby the unsold space in the cars is
divided pro rata among the various advertisers.
Doe's cards are now at the car barns ready to be inserted in
the cars.
It is eight o’clock at night—the time at which the carders
generally begin their work (although there is a day force for emer-
Channing 8°W work). The force of about twenty carders is
..".% assembled, ready to receive their assignments from the
chief. Doe's cards must show in the cars to-morrow
according to the terms of the contract.
Now, Mr. Doe's cards go in every Broadway car. That’s all
right—there’s no trouble about that. But what particular
card must come out of every Broadway car in order to make
room for a Doe card?
How do the carders know which particular cars on the Fourth
and Madison Avenue line Doe's cards go in? And how do they
know which particular cards are to be replaced by Doe's?
The system is foolproof.
In the office of the street-car advertising company there are
402 ADVERTISING MEDIUMS
sheets prepared which, when filled out, are virtually a diagram
of every car by number and by line and which constitute a per-
manent office record in loose-leaf book form. That is, a look
at any of these sheets will tell exactly the advertisers' cards that
are in any car in the city.
When it is considered that there are about 2,946 street cars
in New York City being operated over 108 individual lines and
branch lines which, collectively, extend over between 500 and
600 miles of track; that in each car there are, on the average, 28
cards; and that in a considerable number of cars changes of
cards are being made every day; then the enormity of the detail
connected with the putting in and taking out of street-car cards
becomes a little more understandable.
A few years ago John Wanamaker’s cards in the New York
street cars were changed every day. At four o’clock each after-
Panamak noon the printing of the cards for the following day
er's daily was begun, and that same night the finished cards were
Cards in delivered to the barns for insertion in the cars. This
the Street daily Wanamaker advertising was the only instance
Cars of its kind, so far as is known, that has occurred in the
history of street-car advertising.
In the office of the car advertising company the sheets, which
form the pages of the loose-leaf record books, are ruled off.
For each line in the city there is a separate book. At the top
of the page is written the name of the line. To the extreme left
of the page the names of all the advertisers on that particular
line are written down, one under the other. The date is also
written at the top of each page.
At the top of each page, extending all the way across, the
numbers of the cars being operated on that particular line are
How the written.
Records The clerks in the office who are working on the
of All the sheets simply add Doe's name to the list of adver-
Cºs 4re tisers in the Broadway book and in the Fourth and
* Madison Avenue book.
Then they put a mark (V) opposite Doe's name and under
every car which is being operated on the Broadway system, since
his contract calls for a “full run” on Broadway.
In the Fourth and Madison Avenue book the same mark is
made, but it is made under only one half of the number of cars
being operated on Fourth and Madison avenues, since Doe has
contracted for only a “half run” on that line.
ADVERTISING MEDIUMS 403
The clerk in charge of the office force might be compared, in a
broad way, with the man who “makes up” the advertising
pages of a magazine. The latter decides in what particular
place in the publication a certain advertisement shall appear;
the former determines in what particular cars on a certain line
an advertiser’s cards shall show.
When the clerk who has checked off in the books the cars in
which Doe's cards are to appear has finished, she reads them off
to another clerk, who records them on separate slips of paper,
called “order slips.” It is by means of these “order slips”
that the carders at the several car barns throughout the city
are enabled to do their work with such speed and clocklike
precision. But before the work at the car barns is outlined,
let us stay in the office a while longer.
The order slips are worked like this:
At the top of each slip the name of the line is printed; the slip
is ruled off into ten spaces; and at the top centre of each space is
printed the number of the particular car.
Now, for every Doe card that is put in a car there must be
another advertiser’s card taken out. So, in each space it is seen
that where it says, “Put in Doe,” it also says, “Take out Jones,”
or “Hopkins,” as the case may be.
Yes, but how does the clerk in charge of the office force know
which card, in each car, to take out so as to allow for Doe—a
newcomer? you ask. And what becomes of the card that is
taken out? Does it go into another car? Or if it does not,
what becomes of it?
In an earlier paragraph one of the reasons given for printing
25 per cent. more cards than an advertiser’s contract actually
HZhat I, calls for was the fact that he is a sharer of the unsold
Done with space in the cars. Now, when a new advertiser comes
Unsold along, this unsold space in the cars is lessened to the
* extent of his contract; so the advertisers who are taken
out of the cars to make room for Doe are those who have been
enjoying, by virtue of the custom, more space than they were
actually paying for. So a number of their cards are removed
without any ado. The cards thus removed do not go into other
cars; but the car advertising people ask the advertisers what dis-
position they wish to make of the cards that have been taken
out. The cards are preserved in the barns or destroyed, just as
the advertisers say.
When all the order slips for the insertion of Doe's cards in the
404 ADVERTISING MEDIUMS
Broadway and Fourth and Madison Avenue lines are made out
they are collated in the office and set aside.
At five o’clock each afternoon the head of the carders calls at
the office of the car advertising company for the order slips that
have been made up that day, Doe's among them. It sometimes
happens that as many as twenty-five or thirty different adver-
tisers’ cards must be changed in one night, which keeps the
carders busy until all hours of the morning.
The head carder is now on his way to the barn with the order
slips to give his men their assignments and instructions for the
night’s work.
J. * To one carder he hands over all of Doe's order slips.
“...” That's all that carder has been waiting for. Over to the
“Doe bin” he hustles, snatches a big bundle of Doe's
cards and is on his way in no time to the empty cars in the barn.
As soon as the carder takes out of a car the advertiser’s card
which is designated on the order slip, he replaces it with a Doe
card. Then he checks off his order slip to show that in that
particular car Doe's card has been put in and the correct one
taken out. He goes through the same process in every car that
Doe's order slips call for, checking up each space on the order
slips as he goes along.
In some cases it may require a little rearranging so as to have
light and dark cards alternating, but steady practice makes short
work of that difficulty when it does arise.
In the meantime, another carder has taken a bundle of Doe
cards to the Fourth and Madison Avenue car barns, and the same
work has been put through.
When the insertion of Doe's cards is completed the carders
turn into the chief at the stockrooms the order slips properly
checked off and, in addition, they bring back with them all the
cards which have been ordered out of the cars to make room for
Doe's cards.
The order slips are then returned to the office of the car ad-
vertising company for reference. -
From these checked-up order slips, as well as by the books of
record in the office, advertisers are enabled to verify the insertion
of their cards.
Every time an advertiser changes his cards—which may be as
often as he pleases, but which generally is done every few months
—the same work is gone through both at the office and at the
car barns as has been here described.
ADVERTISING MEDIUMS 405
For food products and other quick-repeating lines the method
of sampling has certain obvious advantages as a means for
5. Sam- building up business. G. W. Clifford discusses in
pling the following article some of the methods which have
been employed in sampling by concerns who have used it suc-
cessfully:
*“The most successful sampling campaign we ever operated,”
says the sales manager of a well-known soap concern, “was a
combination of house-to-house solicitation and dealer co-opera-
tion.
“This plan was based on the giving of premiums in the form
of silverware, in return for coupons enclosed with our soap. We
organized a crew of salesmen for house-to-house work. Each
man was equipped with a neat suitcase containing a full line of
premiums. When the housewife opened the door, the salesman
would greet her in a polite way, spring the catch on the suitcase,
and hold it out for her inspection. Silverware possesses a strong
attraction for every housewife, and on this our appeal was based.
‘Take your pick of any set of this silverware, madam,” the sales-
man would say, ‘I want to give it to you free; it is not for sale—
money cannot buy it. The only way you can get it is to accept
it as a gift from my firm.’ -
“Then from his pocket he would take a full-sized package of
our soap, open it, and explain that a coupon was enclosed in each
package, a certain number of which would entitle the holder to
One of the valuable sets of silverware. Each prospect was given
a ticket. On representing this at her grocery store and buying a
cake of the soap she would be given a full-sized cake free—two
cakes for the price of one.
“The ticket was in the form of a request to the grocer to give
the holder a free cake of the soap, provided she bought one cake
at the same time, and stating that we would allow him the full
price of a cake of soap for each ticket sent in to us.
“Preliminary work on dealers won their interest in this plan,
for in it they could see certain sales. They were not asked to
distribute our goods free. They obtained a double profit on
each transaction—a profit on the sale of the cake of soap, and a
free gift of the full price of the sample cake.
*Printers' Ink, February, 9, 1914, p. 20.
406 ADVERTISING MEDIUMS
“This plan gave us two appeals to use on the housewife: first,
the appeal of the free gift of silverware, and second, our regular
appeal on the quality, utility, and value of the soap. Direct re-
turns came in immediately from each district in which the plan
was operated. Regular repeat orders followed as a natural re-
sult, because once started on the proposition, housewives felt no
inclination to discontinue using the soap regularly, as to do so
would render valueless the premium coupons they already
possessed. Apart from this they needed soap, anyhow, and
naturally favored the brand that offered them a valuable gift in
return for regular use.”
Sampling methods of all kinds fall naturally into five main
divisions:
1. By mail.
2. Through stores.
3. House-to-house.
4. Through professional men.
5. Special “stunts.”
On account of the large number of free-sample offers contained
in the average publication, it is becoming increasingly difficult
to pull requests for samples through the mail.
A typical example of the way a “twist” is put into a sampling
campaign, operated through press advertising, is the case of
A Ralston Ralston Wheat Food. The purpose of the magazine
#.” campaign this concern operated during October, No-
vember, and December, was to induce prospects to
sample and use regularly its wheat food. Prospects were not
asked to send for a sample of the food, however. Instead, they
were approached on their “blind” side—they were invited to
enter their children in a “development contest” and participate
in $500 worth of prizes.
The bait in the offer designed to pull inquiries read: “Mothers!
Ask us for this development chart that shows height, weight,
and measurements of the average boy and the average girl from
1 to 14 years of age. Contains many helpful suggestions about
diet and the care of children, and has a tape-line attachment for
accurately measuring them; also a place for recording the yearly
weight and measurements of an entire family. Every mother
should have one. Write for your free chart, and particulars of
our $500 prize development contest for children.”
With each chart was sent an application blank for the develop-
ment contest. Directions read: “Just measure the height of
ADVERTISING MEDIUMS 407
your boys and girls and weigh them on your grocer’s scales.
Then fill out the entry blank attached hereto, and get your gro-
cer to sign it. Mail the entry blank to us promptly, with the
top of a Ralston Wheat Food package for every boy and girl
entered. When you enter the children, let them eat all the
Ralston Wheat Food they want, and watch them grow.” . . .
Colgate & Company also operate a cleverly disguised plan for
sampling their Nursery Talc. The appeal is to mother love—
every mother admires artistic pictures of “cute” children. The
advertisement shows a picture of four pretty babies, in different
positions, playing with a can of talc, and reads, in part: “Colgate
Baby Buntings, 13 inches high, are beautiful decorations for the
nursery wall. Children love them. You may get them, and a
trial of the real Nursery Talc-Colgate’s—for 30 cents in
stamps.”
A combined method of sampling and testimonial getting is
operated by Johnson & Johnson. In each carton of their shaving
combing soap is a postal card, addressed to the firm, the back
tion of which reads: “This card is enclosed in every pack-
Method of age of Johnson’s Shaving Cream Soap, so that the
* * pleased purchaser may have an opportunity to have
” us send a trial tube free to any friend to whom he
wishes to recommend it. Full-size tubes, containing 150 or
more shaves, can be bought from any druggist, or if not, a re-
mittance to us will bring one postpaid.” Follows a blank that
calls for the name and address of the person to whom the sample
is to be sent, also the name and address of the person who sup-
plies the name. Then comes a blank headed, “And what do
you think of Johnson’s Shaving Soap?”
The card is enclosed with each sample sent out. Thus at one
stroke Johnson’s obtain names of prospects without spending
a single cent in advertising for them, a testimonial of their
product, and what is practically a personal letter of recommenda-
tion from one friend to another.
Splendid opportunities exist for sampling through retail stores
when the co-operation of dealers can be won. A plan typical
of that used by many concerns is operated by the Shredded
Wheat Company. The dealer is impressed with the power of
the sample as a trade bringer. Then he is told that in considera-
tion of his placing an order for a certain amount he will be given
a supply of special samples, each carton containing three full-
sized biscuits, which he can present to his customers with his
408 ADVERTISING MEDIUMS
compliments. Distribution of samples is effected by placing one
of the samples in each delivery of groceries for, say, a week.
This method has a triple action. It is a lever to induce the
dealer to place a worth-while order; the dealer’s customers ap-
preciate his sending them the samples, as they are large enough
to represent actual cash value, and the Shredded Wheat Com-
pany gets its samples right into homes at no cost to itself.
Sampling through stores by means of demonstration booths is
a method widely used. A girl demonstrator is given charge of
an attractive booth, and flags the attention of cus-
Sºpºg tomers of the store. She gives a short, snappy talk
Through e
D., on the merits of her product, and presents each person
tion Booths with a small sample. Crystal Domino Sugar samples
take the form of a box representing a domino, which
contains two pieces of sugar. Gold Medal Flour samples are
. sacks of flour, each containing about a teacupful of
OUIT.
Other concerns dispense with a demonstration booth, and
leave it to the store to distribute the samples. One way in
which this is done is to place a supply of samples on each counter,
together with a placard inviting people to take one. The clerks
are instructed to give one sample to each customer. This
method is widely used with proprietary articles in drug stores.
Another method is where stores hold “sampling weeks.” A
drug store in Chicago uses this plan as a feature in its advertise-
ments. &
The success of many commodities depends to a large extent
upon the manufacturers obtaining professional endorsement. A
Getting the typical example of this is the case of a certain tooth
Professional paste. In addition to operating an extensive press
Endorse- campaign, the manufacturers work directly on den-
” tists and physicians through salesmen and sales-
women. Many concerns employ graduate physicians or dentists
for work of this nature.
The procedure is generally to call upon professional men and
explain the merits of the product from the professional stand-
point. . . . Samples are left for the doctor’s or dentist’s
personal use. A week or so later the salesman returns and finds
out just how it pleased the practitioner. If he is not thoroughly
sold on the merits of the product, he is drawn out regarding his
objections, and these objections are overcome. When he admits
that it is a good thing, he is asked to recommend it to his patients
ADVERTISING MEDIUMS 409
and give out samples as occasion arises. For this purpose a case
of samples is shipped to him.
Other products are so constituted that while professional en-
dorsement is not absolutely necessary, yet it helps. An instance
of this is Armour's grape juice. As this product is said not to
contain added cane sugar, one argument is that it can be drunk
by diabetics.
Armour's work on professional men is known as “detailing.”
A strong salesman or saleswoman, versed in medical lore, calls on
doctors and talks up the merits of the grape juice in general, and
as related to diabetes in particular. Convincing data along
medical lines is submitted. Physicians are asked to recommend
the grape juice to their diabetic patients, and samples are shipped
for this purpose.
Hospitals also are worked upon on much the same lines as
physicians. The person to see in a hospital varies with each
institution. In some cases it will be the superintendent; in
others, the buyer, head nurse, or dietitian. Food value is talked
first, utility in diabetes second, and then price.
Practically every firm that samples regularly finds occasion to
put over a special “stunt” that is off the beaten path.
A manufacturer of a line of toilet articles scored a
*ºd, hit with a new perfume by arranging with theatres to
Tº p.1 tie a sample bottle to each programme given out dur-
ing a certain week. A printed slip wrapped around
the bottle listed the names and addresses of downtown stores
that carried the line.
The same idea was used with restaurants. Waiters were in-
structed to give each guest a sample bottle at the time they
took the order. Hotels, too, were induced to place a sample
bottle of the perfume in each room. -
Another toilet-goods house keeps tab on college reunions, and
mails to each participant a neat carton containing a sample of
talcum powder and shaving soap.
When W. K. Kellogg placed his wheat biscuit on the market
he had a sample biscuit, wrapped in waxed paper, placed in each
package of his corn flakes. This simple method proved a means
of building up a considerable demand for the new biscuit.
Church fairs offer an excellent medium for sampling. Many
firms are extensive users of this method. In placing a new drink-
ing chocolate on the market, one company used church fairs
extensively. An attractive booth was fitted up and placed in
410 ADVERTISING MEDIUMS
charge of a live saleswoman with several assistants. One ad-
vantage of church fairs is that one need feel no compunction
about forcing goods on people. That is what they go there for—
to be separated from their money. The chocolate firm in ques-
tion made a combination offer—“buy a box of our eating choco-
late and we will give you free a full-sized package of our drinking
chocolate.” A commission on all sales was paid into the church
fund.
The motion picture as an advertising medium has not yet
come into its own. The use of cards and other forms of inter-
6. Motion- ruption of the regular “shows” offer probably the
picture least satisfactory field for the employment of this
4dvertising medium, and yet it is about the only field which has so
far been developed to any extent. A number of manufacturers,
among them the Studebaker Manufacturing Company, however,
are said to have secured remarkably good results from the mo-
tion-picture demonstrations. The Studebakers, for example,
made such demonstrations in this country and in England, illus-
trating to agents, dealers, and prospective car buyers the meth-
ods of building and testing Studebaker cars.
The unique plan of advertising employed last spring by the
Gossard Corset Company suggests a new line of development
which has large possibilities. This plan, in brief, consisted of a
motion-picture play, an important feature of which was a series
of scenes illustrating corset fittings. This was put on at local
motion-picture theatres under the joint auspices of the Gossard
Corset Company and the local store handling their line. Tickets
were given to the women patrons of these stores and the “show”
was conducted at a time of day when the largest possible number
of women would be at liberty to attend.*
The possibilities of these and other uses of this new medium
give interest and value to the following discussion of the present-
day organization of the industry. Walt Bloeser, Manager of the
Motion Picture Advertising Division of the Chicago Tribune,
*Printers' Ink, December 24, 1914, p. 62.
ADVERTISING MEDIUMS 411
delivered at the Chicago Convention of the Advertising Clubs of
the World the following address under the title, “The Motion
Picture Industry and Its Advertising Possibilities.” Mr.
Bloeser’s article is prepared primarily to interest newspaper
men in the possibilities of securing advertising from the motion-
picture concerns, but it has much general interest also:
*The motion-picture industry might be split into three great
divisions—three monster organizations, which grind out
263,000,000 feet of film yearly, realizing therefrom a revenue
greater than is returned to the steel interests. They are the
General Film Company, the Universal Film Company, and the
Mutual Film Company, named in the order of their strength and
standing in the motion-picture world.
Briefly, the history of the motion picture dates back about
eighteen years. Motion pictures were invented by Thomas
Edison in the year 1872, but never came into general use in a
commercial manner until about eight years ago. It is necessary
for me to go into this brief history, so that you may follow some
of the facts that I will quote in another part of this paper, which
if taken singly would look wholly unreasonable, but, on the other
hand, will look very plausible when you have some idea of the
fundamental principles on which this business operates.
The General Film Company is an association of manufacturers
whose products have been licensed under certain patent rights,
and are owned and controlled by what is called the Motion
Picture Patents Company, otherwise referred to as the “licensed
group of manufacturers,” of which Selig, Edison, Essanay, and
others are a part. The members of the Motion Picture Patents
Company are the producers of film and the General Film Com-
pany are the releasers of these films. The General Film Com-
pany has forty-seven offices in the United States and Canada.
It owns and operates them at its own expense. The licensed
group of manufacturers contribute a certain number of films
each week to the General Film Company, which in turn makes
up out of these contributions a general program to which 60
per cent. of the exhibitors subscribe. The various licensed
manufacturers are paid in accordance with the number of prints
they contribute to the General Film Company. (By the way,
*Printers' Ink, June 24, 1915, p. 61.
412 ADVERTISING MEDIUMS
when I refer to a print, I mean a copy from the original negative.
The negative is retained by the manufacturer from which as
many prints can be made as he desires.)
The Universal Film Company is a combination of manufac-
turers who are not considered as licensed; that is, they are not
supposed to use the same patented instruments that are used by
the licensed exhibitors. At the present time there is a certain
amount of litigation going on between them and the General
Film Company, which considers them infringers. The Univer-
sal Film Company has thirty-five offices in the United States
and Canada. The Universal differs from the General in that
most of the manufacturers included in its group own and operate
their own exchanges, whereas in the General Film Company
none of its group own or operate them.
The Mutual Film Company, which has thirty-five offices, like
the Universal Company, is a group of manufacturers operating
under the brand of Mutual Pictures, and is regarded very much
in the same light as the Universal Film Company, as far as the
idea of being licensed is concerned. The stock in the various
companies making up the Mutual is largely owned by the
public and is customarily sold by bond houses and on the curb
market.
These three that I have just described are practically the
mainstay of the motion-picture business. In addition to them
are many independent concerns who deal in features.
ſººd- Hardly a day passes but what one of this type does not
ent Fº spring up and at the same time another dies. We
cerns might call these the Independent Companies, the
more stable ones being the Paramount Company, the
Metro Company, and others. We might again divide this inde-
pendent group into two branches, one which I have just de-
scribed, and the other, Serial Feature Companies such as are
exploited by newspapers. Keeping these facts clearly in
your mind, you have some idea of the foundation of the
motion-picture business and how it is classified at the present
date.
What most interests us is, what bearing does all of this have
on the newspaper business, and how can the newspapers benefit
by motion pictures and accumulate revenue from the motion-
picture manufacturers? I regret to say that a newspaper's
opportunity for securing advertising from the licensed companies
is not great; in fact, there is little opportunity, and for this
ADVERTISING MEDIUMS 413
reason: An exchange, in order to make money, must be run at a
minimum of expense. Volume of purchases does not make for
a volume of sales. This is contrary to the rules of modern mer-
chandising, but it is not surprising because in the show business
not one of the principles of successful commercial enterprising
applies to successful motion-picture enterprising. I, for instance,
am a manufacturer of the licensed group. I contribute, we will
say, seven prints a week to the General Film Company. The
General Film Company releases these on a certain date to the
exhibitors. Reversing the process, the exhibitor makes his
demand for pictures upon the exchange at least 30 days in ad-
vance. The exchange in turn makes the demand upon me, as a
licensed manufacturer, almost 120 days in advance, in order to
give me ample time in which to make the pictures. Conse-
quently this makes me a manufacturer with orders filled and
waiting, so why should I advertise to-day a film that I have had
a full order on 120 days ago? If I did I would only be making a
greater number of prints and would therefore incur a greater
expense in the manufacturing and a still greater expense in the
handling, and have less profit, because, as I mentioned before,
an exchange must be run at a minimum of expense or, as you
might say, a minimum of purchases.
Another great disadvantage of the business is the fact that the
sales price is determined not by the quality or the merit of a film
... or picture, but by the age of the film. In order that
riº. you may form a clear comparison in your mind that
... f.e will illustrate this point, think of the Uneeda Biscuit.
his is a nationally advertised product, comes in a
package, and is sold for five cents. It is five cents this minute,
to-day, to-morrow, the next day and forevermore. Like many
nationally advertised products, it is the same Uneeda Biscuit
in quality to-day, to-morrow, and ever after, but in the film
business you have a feature to-day, something else to-morrow,
and still something different the next day. For example: At
my theatre, I show a picture called “A Fool There Was.” The
picture is known as a first-run because I show it first. I, we
will say, run it to-night. The other fellow, a few blocks away
or at some distant part of the city, runs it to-morrow night. It
then becomes a second-run. The fellow who shows it the next
night makes it a third-run, and so on, the film becoming older
each day. Mind you, it simply becomes older each day it moves
farther from its original release date. (The actual wear and tear
414 ADVERTISING MEDIUMS
of a film is a minor factor, most copies of film enduring about six
months, at the end of which time they can be replaced at a cost
of from 4% to 10 cents per lineal foot.) First-run prices for big
features usually start at $100 and go downward. First-run
prices on serial pictures, that is pictures divided into, we will say,
twenty episodes, start at about $25 and go downward. The
reason for this is because a picture is not a product like a biscuit,
but is stamped by the exhibitor as new or old according to the
date on which it is released, and the price is arranged and fixed
accordingly. This does not always apply to big features like
“Cabiria” and “Quo Vadis.” These pictures usually run at the
large theatres in business districts more than one night, some-
times playing from one week to one year, just as does a legitimate
dramatic show. In this case it is well to advertise a picture be-
cause you can get the accumulative effect of advertising, whereas
you cannot get the same effect if you show a picture to-night and
replace it for another picture on the following evening. There-
in lies the great possibility for a newspaper to secure adver-
tising, and this necessarily must come from the exhibitor
jºins the play, a phase of the business which I will explain
ater.
It is a sad fact, but true, that the general program, i. e., the
programs made up of the contributions of the firms in the
General, Universal, and Mutual Film Companies, cannot be
advertised successfully, as they are the only dependable staple
that these motion-picture concerns have.
In a few words, then, let me give you a resumé of the facts
just quoted. 1. Motion-picture concerns like the licensed pro-
ducers do not have to advertise, because their sales are made be-
fore their product. 2. The feature companies which I have
treated briefly should advertise, and will in the future advertise,
because their products are shown under more favorable circum-
stances for advertising. It is to this end that the newspapers
should encourage the independents to the use of their columns.
That newspaper advertising has been successful for them is
proved every day, not alone in the Tribune’s own pictures, but
with other newspapers throughout the country.
Among the most enterprising and aggressive large groups are
the Universal Company and the Mutual Company, the former
spending to my knowledge about $200,000,000 yearly in news-
paper publicity, and the latter, through their various groups,
about the same amount.
ADVERTISING MEDIUMS 415
In social life everywhere the query goes back and forth, “Will
the movies some day replace the legitimate theatre?” Show-
men, experienced and keen of vision—long-bearded
Tº Thespians, steeped in and wedded to the art of the
Thai, stage—producers of drama, comedy, etc., all, are
ooking with grave concern toward this new industry
and marvelling at its phenomenal growth. Personally, I am of
the opinion that the legitimate drama will never die. Acting
“in the flesh” will always be popular with even the rabid
movie fan, if for no other reason than as a contrast to pictures.
What will take place is an elimination of the trashy stuff
that makes up a large part of our modern speaking stage.
Such a result, I am sure, will be welcomed by those who
are directly and heavily involved, financially, in theatrical enter-
prises.
Despite the opinions of some showmen of the legitimate or
speaking drama who cling with jealous pride to their art, the
movies as amusement material have proved to be a very present
help to all and will therefore live and grow. The fact that they
are making tremendous inroads into the revenue of legitimate
producers, which is represented in the astounding figures that
$275,000,000 is being spent annually by patrons of movie thea-
tres, indicates that nothing except a nation-wide holocaust
could check its growth. Some “bred-in-the bone” theatrical
men voice their sentiments by saying that the movies’ entry into
the amusement field is merely a hard times’ development, that
it is simply a fad born in order to die again, that it is something
of an experimental venture which may vanish with the present
business depression.
All of this is well said, but we cannot overlook the sane, sound,
and modern economic principle on which the business is bound to
thrive. It is primarily an amusement for the masses and classes
—it is convenient insofar as it is a neighborhood proposition—it
supplies everything that the art of the stage does with the ex-
ception of the voice, and this part lacking is very generously
offset by the vast scope of original and natural effects possible in
making motion pictures; features that are peculiarly its own.
Motion pictures, besides being a form of amusement, have gained
recognition in the courts, schools, technical colleges, and art
studios, by doctors, lawyers, judges, business men, and people
in every walk of life.
It is needless for me to dwell on the news value of a photoplay
416 ADVERTISING MEDIUMS
department in a newspaper. Publishers should devote a section.
of their paper to movie news in which current films
Pº are reviewed and gossip of the fans is given free and
ºraj full play. News and movies are strikingly analogous
to one another. The printed word and the visualized
thought are as one, and compel an equal amount of attention
from the reader whether the publication is a morning or evening
daily, with or without Sunday issues. Movie news is on a par
with baseball news, with the added advantage that it is an all-
the-year-round feature. It serves the advertiser by increasing
the publication’s attraction value and has the lasting influence
of an editorial page. The modern daily is hardly complete
without its movie section, and has much to offer its advertisers
when it serves a large movie clientele.
Publishers should give some very serious thought to the as-
tounding decline of amusement advertising, and will find the
institution of so-called movie directories a splendid counterbal-
ance for the loss in regular amusement lineage.
In order to establish a movie directory it is necessary to meet
the requirements of the neighborhood theatre. These require-
ments consistin serving a new type of advertiser, a special rate, a
new method of maintaining credits, a copy service, and sufficient.
publicity to educate your public to the habit of reading your
columns for program information.
Taking each of the aforementioned classifications separately
and treating each briefly in the order of its mention, the following
will be of interest: The movie eachibitor might be divided into
three classes: first, showmen of the Marcus Loew type, who
conduct their chain of theatres on a large scale and in a business-
like manner; second, circus men, theatrical offcasts, and plain
everyday money-grabbers, who forsake everything for the
pleasure of increasing the cash till, and third, business men, who
venture into the game, having become intoxicated with the for-
tunes made by others in the movie business.
This is not altogether an immodest statement. I have seen
the shrewdest and hardiest products of our money-laden Wall
Street—men of brains and ability, credited with huge success in
the merchandising world—and theatrical men with bulging
bankrolls (who should have known better) plunged headlong
into this movie mire and led with bankroll and reputation to the
abattoir and slaughtered like so many helpless lambs. Each
class has a personality that must be studied and handled, and
ADVERTISING MEDIUMS 417
the greatest play for business made on the exhibitor's vanity
pure and simple if you hope to secure lineage for the present,
along the lines of least resistance.
A theatre in order to run at a profit must have from three
hundred seats upward and charge ten cents admission. Results
from advertising are manifested not in increased patronage, not
in all the other benefits advertising gives, but in the indirect
result that an added service gives to the exhibitor’s patrons.
In the final analysis, an exhibitor does not have to advertise to
get business these days. Advertising from his viewpoint is like
serving ice water to his patrons, and will not be a necessary part
of his business until the public gets the habit and relies on it.
Fortunately, the task of getting the reading public—the motion-
picture-going masses—into the habit of reading the newspapers
. programs of motion pictures is allotted to the newspapers
alOIle.
A rate must be determined on the lowest possible basis so that
an exhibitor can afford to advertise his business at a cost not to
exceed the price he ordinarily pays for printed heralds.
Being a cash business and one in which the proprie-
tors of theatres change hands to the extent of 20
per cent. every three months, all bills should be pay-
able at the end of seven days, and secured cash in advance
wherever possible. The typical showman cannot appreciate the
value of long credits, being accustomed to doing a cash business
himself and preferring not to keep unwieldy ledgers, journals, or
books of any sort. His is the province of the loose jitney, the
easy come, the easy go, and publishers must get in line “while
the coming is good.”
A regular daily copy service must be given the exhibitor, he
relying almost entirely on the integrity of the publishers’ ad-
vertising staff to take care of such details as pleasing set-up of
ads, appropriate wordings, phrases with punch, etc., etc.
Such a feature, being news to the reading public, must receive
encouragement through the newspaper’s own columns, must
tend in every particular to stimulate the habit of seeking the
directory column for program information.
Such a directory in a city the size of Chicago should bring
publishers from 100,000 to 150,000 lines of space annually. The
business is substantial, the money good, and the proposition,
besides having exceptional news value, is a very lucrative form
of advertising.
How to
Develop the
Advertising
418 ADVERTISING MEDIUMS
As a circulation builder, the serial motion picture reigns su-
preme. It fetches a class of reader who at least has five and ten
cents a day to spend for amusements, who is educated sufficiently
to appreciate in his or her way the pictures that are shown to-day,
a reader who has ambition, whims, motives, and desires, and
withal a reader whom any publisher can consider an asset to
offer the average advertiser. It gets the men, women, and
children, rich and poor, foreign and American born, including
every law-abiding citizen in the community, and delightfully
eliminates the riff-raff who menace our public and who don’t
patronize the advertiser because they can get it just as easy by
stealing or begging.
2. A CONSIDERATION OF SOME DISPUTED MEDIUM QUESTIONS
These are a number of questions about mediums which are
perennial in advertising circles. But many of these seem to be
gradually working toward a satisfactory settlement. A separate
chapter will be devoted to progress in the solution of circulation
problems, since these constitute not only one of the most impor-
tant groups, but the group in which progress is being made most
rapidly. Some of the others are reserved for consideration in
this chapter.
The following paragraphs are taken from an address before the
Six Point League in New York on March 12th by George Frank
Lord, Advertising Manager of the Du Pont Powder Company.
In the course of this address Mr. Lord gave the newspaper repre-
Sentatives a very plain statement of what he as an advertising
manager thought of some of the soliciting practices employed in
attempting to sell space:
*Now as to this question of service. It is quite apparent that
all the various interests connected with advertising are coming to
a realization of the mutuality of interest of the advertiser, the
publisher, and the public. The proposed advertising campaign
of the Association of National Advertisers has for its object
nothing more nor less than preaching the aforementioned mu-
*Printers' Ink, March 18, 1915, p. 37.
ADVERTISING MEDIUMS 419
tuality of interest and thereby convincing the public that they
ought to buy advertised articles for their own protection and
advantage.
I believe that there is a great opportunity for development
work in newspaper advertising, but to approach it, newspaper
advertising managers and representatives must co-operate, and
they must study the field of sales for commodities in general
rather than the bank accounts of advertisers.
It is perfectly obvious that the newspapers as a whole and
united represent the greatest publicity force in this country, but
they are not getting the advantage of this power, for the simple
reason that they do not unite nor use it as a whole. Such united
work as is done by the newspapers is planned for them, and
their co-operation secured by some outside party, and the fact
that such movements are successful and benefit the adver-
tiser, the publisher, and the public clearly proves that such or-
ganizations as this or the American Newspaper Publishers’ As-
sociation, or any other organization representing publishers as a
whole, could well afford to establish a promotion department
for the development of newspaper advertising and sales cam-
paign.S.
Not the least important part of the work of such a department
would be to broaden the attitude of newspapers themselves
toward national advertising, and to stop the petty competition
that destroys the united action necessary for the success of such
promotive work. Such a department would have to be free
from all bias as to individual papers, and it must have the
complete confidence and support of every publisher represented
therein. Consider the possibilities of such a department for
quickly gathering data necessary for planning a national cam-
paign. Consider the power of a department able to offer an
advertiser the united local co-operation of newspapers in 100
important centres. Consider the possibilities of intelligent co-
operation with an advertiser on the part of a nation-wide asso-
ciation of newspapers. Such a central organization could
readily decide what was proper and legitimate co-operation and
what was not.
In closing I wish to state it is my conclusion that newspaper
advertising for national advertisers offers the greatest develop-
ment opportunity of any factor in modern advertising, and that
the newspaper publishers of this country are losing millions of
dollars annually by their failure to organize their efforts to cut
420 ADVERTISING MEDIUMS
out lost motion and to reduce to a science the problem of market-
ing goods through newspapers.
An equally frank unburdening of the mind was that indulged
in by S. Wilbur Corman of N. W. Ayer & Son in an address
delivered to the Southern Newspaper Publishers’ Association
at Grove Park Inn at Asheville, N. C., on June 14, 1915, in the
course of which he undertook to tell the newspaper men how
some of their methods were regarded by the advertising agents:
*The first plank of my platform is that newspapers constitute
the greatest form of advertising media; the second plank is that
you newspaper publishers have a gold mine that you don’t know
how to work, and that, as far as national advertising is con-
cerned, it is being accomplised without your aid in proper degree,
because you Heralds of Modernity are the most behind-the-
times men in appreciation of your own opportunities and your
own values that the business world can exhibit.
Most of you will readily admit the correctness of my first
plank, so I’ll put that aside for later consideration and take up
plank number two, with some attention to detail.
Basically, newspaper men do not believe in advertising. With
rare exceptions, the advertising agency and the publisher are the
poorest advertisers in America. A newspaper man had rather
do anything else than spend some real money (all of which he
has earned from advertising) for some advertising for himself.
If he ever does get his courage screwed up to the point of print-
ing an ad in his own paper (where it costs him absolutely nothing,
and generally earns him a reward proportionate to its cost), the
ad is usually the poorest example of advertising in the paper—
poorly written and poorly arranged typographically—a bunch
of brag and bluff and bluster of a sort that would send any busi-
ness house into bankruptcy if it adopted publicity of a similar
type. . . .
The newspaper publisher with his stock of merchandise
(which is white space for the advertisers of this nation to utilize
to their high advantage) does not, broadly speaking, fix his
prices, terms, and conditions with any scientific regard for to-day
or to-morrow, but with almost slavish fidelity does he face the
*Printers' Ink, June 24, 1915, p. 41.
ADVERTISING MEDIUMS 421
past and ask, “How have these things always been done and
what do my fellow-publishers do?”
The whole newspaper rate question needs disinfecting, fumi-
gating, and deodorizing. You will gather from my remarks
Concessions that I consider it to be in a bad state of decay. A
from the similar price to all customers under like conditions
Paper to is generally regarded as simple business honesty, and
* yet the newspaper which, under any circumstances or
conditions, will not in any manner, shape, or form make any
rebates, discounts, or concessions of any kind or character, is a
rara avis.
How many of you will not, for my house, give a free insertion
or a reading notice or concession of some kind? Do you answer
me that my house should not ask for such things, fight for them,
demand them, yes, almost force them? Well, I reply that if we
did not do so we should soon be badly in need of customers, be-
cause if we do not get these things for our clients some other
agent will; and as long as advertisers want such things and
newspapers grant them, we, as an agent, must ask for them
and contend for them as a simple matter of primary self-protec-
tion.
We never know what day we will lose a good account because
we have tried to be fair and decent, and some less scrupulous
agent has cooked up a plan whereby, with the connivance of a
lot of weak-kneed newspaper publishers, he has assured our
client of that glittering bauble desired by so many advertisers—
“something for nothing.”
Dilly-dallying with newspapers for concessions of various
kinds costs us time and money, and earns no commissions.
You gentlemen, I think, have no adequate appreciation of all
the annoying angles of this proposition from the viewpoint of an
advertising house which is devoting its entire time and talent
to the creation and development of advertising, and yet is sub-
ject to the constant competition of other agents keen and skil-
ful in the manipulation of newspaper rates and rules.
I recently failed in the solicitation of an automobile tire ac-
count, and the president of the company told me privately that
he had been promised by the successful agent a definite number
of inches of free reading matter for every column of paid space
he used in his newspaper list. I had refused to promise any-
thing but the best service my house could give him for every
slollar he spent with us.
422 ADVERTISING MEDIUMS
All the associations you can organize won’t stop this sort of
thing. Get together and resolute until you are black in the face,
and you won’t stop it. -
We do not ask the Curtis Publishing Company for conces-
sions, because we know we will not get them, and because we
know no other agent will get them. This is true, not because
Cyrus Curtis belongs to the Periodical Publishers’ Association,
but because he is Cyrus Curtis—able, independent, and square.
We may not agree with him on some points, but we know just
where he stands, and when we tell a client what we can do for
him in the Saturday Evening Post, or the Ladies’ Home Journal,
or the Country Gentleman, we waste no time in wondering if some
other agent can promise or deliver more. tº gº
Let’s look at another phase of the newspaper rate situation
that is very discouraging to the national advertiser. Even
assuming that rates are fully maintained, there is to my mind
a gross injustice done under the present system of rate making.
No one shall surpass me in my admiration of the modern de-
partment stores as a great merchandise distributing machine,
and as a community convenience of high order; but its cost to
the community it serves, and particularly the newspapers of
the community, should also be taken into consideration.
That the big buyers should have the best price is a very well-
established principle in many lines of business, but in some other
The “In- lines it is absolutely unsound, uneconomic, and hurtful.
... n., The big customer of N. W. Ayer & Son gets his adver-
tising advice and service at no lower rate of commission
than the advertiser of small size. The big user of advertising
space in many of our highest class periodicals pays exactly the
same rate per line, per inch, or per page that is charged the most
modest advertiser in the publication.
Department stores themselves are great advocates of the
“one-price-to-all” theory, and in many first-class stores you
or I would pay the same price per yard for one or a hundred
yards of lace—the same price each for one of a half-dozen
neckties.
I am advocating no impractical, Utopian ideals, and I do not
mean to offer the suggestion that conditions are ripe for such a
revolutionary move, but it is very clear in my mind that the
flat-rate principle is right, and that newspapers are great suf-
ferers because so many mediums of general circulation are prov.
ing it to be right.
ADVERTISING MEDIUMS 423
Under a flat rate the little fellow has a square deal. Be-
ginners in advertising, like beginners in anything else, are apt to
start small. Protection and help for the beginner are
jº,, very desirable. Advertising badly, needs the begin-
Hai," ner. The death rate is alarmingly high, so let’s keep
up the birth rate. . . .
You use the amount of department-store advertising that
your paper carries as a big argument in soliciting business from
me, but because a department store used your paper at five
cents a line is no reason why my client, with possibly only a
partial distribution in your town, can use it at five times as much,
which is probably the rate he will have to pay for the amount of
space he can use. -
Now here is another point. Possibly my client sells his goods
through drygoods or men's furnishing or hardware or drug
stores, and the department stores, and the department stores
handle such goods as he produces. Department stores are
notoriously difficult to induce to stock a branded and adver-
tised line, but having taken it on, one of their pleasant practices
is to cut the price to Smithereens, and by advertising it in your
papers at the dainty little private rate extended to them, disgust
other merchants with the line and ruin the market for my client.
Under present rulings a manufacturer may not, by contract
or agreement, fix the price at which his wares shall be offered
to the consumer. Suppose you owned a trademark name on a
valuable line of silks, and had spent a half million dollars in ad-
vertising it until the consumer of such goods knew it and re-
spected it. Suppose that department stores here and there,
recognizing that your goods were standard, cut the price in half
for their own glorification, and to attract customers to buy other
things on which they make a good healthy profit. Suppose de-
partment stores advertised their cut prices on your goods widely
in the newspapers of their towns (paying for such advertising
about one fifth or one sixth the rate that you would have to pay
for the amount of space you could afford to use). Suppose some
newspaper man came to solicit your advertising, and used as
his chief argument the amount of department-store advertising
his paper was carrying. What would you have to say? Your
answer to him is my answer to you, when you inquire why the
newspapers do not get more foreign business.
Short rates, foolishly extravagant discounts for space, local
rate arrangements to meet the requirements of some one store
424 ADVERTISING MEDIUMS
or class of stores—all these things must pass away before the
correctness of the flat-rate principle—if not now, eventually.
Some attention must be given to the actualities of the require-
ments of national advertisers if the newspapers want the busi-
ness of national advertisers. I, for one, do not think you will
have to lower rates, but an evening process must come about;
gross inequalities must be ironed out; some must pay more,
others less; the peaks must be trimmed down and the valleys
filled in. You can make money by bringing about the change.
As far as drygoods lines are concerned—in our 100 largest
cities five stores in each city do over 75 per cent. of the business;
in the 2,500 next largest cities three stores in each city do over
85 per cent. of the business; in the same 2,500 cities one store
alone does 40 per cent. of the business; in 1,200 small cities one
store does over 50 per cent. of the business.
In most American cities most newspapers are “stymied” by
the department store, and the wise publisher will do well to face
the facts and think of the future.
If I were soliciting advertising for a newspaper from the general
agencies of this country, or from the national advertisers direct,
Pract. I would quit bragging about the amount of space some
ractical e
6. department stores used with me, and tell how many
tion News- hardware stores or drug stores or grocery stores there
pºpe's were in my town. I would be prepared to tell what
#. kind of merchants they were; what branded lines of
goods they carried. I would equip myself to talk
about the people of my community; what kind of homes they
had; their employment; their standard of intelligence; their
scale of earnings.
Advertising is shifting and changing very rapidly. No worth-
while agent talks much about the glittering generalities of ad-
vertising nowadays, The best advertising man is neither a
literary genius nor a spellbinding solicitor. He is a student of the
flow of merchandise. He is investigating the purchasing habits
of stores and consumers.
The making of a modern advertising plan involves a study of
distributive methods and channels and a proper understanding
of trade relations or lack of them. Advertising is now generally
considered as an item of sales cost, and may only be made fully
effective through intelligent retail co-operation, sales efficiency
of roadmen, and numerous other contributing factors. Even
when publications of national circulation are exclusively em-
ADVERTISING MEDIUMS 425
ployed in an advertising campaign, very exhaustive charts of
their circulation in various communities or districts are compiled
as a basis of operation, and newspapers are far behind their
opportunities in the extension of the sort of co-operation that is
practical and helpful. -
Newspapers will not develop their foreign business by oppos-
ing other forms of advertising. They are natural aids to periodi-
cal publications, and periodical publications can greatly im-
prove the resultfulness of a newspaper campaign.
Quit knocking the magazines. The most successful periodi-
cal publisher in America answers that sort of thing by spending
a few hundred thousand dollars per year advertising in your
newspapers and building his own splendid subscription lists
larger and larger, and his prestige with business men stronger
and stronger—making his wonderful publications more and
more essential to the general advertiser and making it con-
stantly less essential for such advertisers to use your papers to
cover the country.
Running a newspaper is a simon-pure business proposition,
like running a laundry, or a coal mine, or a shoe-shining parlor,
or a street-railway system. Business in any line succeeds in
almost direct ratio to the efficiency with which it understands
and meets the requirements of its customers.
The biggest asset that any newspaper can have is the confi-
dence of its primary customers—that is, the readers. Next, it
must consider the claims of its secondary customers—that is,
the advertisers. If it wants the national advertiser it must pay
some attention to his needs, his difficulties, his rights.
There probably isn’t a man within the range of my voice who
couldn’t take my place and tell as many wrong things about the
advertising-agency system as I have pointed out concerning the
newspapers. I will save him the trouble, however, by admitting
them in advance. The main difference is that you make the
agent by your recognition of him, while, on the other hand, if
your paper is right and deserves to win, I do not believe that
any agent or combination of agents can whip you.
Every one knows there are far too many advertising agents—
newspapers, magazines, and the agents themselves all admit it.
The business premises of half the advertising agencies in this
country aren’t physically large enough for a real file-room of the
leading newspapers, but take it by and large, “any one who can
get an account can get a commission.”

426 ADVERTISING MEDIUMS
This simply results in most agencies devoting their time to
taking accounts from others instead of creating new business.
You transfer the account from one agency to another on your
books, but your revenue isn’t increased.
Newspaper recognition should be a highly prized franchise.
It should be impossible of obtainance except on a basis of dem-
Recognition onstrated ability to create and develop new advertising
of Agents accounts and unquestionable financial responsibility.
too, Easily There are not above a score or so of agents with
” whom you are doing business who could pay their
bills to-morrow if their leading client were to fail, but this great
business of newspaper publishing takes no heed of that fact.
And so I say again, as I said at the outset, that what the news-
paper business needs is business principles in its conduct and
management—a realignment of rates, rules, and regulations to
the requirements of this present hour.
Now I haven’t forgotten, even if you have, that there are two
planks to my platform, and that one of them is a pleasant plank.
I made the statement that the newspaper is the foremost
form of advertising media, and I mean every word of it. Many
of the greatest national advertising campaigns had their start
in the newspapers of one city or one state or one section. As
production, capacity, and distributive ability grew, the zone of
advertising widened until the country over was covered, and
national publications could be used with maximum resultfulness.
The house that I have the pleasure of representing does a very
large business with the newspapers, and is successfully con-
ducting many sectional campaigns. I believe we will see more
national advertising in newspapers; simply because all logic and
all sanity and all experience are behind the newspaper as the
ideal advertising medium for everything, from the five-cent
soda-cracker to the five-thousand-dollar automobile, and be-
cause I believe that the newspapers are beginning to commence
to start to see the national advertisers side of the case.
The American newspaper owes its strength to its local suffi-
ciency. It is the palladium of local interests. It is the re-
The News-flector of local sentiment. It is the stimulator of
paper's local enterprise. It is the booster of local talent. It
Power is the recorder of local endeavor. It is the reporter
of local accomplishment. It is the herald of local ambition.
All these things it is, should be, and will continue to be.
But a spirit of nationalism is in the air. Men are thinking
ADVERTISING MEDIUMS 427
with a national mind. What the nation eats, wears, does, and
º: is reflected in Decatur, Ala.; Decatur, Ill., and Decatur,
CX8,S.
If a man produces an excellent breakfast food in Battle Creek,
Mich., and educates a nation of men and women to demand it,
and a nation of storekeepers to supply the demand, the attitude
of the New Orleans newspapers toward it should be that they
will advertise it for him at a fair rate, compared with what
they would charge one of their big stores if it should bring out a
breakfast food under its own brand—they should help him get
it into stores in their town—they should give all the local aid
and help they can to those employed by the advertiser in open-
ing and developing the New Orleans market. Incidentally,
the papers of Battle Creek ought to do just as much for some
gentleman of the Crescent City who works up enough courage
to put a first-class package rice on the market when he reaches
their town with his campaign.
Who cares where goods are made? The average man doesn’t
know or care if Prince Albert Smoking Tobacco is made in West-
field, N. Y., or if Welch's Grape Juice is bottled in Winston-
Salem, N. C. The newspapers are getting the advertising of
both products because they have been nationalized, and inten-
sified selling means local application of the forces of publicity.
Don’t be afraid of national advertising mediums. Love them
for the good they have done. The very best national periodi-
cals are only sublimated newspapers, anyway. They are fast
developing news features and approaching newspaper standards.
The greatest advertising mediums are getting away from the
purely fiction idea and are approximating great national, weekly,
or monthly newspapers. They are doing infrequently, in a
national way, just what you can do frequently in a local way.
You fit together in a national advertising campaign like peas in
a pod.
Why this question of newspapers or magazines? What rea-
sons under the sun are there, except your own self-erected bar-
riers, why newspapers should not have more and more national
advertising?
We have seen a lot of thinly spread out, so-called national ad-
vertising campaigns, designed solely with the idea of bluffing the
dealers into stocking the goods, but this is only just one little
picture in the ever-shifting, fast-moving kaleidoscope of adver-
tising experimentation.
428 ADVERTISING MEDIUMS
Advertising fundamentals are safe. Advertising principals
are certain.
One other point of dispute which is constantly causing friction
is the question of flat rates for space. Lafayette Young, Jr., of
the Des Moines Capital discussed this question quite freely and
suggested a way out in an address which he delivered before
the Newspaper Conference of the Associated Advertising Clubs
of the World on June 22, 1915:
*Newspapers are anxious to secure more advertising, and I
am assuming for my hypothesis that the complexity of the news-
paper rate-card operates as a serious handicap for handling the
present volume of general advertising and militates against
an increase of volume. I wish to support this argument, not
by views or theories, but by facts furnished by advertisers and
advertising agents with whom newspapers do business.
Herbert Gunnison, of the Brooklyn Eagle, expresses the situa-
tion when he says, “There is nothing so unbusinesslike as most
of the rate-card methods of newspapers.”
Collectively the newspaper cards contain too many different
rates and too many discounts. They are lacking in uniform-
ity and simplicity. They are lacking in intelligibility. They
are published in all shapes and sizes from a single sheet to as
much as twelve pages. There is no sequence to the informa-
tion given and there is no rule as to the amount or character
of the information. They are almost impossible of interpre-
tation by laymen, and they are extremely difficult for the ex-
pert. I examined one hundred rate-cards of metropolitan
newspapers for the purpose of this discussion and I found
in the aggregate thirty special rates in addition to innumer-
able variations of these same rates. Special rates are made
by newspapers for insurance statements, schools, and colleges,
hotels and summer resorts, for different pages, automobiles,
political advertising, new publications, steamships, books and
periodicals, mail-order advertising, farm and garden maga-
zines, railroads, financial advertising, motorcycles, excursions,
educational advertising, transients, beer, whiskey, and liquor
advertising, doctors, motor-boats, art sales, lake steam:ers, poul-
*Printers' Ink, June 24, 1915, p. 73.
ADVERTISING MEDIUMS 429
try, advertising on woman’s page, government ads, sanitariums,
travel, and special rates for special days.
Under the circumstances, what should be done for improve-
ment and simplification? I have communicated with a very
large number of agents and with more than a hundred important
newspapers in America, and with a large number of general
advertisers. My conclusion, derived from the information
received from these sources, is that the flat rate is the ideal rate
and should be adopted or approximated by every newspaper
that wishes to do business in the most efficient manner.
The buying and selling of newspaper advertising is difficult
because there are so many newspapers. S. C. Stewart, of the
Stewart-Davis Advertising Agency, of Chicago, scores a point
when he says that all publishers should concede individual prej-
udices and opinions for the benefit of the whole business.
What evidence have I to prove that advertising agencies pre-
fer the flat rate? I received replies from 35 important advertising
agents. Only one agent was bitterly against the flat
†. rate. Five of them were in favor of a graduated
tyocate te e g
fº.º. Scale. Twenty-nine of them were unqualifiedly in fa-
vor of the flat rate, and all of them thought the average
card was open to improvement and especially approved of efforts
at simplicity and uniformity. Here is what some of the agents
who favored the flat rate had to say: -
Lord & Thomas: “We are recommending the flat rate and
believe the time will come when the majority of the publishers
will have just one rate.”
Frank Presbrey Agency: “It is our opinion that the flat rate
is the ideal rate-card, and trust the time may soon arrive when all
of the newspaper publishers may realize this. In all our ex-
perience we have yet to find a case where the newspaper lost
any business on account of the flat rate.”
The Brackett-Parker Company, Boston: “This agency is un-
hesitatingly in favor of the flat rate, with the privilege of posi-
tion at a price, and it would be the greatest step possible to
make in the direction of honesty if the newspapers would all
come to this arrangement and adhere to it.”
Roberts & Mac Avinche, of Chicago: “We have advocated
the flat rate for thirty years. We are buying one thing in a
newspaper and that is circulation. If the circulation is worth
six cents a line, it is worth six cents per line whether we use one
line or twenty thousand lines.”
430 ADVERTISING MEDIUMS
Stack Advertising Agency, Chicago: “It is our opinion that
more and more publishers are coming to the conclusion that the
flat rate is the most satisfactory basis on which to sell advertis-
ing space. The short rate is a bad proposition from every
standpoint, and we believe the day is coming when all pub-
lishers will recognize that every advertiser should be placed on
the same basis, thus giving the small advertiser an opportunity
to expand his advertising expenditures.”
Wrigley Advertising Agency, Chicago: “It is our experience
that the short rate is emphatically a nuisance and the flat rate
is by all odds the better system from the standpoint of the news-
paper, the agency, and the advertiser.”
Hugh Brennan, of the Dooley-Brennan Agency, who for
many years handled the rates for the Stanley Clague Agency,
Pa has the following to say: “I think the flat rate on news-
pers e ©
with Fiat papers is the ideal arrangement. There never has
Rate Get been within my personal experience during the past
* Préſ twelve years any case where a publisher failed to se-
” cure the full lineage on account of a contemplated
appropriation simply because of a flat rate. I do not remember
of having an argument with an advertiser regarding a flat-rate
paper on account of rate, provided the paper was all right.
But I do remember a number of arguments about using a paper
that had a sliding scale. I think it is safe to say where there is a
selection to be made in a city on two papers, one with a
sliding scale and one with a flat rate, both about equal in
circulation, that the flat-rate paper would get the preference
every time.” -
Mallory, Mitchell & Faust, Chicago: “Your letter of May
19th has gone the rounds of the members of this firm and the
order department, and the consensus of opinion is that from our
standpoint the only rate for a newspaper, and, in fact, for any
publication, is a flat rate. We must feel that the newspaper is
absolutely independent before we make any contract that car-
ries with it any possibility of getting stuck with short rates
later on.”
Charles H. Touzalin Agency: “We are surely enthusiastic
for the flat-rate card as the ideal rate-card. The short rate is
certainly a nuisance.”
Blackman-Ross Company, New York City: “I do not believe
there is any doubt in the minds of the agents that a flat rate
for every newspaper would tickle us all to death. But, while
ADVERTISING MEDIUMS 431
we should all be working for the flat rate let us have a uniform,
simplified rate-card in the meantime.”
Morse Advertising Agency, Detroit, Mich.: “We also be-
lieve that putting all publications on a flat-rate basis would be
an advantage, thus disposing for all time of the short-rate bug-
bear. There are lots of arguments in favor of the sliding rates,
we admit, but we believe the advantages of flat rates would
greatly outweigh everything else.” -
Campbell-Ewald Company, Detroit, Mich.: “Your first
question, ‘Is the flat rate an ideal card?’ can most em-
phatically be answered ‘Yes.” On the face of it, the news-
papers should favor flat rates and I am sure that the agencies
of the country would welcome such a change.”
Street & Finney Agency, New York: “The writer’s personal
opinion is the flat rate is the most equitable card. The short
rate is decidedly an annoyance, and very often the cause of
trouble between the agent and his client. There are many
things that enter into a space contract, which, if not fulfilled,
cannot always be clearly explained to the publisher. He can
see no reason to waive a short-rate charge, as it is equal to cut-
ting his rate, even though the circumstances are entirely justi-
fiable. The flat rate would eliminate all such trouble, and place
all advertisers on an equal basis, both large and small.”
Dauchy & Company, New York: “I think you will find that
the flat-rate papers are getting larger volumes of business than
those that have a sliding scale.”
Richard A. Foley, Philadelphia: “The flat rate is very indis-
pensable in a great many cases as it simplifies matters consider-
ably and, as you know, short rates are always rather annoying.”
I could continue to quote indefinitely from advertising agents.
I think the evidence that I have given is sufficient to show the
preference of advertising agents generally.
Let us see what some of the leading advertisers have to say:
Julius Kayser & Company: “The universal adoption of the
, flat rate and the abolition of the short rate are the
most wished-for things from the point of view of the
buyer of advertising space.”
Joseph Campbell Company, Camden, N.J., by L. M. Frailey:
“I am in favor of a flat rate, but only on the basis of this flat
rate applying to both foreign and local advertisers.”
W. B. Morris, Northwestern Knitting Company: “My idea is
that the sooner the flat rate is adopted by all newspapers the

Advertisers
Views
432 ADVERTISING MEDIUMS
easier it will be for newspapers to get hold of the national ad-
vertising that is now appearing in other mediums.”
General Roofing Company: “We strictly desire to use the
paper offering us flat rates because we are sure that flat rates
are in line with up-to-date business.”
What as to those newspapers that are operating under the
flat rate? -
Experience O. R. Johnson, business manager of the Indianap-
of Papers olis News, says: “We have a flat rate of 12 cents a
That Have line. We put in a flat rate about four years ago and
*** find it most satisfactory. Before we went to a flat
rate I wrote to practically all the agencies in the country and
practically every one favored it.”
Every publisher should study the card of the Indianapolis
News. It is simplicity itself. It is a model that should be used
by every newspaper. With respect to general advertising it
says: “Display advertising 12 cents a line flat; no reduction for
regular insertions or total amount of space used. No special
or class rates of any kind.” I do not believe that there is a
newspaper man in America who could dispute the efficiency of
such simplicity or who would doubt that the Indianapolis News
is of such size and character as to test the value of the one-rate
system.
The Philadelphia Bulletin is another eminent newspaper with
a flat rate. Its card is subject to equal commendation with that
of the Indianapolis News. The Philadelphia Bulletin writes
concerning their card: “The Bulletin has a flat rate of 35 cents
per line, run of paper; 45 cents per line for full position, and our
experience is that the advertising agent and advertisers prefer
the flat rate.”
The Buffalo News says that “the best evidence as to what we
think of the flat rate can be determined from the fact that we
propose to put the flat-rate card into effect July, 1916.”
The Boston Globe writes: “Our rate is flat, both for local and
foreign business.”
The Denver Post writes: “There should be a flat rate and ab-
solutely the same rate to everybody. We have flat rates on
both the Denver Post and the Kansas City Post.”
The Milwaukee Journal writes: “The flat rate simplifies the
accounting, makes it impossible to make mistakes in billing, and
is so superior to all other forms of cards that we would not go
back to this form under any circumstances.”
ADVERTISING MEDIUMS 433
The Washington Star says: “In the foreign field we operate
entirely upon a flat rate.” -
The Providence Journal states: “We have employed the flat
rate covering both the local and foreign field since October, 1913,
and could not be persuaded under any circumstances to revert
to our former cards. Most newspapers to-day are handicapping
themselves in a fashion which is hardly short of criminal with
rate-cards which repel the advertiser, give rise to mutual sus-
picion and controversy, and bristle with inconsistencies of such
ancient origin that the publisher himself cannot offer a satisfac-
tory explanation.”
The Chattanooga Times: “We have had a flat rate on this
newspaper for several years, and find that it works satisfactorily
alike to both us and the advertiser. I think the flat rate is
virtually saying to the advertiser that this newspaper does not
need a contract.”
The Omaha Bee: “We have a flat rate. This applies to all
advertising, both local and foreign. From the standpoint of the
advertiser we believe that the flat rate is the most satisfactory
and the most equitable.”
If every newspaper in America had cards as easy to under-
stand, as easy to handle as those of the Philadelphia Bulletin,
the Indianapolis News, and the Washington Star, thousands
of dollars of advertising now going to other mediums would go
to newspapers, and thousands of dollars would be saved in the
bookkeeping and correspondence by agencies and publishers
alike. S. C. Stewart says: “The flat rate simplifies the arith-
metic of advertising and saves time and money for the publisher,
the agent, and the advertiser.” The waste of time due to the
present newspaper rate-card is beyond reckoning.
What is the situation in the magazine field? The magazines,
with scarcely an exception, operate upon a flat rate. The
Marked Saturday Evening Post, the Ladies' Home Journal, and
Success of most of the standard magazines have a flat rate.
Magazines Successful Farming, the Philadelphia Farm Journal,
## and most of the farm papers are each upon a flat-rate
* “” basis. Is there any argument that could be advanced
against the flat rate for newspapers that could not with equal
cogency be advanced against magazines, and has it not always
been apparent that agents find it much more satisfactory to do
business with magazines than with newspapers?
The objections to the flat rate that were advanced in letters
434 ADVERTISING MEDIUMS
that I received from newspapers were based upon two things.
Eirst, that it would be inequitable on the part of the publisher
not to recognize the wholesale rate to the advertiser who buys
in large quantities; second, a fear on the part of the publishers
that they would lose business by changing from the sliding scale
to the flat rate. The first presumption that the sliding scale
should be used on account of its equity does credit to the news-
paper publisher's fairness. Yet the man with whom the pub-
lisher does business, the advertiser and the agent, prefer the flat
rate. The publisher generously offers the advertiser something
that he does not want. Advertisers do not want the sliding
scale with its bugbear, the short rate, attached. They know
that the short rate leads to trickery on the part of both publisher
and advertising agents. One prominent advertising agent in
Chicago told the writer that as a matter of competition they were
compelled to make 10,000-line contracts when they had no in-
tention of using that amount of space, knowing full well that the
newspaper would not enfore the short rate against them.
But what of the loss of business by the adoption of the flat
rate? I asked this specific question of a large number of agents.
Every agency was certain that no newspaper would lose business
by the adoption of the flat rate. They unanimously stated that
flat-rate papers get the complete schedules and most, of them
agreed that the flat-rate papers secured the preference. Ap-
parently there is no ground for the belief on the part of publishers
that the graduated scale should be extended as a matter of justice
or that the adoption of the flat rate would lose them any business.
Personally, I am thoroughly convinced that the adoption of a
flat rate or its approximation, the simplification of the rate-card,
Urges Papers and the elimination of the short-time rate, and the
to Endorse special rates, would be beyond price to the publisher
Sºmplified and the advertiser, and I am greatly in hopes that this
*” meeting will take some action, endorsing such proce-
dure and urging a similar action upon the Bureau of Advertising
of the Publishers’ Association. The whole tendency of modern
business is toward an elimination of waste. It is a problem of
simplicity versus complexity. In the fire insurance business
they have a standard fire policy and a bureau for the establish-
ment of rates, and in no business has there been greater difficulties
than in the fire insurance business to get onto an efficient basis.
The newspaper publishers have made a tremendous advance
with the circulation problem in the Audit Bureau of Circulations.
ADVERTISING MEDIUMS 435
This organization takes the circulation problem out of the field
of controversy and allows advertisers to study newspaper charac-
teristics and newspaper productivity rather than devote them-
selves to constant circulation investigations. Now, if the pub-
lishers will do with the rate-card what they have done with the
circulation it will be the biggest advance that has been made in
twenty-five years in the newspaper publishing business.
In correspondence with advertising agencies I received a large
number of suggestions as to what every rate-card should contain.
In general, every publisher knows what should be on the rate-
card. I will only name those things that are frequently omitted,
and which the advertiser and the advertising agent desire. The
agent desires that the card should contain the agency commission
and cash discount; that it should contain circulation figures; that
it should contain data concerning the field in which the publica-
tion circulates; that it should contain the date on which the card
went into effect; that it should contain the name of the publica-
tion in full and the price at which it sells per year and per copy;
information as to whether cuts should be mounted or unmounted;
it should contain the special rates in logical order; information
as to special position should be very specific. It should be very
plain whether the publication is a morning or evening paper.
Cards should be issued frequently so that the agent is sure that
the card is up to date. All regulations concerning illustrations
and objectionable advertising should be mentioned. One of the
advertising agencies suggests that the card should be put in
loose-leaf form and another advertiser insists that it should not
be on cardboard, as he says there are a number of agents who
paste the cards in books rather than file them. Some of these
suggestions may be helpful to publishers who have not been
giving the matter recent attention. •
Many advertisers and advertising agents to whom I have
written and with whom I have conferred have made complaint
The Inside against newspapers for having lower rates in the local
#..."; field than in the foreign field, and this difficulty exists
in a great many cities, and particularly in the automo-
bile and department-store field. One agent writes on this point
saying, “When the advertising agent figures with a wise adver-
tiser he is likely to find that the advertiser makes a comparison
of the rate he can secure buying over the department-store
signature as against buying direct through the agent. There
is no question but what the department-store rate enables the
436 ADVERTISING MEDIUMS
advertiser to save some money. But if you want to develop
advertising in the foreign field of the kind that is most naturally
going to develop, it will be necessary to make some protection of
the agent on this particular point.” §
Another agent complains about allowing the commission direct
and about different rates in the local and foreign field, and says:
“One annoying thing in connection with our business with news-
papers is caused by the utterly unfair attitude that most news-
papers take in the matter of allowing agency commission to
advertisers direct. Another is the granting of local rates,
which are in many cases much lower than the foreign rates on
business that is run over the imprint of a local dealer.”
The problems of the inefficient rate-card lead us to inquire if
there is a business in the world in which there are so many
difficulties to be corrected as those existing between the news-
paper, the advertising agent, and the advertiser. And this
makes me hope very much that every newspaper publisher will
canvass the situation with respect to his own rate-card and his
own methods of doing business in an effort to make improvement
for the benefit of the whole.
I am certain that newspapers can get more advertising by
improving their selling prices. I am certain that newspapers
per se deserve more advertising. I am certain that the rate-
card must be simplified and that the corollary problems affecting
the relationship between the paper and the advertiser must be
solved. Newspapers must do their part to make it easy instead
of difficult to buy space.
CHAPTER XI
ADVANCE IN CIRCULATION STANDARDS
OR a number of years efforts have been made to stand-
F ardize circulation facts and figures. For a long time
little apparent progress was made beyond developing
the idea that there was real virtue in telling the truth about
circulation when the truth was agreeable. There never was any
trouble about knowing what circulation standards ought to be,
but it was difficult to get enough people to adopt these standards
to make it really mean anything that they had been adopted.
Bert Moses, of the Omega Chemical Company of New York
and former President of the Association of American Advertisers,
delivered an address before the Fourteenth Annual Meeting of
that association in which he outlined some of the main features
of the system of circulation reports which the American Associa-
tion had adopted. In the course of this address Mr. Moses dis-
cussed some of the main points in the history of the Association
of American Advertisers and its efforts to work out this problem.
To this work a large part of recent progress owes its origin:
*In fifteen years’ experience it has been found that the only way
togetcirculation facts is to open up the booksand countthefigures.
By comparing this book with that, by consulting cash records,
by checking up white paper bills, by matching mailing-lists with
correspondence, and other methods familiar to competent ac-
countants, we come close to the truth.
If there is any better method than the one we have arrived at
after fifteen years’ work, we surely would like to know what it is.
The Association of American Advertisers’ reports are wonder-
fully comprehensive and supremely simple.
*Printers' Ink, April 5, 1914, p. 41.
437
438 CIRCULATION STANDARDS
I have here the report of our examiner upon a great daily in
a great city. -
. It comprises 23 pages and gives information of vital
importance to an advertiser. -
It tells how many papers are sold—how many are
given away or returned—average press run and circulation by
months. - - -
It shows whether the paper is going ahead or going back by
giving gains or losses from month to month.
It divides the circulation up into city and country distribution.
It gives a brief history of the paper. 3.
It gives the subscription price—the typographical appearance
—the quality of the paper used—the length and width of columns
—the average number of pages for a year—the number of edi-
tions issued and the quantity of each and where the bulk of each
edition goes.
It indicates what the general policy of the paper is and what
are probably the sort of people who buy and read it.
It tells all about methods of distribution, and if there are com-
binations or special deals or premium schemes used those par-
ticulars are set down also. *
It tells how collections are made from dealers, and it tells
whether the accounts are well paid up or otherwise.
It tells what kind of advertising is accepted and what kind
rejected and all about the paper's advertising policy.
i. gives the politics of the paper and the news service it em-
ploys.
It gives the names of those of our members who are using space
in its columns.
And it gives in page after page of figures the precise distribu-
tion of circulation that goes outside the city.
This report cost our members about 75 cents, while the adver-
tising rate of the paper itself is 40 cents or 50 cents a line.
Thus, by paying out the price of two lines of space, we get all
this information beforehand, and when we are ready to make
contracts we know precisely what we are doing.
We do not pretend to do anything more than give facts, and
facts are things you can never get too much of. -
I do not believe any representative of this paper is possessed
of half as much knowledge about it as the members of this asso-
ciation. tº tº
We are not satisfied with publishers’ statements alone.
A Sample
Report
CIRCULATION STANDARDS 439
We do not believe in circulations made by affidavit any more
than a bank will accept deposits on affidavit.
We want to count the papers, just as a bank wants to count
the money before making an entry in the pass-book.
Delicate, indeed, is the work we are trying to do.
A publisher is as touchy about his circulation as Boston is
touchy about her syntax.
The difficulty is that up to date nobody has supplied a satis-
factory definition of circulation that is generally accepted, and yet
circulation is the hole into which the advertiser pours his money.
There are more ways of defining the word than there are poli-
ticians in Indiana.
It is good to realize that the work we have done is coming to
be recognized as a real service to the honest publisher.
More and more publishers are showing a tendency to deal from
the top of the deck and play fair.
e They not only permit our auditors to go over their
* books, but urgently seek such examinations.
Q?)670 (1 & e
jº. As a matter of fact, requests for examinations are so
constantly increasing that we are unable to comply as
quickly as we wish we could.
The most valuable part of our work, however, is getting infor-
mation from publishers, who, through various excuses, endeavor
to cloud the issue. tº e
The opposition we had to overcome emanated from two
SOUITCéS.
The first, naturally, was from publishers who were playing
with a cold deck.
You never found a man like Victor Lawson, or Cyrus H. K.
Curtis, or any of a dozen publishers, like those of the Washington
Star, the Newark News, the Indianapolis News, or the New York
World, say a single syllable against us.
We were savagely attacked by a publisher in the South and
by another publisher out on the coast, but these folks were hid-
ing something they didn’t want us to find, and so, like inkfish,
they endeavored to get away by clouding their surroundings,
and tried to escape in the noise and din they expected to follow.
We have been attacked by discharged employees, but you may
always expect to be vilified by people to whom you have paid
wages after you find you need them no longer.
The other source of opposition, remarkable as it may seem,
was from advertisers themselves.
440 CIRCULATION STANDARDS
It is rather a sad commentary on modern progress to have
to say that not one advertiser in a hundred seems to care
whether the circulation figures laid before him are authentic or
not. . . .
I have gone to hundreds of these misguided gentlemen and
endeavored to get them to join us in our work, showing as best I
could how really desirable it is to have facts in advertising, and
the answer I usually got was that our work was not extensive
enough—that we didn’t have enough members or enough money
to cover the country as we should, which was the naked truth,
just as it is the naked truth to tell a hungry man that what he
needs is food, and then turn on your heel and walk away.
Poverty has stared us in the countenance practically every day
since we started, and the marvel is that we have done one tenth
the work that we have actually performed.
#.ºd Every dollar has been stretched to the utmost, and
fo, i.is the men who have done so much with so little are
surely candidates for statues when the time comes to
perpetuate in bronze or marble the pioneers who set things
in motion for honesty in advertising when advertising was
YOUIlg. . . .
Of the hundreds of reports sent out by the A. A. A. in the
last fifteen years, I have every reason to feel and almost to know
that, like Ivory Soap, 99% per cent. were pure, and more
than likely the percentage is even higher.
Advertising is the most uncertain and the most expensive in-
stitution we know anything about unless it be a son going to
college or a gasoline car. #
The one thing about advertising that it is possible to hog-tie
and to hold is circulation.
There is one kind of circulation that is valuable and another
kind which has very little value.
The only kind of circulation I personally care very much
about is the kind that comes from printing a good paper or a
* good magazine which people buy because they like it.
ºff" Of what value is circulation secured by giving away
pº. premiums that are alleged to be worth more than the
subscription price—when subscribers subscribe for the
premium rather than for the publication?
Of what value is circulation largely made up of copies pur-
chased for the purpose of cutting out voting coupons?
Is circulation circulated free by campaign committees of any

CIRCULATION STANDARDS 441
#. value to anybody but the advertising manager and pub-
isher?
Of what value is bulk circulation created by affidavit, and bulk
circulation that exists only in the imagination, and bulk circula-
tion secured in any way except by printing a good paper?
When an advertiser buys circulation he is entitled to know
what he is going to get in the way of quantity.
That is so self-evident that no normal man will dispute it.
And the only way to know is to set an accountant at work
upon the books and the records.
But how was the circulation secured?
Where do the papers or magazines go?
What kind of people comprise the readers?
Now, my fellow income-taxpayers and citizens of this more or
less free land, we are getting close to the theme.
If the circulation of a two-dollar magazine was built up by
giving away four dollars’ worth of bum dishes, it is not worth so
much per thousand as the circulation secured by hiring good
editors and good writers. &
If the circulation is largely made up of people whose incomes
are limited, it is not the kind of circulation to create sales for a
Packard car.
If the circulation scatters all over creation and then back
again, it is not good circulation for the advertiser whose product
is distributed in a few places or in one place only.
If, for instance, I use a paper in Chicago, and am desirous of
reaching Chicago people alone, then I want that paper which,
other things being equal, reaches the most Chicago people.
It seems foolish for me to stand here and state such self-evident
truths, but I state them because all this vital information is to
be had only in A. A. A. reports, and less than a hundred adver-
tisers are getting these reports. . . .
There is a law making publishers give their paid circulations to
the Government, but these figures, even if accurate, are as worth-
less as a hobble skirt, and even more limited.
The Government simply asks for a total, while we get all the
items that contribute to this total. -
In this report to which I have referred we give twenty-three
pages of detail, while the Government gives out less than twenty-
three words. tº º
We have been doing the work as best we could under handicaps
that would discourage any but men who work for a thing
442 CIRCULATION STANDARDS
because they believe in it with a belief that goes down to
bedrock.
At the same meeting of the association at which this address
was delivered there were other discussions of various aspects of
the subject, and Louis Bruch, Vice-President of the Association
and Advertising Manager of the American Radiator Company,
after a further discussion of the work of the association in this
direction, offered the following resolution:
Resolved—That for a period of one year the service rendered by the Ad-
vertising Audit Association & Bureau of Verified Circulation be utilized by
the Association of American Advertising, the cost for such service to be at
the rate of two dollars a year for class “A” members, and that the regular
service heretofore rendered by the A. A. A. be suspended for that period, but
the organization itself to be kept intact as at present.
Resolved—That for the above period of one year the plans, records, and
equipment of the A. A. A. be transferred to the Advertisers Audit Association
& Bureau of Verified Circulations.
Resolved—That a committee be appointed to conclude negotiations in carry-
ing out the foregoing resolution.
The meeting at which this resolution was passed was held on
February 24 and 25, 1914. On May 20th of the same year there
was held in Chicago a meeting of advertisers, publishers, and
advertising agencies of the United States and Canada, which was
attended by 200 delegates, representing 637 concerns. The re-
sult of the meeting was the formation of the Advertising Audit
Association and Bureau of Verified Circulations, which was
formally organized on May 20, 1914.”
In October of 1914 it was announced that a corps of eleven
men were at work for the Audit Bureau of Circulations. The
list of members who were interested in the organization at the
time of its establishment included the names of 301 newspapers
in the United States and 9 in Canada, 49 advertising agencies,
76 advertisers, 46 of which were members of the A. A. A.; 51
farm papers, 27 magazines, 10 weekly newspapers, 53 class,
trade, and technical papers, and 2 supply catalogues. The fol-
*Printers' Ink, May 28, 1914, p. 10.
CIRCULATION STANDARDS 443
lowing account of the work of the organization to date is taken
from material supplied by the Bureau.
The growth of the Bureau since that time, both in extent and
character of work accomplished, indicates that service of this
kind is being appreciated in advertising circles. The figures for
one year's growth in mere size alone are impressive. As of
September 1, 1915, the Bureau reports in its membership list 617
United States newspapers, 27 Canadian newspapers, 9 agricul-
tural weekly newspapers, 4 foreign language weeklies, and 2
United States and 6 Canadian weekly newspapers, 52 magazines
and periodicals, 63 agricultural publications in the United States
and 4 in Canada, and 106 class, trade, and technical papers.
The efforts to standardize circulation facts and figures have a
legal as well as a mathematical side. In the Appellate Division
of the Supreme Court of the State of New York, Third Depart-
ment, a decision was handed down in March, 1915, defining a
“paid subscriber.” This decision was given in the case of Cream
of Wheat Company, appellant, versus the Arthur H. Christ
Company, respondent, and involved some question as to the size
of the paid circulation of American Motherhood. The opinion
of the court, prepared by Presiding Justice Smith, contained the
following clauses and was concurred in by all the court except
Judge Woodward, who, dissenting, took a somewhat different
view of the situation:
*SMITH, P. J.-Under the contract, which is here for interpre-
tation, the plaintiff is entitled to recover if it appears that the
defendant in 1911 and 1912 had materially less than 63,000 “paid
subscribers.” Upon the wording of the contract alone the court
would interpret the expression “paid subscribers” to mean
those only who had prepaid their subscriptions. The trial court
has found that by an established custom of the trade the term
“paid subscriber” has a broader meaning, and includes not
only those whose subscriptions had been prepaid, but any sub-
scriber to whom the paper was sent and who had once paid al-
*Printers' Ink, April 1, 1915, p. 45; see also issue for April 22, 1915 p. 57.
444 CIRCULATION STANDARDS
though the subscription had not been prepaid for the years in
question. This finding is abundantly supported in the record.
First. The purpose of the contract is to advertise the plain-
tiff’s product. The actual circulation of the defendant’s maga-
zine was confessedly over 70,000 copies per month, although
Some of these subscribers had not paid for several years. The
magazine was only sent upon the request of the subscriber, re-
newed each year, upon which the trial court has found that there
was legal liability to pay. The purpose of the insertion of the
advertisement would, therefore, seem to be fully accomplished
whether or not the subscriber had in fact paid the subscription
price in advance.
Second. The contract itself in effect defines a paid subscriber
as one to whom the paper was not sent as a gift. The term
“circulation” is therein described as “the total number of copies
of each issue of the publication above mentioned which shall
be published and sold and delivered by the publishers thereof,
both to paid subscribers and to news agencies, exclusive of all
returns from news agencies and copies given away in any manner
whatsoever.” It appears that it was the custom of the differ-
ent magazines to give away to employees, to advertisers, adver-
tising agents, to exchanges and for other purposes what are
called service copies. These would seem to be the part of the
circulation that was intended to be excluded by the terms of the
COntract.
Third. The term “paid subscriber” has been construed by
the plaintiff’s general manager and secretary, who negotiated and
signed the contracts in question. In 1912 E. Mapes,
4"; * who for the plaintiff negotiated and signed these con-
# tracts, was upon the circulation committee of the Asso-
ciation of American Advertisers, which was an associa-
tion composed of about seventy or eighty prominent advertisers,
which at its own expense had audits made of magazines and
newspapers to determine the extent of their circulation, for the
purpose of ascertaining their value as advertising mediums.
Among the papers thus examined by this association were the
Albany Knickerbocker Press and the Albany Times-Union in
the city of Albany. In that year a contest arose between those
two papers as to which had the larger “paid circulation.”
This contest was referred to a committee of this association of
which Mr. Mapes was a member. That committee decided
that in ascertaining the paid subscription list all those sub-
CIRCULATION STANDARDS 445
scribers should be counted who had once paid and to whom the
paper was then being sent, although no subscription had in fact
been paid for fourteen years. The record does not show whether
or not Mr. Mapes assented to that decision, but as he was on the
committee which made the decision, and it could easily have
been shown if he dissented therefrom, it is fair to assume that
it was his interpretation as well as that of the committee of the
term “paid circulation.” It is true that this was the interpre-
tation of the term as that applied to the circulation of a news-
paper and not of a magazine. As the audit of a newspaper
circulation, however, was for the same purpose as the audit
of a magazine circulation, it is difficult to see why the term should
have a different meaning when applied to the circulation of
a magazine in a contract for advertising. This interpretation
of the term made in 1912 by the man who negotiated and signed
this contract for the plaintiff is most cogent, if not controlling,
evidence of what was intended in the contract to be included in
the term “paid subscriber.”
Fourth. The witness Turner is an expert accountant, who
for four years before the trial had done nothing except examine
the circulation of magazines and newspapers. He had done
this work under employment from the plaintiff and other indi-
vidual advertisers, and also of the Association of American Ad-
vertisers before mentioned. Of this association this man Mapes
is now the president and was then upon the circulation commit-
tee. He swears that in making those audits the entire circu-
lation of the paper was divided into two branches, paid and un-
paid; that there was included in the paid class the entire mailing
list and the news agencies, and in the unpaid class the adver-
tisers and advertising agents, exchanges, service copies, and em-
ployees; that in the class of paid subscribers was included all
subscribers to whom the magazine was sent, whether or not
payment had been made in advance or the subscriber was in ar-
Irea.I’S.
It is true that few magazines continue to send the paper where
the payment of the subscription is far in arrears. That, how-
ever, was a matter entirely within the policy of each magazine,
and some were more liberal than others, and that since 1912
the tendency had been to draw the lines still closer. The plain-
tiff produced two experts, who made the audits of the defen-
dant’s magazine for the years 1911 and 1912, in order to ascer-
tain whether the plaintiff was entitled to any rebate under the
446 CIRCULATION STANDARDS
contract. This audit was made, however, at the request of the
plaintiff, and with a strict construction of the term “paid sub-
scriber” as only those who had paid in advance, it was found the
circulation was substantially less than 63,000 copies a month.
The testimony of plaintiff’s main expert, Rink, as to what was
understood to be included in the term “paid subscriber,” is un-
satisfactory and evasive, and in view of the purposes to be ac-
complished by the contract in question the trial judge was abun-
dantly authorized to find that in the custom of the trade the
term “paid subscriber” was not limited to those subscribers who
had paid in advance. An examination of the evidence of the
two experts called for the plaintiff will be found to contain no
substantial dispute of the evidence of Turner, the defendant’s
expert, as to what was understood to be embraced within the
term “paid subscriber” in an audit made for the purpose of
determining its value as an advertising medium.
Fifth. It appears that the price of this magazine was nor-
mally $1 per year, and that the receipts for the years in question
from the subscription list were only between $20,000
cº; and $30,000. This disparity between the circulation
O72tract o -
Noſs.fic and the receipts therefrom undoubtedly casts some
suspicion upon the good faith of this circulation.
There is no question made, however, that the circulation
in fact exceeded 70,000 copies per month. Moreover, while
the subscription price was ordinarily $1 a year, it is suggested
in the evidence that clubs were formed with a subscrip-
tion price of 50 cents. So that the actual paid subscriptions
were not fairly represented by the actual amount of cash
received. It appears from the evidence that other magazines,
by offering prizes, send their numbers to many who in fact pay
for the magazine much less than the subscription price. Pre-
Sumably the increased price received from advertisements in-
serted compensate for loss in the subscription price. These
facts were all known to Mapes when he made this contract, and
of the fact that audits made for the purpose of these associations
included in the list of paid subscribers many whose subscrip-
tions were not prepaid, it is a fair inference that if they had
intended to provide only for prepaid subscriptions he would
have used more specific language to that end. There was no
finding by the trial court of any bad faith on the part of the
defendant in padding its circulation list, nor was there any re-
quest by the plaintiff so to find.

CIRCULATION STANDARDS 447
The judgment dismissing the complaint must therefore be
The Dis- affirmed.
senting All concurred, except WooDWARD, J., who read
Opinion for reversal.
Woodward, J. (dissenting)– . . . The only question
at issue on this appeal is the proper construction of the con-
tract: What is meant by the words “paid subscribers?” The
auditors held that it meant the subscriptions paid in advance
or during the term of the contracts up to the date of the audit,
while the defendant contends that it embraces all of the names
carried upon its subscription list, some of whom have paid
nothing upon account of such subscriptions from the time of the
original subscription, running back to the year 1903.
What did the parties agree to? What was their mutual
understanding? That is the real test so far as it finds expression
in language, and we can get very little help in determining this
question from the evidence in reference to the alleged customs
of advertisers, if, indeed, such evidence has any proper place in
the case. Obviously, without any extra language, the guar-
antee of the publishers of “the average circulation” of the publi-
cation would be satisfied by showing that a number equal to
or exceeding 63,000 was sent out each month or that the aggre-
gate for the year reached this number for each issue for circu-
lation does not necessarily require that the publication shall be
sold and delivered to individuals.
But the parties did not stop with the guarantee of the number
to be circulated; they stipulated what should constitute circu-
lation for the purposes of this particular contract, and we have a
right to assume that in making a definition they used language
calculated to be accurate—language which conveyed the very
idea which they intended. Indeed, the contract itself provides
how the word circulation shall be construed; that is its very
language. It “is understood and agreed that the term circu-
lation, for the purposes above mentioned, shall be construed as
follows,” and this court has no right to give to the word any
other construction than that provided for by the contract.
Limitin Clearly the word “circulation” was intended to be
the Medº- modified in its meaning; it was not to have any general
...ing of or uncertain use, and the circulation was the basis of
(** the contract—was the essential consideration for the
* making of the agreement on the part of the plaintiff.
The language clearly indicates that the parties understood
448 CIRCULATION STANDARDS
that “circulation,” as used in the contract, was vague and
uncertain; that it did not guarantee any certain amount of
publicity of value to the plaintiff in seeking an enlarged market
for its product, and for the purpose of making definite and cer-
tain what was otherwise indefinite and uncertain, the parties
undertook to define circulation, and it was agreed that the word
should be construed to mean “the total number of copies of
each issue of the publication above mentioned which shall be
published and sold and delivered by the publishers thereof,”
and if it had ended here it would not have changed the general
meaning of the word, for to publish is “to send forth, as a book,
newspaper, musical piece, or other printed work, either for sale
or for general distribution” (23 Am. & Eng. Ency. of Law, 459),
and a sale and delivery of the papers would have been accom-
plished when the same had been sent to those who received them
with an express or implied promise to pay for the same. But
the contract definition did not end there; the parties had a
different purpose to accomplish, in so far as the plaintiff is con-
cerned at least, and so it was provided further that these maga-
zines “published and sold and delivered by the publisher
thereof.” should be “both to paid subscribers and to news agen-
cies, exclusive of all returns from news agencies and copies given
away in any manner whatsoever.” It was not the whole num-
ber “published and sold and delivered,” but the whole number
“published and sold and delivered . . . both to paid sub-
scribers and to news agencies,” excluding all copies returned
from news agencies as well as all copies “given away in any
manner whatsoever.” In other words, “circulation,” as used
in this contract, was to cover only the papers “published and
sold and delivered” to two classes—to “paid subscribers and
to news agencies”—and no allowances were to be made for re-
turned copies from the news agencies or for any copies which
were given away in any manner whatsoever. This latter clause
had no relation to subscribers; it dealt with the sample copies,
with copies which might be delivered to advertisers for their
own private distribution, as in the case of Ashton v. Stoy (30
L. R. A., 584), and with those given out to trainmen, policemen,
and others upon the complimentary list, and is not to be con-
fused with the main purpose of the definition of “circulation”
for which the plaintiff was contracting.
The learned referee has dealt with the question exactly as he
would have been called upon to do in the absence of the defini-
CIRCULATION STANDARDS 449
tion; he has held, in effect, in so far as this controversy is con-
cerned, that the defendant is to be credited with all of the copies
published and sold and delivered, whether to paid subscribers
or to those who are carried upon the books after having once
been subscribers, though they have never paid but a single sub-
Scription and there is no more than an implied promise to pay.
He has completely ignored the definition which the parties them-
selves agreed should control on the construction of the word
“circulation” and has given it exactly the effect which it would
have had without the definition, and if this may be done, there is
very little use in people reducing their contracts to writing.
There was a distinct object in making this definition: the
plaintiff wanted to obtain a circulation among live people;
The Ad among people who were taking this magazine be-
vertiser’s cause they were interested in it—because it had an in-
Right to dividuality which appealed to them. The intelli-
}*# gent advertiser buys quality in his advertising as well
Quality is quantity, and he has a clear right to stipulate in his
contract for any particular quality which he may desire. If
the publisher does not have the quality of circulation demanded
by the advertiser, then he has no right to contract to deliver
it. If he enters into a contract to furnish publicity among
a particular class of people he is bound to furnish such publicity
or respond in damages, upon the broad principle that where a
person, by express contract, engages absolutely to do an act not
impossible or unlawful at the time, neither inevitable accident
nor other unforeseen contingency not within his control will
excuse him, for the reason that he might have provided against
them by his contract (Wheeler v. Conn. Mutual Life Ins. Co.,
82 N. Y., 543, 550, and authorities there cited), and the plaintiff
having carefully provided the rule by which the quality as well
as the quantity of circulation was to be determined, should not
be deprived of its protection by a construction of the contract
which utterly fails to give any force or effect to the rule. The
contract itself, in other parts, uses the word “paid” in its proper
Sense, and why the word should be given any other sense, or
given no sense at all, is not clear.
The contract provides that the price of the advertising shall
be $60 for each insertion “less 5 per cent. for cash if paid within
ten days,” and it is provided that “the party of the first part
will pay to such advertising agents as are designated by the party
of the Second part, their regular advertising agent’s commission,”
450 CIRCULATION STANDARDS
and again that in the event of the circulation being materially
less than above stated the defendant will “immediately after
said examination make a pro rata rebate to the said Cream of
Wheat Company for such shortage in circulation, paying said
rebate in cash,” and finally that “in consideration of the above
agreement the Cream of Wheat Company agrees to pay the
party of the first part, in payment in full for the insertion of the
above advertisement,” etc. All of these words from the com-
mon root are used in their intelligent grammatical sense, yet it
has been held that in that portion of the contract where the
parties attempted to formulate a rule to govern in the construc-
tion of the word “circulation” the word “paid” is to be under-
stood as referring not only to those cases in which there has been
an actual payment, but to all of those instances in which there
is an implied promise to pay from the fact that the magazine
is continued to an original subscriber years ago.
We are clearly of the opinion that the learned referee erred
in this construction of the contract, because it fails to give any
“pata” I, effect to the provision which assumes to define what
the Active circulation is contracted for and because it ignores
Word in the maxim eacpressio univs est eacclusio alterius. While
* Pºſº this maxim will not be permitted to defeat the obvious
* intent of the parties, where it conflicts with the letter
of the contract, such intent must, nevertheless, be discernible
in the context of the contract itself (Aultman & Taylor Co. v.
Syme, 163 N.Y., 54, 47). Here the context of the contract indi-
cates clearly an intention to make “circulation” mean some-
thing more than the mere publication and delivery of a given
number of magazines; it specifically provides that it shall be
confined to “paid subscribers and news agencies,” and we have
no power to change that contract and make it practically ig-
nore the word “paid,” which is the active word in the definition
attempted by the parties. “I would wish,” says Lord Bacon
(TV Lord Bacon’s Works, 187), “all readers that expound stat-
utes to do as scholars are willed to do; that is, first to seek out the
principal verb; that is, to note and single the material words
whereupon the statute is framed; for there are in every statute
certain words which are as veins where the life and blood of the
statute cometh and where all doubts do arise,” and the only word
in this contract which makes the latter part of the definition
any limitation upon the ordinary use of the word “circulation”
as applied to newspapers and which is “the life and blood of the
CIRCULATION STANDARDS 451
statute” is the word “paid.” If this is dropped out, then the
contract would in effect read that the party of the first part
“guarantees that the average circulation of the above-named
publication shall not be less than 63,000 copies per issue, ex-
cluding all returned copies from news agencies and copies
given away in any manner whatsoever.” Obviously this was
not the intent of the parties; the contract fairly read con-
templates the live, paid subscribers to the magazine dur-
ing the period covered by the contract. It was the quality
of the circulation as well as the quantity which the plaintiff
sought to secure, and the letter and the spirit of the contract
are violated by including as paid subscribers persons who were
not paid up at the beginning or during the life of the contract.
The primary meaning of the word “subscriber” is to write
underneath, as one's name; but it also means to give consent to
Something written, to assent, to agree: and a subscriber is de-
fined to be: (1) One who subscribes; one who contributes to an
undertaking by subscribing; (2) one who enters his name for a
paper, book, map, or the like (Web. Int. Dic.). To become a
subscriber to a newspaper includes some voluntary act on the
part of the subscriber, or something which is in effect an assent
by him to the use of his name as a subscriber. A person to
whom a newspaper is sent without his knowledge or consent,
either expressed or implied, is not a subscriber within the mean-
ing of the statute (Ashton v. Stoy, 30 L. R. A., 584). To become
a paid subscriber requires not only the act of subscribing, but
the act of paying, and the defendant’s form letter, in which the
old subscriber is asked to “please remember that this order will
be accepted without any remittance and payment can be made
later” strongly suggests that the so-called circulation of some-
thing over seventy thousand, yielding a revenue of only about
$30,000 annually (the subscription price being $1 per year),
is not in any proper sense such a paid subscription list as the
plaintiff had a right to expect under its contract. “Paid sub-
scribers” are not persons who are legally obligated to pay, but
those who have in fact paid, and if the defendant wanted to sell
advertising space under the basis of its general circulation, or to
subscribers legally obligated to pay, it was easy to provide for
that, but it has no right to specifically provide for one kind of
circulation and to substitute another as “just as good,” for that
is not what the plaintiff purchased. The plaintiff allowed all of
the paid subscribers up to the time of its audit in each case, giv-
452 CIRCULATION STANDARDS
ing the defendant the benefit of any one who had become a paid
subscriber during the time under which the parties were operat-
ing under the contract, and is entitled to recover in these actions.
The judgment appealed from should be reversed, and the
findings of fact should be made to harmonize with this con-
struction of the contract, the plaintiff having judgment for the
amount of its claim.
There are various problems connected with circulation
which are a good deal less definite than this question of facts
about the volume of circulation. Even after the facts have been
correctly defined and have been made known honestly, there
are a number of questions which puzzle the advertiser and all
others concerned with advertising. For example, a good deal
of attention has been given to the question of duplication of
circulation, particularly among magazines, and there is oppor-
tunity for a large amount of good work to be done in this field.
One advertising agency in New York City has made an investi-
gation of over 16,000 persons and has tabulated the volume
and percentage of overlapping in the case of fifty-two maga-
zines.”
There is something very reassuring, although not very scien-
tific, about the following open letter to advertisers who are con-
cerned about duplication, signed “by a representative.” What
this article lacks in scientific accuracy it partly makes up at
least by the paragraphs of homely common sense which it con-
tains.
f(Sentlemen: I go into your office to find out how things are
going, and I find you all perturbed. You’ve just closed a very
prosperous year and your advertising must deserve a lot of
credit. I expect to find you in an optimistic frame of mind,
working out plans and copy and going it harder than ever.
But, no. All that is side-tracked and has been for several
*This tabulation was made by Frank Seaman, Inc., and was printed in
Advertising and Selling, January, 1915, pp. 33, 34, and 35.
fBrinters' Ink, February 12, 1914, p. 66.
CIRCULATION STANDARDS 453
weeks. Copy and plans are in the discard: you’re at work on a
greater problem.
Some one of your directors has asked you, “Brown, how
much duplication is there between the mediums we use? There
must be a tremendous waste there. If we could eliminate dupli-
cation, think how much money we could save.” -
You couldn’t answer him off-hand, and were nonplussed.
Instead of feeling that what you’ve done in the last five years
puts you among the advertising “majors,” you’ve decided you
belong in the “bush league.” A fine advertising manager, not
to know how much of your advertising efficiency is wasted by
duplication!
Forthwith you’ve possessed yourself with that enormity of
duplication. You’ve called your advertising agent on the car-
pet, and jumped him for his ignorance. You’ve written a list
, , of questions to all the advertising managers you know.
#. You’ve taken a thousand names out of the telephone
jº" book, and written them, asking what publications they
read. You carry a notebook and besiege people at
lunch, at the club, and while visiting at their homes. You’ve
pounced on us poor solicitors for information, and half of us
are working the multigraph overtime trying to get duplication
data for you.
Not a word from me if I don’t know how much my periodical
duplicates with the other ten you use: I must get busy, find out
and write you a long letter about it, if I want to keep your busi-
IleSS.
Now here’s my letter:
It would doubtless be very interesting to know how much
duplication there is between my publication and A and B and C:
but, in the first place, it can’t be done.
No figures you can get can be correct. Just because the in-
Surance companies can say that eight out of every thousand men
aged 30 will die in 1914, you think you can write a thousand men
and find out what percentage of ten million men read both the
Alpha Weekly and the Omega Monthly and a few others.
You forget that the insurance companies tabulate ten million
deaths over a period of forty years, and then figure out the pro-
portion for a hundred thousand or so for one year. Any insur-
ance company that used the thousand stuff on a ten-million basis
would be haled before the lunacy commission in a hurry.
A hundred men of a thousand, aged 30, die in one community,
454 CIRCULATION STANDARDS
while the whole thousand in another live to be 31. The average
of millions is eight to the thousand.
Just so with your duplication test.
If you doubt it, get detailed circulation statistics from half a
dozen publications and see how easy it is to make the compari-
sons tell half a dozen different stories—if you leave out
What º the right things. Only by comparing all the circula-
*...* tion of one against all of the others can you get the
right answer.
The only way you can find out about the Alpha Weekly and the
Omega Monthly is to catch all their two or three million at the
same time, and get ’em all to tell you the truth about whether
they read both periodicals, every issue. Then you would have
the answer.
Assuming that you do write them all (no publication has 100
per cent. Subscription circulation, by the way) and place before
them a list of publications, many of your best folks
ſº º: won’t take the trouble to answer you. Why should
... they? Another class expect some kind of come-back
or solicitation, and are afraid to answer for fear of
being bothered.
In the second place, if they do answer you they will put down
everything they read at all; it’s human nature to make a good
showing, even with strangers. I went to grand opera once this
season; but if any one asks me, “Do you go to grand opera?” I
assent in a way that indicates that I’m No. 1 on the season-
ticket list. In the same way, the 10 per cent. or so who do
answer your question will check off from half a dozen to a dozen
publications they are familiar with—including the two or three
they get every week or month, as published.
So, I say, the cards are stacked against you from the start; the
data you get will not even be correct for the people who do write
you. Your dope from a few people is as inaccurate for the whole
number as that of the newspaper which takes a straw vote on
5 per cent. of the city’s voters—and invariably picks the wrong
candidate as winner; second, the most intelligent people (who do
read regularly and thoroughly a number of periodicals) will in
most cases not take the trouble to reply, and the people who do
reply will exaggerate the number of publications they read.
Then, too, circulation shifts like the sand on the seashore.
The publications which reach 80 per cent. of the same readers
this year that they did last year you can count on the fingers of
CIRCULATION STANDARDS 455
one hand—and use only one finger. The range is between 20
and 80 per cent. -
Even if your dope was right to-day, it’s wrong next season.
“Now, what good came of it at last,”
Quoth little Peterkin;
“Ah, that I cannot tell,” quoth he,
“But ’twas a famous victory.”
Now, what of your “famous victory” when (if) you have
won it?
Are you a fly-by-night advertiser, who only wants to reach the
sucker once, and as many suckers as possible at once?
“The second law of advertising is reiteration.”
Why do you advertise more than once in the same publication ?
To get as close as possible to 100 per cent. duplication for your
nessage. -
You use five or six insertions a season in every medium you
use, just to get duplication.
You put up the same 16-sheet on a thousand billboards in the
same city.
You use the same card in every street car in the city and gloat
over the fact that people ride from two to a dozen times a day,
etc., etc.
And then you are worried because the same consumer may read
two periodicals and see your advertisement twice!
You said, “Old stuff; everybody knows that,” when you read
in the Curtis Company’s excellent “Selling Forces”:
Constant repetition impresses us more than an initially eloquent plea. The
insurance man gets us on his tenth call more often than he does his first. I
may notice a certain advertisement one week and pass it by. The next week I
see it again, and say, “Oh, yes, I’ve read about that before.” Seven days
later it comes along, and I wonder if that isn’t worth investigating. About
the fourth or fifth time I see it, it seems as if I’d known it all my life, and when
I need such an article that's the one I buy.
Yet you’re disturbed at the fearful waste in duplication of
circulation. ^
Believe me, any family which is intelligent enough to read
several publications of the kind you have wisely chosen as best
suited for your advertising is the kind of family you want dupli-
cation on.
The kind of woman who is so interested in efficiently managing
456 CIRCULATION STANDARDS
her household, her family, and herself that she takes Delineator,
Woman’s Home Companion, Ladies’ Home Journal, and Good
Housekeeping is the kind of woman to whom your message of
a new food product or a better vacuum cleaner ought to be told
as impressively as you can. -
In almost every case it takes time and repetition to put over a
sale. If it’s an expensive article, sold only once, duplication is
invaluable in piling up enough impressions to bring about that
one big-money sale. If it’s an inexpensive article, it still takes
piling up of impressions to get it bought and keep repeat orders
to maximum.
No publication is first in the minds of all its readers. One
man thinks Alpha Weekly is the best there is; he also likes Omega
Each Pub- Monthly and a couple of others. To him an advertise-
lication Has ment in the Weekly makes the greatest impression,
Its Fol- for every advertisement profits by the introduction of
” the individual publication carrying that advertisement
to the consumer.
But another man devours the Monthly, while merely glancing
at the Weekly.
You profit, in the duplication of circulation, by reaching each
man through the most efficient medium for reaching him. Also,
by clinching that impression by a second one, even if it isn’t as
strong.
Then we all have our moods, and they change. In one mood,
the stuff the Weekly gives us makes that the one we pick first
. . . from the pile; in another mood it’s the Monthly. You
ºº get different angles of approach in duplication of cir-
Cºitiºn culation, just as you do when friends recommend a
man or an automobile.
Again, in the same family the Weekly is ace high with father,
who lets mother do most or all of the reading of the Monthly.
Duplication doesn’t hurt any in making both of them decide that
the Blank piano is the best to buy. This concentration of in-
fluence in a given household is no unimportant factor.
Duplication is really intensive advertising—and usually a
blessing in disguise to campaigns that wouldn’t be intensive
enough if the duplication-worried advertising manager had his
Way.
If I were giving advice it would be this:
(1) Stop worrying about duplication.
(2) Instead, spend your gray matter and your time picking the
CIRCULATION STANDARDS 457
mediums most efficient for your advertising and using them effi-
ciently with good copy.
(3) If you think there's much duplication between mediums,
use different copy when you use them simultaneously.
(4) If you want to criticise duplication, you’ll generally find
plenty of opportunity in the sameness of your own copy and
your competitors’, and in the sameness of this month’s copy and
last month’s and the months’ before. You can’t get away from
duplication, no matter how much you want to. But you can
cash in on duplication more than you’re doing when you use the
same old copy seventy-five times or places in a month.
Give the public fresher messages, with more variety—and
say “I should worry” to duplication.
John Wenzell, “business statistician and investigator,” in the
following article describes some suggestive methods of charting
the factors that reveal progress in the relationship between circu-
lation and the market covered:
*It has often been said by advertising men that circulation
figures mean so little. This is so true that we have had what
amounts to fad or fashion regarding the viewpoint about circu-
lation of any kind of periodical. There was a time when we
were all hypnotized by big circulation, and there was in conse-
quence much “forced circulation” taken on to impress the ad-
vertiser.
To-day we know better, and we focus our attention more on
the publication’s field. Its strength or weakness is not made
evident by bulk or lack of bulk of circulation, but by the relativity
of the circulation figures, to the particular field, and by the rate of
growth as thus compared.
To do this with a trade paper or class periodical is very simple,
but to do it with a newspaper is by no means easy. Yet a great
deal of the claim and counter-claim and confusion of values about
newspapers might be cleared up if the graphic chart were used to
analyze the field on these principles.
Suppose it is required to present to the public the circulation
of a newspaper, and also the number of lines of advertising car-
ried during a period of several years; the object being to analyze
*Advertising and Selling, March, 1915, p. 9.
458 CIRCULATION STANDARDS

sº -
O
*Y. º o º º º tº ſº © © © © ise p- tº do C. do
3° à & 3 s. 3 # * : ; ; # 3 # 5 § 3 ;
© MC &Q QR c\} uſe to do o r1 tº cº sº gº is to ºr
4.
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7 - CIRCULATION OF A l
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–––.--Tº 1898 – 1914 -
Slanting lines represent
circulation per loo
population in New York City.
O | 1– ſ | | i | - O
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gº 2. º º * *
& g g g g g º e s sº sº a sº a
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Slanting lines show
amount of advertising
per capita in New York City
in this newspaper
O | | | | | Yºjo
# # 3 3 # 3 # 3 # 5 § 3 ; ; ; ; ;
º e-º - &
CIRCULATION STANDARDS 459
the growth of the paper and show the relation of its growth to
general comparative factors. Charts similar to those which ac-
company this article will tell the story much better and more
quickly than a mere recital of the figures will do. In fact, the
figures are all given as a part of the charts, so that if one desires
to verify the curves it can be done without difficulty or delay.
For the purpose of illustration the published statement of a
New York newspaper has been taken, and the charts were drawn
presenting these figures. In Figure I the circulation from 1898
to the present time is shown.
It is often of value to know whether the circulation of a news-
paper is keeping pace with the increase in population of the
territory that it serves. It is apparent that if in ten years the
circulation of a paper increases 28 per cent., and during the same
period the population has increased 32 per cent., the gross in-
crease in the number of papers printed has not been a net in-
crease as far as the ratio of circulation to population is concerned.
For the purpose of showing the increase in population the slant-
ing lines were added to the chart in Figure 1.
The use of two sets of lines, or “double co-ordinates,” as they
are called, running across the chart for the purpose of reading
e the curve from two different scales is not frequent,
º; * because their value is appreciated by very few. In
*fferent tº e
§..." this instance they very clearly show how many papers
were circulated per hundred people in New York City.
It will be seen that in 1898 the circulation was less than one
to each hundred population; while in 1914 the chart shows
that more than five people out of every hundred read this
sheet.
The method of finding out where to locate these slanting lines
is as follows: The population of New York in 1900 was
3,437,000. If one person out of every hundred read the paper,
the circulation would be 34,370; if two, 68,740; if three, 103,110,
etc. In 1910 the population had increased to 4,766,000, so that
if only one person in a hundred read the paper they would have
to print 47,660; if two, 95,320; and if three, the required number
would be 142,980, and so on. The percentage of increase in each
case is 38.7 per cent., which was the increase in population in
New York City during the decade.
From the foregoing calculations it will be seen that the loca-
tion of the 1900 per capita lines are plotted 34,370 units apart,
while in the 1910 column 47,660 units is the basis of measure-
460 CIRCULATION STANDARDS'
ment. This accounts for the difference in the angle of the slant-
ing lines. -
By comparing the progress of the heavy line, technically called
the curve, which represents the circulation of the paper year by
year, it is seen that although there was a gain over the preceding
year in the average number of copies printed in 1903, yet
the increase failed to keep up with the growing population.
This was also the case in 1905. From 1909 to 1911 the in-
crease of 13,058 just barely kept pace with the growing popula-
tion. -
At the right-hand side of the chart is placed the scale showing
the number of papers circulated for every hundred people in
the city. These are placed at the ends of the slanting lines, and
serve as a scale for them. They have no connection with the
horizontal lines.
The growth of the advertising carried from 1898 to 1913 is
shown in Figure 2. In this chart the double co-ordinates are
used to show the increase in population. The slanting lines in
1900 3,437,000 units apart, and in 1910 the basis is 4,766,000.
It will be noticed that the curve crosses diagonal line 1 in 1899.
At this point the paper annually carried one line for every person
in Greater New York. By 1902 the number of lines per capita
had almost reached one and one half. For the next six years
the per capita decreased generally until the panic of 1907–8.
It was not until 1909 that the 1902 per capita was surpassed.
In 1909 the number of lines carried was 1,692,924 more than were
carried in 1902, yet considering the increase in population, the
per capita was practically the same.
The growth in advertising since 1908, and its relation to the
increase in population is much more apparent by comparing the
curve with the slanting lines than it would be by noting its rela-
tionship to the horizontal lines, and then mentally taking into
account the fact that during the last ten years the population
had increased about a million and a half.
It will be quite clear from the use of this New York City in-
stance that a great deal of important fundamental data about
circulation is to be gleaned by a careful study of circulation
and the field in this way. Trade papers, general magazines,
class papers, and newspapers all could make their situation
more clear by such means. And if the publisher will not do
it, advertisers will / Indeed, they are doing it now, as I can
testify.
CIRCULATION STANDARDS 461
A careful examination of the technique of this chart is worth
while if one is interested in the subject. On the left-hand side
of the chart the scale of the circulation beginning at
#. º, zero is found. On the bottom the years are arranged
*ś,” from left to right. At the top of the chart the average
circulation figures are given for each year. The letter-
ing is made so that it can be read from the column at the top of
the chart, or from the column at the left. The base line is much
heavier than the other horizontal lines, as it marks zero, the start-
ing-point of the scale. This, according to the leading authorities
on graphic charts, is the most approved method of presenting
the data.
One of the most frequent faults with graphic charts is that the
base line does not begin at zero. While it frequently saves
space to have the scale at the left begin with a number of some
size, thus permitting one to make the fluctuations in the curve
more pronounced, nevertheless it is very apt to be misleading,
as the casual observer often does not notice that the bottom of
the chart begins part way up the scale. Therefore the impres-
sion is apt to be conveyed that the rise in the curve represents a
much larger growth than there really was, because we naturally
expect that the base line of a chart begins at Zero.
CHAPTER XII
DIRECT-BY-MAIL ADVERTISING
HY should there be in this compilation a separate chap-
ter devoted to what is called “direct-by-mail” ad-
vertising? There are at least two reasons either one
of which would be sufficient. In the first place, everybody who
is engaged in advertising at all uses direct-by-mail advertising
in some form, no matter what other mediums he may employ.
His catalogue, his circular matter, and the various other messages
which go from him directly to his customers, to distributors of
his goods, and to others come within this field. In the second
place, direct-by-mail advertising offers an opportunity for direct
contact between the advertiser and those engaged in distributing
his products, or the advertiser and the consumer, or both. For
this reason, it is one of the points at which standards of truth
and service can be set up most satisfactorily and with the best
chance of securing results from the tests upon which reliance can
be placed.
Within this field rapid progress has been made within the
last two or three years. Not only is printing for this purpose
being better done, but it is being bought and sold and used more
skilfully. Not only are mailing lists being much more intelli-
gently compiled than they used to be, but they are being used
to much better advantage.
Direct-by-mail advertising, in short, is assuming the position
of an indispensable supplement to practically every kind of ad-
vertising effort. Its service in connection with this is to reduce
the waste in the response of advertising appeal.
George L. Lewis, Advertising Manager of A. Stein & Co., the

462
DIRECT-BY-MAIL ADVERTISING 463
manufacturers of the Paris Garter, in the course of a short talk at
the Chicago Convention of the Associated Advertising Clubs of
the World, spoke as follows on the subject of the use of direct-by-
mail advertising to follow up other forms:
*The average advertiser to-day is handicapping advertising
more than he is benefiting it, and logically it follows he is handi-
capping his own business.
You use magazines, newspapers, posters, street-car cards, or
whatever else you employ, to directly affect the consumer, the
final buyer. Now, this national advertising has its influence on
every other phase of buying and selling to a certain extent. But
national advertising, however strong it may be, has its limita-
tions; the magazine, the newspaper, the poster, the street cars are
the straight lines to the ultimate buyer. But when you try to
bend that straight line into a circle so that it will also touch and
impel the retailer to action, you are over-burdening it. Your
advertising is weakened. There’s likely to be a break some
place.
As many of you know, I made a very careful, thorough four-
year dealer analysis. During that period I visited in the neigh-
borhood of 800 retailers of every variety in small and average
size towns and in every state. I have found out how it is possi-
ble to get the hearty, willing co-operation of the retailer. The
only way to approach the retailer is by the straight line, which,
interpreted, means by direct advertising; approach him and talk
to him directly.
I found where direct matter was mailed regularly between the
gaps of the salesmen’s visits it was very difficult for competitors
to get the retailers’ business. It is only by means of direct ad-
vertising in one or the other of its many forms that it is possible
to connect the dealer with your national advertising.
At the same meeting Milton Hartman of the Curtis Company
of Detroit spoke of direct advertising as the “wasteless way.”
fDirect advertising is the wasteless way, a selective medium of
direction by which a sales message may be communicated to a
segregated group of individuals or in a concentrated zone.
*Advertising and Selling, July, 1915, p. 33.
fAdvertising and Selling, July, 1915, p. 31.
464 DIRECT-BY-MAIL ADVERTISING
Here are the specialized classes to whom direct advertising is
an easy method of approach.
The Farmer–Who sells the world food and raw material and
is the big buyer of the world’s manufactured wares.
The Housewife—Here is the biggest little spender since time
began.
The Professional Man—The architect—the physician—the
dentist—the lawyer—the clergyman—the teacher.
The Sportsman—A man will indulge his hobby though he goes
without many a real need.
The Workman—The mechanic—the engineer—the railroad
man—the artisan—the machinist. These men can be cultivated
by direct advertising. They may not have the actual say so,
but they have a lot of influence in the buying of tools, supplies,
lubricants, equipments, etc.
Broadly speaking, there are three classes of direct advertising
campaigns. -
The first is the use of direct advertising as a self-sustained
campaign, employing it to the exclusion of all other media.
These instances are occasional, but several large successful cam-
paigns of this nature are now in operation.
The second is the use of direct advertising in conjunction with
other media—the one having a reactionary effect on the other.
The third is the use of direct advertising as a follow-up to
Some previous movement, thus vitalizing it, and in the instance
of direct advertising following up salesmen’s initial calls, accel-
erating the work of those salesmen.
(1) SUPPLEMENTING THE SALES FORCE
Some of the ways in which direct-by-mail advertising may
be used to supplement the sales force are suggested in the follow-
ing description of the methods employed by a concern making
pipe fittings, which on the face of it do not appear to be a very
promising line for sale by description:
*Among the other things which a careful study of the market
will disclose are ways to make catalogues and printed matter do
part of the work which has hitherto been left to the sales force.
There are very few lines indeed in which catalogues can “take
*Printers' Ink, May 7, 1914, p. 76.
DIRECT-BY-MAIL ADVERTISING 465
the place” of salesmen, but there are even fewer concerns whose
catalogues could not be arranged so as to help the sales force
more than they do. If an extra two or three cents per catalogue
will save one salesman’s call per prospect—to say nothing at all
about helping “close” the sale—it will be a mighty good invest-
ment. . . .
In a future article there will be a discussion of the catalogue
which is a sales argument as distinguished from that which is a
price-list, but the distinction between the two should properly
be made right here. Most price-list catalogues for specialties
could be improved by the addition of sales arguments, or by the
issuance of supplementary printed matter containing sales argu-
ments. That is a sweeping assertion, but I believe it is fully
warranted. For it is the sales arguments which get the “come-
backs” with information about the prospect’s own business, and
every bit of information of that character puts the salesman just
that much nearer closing the sale. Just what the addition of
sales arguments can do is well illustrated by the experience of
M. B. Skinner & Co., Chicago, distributors for James McCrea &
Co. (pipe repairs and steam specialties).
Probably there is no other line of specialties in which the price-
list catalogue is more in evidence than here. The vice-president
of one of the largest steam-specialty houses writes that he has
been compiling catalogues for twenty years, and adds that he
does not believe that the experience of any one else would be of
the slightest use to him. His catalogue is a big price-list, ex-
cellent as a reference book, and giving every necessary detail to
enable the customer to order the goods. But all the preliminary
work of getting the customer to the point of ordering is loaded
upon the salesman and the local dealer. Contrast the fore-
going with the experience of the Skinner people, as told by
Advertising Manager K. G. Merrill:
“One can scarce imagine a “colder,’ more unsympathetic
sort of a business,” says Mr. Merrill, “than that of marketing
steam specialties—to be specific, pipe and valve repairs. The
very name conjures visions of dusty, sweating pipes and hissing,
equally dusty valves. Moreover, they are repairs of the kind
needed only in emergencies.
“When in trouble, a person’s first impulse is to appeal to an-
other for help. How should we make our devices seem human
enough to receive first thought? Obviously by introducing a
character to be used in our advertising matter who should be
466 DIRECT-BY-MAIL ADVERTISING
warm but not irrelevant nor out of place. The usual characters,
children, girls, animals, were rejected as unsuitable. Mr. Skinner
and I talked it over for days, and we finally decided to use an
engineer typical of the best in his profession.
“One day while casting about in my mind for a fit person
the engineer of our building, radiating good nature, entered the
office to talk to the business manager. Like a flash he was
nominated for the office and his consent was straightway ob-
tained.
“Then began the planning of our first circular. The reverse
side was to show our genial engineer—whose name, by the way,
was Deephouse—applying our clamps, reseating valves with our
tools, and always showing his happy face. Old stuff but always
effective. But the big part of the job was to make the front—
the address side—attractive; the illustration and the catch-
phrase sufficiently enigmatic to compel further perusal, and the
whole to possess an originality, a warmth, a unity that would
make it stick in the mind of the average engineer.
“As the circular was to illustrate two groups of devices—pipe
repairs and valve reseaters—I wanted to use the word “twins’
in my catch-phrase. So, after Deephouse (which name for the
purpose of our circular we had changed to Deepthought) had
posed in various attitudes for the reverse side, I told the pho-
tographer to take the last picture ‘on signal.” Then I handed
Deephouse two cigars, one of which he promptly put in his
mouth.
“‘Your nerves are healthy, aren’t they?’ said I; ‘but I’m
going to smoke that other one!’
“‘This one?’ he said, holding it toward me; ‘you’ll never see
that cigar again,’ and his face expanded into one of his whole-
hearted grins.
“At that moment the camera clicked, and the front of the
circular shows the result. With that we decided upon ‘Twins,
by George,’ for our catch-phrase. Could any proud father more
look the part?
“The body matter on the reverse side, far from the usual
cold, mechanical statements, was made simple, direct, and good-
natured—a style of talk I’d found successful when a salesman.
It contained the principal facts set forth in our catalogue, but
boiled down and presented forcefully—we did not scorn an epi-
gram here and there. The name Deepthought was used only
in little sentences set in six-point type under the pictures on the
DIRECT-BY-MAIL ADVERTISING 467
reverse side—‘Mr. Deepthought reseating a valve,’ ‘Mr. Deep-
thought applying an emergency pipe clamp.” We didn’t want
to rush the idea the first time.
“We had the work done in two colors by a good printer.
The sales records show that this circular kept the month’s
sº business about the same as the corresponding month the
j" year before, when twice the sales work had been done
among the trade.
“Encouraged by our success, we immediately started on a
follow-up circular, this time to feature the name Deepthought.
In contrast to the former circular it was in story form—a con-
versation between the old engineer (Deepthought) and a green
hand. This time the head alone was shown on the address por-
tion, and simply the word Deepthought as a catch-phrase. A
return card was enclosed and the argument for keeping our re-
pairs on hand for emergency launched with full force.
“The return cards poured in, together with letters from job-
bers asking for packets of circulars for local distribution.
Many consumers who had not been heard from in years ‘came
across.’ The great house of Crane Company asked that we
print a quantity of these circulars over its name. .
“We brought out our third circular a month or so later, and
showed Deepthought’s face in silhouette and the catch-phrase
‘Recognize me?’ It was an imitation typewritten business
letter—straight from the shoulder. A coupon was included and
the recipient was invited to ‘see how easily this card tears off—
we’ve started it for you.” (It was die-cut for half an inch from
the edge.) This circular cost but one half as much as the others
but pulled just as hard.”
The folders described by Mr. Merrill were not designed to do
away with the company’s catalogue; in fact, the price-list cata-
logue was featured in the folders. M. B. Skinner, president
and manager of James McCrea & Co., says that the folders have
been “infinitely more successful as business getters than the cata-
logues. These folders pulled as much business this summer as
the salesmen did last summer.”
The present writer has no intention of attacking the price-
list catalogue. It is valuable as a reference book, and is abso-
lutely indispensable in many lines. But unless it is supple-
mented by frequent salesmen’s visits, or by other printed matter
containing sales arguments, it is quite likely to remain passively
gathering dust in a pigeon-hole. Salesmen’s visits cost money,
468 DIRECT-BY-MAIL ADVERTISING
§
and if a series of three or four five-cent folders (including post-
age) can take the place of only one visit per prospect, the saving
is worth thought.
(2) SOME USES OF THE CATALOGUE
Roy W. Johnson of the Printers' Ink staff recently prepared
a series of articles on the making and using of catalogues.”
In the course of this series Mr. Johnson had one article headed
“Catalogues That Tell How,” in which he calls attention to the
necessity for a clear understanding of the purpose of a catalogue
before preparing it. In this article the following cases are de-
scribed:
iThe most important factor in the production of a good cata-
logue is a perfectly clear idea as to exactly what the catalogue
is meant to accomplish. Don’t interrupt with the trite remark
that the catalogue is meant to “sell goods.” The most any
catalogue can do in that direction is to procure an order for
goods. Something must happen after the receipt of the cata-
logue before any goods are actually sold, and that something
generally happens in the mind of the customer. Selling goods
is a more or less remote object of the catalogue. Its immediate
object is to tell something, and a definite idea of what it is to tell
is the prime requisite of a good catalogue.
One of the first lessons the successful catalogue writer learns is
that the catalogue is not merely a piece of descriptive writing.
Description plays a most important part in the catalogue, but
the true catalogue is not descriptive; it is eacpository. In other
and plainer words, it tells how to do something. The sum total
*The “Loose-leaf” Catalogue vs. the Bound Book, September 16, 1915,
p. 57; Keeping the Catalogue “Alive” in the Hands of Prospects, May 27,
1915, p. 84; Catalogues That Tell “How,” December 24, 1914, p. 19; Im-
proving the “Style Book” Catalogue, August 6, 1914, p. 22; How Market
Data Built a Catalogue, July 9, 1914, p. 72; Judging the Value of Data for the
Catalogue, June 18, 1914, p. 63; Study of the Product for Catalogue Pur-
poses, June 4, 1914, p. 54; Sales Co-operation by Catalogue, May 14, 1914,
p. 67; Catalogues Which Save Sales Effort, May 7, 1914, p. 76; Catalogues
Which Influence Future Buyers, April 30, 1914, p. 23; Catalogues That Fit
the State of Mind of the Consumer, April 23, 1914, p. 28; Building the Cata-
logue to Meet Market Conditions—1, April 16, 1914, p. 49.
fBrinters' Ink, December 24, 1914, p. 19.

DIRECT-BY-MAIL ADVERTISING 469
of the impression left by a good catalogue in the mind of the
prospect is not merely the conviction that So-and-So's goods are
made of proper materials in the right way, but it is the conviction
that So-and-So's goods will enable the prospect to accomplish
something more easily than the same thing can be done with-
out them. If So-and-So makes shoes, his consumer catalogue
will tell how to get foot comfort and long wear. His dealer
catalogue will tell how to sell more shoes at a profit. If he
makes musical instruments, his catalogue will tell how to enter-
tain, how to get more pleasure from one's evenings, etc. If he
makes soap, his catalogue will tell how to beautify the complex-
ion, how to save wear and tear on the clothes, and so on.
I have often thought that every catalogue should have a sub-
title, carefully thought out, and commencing with the word
give the “how.” The sub-title need not be printed, nor
Catalogue even written, but it should be before the mind of
a Working the catalogue writer continually. Reference has al-
* ready been made, in a previous article, to the cat-
alogue of the Burroughs Adding Machine Company for retail
stores. Before a line was written the sub-title had crystal-
lized into “how the retailer can go home on time,” and in
writing the book we never lost sight of it. Everything which
went into the book was regarded from that standpoint, and
many things which would seem to be obvious catalogue mate-
rial were discarded because they could not be made to harmonize
with that conception of its purpose.
Another Burroughs book for which I was responsible was the
manual of instructions for users of the machine. As it hap-
pened, the sub-title in that case was pretty easily arrived at:
“how to operate and care for your adding machine.” I was
appointed to the task very shortly after my connection with the
company, when my own knowledge of the operation of the
machine was very limited indeed. One day a department head,
whom I had been bothering for information, complained to
Advertising Manager Lewis:
“Why on earth didn’t you get somebody to write that book
who knows something about the proposition?” he said. “Simply
because,” Lewis replied, “the purchaser of the machine doesn’t
know anything about it, either, and he wants to be told the whole
story. Johnson will go around here and ask every fool question
that any user will ever ask, and he will pester everybody in the
Vlace until he finds out. Then he will put it all down in black
470 DIRECT-BY-MAIL ADVERTISING
and white, because it is new information which he is interested
in. Most of the things which are too obvious to be mentioned
are the very things the user needs to be told, and the greenhorn
will get them because they aren’t obvious to him. When he gets
through we’ll have a book which will be vitally interesting to
the new user of the machine, though it won’t interest the fac-
tory a little bit. It isn’t meant to.”
It all boils down to the question of finding out just what the
reader of the catalogue needs to be told, getting a clear-cut con-
ception of it, and then going ahead. No two catalogue prob-
lems are precisely alike, and it requires some really original
work in each case if the catalogue is to fit the conditions. The
big thousand-page catalogue of the Yale & Towne Manufactur-
ing Company consists almost exclusively of descriptions and
specifications of the goods themselves, and the Victor “Book
of the Opera” entirely subordinates the goods to a description
of something else. They are entirely different, yet both are
excellent examples of catalogues built upon the plan suggested.
Both are expository. The one tells the dealer “how to main-
tain a stock of good hardware,” and the other tells the music-
lover “how to study the opera at home.”
During the past two years the writer has examined upward
of 600 different catalogues, some of which have been com-
mented upon, while others have been set aside for
4..#. future comment. Out of the latter I have selected
6. two which seem to illustrate particularly well, the
point I am trying to emphasize. One is the book of
the James Manufacturing Company, Fort Atkinson, Wis., makers
of Sanitary Barn Equipment, and the other is the catalogue of
the Crouse-Hinds Company, Syracuse, N. Y., featuring a line of
electrical supplies known as Condulets. Both books are copy-
righted, and the quotations and reproductions herewith are made
by permission.
Those books are about as unlike as two catalogues could pos-
sibly be. The one goes to the non-technical farmer, who needs
to be “sold” on every statement which is made, while the other
goes to the dealer in electrical supplies and to the electrical con-
tractor–semi-technical men, who are already convinced of their
need for the kind of goods advertised. Yet both catalogues are
expository from the first page to the back cover. Let's take
them up separately and see wherein they differ from catalogues
which merely describe the goods.
T)IRECT-BY-MAIL ADVERTISING 471
The Barn Equipment Book is entitled “The James Way,
and puts its sub-title in the first paragraph. Under the heading
Consisten, “A Personal Talk by Mr. James,” the first page of
Purpose of text begins as follows: “Now that we are issuing a
James Mfg.new catalogue, the advertising department seems to
Co i. %tº think I ought to start it off with a talk about how to
* make barn work easy.” There you have the flag
nailed to the mast, and it is kept fluttering throughout the 255
pages. Not only does the book tell how to make barn work easy
but also “how to make more money out of the dairy herd.”
The two appeals are skilfully intermingled. “Now don’t you
See,” says Mr. James at the close of his introduction, “that
whether you buy James Equipment or not, you are paying for
it anyhow—paying for it in unnecessary cost of caring for the
cows in the barn, in wasted feed, extra help, loss of time, ruined
udders, and by other losses and wastes which would be prevented
by James Equipment?
“So long as you are paying out this money anyhow, why not
have James Equipment to show for it?
“Why not take this money that is being expended without
getting anything permanent in return for it, and change it into
an investment that will pay back a big profit every year?
“Can you afford not to modernize your barn the James way?”
Then the book proceeds to deal with the separate items of
James equipment, beginning with cowstalls and stanchions
and continuing with pens, mangers, manure and litter hoists,
ventilating systems, and so on. Plenty of selling talk is given,
showing the advantages of the device, its construction in detail,
how easily it may be installed, etc., not forgetting testimonials
from users and plenty of pictures of barn interiors showing the
equipment in actual use. Those pictures, by the way, are one
of the features of the book, being full page in size (some are
double spreads) and bleeding off the edge of the paper all
around.
As just a sample of the sales talk I quote the following first
paragraphs of the section on cowstalls:
“Most folks have been used to thinking of a cow-stanchion
or cowstall as merely a convenient means of tying the cow.
Of course, that is its first purpose—and a stanchion or a stall
º permits the cow to get loose in the barn loses most of its
Vallie.
“James stalls and stanchions do tie the cows, all right—tie
472 DIRECT-BY-MAIL ADVERTISING
them so they can’t get loose until they are turned loose—but
they are far more than mere mere cow-ties.
“James stalls and stanchions insure comfort for the cow, keep
the stalls and the cows clean,” etc. The things the stalls will
accomplish are enumerated, and then the farmer is shown ex-
actly how they are accomplished—all in the same informal style.
At the end of the section the dimensions, specifications, and
prices are summed up in a few pages conventionally arranged.
The same plan is followed with respect to each line of goods
mentioned. There is a section on barn construction which is
illustrated with an elaborate set of architects’ blueprints, and a
six-page list of the names and addresses of users of James equip-
ment. The company does not forget to play up its own organi-
zation—the size of its factory, its growth, the men back of it, etc.
—but that feature is placed where it belongs, over toward the
back of the book. The book closes with the offer of free advisory
service furnished by the company’s architectural department.
The book as a whole gives the farmer every bit of informa-
tion he needs, down to the prices of parts. But it is far more
than mere information, because it is applied so far as is possible
to the specific needs of each individual reader. It does not
merely describe something which remains detached from his
needs and his experience, leaving him to make the connection
if he feels like it. In brief, when the reader closes the book he
can feel that he has been told how to accomplish something
which he would like to do and which is worth doing.
So much for the example of an expository catalogue for the
non-technical reader; the reader who needs to be informed con-
cerning the use of the goods, and who must be educated to the
value of better equipment. How about the catalogue of goods
which go to users who do not need educating? There are hun-
dreds of concerns who deal in supplies of one kind and another
the use of which is perfectly familiar to every reader. How
can a catalogue addressed to them be made more than a de-
scription and tabulation?
Again itis a question of getting a clear comprehension of exactly
what the catalogue is meant to do, and of arranging the
#%. material so as to accomplish that end. A purchasing
asy * *
... i., agent may have two catalogues before him which fea-
ture exactly parallel lines. He may have no prefer-
ence so far as quality goes, and may be quite willing to buy from
either concern. Other things being equal, he will order every
DIRECT-BY-MAIL ADVERTISING 473
time from the catalogue which makes it easier for him to find
the specifications he wants. He doesn’t want sales arguments,
doesn’t need instructions in the use of the product; but he does
want to save time and energy. He wants to know how to buy
eacactly the right goods with least trouble. So we find that this
sort of catalogue is expository also, only the exposition is in the
arrangement rather than in words.
This brings us to the Crouse-Hinds Company’s catalogue,
which is a specific illustration of what I mean. The company
makes a long line of electrical supplies, such as switch-covers,
lamp-receptacles, etc., which go under the general name of
Condulets. It takes 208 pages, 9x12 inches, to feature the en-
tire line, yet the whole catalogue is practically condensed into
the first 18 pages by means of a pictorial index. This index not
only gives the name and the type letter of each item, but also
a four-color reproduction of it, and refers to the page on which
the complete specifications are to be found.
F. W. Clary, manager of the company’s publicity depart-
ment, says regarding the index:
“The index performs two functions. First, from an illus-
trative standpoint, it condenses the book into eighteen pages,
thereby facilitating the efforts of the individual to choose a
Condulet or Condulet Fitting for a certain requirement when
he does not know whether or not there is a Condulet or Fitting
exactly suited to the requirement. Without the pictorial index
this individual would have to look through each page of the
catalogue. The second function applies to the individual who
knows what a certain Condulet or Fitting looks like, but does
not know its type letter. He runs over the index until he lo-
cates the illustration of the desired type, where he finds the
type letter, and refers to the listing thereof.
“This pictorial index also serves as a regular index to the per-
son who is familiar with the type letter of the Condulet or Con-
dulet Fitting desired. He runs through the reference columns
until he locates the type letter in mind, at which point he is re-
ferred to a certain page or a group of pages.
. “It was expected, and has proved to be the case, that the
colored illustrations would greatly reduce the number of re-
quests for sample Condulets. Furthermore, it has proved to be
of material assistance to the salesmen, in that they do not have
to carry as many samples as before the catalogue was issued.”
Such a feature is expensive, particularly when you reflect
474 DIRECT-BY-MAIL ADVERTISING
that it includes upward of 400 cuts, some of them in two and
three colors. But the company finds that it pays. In its pre-
vious catalogue, issued three or four years ago, the idea was
first tried out, the index occupying five pages printed in
one color. The enlargement of the feature in the company’s
Pºnt catalogue shows pretty well what the company thinks
of it.
The same idea is carried out in the arrangement of the detailed
specifications. Mr. Clary writes:
“The entire catalogue is systematically divided into groups
of listings, which cover individual groups of Condulet Fittings,
which are considered by us and the trade as a family, because
they are designed for a particular purpose, the only difference
being a slight variation in shape or location of hub. You will
note the first page of these family groupings, which is always a
left-hand page, serves as a separation between groups, illus-
trates the various covers or fittings that can be used with the
particular family, and also conveys the idea of interchangea-
bility of these covers and fittings.
“The individual listings are so planned that an illustration
representing all the material covered thereby is blocked in with
each listing, avoiding the possibility of confusion in regard to
the listings on the individual pages.”
It is perfectly evident to anybody that a great deal of ex-
pense and a lot of the hardest kind of detail work could have
been saved by making the catalogue simply a straightout de-
scription of the goods. In that case it probably would contain
somewhere within its covers every single bit of information
which is there now. But would it be as good a catalogue?
Most emphatically it would not. As it is, it is expository, be-
cause it shows the prospect how to find what he wants, even if
he doesn’t know the name of it.
Some catalogues must go out and create a desire for the goods
which are for sale, while others must only show where an ex-
isting desire can be satisfied. They require totally different
treatment, but the success of either variety depends upon some-
thing besides the accuracy with which the goods are described.
That something begins in the mind of the man who writes the
catalogue, and takes definite shape as he studies his problem
from every angle. The success of his work is likely to be in di-
rect proportion to his understanding of exactly what the im-
mediate effect of that work ought to be.
DIRECT-BY-MAIL ADVERTISING 475
(3) KEEPING THE CATALOGUE ALIVE
Another article in this same series carries out somewhat
more fully the idea which is achieved in Mr. Johnson’s previous
article, and shows how some concerns have undertaken to pre-
serve the news value of their catalogues after they have been
put into the hands of their customers:
*If some advertising genius could invent a plan whereby a
catalogue would be placed in the hands of the prospect at the
precise moment when he was ready to buy, said genius would
be fixed for the rest of his life. His only embarrassment would
be the number of concerns which would be trying to outbid one
another for his services. But that particular genius has not
yet appeared, nor is he likely to. So the problem of keeping
the catalogue “alive” in the hands of the prospect is still with us.
It is frequently the case that the man (or the catalogue)
which happens to arrive on the spot at the right time, walks off
with the order, in spite of the fact that most of the preliminary
work may have been done by somebody else. For example,
Hank Rogers of Hay Corners writes in to the A & B Company
for an incubator catalogue. He has a mild attack of the chicken-
raising fever, and would like an incubator—some time. He
reads the catalogue with interest, makes sundry calculations
on the margin with a stub-pencil, and concludes to wait a spell.
At intervals he receives the follow-up, treats it respectfully,
and even comments upon the enterprise of the concern. From
time to time he talks the incubator question over with Mrs.
Hank, and maybe six months or a year later makes up his mind
that he really can afford to invest. Where’s that catalogue?
Never mind; here’s an ad of the C & D Company in the farm
paper. They may have a better proposition. It’s always a
good plan to get more than one offer.
Now according to any theory of abstract justice, A & B should
get the order. That concern was on the ground first, and has
done most of the work of educating Hank to the buying point.
But the order goes to C & D because its catalogue arrives at the
psychological moment when Hank is ready to spend his money.
That is a very simple and homely illustration, but the same
*Printers' Ink, May 27, 1915, p. 84.
476 DIRECT-BY-MAIL ADVERTISING
thing is happening more or less frequently in every line of busi-
ness. It is necessary not only to get the catalogue into the
hands of the prospect, but to keep it “alive” there until he is
ready to buy the goods. He may have put it away ever so care-
fully, but if he has forgotten where he put it, it is as good as dead.
He may write for another one, and he may not—probably not.
And if the competing catalogue shows up just at this opportune
moment the chances are all in favor of its getting the order.
Let’s suppose, however, that the catalogue of the A & B
Company had contained some very practical information on the
feeding of chickens to increase egg-production, which appealed
to Mrs. Hank as something worth trying. She would be more
than likely to keep the catalogue to refer to, and if the informa-
tion was practical enough and vital enough, the book would be
in more or less regular use. That would be an example of the
very simplest method of keeping a catalogue alive—by making
it, in effect, a reference book.
Not every concern can do it, of course, and sometimes it would
be unwise to attempt it. Yet the list of advertisers who have
Informa- done that very, thing, or something closely approxi-
tion. With- mating it, would be a long one. Reference has already
out a String been made in Printers' Ink to such books as the Victor
** Talking Machine Company’s “Book of the Opera,” the
American Radiator Company’s “Ideal Fitter,” the Yale & Towne
Manufacturing Company’s “Locks & Hardware” (primarily
a reference book for architects), and the Burroughs Adding
Machine Company’s “Cost-keeping Short Cuts.” Those are
conspicuous examples of catalogues which are kept alive for
purposes of reference. Almost any good catalogue of technical
products will afford additional illustration in its pages of tabular
matter which engineers refer to. Probably the earliest exam-
ple of the catalogue which keeps itself alive in this way is the
patent-medicine almanac which tells when to plant turnip seed,
when to trim the rose bushes, etc., but the book of cookery re-
ceipts was undoubtedly a pretty close second in point of time.
One thing is to be noticed, however. The catalogue which
keeps itself alive in this way, whether it is the humble cook-
Must Meet book or the impressive treatise on Schools of design in
Need of hardware, gives information which does not require
Man Refore a purchase of the goods before it can be used. Just
** as Mrs. Hank could follow the hypothetical system of
feeding her chickens if she never bought an incubator, so the
DIRECT-BY-MAIL ADVERTISING 477
architect can collect ideas from the Yale & Towne book without
ever specifying Yale hardware in a single instance. The cases
aren’t parallel, and aren’t meant to be. But the principle is
the same. In order to keep a catalogue alive by making it a
book of reference it must give information which has no string
attached to it. It must meet the needs of the prospect as he is,
not as he would be after he bought a bill of goods.
A recent speaker before the Technical Publicity Association,
an architect, singled out for special commendation the Red
Book of the United States Gypsum Company, Chicago. He
declared that the book was not only preserved in the office files,
but that it was referred to whenever the questions of plastering
or fire-proof construction came up. Sometimes the company’s
product is specified, sometimes not, but the book is in requisition
just the same. With regard to that same Red Book, W. H.
Price, of the United States Gypsum Company, says:
“Our line differs materially from most lines in the fact that
the average consumer or builder knows little about construction
or comparative values of materials. So it resolves itself down
practically to architects’ specifications, at least on large build-
ings, as it is only on homes or smaller structures that the actual
owner interests himself to a point where investigations are made
regarding the value of materials entering into the construction.
The architect is perhaps a more difficult prospect than almost
any other line, as he is technically trained and is always “from
Missouri.’ So it is a case of convincing him, and to do this re-
quires both the right kind of advertising and sales efforts.
“In this respect the Red Book has proved a very successful
piece of printed matter. It was sent out to 4,800 architects and
over 50 per cent. acknowledged receipt of it. Perhaps 90 per
cent. of these practically said it was just what they wanted.
Direct information from our various salesmen in all parts of the
country indicates very clearly that the Red Book has been of
material assistance to them in interesting the architects in our
materials. I consider that the strength of the Red Book lies in
the fact that it treats in a semi-technical way the products we
manufacture, developing the points of advantage briefly and not
belaboring the architect with a lot of customary advertising
and sales talk.
“I will say without hesitation that we have been able to make
this little catalogue do considerably more of the work which
formerly was done by the sales force, and I think in his state-
478 DIRECT-BY-MAIL ADVERTISING
ment I voice the sentiments of our entire selling depart-
ment.”
The Red Book mentioned is not a very elaborate affair, when
compared with some of the other catalogues which are meant for
the architect. Yet some of the latter are peacefully slumbering
in his files, or on the bottom shelf of his sectional book-case,
while this little paper-covered, 72-page, 4x6% booklet is very
much alive. It well illustrates the general principle that the
thing which really keeps a catalogue alive isn’t so much what
comes out of the printshop as what went into the copy in the
first place. The Red Book, for all its modest size and incon-
spicuous appearance, is pretty solid “meat,” and must have
taken much longer to write than many a more pretentious
volume. And the thing that keeps it alive is its information
on proper methods of lathing, on the mixing of plaster, on the
placing of metal doors in fire-proof walls, etc., etc. In the back
of the book are several pages of automatic wall-measurement
tables, showing instantly the number of square yards of wall
space in rooms of given dimensions. It does not in any sense
detract from the value of this particular catalogue that it is a
very practical and lucid instruction book for the use of the prod-
ucts it advertises. -
It may look easy enough to keep a catalogue alive in this
rather obvious fashion, but it isn’t. In fact, it is one of the most
difficult things to do, because information which is really authori-
tative, and which the prospect really wants, doesn’t grow in
every encyclopaedia, and can’t be cribbed out of text-books or
competitors' catalogues. In the first place, it is necessary to
find out what kinds of information are wanted—not merely
what the prospect will be mildly interested in if he hasn’t any-
thing else to do at the moment, but what he actually has need for.
Then it is a question of getting that information: locating it,
digging it out, testing it. And lastly, it must be arranged in
such a way that it will be easier to get it out of the catalogue
than to find it anywhere else. The engineer with a slide-rule in
his vest pocket isn’t going to search the back pages of your
catalogue for a table of logarithms. He can get what he wants
more easily than that. And the fact that the tables are in
themselves valuable doesn’t necessarily prove that the cata-
logue will keep itself alive.
But there are other ways of keeping the catalogue in the minds
of prospects, consisting chiefly of reminders apart from the cata-
DIRECT-BY-MAIL ADVERTISHNG 479
logue itself. These may range all the way from form letters
calling attention to the catalogue, or some specific page in it,
to supplemental bulletins issued on the loose-leaf principle.
The latter plan is good—provided the prospect will take the
pains to file the supplemental bulletins with the main body of
the catalogue. If he doesn’t file his bulletins, he is likely to
think his catalogue is incomplete, and may order from some
other source if he happens to be in a hurry.
It may be mentioned right here, though the subject will be
taken up in more detail in later articles, that there is great
Loose leaf diversity of opinion with regard to the loose-leaf sys-
versus tem of issuing catalogues. As a method of keeping
Bound the catalogue alive it has its attractive features as
* well as its drawbacks. The General Electric Com-
pany, for example, has this year issued its first supply catalogue
in loose-leaf form, having hitherto relied upon the system of issu-
ing separate bulletins. J. A. Hills, of the company’s publica-
tion department, says: “This book is a radical departure from
other books gotten out by us. Personally I am open to con-
viction as to whether the loose-section or loose-leaf catalogue
is better than the bound catalogue. In the former the human
factor is involved in keeping it up to date, and in the latter it
becomes out of date quickly.”
On the other hand, the Western Electric Company has gone
back to the bound-book form of supply catalogue. In the hard-
ware field, Yale & Towne cling to the loose-leaf form of dealer
catalogue, while Sargent & Company are faithful to the perma-
nent binding. In short, there is no standard of practice even
among concerns in the same field.
A number of concerns, however, have more or less satisfac-
torily solved the problem of keeping their catalogue alive by a
skilful use of the house-organ as a sort of supplemental cata-
logue. This method seems particularly valuable in cases where
the product is supplied on special order to meet certain working
conditions, or where the catalogue is intended chiefly for “filling
in’’ orders to complete the dealer’s stock. Thus we find this
use of the house-organ as a catalogue supplement in such widely
separated fields as the manufacture of street cars and wire rope,
and the retailing of shoes.
The J. G. Brill Company, of Philadelphia, for example, uses
its Brill Magazine with the avowed purpose of keeping its cata-
logues before the minds of the street-railroad fraternity. Its
480 DIRECT-BY-MAIL ADVERTISING
general catalogues on cars, trucks, and supplies are very com-
plete, and are usually retained in the files of the operating com-
panies. That, however, is not enough. The types of cars used
under different operating conditions vary greatly, and it is to
the company’s interest not merely to be thought of when new
equipment is wanted, but to be thought of as having data on the
precise kind of equipment which is needed. The Brill Maga-
zine furnishes the information which is necessary to that end,
but which cannot be included in the catalogue. Semi-technical
articles are run dealing with traffic conditions and cars in various
cities, what the conditions were which determined the type of
car in use, figures showing operating economies, etc. Usually
there are a few pages devoted to some specialty, such as a signal
gong or fender, for example, which is also featured in the cata-
logue which reposes in the file. The company furnishes a binder
each year in advance, for copies of the magazine, and states that
the binders are quite generally used.
There are numbers of products which are bought only at long
intervals, which last a long time, and which have no external
or visible features which can be used as talking points for supe-
riority. Wire rope is one such commodity. Much depends
upon the way in which it is used, and when a man wants it
he wants it quickly, for a special purpose. So the wire-rope
manufacturer wants his catalogue to be alive and on the job
when the need for the product arises.
But it isn’t feasible to make a very elaborate catalogue for
wire rope, unless one is prepared to write a complete treatise
When the on the various uses of the product. So the average
Catalogue wire-rope catalogue is generally what would be
Isa,Mere called a “mere price-list.” . The Broderick & Bascom
º Rope Company, St. Louis, uses its monthly pub-
lication The Yellow Strand as supplementary to its
catalogue, or price-list, by featuring installations of aerial tram-
ways. It also shows how the product is used in logging-
camps, mines, etc., much of which may be regarded as logical
catalogue material, but which perforce is not included in the
catalogue itself. The idea has been so successful, according to
Charles E. Bascom, that “since we started publishing it, three
other wire-rope manufacturers have taken up the idea with
more or less success.”
It is a far cry from wire rope to shoes, yet we find somewhat the
same proposition in operation in the latter field. The average
DIRECT-BY-MAIL–ADVERTISING 481
shoe-manufacturer's catalogue has a peculiar function to per-
form. As W. G. Dennison, of Rice & Hutchins, Boston, puts it:
“A catalogue in a wholesale shoe business is used by retailers
principally for filling in their stock, and is rarely if ever used on
an initial spring or fall order. Catalogues are therefore made as
simple as possible, and contain only such information regarding
the shoes as is necessary to the retailer’s proper understanding
for the intelligent writing of what is termed sizing orders.”
Indeed, so specific are these catalogues, that the Rice & Hut-
chins concern, which operates nine branch distributing houses,
issues a separate catalogue for each branch. “Each of these
wholesale houses,” says Mr. Dennison, “does business with re-
tailers in surrounding conditions somewhat different from those
of the other eight. These varying conditions make it necessary
for us to publish nine catalogues. There are many points of
similarity, but the selection of shoes is made with special refer-
ence to the kind of trade served.”
From the foregoing it is evident that the shoe catalogue must
be kept alive if the dealer’s stock is to be maintained at the high-
water mark. And the monthly publications of such concerns
as Roberts, Johnson & Rand, Rice & Hutchins, etc., come in
very handily here. It isn’t a question of selling the line to the
dealer—the salesman has attended to that—but it is a problem
of getting him to keep up his stock, and of keeping the cata-
logue alive.
In conclusion, the problem of having the catalogue in the
right place at the right time, and seeing to it that the prospect
knows it is there, is worth considerable study. It is a mistake
to expect a poor book to keep alive, and even the best book needs
following up from time to time. In a certain sense the catalogue
in the hands of a prospect represents an investment, and it is up
to the advertiser to make it pay.
(4) THE CATALOGUE As A CREATOR OF PERSONALITY
Closely connected with the field of direct-by-mail advertising
in supplementing their salesactivities is the fact that providing, as
it does, direct contact between the producer of the catalogue
and the probable purchaser of the goods, the catalogue plays an
important part in establishing the consumer’s idea of the person-
ality of the concern. Robert R. Updegraff, Manager of the
publicity of Daniel Low & Company of Salem, Mass., in an
482 DIRECT-BY-MAIL ADVERTISING
address before the Toronto Convention of the Associated Adver-
tising Clubs of the World, explains some of the methods his
concern has employed in creating an atmosphere of sincerity in
building up their mail-order jewelry business:
*As a mail-order advertiser I am concerned with the atmos-
phere of sincerity, which bears a message to the heart rather
than to the intellect.
To make my idea clearer let me tell you about a certain Y.
M. C. A. located in one of the largest cities of America. This
Y. M. C. A. was built at an expense of hundreds of thousands
of dollars. It is a wonderful building. Its entrance is imposing.
Its parlors are rich. Its stairways are of marble. Its walls
are hung with beautiful pictures. And yet socially it is a
“frost.” In spite of the hardest kind of work on the part of
its secretaries, social life is difficult to foster. This fact was
noted very soon after the building was opened. The officers
set themselves to the task of finding out why. They looked
around at the handsome office, the elegant parlors, the marble
stairways, the luxurious leather furniture, the rich rugs. And
they said: “What is the matter?”
And this was what they finally discovered: There was no
heart to their building. There was no one spot in their whole
big reception floor to which men naturally gravitated—no spot
that drew men for chats and stories. What that Y. M. C. A
needed was a big fireplace or a lounging corner or something to
which a man’s mind would naturally turn on a lonesome evening.
It had plenty of artistic atmosphere, but no soul—nothing for a
man to catch hold of and say, “I like the atmosphere of this
place. It is homey. I feel that I belong here.”
When I first heard of that Y. M. C. A. it came to me like a
beam of light: That is the trouble with so many businesses,
especially those which must depend upon the catalogue as a
salesman. They lack a soul, or, having one, they fail to get it
across to those whose business they are soliciting. These busi-
nesses need fireplaces where friendly little chats may be held,
and where the heart behind the business may be revealed.
It is hard for a business to reveal itself and not lose in the
revelation. The truth of that statement is not realized until
*Printers' Ink, July 2, 1914, p. 67.
DIRECT-BY-MAIL ADVERTISING 483
one tries it. Businesses are like men, for they are merely the
enlarged shadows of men. Men cannot reveal themselves di-
rectly. It would seem egotistical and insincere. It is largely
in his attitude toward life, people, and things that a man reveals
his true nature. Have you never revised your first judgment
of a man when you saw him stoop and pat a dog on the head or
chuck a baby under the chin or pick a flower? It was his atti-
tude toward something else which revealed the true man to you.
It is just so of businesses. It is not so much what they say of
themselves that impresses us; it is their attitude toward their
customers, their employees, their place in the world, their mer-
chandise or manufacture.
Right here comes the difference between true atmosphere
and the usual spirit, or lack of spirit, to be found in much mail-
order literature. One tells you bluntly, almost starkly, of it-
self; the other opens its heart and allows you to observe and
learn for yourself. It is the difference between an illustration
and a picture. An illustration tells its whole story at a glance,
just as many catalogues tell their whole story in the half-tones
and type of which they are built. A picture is something more
subtle; it unfolds itself more gradually. There is a story be-
hind it. In it and around it hovers a spirit—an atmosphere—
which gives it an identity.
The chairman of the program committee has asked me to
tell about what we have done at Daniel Low’s. He thinks our
catalogues are more like pictures than illustrations because there
is a subtle personality to them.
That is what we have tried for. What success we have had in
creating an atmosphere has been due largely to a more or less
unconscious realization that business souls must be revealed
just like the souls of men—indirectly, by showing their attitude
toward things and people.
We started out to make our catalogue intimate without being
impertinent. We wanted people to feel the spirit behind our
business. It takes more than type, half-tones, paper, ink, and
art work to make a catalogue with a soul. It takes, first, last,
and all the time the same quality that we recognize in men as
being necessary—the quality of sincerity.
But even though a business be cradled in sincerity, there yet
remains the task of getting that sincerity across the gap of
mechanical reproduction, and of the mail service, to the cus-
tomer or prospective customer. It is at this point that so many
484 DIRECT-BY-MAIL ADVERTISING
mail-order catalogues fall short. They may have the sincerity,
the soul, but many of them have found no other way to express
it than by telling how sincere they are, which in itself, unless
carefully done, sounds like egotism and even insincerity.
This fact we were confronted with in putting a soul into the
Daniel Low catalogue. We wanted to create such an atmos-
phere that the person who picked up one of our catalogues would
immediately feel the sincerity of the house behind it, and would
halfway expect to meet Mr. Low when the next page was
turned.
I cannot go deeply into the reason-whys and the evolution of
our ideas, but I think if I call attention to a few touches in our
literature one will quickly grasp the thought. We do not claim
to have mastered the art. We are only beginning. Other
houses are working along the same line. Probably the most
notable example is the series of advertisements recently run by
Montgomery Ward & Co., of Chicago.
In our case we decided that it would be a good thing to tell
our customers the story of our business since its beginning. We
felt that if they were acquainted with our past they would have
more confidence in our present and our future. So we devoted
a whole page in our Year Book, a space valued at hundreds of
dollars, to telling the story of Daniel Low, of his beginning in a
little shop in Salem, of his position in the community, of his
attitude toward his neighbors and theirs toward him. It is a
story of sincerity and neighborliness, with little waving of ban-
ners. But it put a touch in the catalogue which made the new-
est reader feel like an old friend of the family.
Soon after this it came to us that we ought to tell our
customers what we were striving to do. We looked back at
what we had been striving for during all the years we had been
in business, and then we looked ahead. We gathered up all of
these strivings and ideals into two brief paragraphs and called
it “Our Aim.”
Last year we issued a booklet of “One Hundred Birthday
Gifts.” We wanted in that book to show how we felt about
birthdays, so we wrote a little introduction which George Gallup
has been complimentary enough to compliment. It is as follows:
THE BIRTHDAY GIFT
Back of all birthdays is the wonderful fact of Birth, Nature's most holy
manifestation. By the same token, back of all gifts is the beautiful spirit of
Giving, the noblest impulse of the heart of man.
DIRECT-BY-MAIL ADVERTISING 485
It is fitting, therefore, that when we employ the art of Giving to commem-
orate an anniversary of the birth of one of our friends or dear ones, that we
select as the token of our friendship or love some gift that will really carry
with it the spirit of Giving and be a complete and lasting symbol of the gen-
erous impulse which prompts its sending.
Let us, then, select our gifts with this in view. Let us raise the standard
of gifts and maintain the dignity of Giving. Let us give gifts that must be
lived up to, gifts that our friends and loved ones can keep as permanent re-
minders of our love and which they will take pride in saying in the coming
months and years: “This was given to me on my birthday.”
This little introduction is really a lay sermon, simple, digni-
fied, sincere. It illustrates what I mean by revealing one
through his attitude toward some outside thing. In this case
it was birthdays. Yet how better could a business house con-
vey an idea of its own ideals and sincerity in 177 words?
Then, one day it came to us that ours was largely a house of
gifts, and we had a desire to let people know how we felt about
giving, even before they opened our catalogue. We wanted a
picture which should symbolize the Spirit of Giving. It must
be a sincere picture. It must be Colonial, and truly so. It
must be a Salem picture. So we went to a Salem artist whose
reputation for Colonial pictures is national, and we told him we
wanted a picture that would tell what we thought of giving.
The result of months of work is a picture which hangs in our
retail store in Salem, and which we have had reproduced in rich
brown shades on our Year Book cover. It represents our atti-
tude toward giving. It is what we would say if we could talk
about ourselves, but, being a picture, it tells it more subtly and
#. greater force. It lends atmosphere to the whole Year
OOK.
And this brings me back to the other kind of atmosphere—
artistic atmosphere. This picture, “The Gift,” is a rare com-
bination of artistic atmosphere and the atmosphere of sincerity.
It is dignified and rich enough for the cover of a jewelry cata-
logue, appealing to a very high class of people, because it is a
picture and not an illustration. And it helps the artistic at-
mosphere of the book and of our business because it is good art
to begin with and it is executed unusually well.
In all of our work we seek first for the atmosphere of sincerity,
which speaks to the heart, and then for the atmosphere of the
intellect. We have only begun to appreciate the possibilities
of this indirect method of creating heart atmosphere, but we are
486 DIRECT-BY-MAIL ADVERTISING
going to grope on, for we believe it will operate on hidden springs
of human nature that will bring many people to us as friends
and customers. -
(5) SOME SUGGESTIONS FOR CATALOGUE CONSTRUCTION
The series of articles by Mr. Johnson before referred to con-
tains some valuable suggestions about how to use market data
in the construction of a catalogue.* These articles are valuable
not only for what they actually contain, but for the suggestions
which any one with imagination can get out of them for meth-
ods of cutting down waste in selling operations.
A somewhat more complicated type of catalogue problem is
that worked out by the Plymouth Fur Company, which found
difficulty in making its style book represent its entire line, and
Mr. Johnson describes the method which they employed in over-
coming this difficulty. Its chief value lies in the fact that it
suggests how almost any manufacturer may profit by enlisting
the customers on his side rather than attempting to tell all his
story himself.
iThe manufacturer of goods which are subject to changes
of fashion, such as men’s and women’s clothing, hats, shoes, and
to a lesser degree jewelry and toilet articles, has a peculiar cata-
logue problem of his own. It is comparatively easy for the
manufacturer of goods which remain the same from year to year
to pick out certain representative items for illustration, or even
to illustrate the whole line. His catalogue will usually serve
as well a year hence as it does to-day, and if it does not prove as
efficient as was expected, no great harm is done, for the goods
will “keep.”
Not so with the manufacturer of fashionable goods, however.
The goods must be sold while they are in style, and the cata-
logue must do its work this season, for next year it is likely to
be hopelessly out of date. Furthermore, the problem of what
to illustrate is troublesome. He may make forty styles of gar-
*Printers' Ink, June, 18, 1914, p. 63, and July 9, 1914, p. 72.
thºrinters' Ink, August 6, 1914, p. 22.
DIRECT-BY-MAIL ADVERTISING 487
ments, let us say. Well and good; he can illustrate forty. But
each garment is made up in different materials, appealing to the
tastes of different customers. Which shall he choose for repre-
sentation in his catalogue? . . .
A catalogue of fur garments—and the same is true of any
catalogue featuring fashionable goods—must do two things:
first, it must adequately represent the line, and second, it must
sell the goods while they are in style. For six years the com-
pany issued catalogues in the familiar “style book” form, illus-
trating a dozen or so of the “leaders” in the most popular furs,
and stating that certain of these garments could be furnished in
any fur desired. “We discovered, however,” says Mr. Bard,
“that the imagination of women did not stretch to any fur except
those that were actually illustrated. You can readily see that
it would be almost impossible to show each style in every pos-
sible fur, because it would mean an enormous increase of stock
on hand without any definite benefit. This matter of keeping
down stock has been one of the most difficult we have had to
face.”
So last year, as Mr. Bard told at Toronto, the company dis-
continued the use of the style books, and substituted for them a
series of photographs showing the goods as actually
*...* worn. It was not only possible to show a wider
Trouble e tº
#. variety of styles than could be shown in the style book,
but when a customerexpressed a preferencefor a certain
kind of fur, on a certain style of garment, the company could
send her an assortment of photographs which would almost
exactly fit her requirements. But here again the old trouble
developed. “In making up my list of photographs,” says Mr.
Bard, “I selected the model in a fur which, to me, looked the
best and would give the best results in the illustration. I would,
for instance, illustrate a model in mink, and then when a cus-
tomer wrote in for ermine models we would include this one
model illustrated in mink, but which would look equally well in
ermine. Our experience was, however, that the customer could
not, or at least would not, decide on models which were not
illustrated in the exact fur she was considering. The chances
were about ten to one that she would decide on a model which
was illustrated in ermine, if she were considering that fur.”
In other words, the company still found it difficult to give the
impression of the complete range both of styles and materials.
If a customer wanted an ermine garment, she would consider
488 DIRECT-BY-MAIL ADVERTISING
none but those actually illustrated in that fur. If she wanted
a particular style of garment, it was hard to make her under-
stand that it could be had in any other fur than that actually
illustrated. So a good many sales were lost which really be-
longed to the company, because the customer did not realize
that she could be satisfied with the assortment offered.
But the company has discovered that although the customer
will not decide upon an ermine model from looking at an illus-
tration of the same model in mink, she will decide from a rough
pencil sketch of the model which does not show any fur texture
whatever! That discovery was originally made in the com-
pany’s retail store, where buyers were met face to face. Much
the same trouble was encountered, until the expedient was
adopted of making a canvas model of each style which could be
displayed when the company had no stock of the goods in the
exact fur which the customer happened to want. The customer
who wanted ermine would not decide upon looking at a set
which happened to be made up in mink, but she would decide
from the canvas model which bore no resemblance to fur at all.
“For some perfectly mysterious reason,” says Mr. Bard, “the
canvas model or the black and white sketch is more convincing.
I have thought a great deal over the matter, and have come to
the conclusion that the reason is in the fact that the customer's
mind is not distracted by a different kind of fur which she must
eliminate while she is considering the style.”
So the company is able to supplement its photographs with
rough sketches which, it is asserted, make many sales which
would otherwise be impossible. Perhaps there is a suggestion
here for manufacturers in other lines who find that an undue
proportion of sales are credited to those goods which are actually
illustrated, and that sales are being lost because customers can-
not appreciate from a single illustration that the goods are made
up in a wide range of materials.
Mr. Bard lays great emphasis upon the importance of first-
hand study of the market. He not only makes it a point to
study the attitude of the customers who come into the com-
pany’s store, but he keeps in touch with former mail-order cus-
tomers, writing to them from time to time for opinions as to the
best policy for the company to follow.
For example, he wrote to about a thousand customers who
had been sold through the style books, and asked them what
they thought about the new plan of using the collection of photo-
DIRECT-BY-MAIL ADVERTISING 489
graphs in place of the books. “We were very much gratified,”
he says, “to receive from these customers a large number of
letters in which they say that the photographs are a big improve-
ment.” So the same plan will be followed next year.
The value of ability to assume the viewpoint of the recipient
of the direct-mail matter is well brought out by an article signed
“by an architect” which tells how he looks upon some of the
direct-mail material he has been receiving:
*I manage an architect’s office. One of my duties is to open
the mail. I am not the office boy, or the stenographer, but a
man with technical training and practical experience, so I can
attend to most of the letters myself. It is the rule in most
architects’ and builders’ offices of any size to have some such man
to handle the routine of the business, leaving the employer free
to handle the clients and supervise the designing or construc-
tion in a broader sense.
After I have read and answered the letters, which come within
my duties, and there are few which do not, I put them, together
with copies of my answers to them, on my employer’s desk for
him to read. I separate the mail on his desk in two piles: one
containing business letters, the other advertising matter. It
is of the advertising matter that I wish to speak.
First come those letters marked “Personal,” but which are
a crude device to attract attention. A sort of sixth sense tells
me whether to open them or not. I am a little quick tempered,
and perhaps several worthy firms have had their literature con-
signed to the waste-basket for lying to me, or rather to my em-
ployer.
What gets on my employer’s desk must be about something
new in the building line; some definite information about an
article or process. He is a busy man, my employer, and he can-
not waste time reading that the “American Seal Cement Coat-
ings” will protect concrete and cement surfaces from disinte-
gration; a property that this material shares in common with
all other cement coatings. The advertisement is about 10%."
by 16%", nicely printed and arranged, but what does it tell me?
It does not mention price, color, method of application, or any
*Printers' Ink, September 24, 1914, p. 49.
490 DIRECT-BY-MAIL ADVERTISING
other useful thing, so far as I am concerned, except the fact
above mentioned; it prevents disintegration and, therefore,
makes cement waterproof. I found this in a waste-basket,
where I put it a while ago, doing duty as a double bottom, and
very well, too.
Here is one that is worth while. It is the booklet lately
issued by the American Sheet & Tin Plate Company, explaining
the effect of copper upon steel, for roofing tin. The cover ap-
pealed to me at first. The absence of a firm name on it, if
nothing else, impelled me to look into the book to see who is-
sued it. Indolent curiosity is one of the strong points in my
makeup.
Whoever wrote that booklet started right in by telling the
real objection to tin roofs at the present day, their lack of dura-
bility. The tendency to get full of holes which most American-
made tin roofs have is almost beyond belief, and this booklet
gave the real reason in a few words, all on the first page. I
turned the page over and kept on reading until I had finished the
book. It started with the truth, which I already knew, gave
me useful information, told of the experiments with the new
material, called “C. B. Open Hearth,” showed photographs of
tests with other materials under the same conditions, tabulated
the results of the tests, gave the time-honored arguments in
favor of tin, and especially “C. B. Open Hearth,” as a roofing
material, and, best of all, gave specifications for the use of the
new plates and data on costs and roof loads. This went on the
desk with a special note, and the next tin roof order from this
office was American Sheet & Tin Plate Company’s “C. B. Open
Hearth.”
Blotters seem to have gone out of style. I always save those
which blot with both sides, but the others are thrown away.
If a bottle of ink spills on a drawing, I can’t stop to see if a blot-
ter is one-sided or not. There is a good side to everything, and
a blotter should have two.
Manufacturers who send stamped, self-addressed envelopes
to us are taking a long chance. If the matter interests me
enough to make me think it worth my employer’s attention, he
will probably have me write for more information; if not, the
stamp goes into the reserve supply for the office boy to soak off
in his leisure moments. We do not feel under obligations to
answer an advertisement for two cents—or two dollars—and as
a rule, if my employer really wishes information from a manu-
DIRECT-BY-MAIL ADVERTISING 491
facturer, he is willing to spend his own money for the
Stamp.
We don’t like to have a manufacturer tell us “For the sake of
your reputation, you should specify Flubolub's Floor Finish.”
How thoughtful Fluboub is; how solicitous! But here comes
Bildad’s literature, giving the same advice, which no sane manu-
facturer would dare tell an architect personally. Certainly, we
want our reputation unblemished, we want our work to live
after we have gone, but we don’t want every Flubjub and Bil-
dad giving us advice about it. An architect’s reputation is a
sacred thing to him, and an advertiser should take his shoes off
and leave them at the door before he approaches the shrine.
The American Rolling Mill Company probably spent quite a
bit of money in telling architects that “Ridge rolls, conductor
pipes, eaves, troughs, metal lath, and window frames made of
quickly rusting, soon-to-be-replaced, mild steel sheets never
added one iota to any architect’s good name—never led one single
person to pick out some one architect. Quite the contrary.”
I am glad to know that “American Ingot iron will do it—has
done it—is doing it,” but what good does it do me or my em-
ployer? The company makes good stuff; we all know that, but
life, in this business at least, is too crowded to have to read un-
necessary advice. The company asks that a postcard, which is
enclosed, be sent it for further information. If I sent all the
post cards of this kind that I was asked to, the office would be
flooded with salesmen, not to mention the time it would take
to fill out a card for an article in which I am not deeply inter-
ested at present, however good it may be.
In this office “follow-up’’ letters, as I believe advertising
men call them, are practically useless. We are glad to hear about
the good points of any product, but letters about these products,
which say the same things as the catalogues we have on file, are
works of supererogation, and are as commonly saved as the big
word is used. If literature is worth filing, by that I do not mean
burying, but setting aside for easy reference, the articles it ad-
vertises are worth using. If they are adapted to the purpose
and appeal to us, they will be used.
An architect cannot create jobs, on which to specify materials,
no matter how good they are; the best he can do in most cases
is to file the literature. Then when the job comes along the
material in the file on the particular subject in question will be
brought, in my own case, to my employer and me. We will
492 DIRECT-BY-MAIL ADVERTISING
look through it for catalogues or descriptions of the article which
meet our requirements. We may find a form letter mentioning
in a general way just about the thing we want, but there is
nothing definite in it, nothing by which we can specify the arti-
cle. “Write us for further information,” and there isn’t time
to write. Our loss, of course, but the other man's, too, for we
specify what some clear-sighted manufacturer has thoughtfully
described for us in tabloid form.
The presence in our files of clear, concise literature with
drawings, prices, methods of application, advantages, and a
scarcity of superfluous selling talk is a most efficient salesman.
When we ask a company to send a representative to talk to us,
we expect him to be well informed, responsible, and able to talk
business. How much advertising literature is able to talk
business? It’s all right to make a literary social call, to say
“How do y’do?” but could the caller close a sale if the need
arose?
A while ago a letter came which made me mad. I wish I had
saved it now, so that I could quote from it literally. If a sales-
man, a total stranger to you, should come into your office and
say to you in a jovial manner “Hello there, Bill, you darned old
fool!” he would probably get your undivided attention, and be
lucky if that was all he got. This letter started out, as nearly
as I can remember, with the words “All architects are fools.
There, I guess that made you sit up, didn’t it?” and then it went
on to talk about the product it was advertising. The rest of
the letter was about as useful as the average form letter, but I
thought the first line would interest my employer, so I put the
letter on his desk. “Say,” he said, after reading the opening
sentence, “this fellow is pretty fresh, isn’t he?” and he tore the
letter up without reading the rest of it. I think he was kind of
fresh myself.
Dignity is a valuable asset, not rhetorical dignity, but the
dignity of truth, undecorated and stated without undue em-
phasis. There are so many articles that are perfect, most effi-
cient, the best made, that I sometimes long for an article which
its manufacturers will admit is not beyond compare. Take
ventilators, for instance; the Royal ventilator is guaranteed to
exhaust more air per minute than any other ventilator. The
makers produce a test to prove it. The Kernohen ventilator
will exhaust, so the literature says, 100 to 300 per cent. more air
than any other ventilator, and its makers produce a test to prove
DIRECT-BY-MAIL ADVERTISING 493
it. If the ventilators could remove the hot air from each other’s
literature, or even from their own, their efficiency would be re-
markable. All of which has something to do with the first sen-
tence in this paragraph.
If companies insist on sending us reminders of the fact that
they are in business, I wish they would print them on the backs
of half-tone cuts of recently erected buildings. Illustrations
are always welcome in the office, if they are clear photographs,
taken from a good position. We always save them for future
reference, and no matter how often the catalogue file is cleaned
of old literature, the picture file is undisturbed. I have known
advertising on a picture ten years old to get in its good work
when the picture was being used. -
Advertisers should remember that my curiosity is really pas-
sive rather than active; that they have to show me before I will
show my employer; that, although the burden of proof lies with
the advertiser, he need not prove his point several times, in
divers letters and pamphlets, after he has once given me the
complete information.
I want all the information the manufacturer can give me that
will assist in comparing his product with others of the same kind,
and enough to specify his goods intelligently, without having
to write to him for details, which should have been at hand; but
that is all. Let him write his “follow-up” letters and litera-
ture by means of advertisements in some good architectural
publication, and he will save money and gain in sales, so far as
our office is concerned.
CHAPTER XIII
TRADEMARKS AND BRANDS
y | WRADEMARKS derive their value from the opinion the
public has of the goods on which they are placed.
The American Tobacco Company enters its brands,
trademarks, good will, and patents among its assets at a valua-
tion of $54,000,000, and other successful advertisers put a high
value on these “commercial by-products” which are so im-
portant a part of their reputation with the public. A recent
report of the National Biscuit Company says: “While plants
inevitably depreciate, trademarks, trade names, and trade dress
of packages, when sustained by quality and service, must
inevitably increase in value.” And the most important clause
in this statement is “when sustained by quality and service.”
A trademarked product is like a marked man, it may be easily
avoided if the public disapproves of it, and no amount of
artificial stimulation of demand will alter this for long at a
time. . .
The Quoin Club, which is made up of periodical publishers,
has recently begun a series of advertisements to the consumer
calling attention to some of the ways in which the purchase of
merchandise identified by trademark or otherwise may be used
by the consumer to his own advantage. This campaign had
the following chief points:
*A series of advertisements has been prepared which began
to appear in the May periodicals. Seven advertisements are
now ready. They will be printed as a series by each publica-
tion, but the entire series will be printed each month in
*Advertising and Selling, May, 1915, p. 24.
494
TRADEMARKS AND BRANDS 495
various periodicals. They will be set in one general style of
type and border and each advertisement will feature at its
top a familiar trademark (different trademarks in the various
publications), although no reference will be made to any par-
ticular trademark in the copy, the idea being to play up the
“reason why” of trademarks as a whole. The general drift
of the argument will be shown by these parts of para-
graphs:
“The manufacturer who brands his goods and advertises
them nationally is so sure of their quality that he is willing to
stand the full force of possible complaints.
“It induces manufacturers of similar trademarked goods
to compete in quality and service, as that is the only way
§ can win—by making their trademark stand for some-
thing.
“A great factor in the cost of goods is the time it takes to
move them. Advertising and trademarks, working together,
are the most efficient movers of goods—consequently the great-
est reducers of selling cost.
“There can be no monopoly in advertising, therefore to-day
One manufacturer stands as good a chance as another to win
favor for his trademark, so long as he backs up his advertising
and his trademark with quality. And the trademark makes
the consumer the deciding factor in all purchases, because it
enables him to identify the goods.
“The trademark makes it as easy to avoid the unsatisfactory
as to repurchase the satisfactory. Therefore, the presumption
of excellence is always in favor of the trademarked, nationally
advertised goods as against the unbranded article of uncertain
Origin.
“The purpose of national advertising is to make widely
known the names and trademarks of goods upon which the
manufacturer places this stamp of his responsibility—this sign
of his willingness to be judged by the quality of his goods. The
trademark identifies the goods—advertising makes them known.
The two things work together automatically for higher standards
of quality.
“It is safer and cheaper to buy the well-known advertised
article put up by the manufacturer with his name and trademark
on the package. Safer, because the manufacturer who puts
his name on his goods puts his future into your hands. He
must put quality into his goods or lose your trade, because you
496 TRADEMARKS AND BRANDS
can always identify his goods. Cheaper, because advertising
reduces the producing and selling costs of manufacturers by
enormously increasing their output.”
Each advertisement closes with this paragraph:
“Trademarks and national advertising are the two greatest
public servants in business to-day. Their whole tendency is
to raise qualities and standardize them, while reducing prices
and stabilizing them.”
There is material available for a consideration of many
aspects of the trademark. The principles underlying the se-
lection of a trademark have been discussed with some detail
and there have been numerous articles describing the technique
of trademark registry and protection. The limits of space,
however, oblige us to leave these points out of consideration
and to confine our attention to the developments of the past
year in the trademark field which have to do with the establish-
ment of this device as a factor in the development of modern
methods of selling merchandise. These points we shall con-
sider in two main groups: (1) The trademark and the consumer,
(2) Some of the problems of competition between trademarks
and private brands.
(1) TRADEMARKS AND THE CONSUMER
In Chapter I we referred to the circular of the Mayor’s
Committee in New York against package goods. This was a
direct attack on package goods, and through it on trademarks,
advertising, and the whole process by which merchandise is
identified for the guidance of the consumer. We have examined
some of the elements of the process of selling goods by advertis-
ing, and we have examined some of the problems connected
with advertising to which the leaders in this modern method
of selling are addressing themselves. We are now in a
position, therefore, to understand something of the point of
view of some of those friends of trademarked goods who
undertook to reply to the Mayor’s Committee. The follow-
TRADEMARES AND BRANDS 497
ing are selected from a number collected by Printers' Ink at
the time:
THE PACKAGE SYSTEM TOO WELL ESTABLISHED TO BE
OVERTHROWN
(By Norah Johnson Barbour, Johnson Educator Food Company,
Boston):
*The subject of package goods has been much discussed, and
the fact that they do cost more is no secret to any one, and no
manufacturer for one instant pretends to say that he can
produce package goods for less money than he can produce
bulk goods.
The circular which New York City’s official Committee on
Food Supply has distributed through the schools, advising
heads of families to purchase goods in bulk, may have its effect
on some people. But the custom of furnishing the consumer
manufactured products in a clean and sanitary condition is one
of advancement, and all the circulars in creation are not going
to overthrow this well-established system of conveying manu-
factured goods to the housewife.
In reply to that first statement, that the package looks pretty
and appeals to the eye, I would say that this is no doubt true.
I cannot agree, however, that it makes the food seem more
appetizing, except as it assures the purchaser that the contents
have not been subject to the contamination of the atmosphere
of the grocery store.
In regard to the second statement, I am sure that for sanitary
reasons an air-tight and dust-proof package is appreciated by
thinking people, and they are willing to pay a little more.
Personally I have never found in the open market cereal products
in bulk that were the same quality as those which I have pur-
chased in packages.
The plan of buying cereals in bulk and cooking them in a
fireless cooker is all right for a certain class of people, but there
is a class of people who cannot afford a fireless cooker. A larger
majority of the people who can afford a fireless cooker are will-
ing to pay the fractional increase on the cost of their product in
order to get it clean and sanitary.
In regard to the cracker question, this is, of course, exceed-
*Printers' Ink, February 4, 1915, p. 12.
498 TRADEMARKS AND BRANDS
ingly interesting to us. In our own enterprise we offer the
customer goods in packages or in bulk. There is much saving
in package goods because there is nothing broken. Crackers
packed directly from the oven are all selected. You pay for
nothing but perfect goods in perfect condition.
Reference is made to ginger-snaps. What kind of ginger-snaps
can be bought loose for ten cents? What class of people are
interested in them? The people who are interested in ginger-
Snaps at 10 cents a pound have been buying them in bulk ever
since ginger-snaps were placed on the market. All the large
dealers put out these goods in boxes with glass covers.
The bacon situation is one that is intensely interesting. Per-
sonally I use the most extravagant kind of bacon because I can-
not find anything to compare with it in bulk. The method of
slicing bacon is such as to bring the product to you in perfect
condition and there is absolutely no waste.
Bulk macaroni is always fly-specked and dirty. I never saw
any that was clean. As for the comparison of canned fruit and
dried fruit, there is no comparison. We will all
ºliº admit that the dried peach and the dried apricot are
"...:"... good, but they do not take the place of the canned
sideration fruit. The same is true of peas and beans. Almost
every household uses peas and beans of the dried
variety for purées, but they do not take the place of the canned
vegetables.
As to the famous Boston baked beans, which are so well
known in New England, the price set by Mayor Mitchel’s
commission for baked beans sufficient for eight people is very
low. I belong to a good New England family, and we cannot
produce the raw material for a good pot of baked beans for less
than 28 cents. Then there is the scientific handling, the fuel,
and energy. It requires a whole day’s attention to produce a
good pot of New England baked beans. I am afraid Mir.
Perkins himself would not be satisfied with the results of 15
cents’ worth of raw materials to serve eight people.
I do not agree with him that it will pay us to “break ourselve-
of the package habit.” I will agree that some things can be
bought both in packages and in bulk of the same quality, and by
careful thought on the part of the housewife living expense may
ine materially cut down, but it will never be done I am quite
Sure, by giving up absolutely all package goods.
A large majority of the mothers who will be at all stirred by
TRADEMARKS AND BRANDS 499
this circular are already using the dusty and specked foods
which are purchased in the ordinary New York grocery store in
bulk. The thinking public knows that if they purchase a pound
of bulk goods it has been handled at least by the man in the
store, and I am sure you will agree with me that in those shops
in New York where bulk goods are sold so extensively, more
than one hand touches the food before it is put into the paper
bag for the consumer.
In regard to dealers watching all the time to find out what
the public wants, they do this as far as they can and make the
most profit for themselves. The progressive grocer of to-day
has adopted the package system, as it is a great saving of labor
to him and he can handle much larger amounts in the same
space. He does not want to go back to the bulk custom, and,
if he did, all creation would not follow him.
A pound of crackers in a paper bag, in my opinion, is not a
desirable article of food to go into any household. Tin is the
ideal container, and, as we know, tin is expensive as compared
with pasteboard or paper, but we do get something for that
expenditure. There is no question about it. . . .
IDENTIFICATION IMPORTANT IF CONSUMER IS TO SECURE
GOOD QUALITY
(By Barnest Elmo Calkins, of Calkins & Holden, New York).
[EDITORIAL NoTE.—The following letter was addressed to George W. Perkins,
*Chairman of Mayor Mitchel’s Food Supply Committee.]
I appreciate the efforts of your committee to reduce the cost
of living to the people of this city, and I feel that there is a great
deal of merit in the suggestions of this circular.
It seems only right to me, however, to point out that the
primary idea of putting food in packages was not to make a
larger profit on them, nor was it entirely, although partly, to
protect the food from contamination. A very large factor in
this matter is the identification of the foods, and this identifica-
tion is very important if the purchaser of food is to obtain good
food for his money.
To illustrate my point I will pick out one item which you
mention, as I happen to know a good deal about it. That item
is vinegar.
You must know that there are a great many grades of vinegar
500 TRADEMARKS AND BRANDS
made, and that the cheaper grades are inconceivably bad.
Bulk vinegar (I am speaking now of cider vinegar) is made
almost altogether from spent apples—that is, apples which have
been pressed originally to produce cider. The fragments are
again pressed and the product made into vinegar—not by the
slow process of aging and mellowing, but by adding various
chemicals and acids (frequently wood alcohol) to hasten the
souring of the vinegar. This vinegar in bulk is drawn from the
barrel into containers brought by the customers, or into empty
whisky bottles, and sold. It is a raw, sour, unpleasant liquid
and bears no more resemblance to real, pure vinegar, properly
aged and mellowed, than a whisky fresh from the still bears to a
whisky ripened for ten years in wood.
A manufacturer who makes a cider vinegar from the first
pressing of the apples, who matures it in wood from twelve to
eighteen months and does everything to enhance his product
and make it an appetizing and wholesome thing, finds when he
sells this vinegar in bulk—that is, by the barrel—that the
dealer takes the empty barrel, fills it with an inferior and much
cheaper article, and sells it under the name of the manufacturer
of the good article.
This happens in every line of food manufactured. Only by
selling the vinegar and other articles in containers which are
filled at the factory and which go sealed and intact to the con-
sumer can this be prevented. .
The reason that such vinegar costs more than the bulk
vinegar is not entirely due to the package, although, of course,
the cost of the package must be considered, but it is more largely
due to the fact that it is a much better vinegar and is the only
vinegar fit for human consumption.
HOME PREPARATION CANNOT EQUAL FACTORY PROCESSES
(By Truman A. DeWeese, Director of Publicity, the Shredded Wheat
& Company, Niagara Falls, N. Y.):
To attempt to prejudice the consuming public against package
foods through the medium of the public schools is certainly
going beyond the legitimate prerogatives of city government.
The right of Mayor Mitchel’s Committee on Food Supplies to
injure or destroy any legitimate industry through the medium
of public schools is certainly open to question. Package foods
TRADEMARKS AND BRANDS 501
represent a long stride in the direction of pure food and away
from the unsanitary methods of other days. A food that is
packed in sealed, germ-proof packages is certainly cleaner, purer,
and freer from dirt and the ordinary contamination incident to
transit than the old style of bulk foods which were sold from
barrels and boxes, which were frequently infested by mice, and
in which the store cat quite often reposed at night.
So much for the package feature which secures cleanliness
and purity and sanitation. Now, as to the process of manu-
facture. It is not what we eat, but what we digest, that
nourishes the human body. The digestibility of a food product
depends largely upon the process of manufacture and how it is
prepared for the human stomach. It is easy enough to tell the
housewife that she can prepare cereals in her own home just
as well as they can be prepared in a factory. The absurdity
of this statement, however, will be quickly apparent to men
who have any knowledge of the manufacturing business and
who know something about the equipment that is required to pre-
pare a cereal food in digestible form. It is not possible to equip
the average kitchen with the appurtenances that will enable a
housewife to prepare cereals in a sanitary and digestible form.
So far as our product is concerned, the circular does not
touch us at any point. It is not possible to make Shredded
Wheat Biscuit in any home. The virtue of our product is in
the process, which consists of steam-cooking, shredding, and
baking the whole wheat under conditions of perfect sanitation
and cleanliness which do not obtain in the average kitchen. We
claim that through this process the whole wheat grain, with all
the rich, body-building material which it contains, is more
thoroughly digestible in the human stomach and that every
particle of the grain is converted into healthy tissue, bone, and
brain. Two of these biscuits with a little hot milk make a
complete, perfect meal, supplying all the strength-giving ma-
terial that is needed for a half-day’s work or study, at a total
cost of not over three or four cents. Being ready-cooked and
ready to serve, the housewife wastes no time and no fuel in
their preparation and is not required to invest in the machinery
which makes this process possible.
Of course, the movement to educate poor people on the food
value of cooked cereals, vegetables, and fruits is a laudable one,
and deserves encouragement and support. Instead of educating
the public away from package goods, however, I think the time
502 TRADEMARKS AND BRANDS
is coming when the public demand for cleanliness and purity
will result in the enactment of laws forbidding the sale of such
foods as cereals, crackers, peas, and beans in bulk. The sale of
such foods in bulk with all the dirt, disease germs, and foreign
material which they contain is fraught with grave danger to
the public health.
PUBLIC WILL NOT GO BACK TO OLD-TIME HABITS
(From B. Fischer & Co., Importers of Tea, Coffee, Spice, Rice,
New York):
We thank you for calling our attention to this circular, and,
of course, we are not in accord with Mr. Perkins’ or the com-
mittee’s theory of the package-food situation. We, further-
more, do not believe that the public, unless a tremendous
amount of pressure is brought to bear upon them, will go back
to the old-time way of demanding foods in bulk in place of
packages, and for that reason we do not think it is going to
interfere with the sale of our goods.
Take, for instance, coffee. It is a recognized fact that in
order to preserve the true flavor and freshness of coffee it should
be packed in a hermetically sealed can. Of course, there is no
denying the fact that an ordinary bulk coffee can be bought at
lower prices, and this is a condition, we think, that will always
exist.
In regard to rice, our goods, which are automatically packed,
cost so little more for the covering that we honestly believe the
public get a better rice, put up more attractively and con-
veniently, at the same price they would pay for an inferior
article. However, there are many different grades of rice, and,
while the retailer gets 10 cents per pound for Hotel Astor Rice,
consumers will always be in a position to buy some sort of
rice at 4 cents, 5 cents, or 8 cents per pound.
Some of the statements made on this circular are rather
exaggerated; for instance, tapioca. “A package of tapioca con-
tains twelve ounces and costs 10 cents.” They have been too
general in this respect, because we put out thousands of one-
pound packages, and thus enable the retailer to deliver the
, consumer sixteen ounces.
We can realize that the committee is naturally going to try
to help the public reduce the cost of living in certain respects,
and we must admit that certain kinds of foods can always be
TRADEMARKS AND BRANDS 503.
bought cheaper in bulk than in packages, therefore we cannot
hope to entirely eliminate competition of this sort.
SACRIFICING THE QUALITY OF TEA TO SAVE 20 CENTS A YEAR
(By W. A. W. Melville, Vice-President, Ridgways, Inc., New York):
The suggestion that the best quality of tea can be regularly
sold by the grocery trade at 40 cents per pound is too absurd
to receive serious consideration. The whole economic law of
supply and demand has been cast to the winds, and a sugges-
tion that will save the average individual about 20 cents a year
is seized upon to help reduce the cost of living. It means
sacrificing clean, pure tea, the quality of which is absolutely
assured in the package, for bulk tea the quality of which cannot
be assured at the next purchase, unless the grocer has a full
knowledge of blending; not to speak of the impaired strength
and damage to the bulk tea through contamination with Sur-
rounding odors.
The public have appreciated the necessity of the package to
provide them continuously with tea of the same quality. The
intentions of the committee are undoubtedly of the best, but
when four cups of tea cost only one cent, the committee could
better afford to show the public how much more money they
could save by drinking the least expensive beverage—tea—in the
place of other beverages. It would amount to many times the
20 cents a year represented by the present suggestion.
We do not consider that the circular will have any effect on
the sale of tea in packages.
COMMITTEE’s STATEMENTS EVIDENCE OF INSUFFICIENT
INVESTIGATION
(By E. Biardot, President, The Franco-American Food Company):
I have read with great astonishment the contents of the
circular issued by the Committee on Food Supply of New York
City, and signed by George W. Perkins, chairman.
My astonishment is caused by the seeming total ignorance on
the part of Mr. Perkins of the stock of bulk goods and the usual
state of that stock in the grocery store in which the people, for
whom the circular is evidently intended, do their purchasing.
How a citizen of New York can make the statement that
“As a matter of fact, it is possible for your grocer to keep on
504 TRADEMARKS AND BRANDS
hand, in bulk, exactly the same foods as the packages contain,
and it is also possible for him to keep them in bulk in a per-
fectly sanitary manner, so that dust and dirt cannot reach
them,” passes my comprehension.
It is to be noticed that the statement above is based on a
possibility and not on the actual state of things.
No doubt bulk goods can be bought cheaper (in most cases
they are of inferior quality), but when we see canned peaches
compared to evaporated peaches, canned apricots compared to
dry apricots, canned peas compared to dry peas, I wonder
how a campaign against package goods can be based on such
assertions. -
Do Mr. Perkins and his committee know how canned fruit
and canned vegetables are prepared in the average reputable
preserving factory? Do they know how bulk dried fruits are
carried and kept? They evidently do not.
I do not mean to say that dried beans, dried peas, or dried
fruit cannot be advantageously used for certain purposes, but
comparing them with vegetables and fruit which are cooked
and preserved when fresh seems to me preposterous.
When the advocates of bulk goods make the assertion that
bulk crackers can be compared with crackers put up in tin or
cartons, they evidently have not studied the subject from the
point of view of taste and flavor—let alone the question of
sanitary reasons which cannot be denied—and they have surely
not looked into the stock in the stores of a number of average
quality grocers.
You ask if such a campaign is apt to injure our trade and I
answer that, inasmuch as you cannot buy soup in bulk (at least
I know of none which is sold that way and would be fit to eat),
such a circular as the one I have read will not affect our sales.
That is why I am at liberty to discuss openly the points men-
tioned above, without being accused of partiality.
ADVERTISING DOES NOT ADD TO COST OF PACKAGE GOODS
(By N. Musher, President, the Pompeian Company [Olive Oil],
Baltimore):
[EDITORIAL NOTE.-The following letter was sent to the Mayor’s Commit-
tee, and published in the New York Journal of Commerce.]
When foods are sold in bulk the retailer who sells the goods
to the consumer is the only one back of them. He is the only
TRADEMARKS AND BRANDS 505
one the consumer can look to for correct weight or measure,
absolute purity, good quality, and fair price.
There are about 250,000 retailers in the United States, and
each must be responsible to his customers for the quantity,
quality, purity, and price of every commodity, while the city,
State, and Federal authorities will have to retain the services of
thousands of inspectors to watch the sanitary conditions, the
exactness of weights and measures, the purity and quality of
the products sold, and last, but not least, as to the price in each
Store.
Is it to be left to these retailers to buy what suits each best
and sell it in bulk to the purchasing public, with no guarantee
that what they sell is the best that can be had for the money?
If your committee will purchase in the open market standard
foods that bear the name of the manufacturer or packer, and
compare them with goods packed under the distributor’s private
label, you will find a marked difference. This will show you
that it is of the utmost importance to purchase only goods that
bear the packer's name. Regardless of the standing of the
merchant under whose name these goods are packed, the packer
always puts the best under his own name.
Don’t be fooled by the thought that the consumer pays for
advertising, nor that a food product well advertised involves a
great profit for the packer to afford advertising it. Advertising
reduces the cost of material, reduces the cost of the container,
reduces packing charges and overhead expenses by increasing
the volume of business, so that judicious advertising is not an
expense, but the contrary.
Those that advertise and expect to sell goods on the strength
of advertising alone find to their sorrow that advertising is only
an adjunct to merchandising; the first essential is to produce
or pack an article of merit to be retailed at a fair price. The
advertising is to let the people know that you have succeeded.
It persuades the public to try the goods once; the quality and
price must make it a household article afterward.
When the Pompeian Company entered the olive-oil field,
How Olive about seven years ago, a four-ounce bottle was called a
Oil Was half pint, an eight-ounce bottle a pint, and a sixteen-
Standard- ounce bottle a quart. The four-ounce bottle retailed
* for 25 cents, the eight-ounce bottle for 50 cents, and
the sixteen-ounce bottle retailed for $1. The sale of olive oil
was limited to the new fancy stores who catered to the wealthy
506 TRADEMARKS AND BRANDS
classes only. Olive oil was not within the reach of the everyday
purchaser.
To-day eight ounces is a full half pint, with the contents
plainly marked on every package, and retails everywhere in the
United States at 25 cents. A full sixteen-ounce tin retails at
50 cents, and a thirty-two-ounce full quart tin at $1. A good
many retailers who do a large volume of business sell Pompeian
olive oil even at less than the prices named above because of
their volume of business.
We have our prices marked on every tin, so that the retailer
cannot take the advantage of charging more than the regular
rate. Remember that every packer who establishes a fixed sell-
ing price plainly stated on the package is doing so for the
protection of the consumer.
We have invested approximately $1,000,000 in advertising
and missionary work to get the proper distribution, but not a
cent of that was ever charged to the goods themselves. It is
carried on our books as an investment in good will. Any one
buying a package of Pompeian olive oil to-day is receiving a
cent’s worth for every cent parted with, the best of olive oil
packed in the most convenient package at the least possible
price. Our watchfulness commences at the source of pro-
duction.
Food sold in bulk by the average retailer cannot be called
wholly pure, as it can’t reach the consumer free from dirt and
filth. When sold in the original package, however, it can be
delivered exact in weight, standard in quality, pure and clean
from dirt and filth, and at a fair maximum price.
To sum up, the consumer deals direct with the producer when
he buys original package goods. The producer is directly
responsible to the consumer, while the jobber and retailer only
act as the agents of producer and consumer. They are the
brokers and work on a very low commission scale. They guard
the interest of the consumer against unfair manufacturers of in-
ferior commodities.
These replies to the circular of the Mayor’s Committee were
not introduced into this compilation immediately after the cir-
cular, because it was believed that their real weight would not
be appreciated without some restatement of what actually is
taking place in the advertising field. Many of the achievements
TRADEMARKS AND BRANDS 507
which have been discussed in the intervening pages, representing
the positive contributions of advertising to modern methods of
selling, either were not familiar to the committee or were ignored
by them. In any case, a knowledge of the fact that these
developments are going on makes it clear that any attack upon
advertised goods which closes its eyes to some of these larger
aspects of advertising is based upon an incomplete considera-
tion of the essential factors.
A careful reading of the replies here quoted serves to make it
clear that the only convincing arguments set forth on this ques-
tion are those based on real service to the consumer. Moreover,
this controversy illustrates admirably one fact about adver-
tising which advertising men are being forced to recognize.
That fact is that the strongest arguments in its favor are
those based on its effect upon the distribution process, which
effect is, for most consumers, obscure, intricate, and uninterest-
ing.
For example, the committee report emphasizes the cost of
the package, but it makes no mention of the minimizing of this
cost by volume of sale, nor does it make any compensating
allowance for wastage and spoilage of bulk goods, both in
transit from the factory to the store and in the home after it is
bought. None of its comparative figures makes due allowance
for what might be called the “cost of consuming”—that is, the
cost of fuel and labor and other items in preparing these foods
for final use. In places where fuel is costless and where the
housekeeper's time has no appreciable value, and where other
elements of the cost of consuming are negligible, the price of
goods at the store may represent a fair measure of their value,
but elsewhere the price, ready for final consumption, with
storage, waste, and all preparation cost included, ought to be
the final basis of comparison. This price it is impossible to
quote. But the continued demand for trademarked goods
indicates that the consuming public uses it in measuring
values. The public apparently takes into account the serv-
508 TRADEMARKS AND BRANDS
ices which have been rendered and chooses, whether consciously
or not, those goods the final net cost of which to them is
least, after they have given weight to the costs of final prep-
aration.
In the case of clothing this same process of factory preparation
has been at work longer. A generation ago household econo-
mists or their predecessors were urging women to buy un-
bleached muslin, bleach it for themselves, and make up their
own underclothes. Unquestionably clothes made in this way
were of good quality and represented a small money outlay.
But the gentle persistence with which the “consumers” pursued
white sales and neglected the unbleached muslin counter had
finally made it clear that the ready-to-wear clothes were in the
long run more economical for most purchasers.
The development in the case of foods has been slower for a
number of reasons, chief among them being the difficulty and
cost of guaranteeing satisfactory quality and conditions of sale.
This has been overcome in a number of striking instances
by the development of an identifying mark and a large as-
sumption of responsibility by the producer. Even yet the
importance of this change in methods of marketing is only
beginning to be appreciated. The selling of goods under
trademark has come to stay—the Mayor’s Committee to the
contrary notwithstanding—and at least in certain lines and
under certain conditions this method represents a substantial
advance over the methods of bulk selling of unidentified goods.
Its place in the distribution system, however, probably will not
be that of a sole occupant of the field.
The comparison of retail prices of goods at the store, even if
we leave out of consideration the additional cost of preparing the
goods for consumption, is not an altogether fair measure of
the social and economic value of the trademark method of doing
business. This is another place in which the obscure contribu-
tions of advertising outweigh the immediate and apparent ones.
In some cases the economies in sale which have been made pos-
TRADEMARKS AND BRANDS 509
sible by the expansion of business through trademark exploita-
tion have been more than enough to offset large increases in the
cost of raw material. Grape juice, for example, now sells at
about one half what it did in 1897, while the price of grapes has
increased from $10 per ton to $40 per ton.
Some concrete cases discussing the effect of advertising on
the price and quality of the goods are contained in the following
Symposium:
*This symposium will provide advertising men with what they
have heretofore largely lacked—convincing facts and figures
with which to fight the reviving delusion that “advertising is
a tax on the consumer.”
This accusation, hoary with medieval ignorance as it is, is
nevertheless being seriously entertained in quarters that have
the power to do considerable harm. For example, the Oldfield
Bill, which is now having new hearings in Washington, would
in its final effect put a trademarked brand at the tender mercies
of price-cutters everywhere.
The Oldfield Bill is only a symptom of a vast mass of un-
educated opinion behind it. Supporting it are those manufac-
turers who are continually claiming that they can undersell
their advertising competitors “because they do not have to
meet a big bill for publicity.” Every advertiser has had to
meet competition times without number on this slogan.
Heretofore attacks upon advertised goods have been met by
general argument; but general argument, no matter how true
it is, is not strictly evidence, and it was evidence Printers' Ink
sought when it sent a letter to a number of leading advertisers.
In this letter advertisers were asked:
“Can you give us some definite figures proving that since
you began advertising one of these three things is true:
“1. Prices of your goods have been reduced as a result of the
larger output secured through advertising.
“2. Quality or intrinsic value of goods has been increased.
“3. If neither proposition can be proven, can you show that
price and quality have remained stable in face of increased
cost of raw material and workmanship?”
*Printers' Ink, January 22, 1914, p. 3.
510 TRADEMARKS AND BRANDS
A reading of the contributions from the prominent advertisers
below will reveal the overwhelming nature of the evidence in
favor of advertised goods. In statement after statement it is
proved, without qualification, that advertising has been instru-
mental in increasing quality and reducing price or in increasing
quality and keeping price stable despite increasing costs of
manufacture. If these statements were words only they would
not, of course, be deserving of the significance that must be
attached to them. But the assertions made are backed by
advertising appropriations which in the aggregate represent
millions of dollars a year.
TXIOXOGEN ADVERTISING HAS EEPT RETAIL FROFITS NORMAL
(By J. G. Timolat, President, the Oakland Chemical Company):
We cannot give you any definite information about any
product except our own. There is a good deal of hearsay
information on both sides of the question as to whether adver-
tising increases the cost of goods, and we do not think that
general statements will cover the question, because so much
depends on the article itself that every article should be con-
sidered by itself.
In the case of Dioxogen, some two or three years ago, reduced
costs of manufacture, due to larger production, induced us to
increase the size of our package 33% per cent. each on two sizes,
and 25 per cent. On the third size, without any change of prices
whatever, either to jobber, retailer, or consumer.
A few years before that—I am not quite sure of the date—
we had reduced the prices of one of our size packages 20 per
cent. without any compensating advantage to us, so that in this
particular case there have been two actual bona fide important
reductions.
Manufacturers and advertisers carry a good deal of a load of
censure. With a product like Dioxogen, where we attempt to
establish a uniform price throughout the United States by pre-
paying freight charges, so that the wholesale or retail distributor
in one part of the country buys his goods at the same price that
the distributor in some other part of the country buys his, it goes
without saying that a competitor located near the manufac-
turer’s own plant, who does not maintain such a policy, can
on the face of it sell his goods just so much less, and in that
particular territory.
TRADEMARKS AND BRANDS 511
Again, a manufacturer of a proprietary article, whether it
be medicinal, toilet, food, or wearing apparel, always considers
during the time of introduction that his expenses of
º' introduction are part of the capital investment; while
of Intro-
º, he keeps an eye on the amount so expended, he
rarely expects to get any immediate return of that
expenditure.
Most of the widely advertised articles have more or less
irregularity in the way of spending an advertising appropria-
tion. Some firms spend a great deal of money for a certain
period and then reduce that expenditure to give themselves a
chance to catch up. All of these matters are questions of
individual ideas and experience, and it is only after an article
is well established that the proportion of advertising expenses
should be really considered as one of the elements of cost.
Another point that is usually overlooked is that a product
which is widely advertised and which has a high reputation to
maintain spends a good deal of money in investigation,
º: overhead charges, etc., which a product which sells
'...} § only from the price standpoint does not carry.
Siandard In the case of Dioxogen, this expense is very heavy.
We do an enormous amount of research work which
is of great value to the consuming public. Our non-advertising
competitor does not hesitate to seize on any of this information
and appropriate it as he pleases, attributing to his goods (of a
more or less similar character) all that he can with any advan-
tage. The question of quality or standard is a very elastic one
for the non-advertising, no-reputation manufacturer.
These are only a few of the considerations of this general
subject. It is safe to say, however, that after all of these
matters are summed up the net profit of the advertising manu-
facturer is not larger than the net profit of the non-advertising
manufacturer, and he has to depend ultimately on the volume
of business which he establishes.
The public at large does not understand or appreciate the
costs of doing retail business. The public does not seem to
realize that its demands on retail distributors are such
ºft that the retail distributor has got to make a relatively
ºf the fit, and retailers themselves f tl *-
Dealer large profit, and retailers themselves Irequently over
look this point in their criticism of the advertised
article. Most advertised articles provide a proper profit for the
retailer, and they get little or no credit for this consideration.
512 TRADEMARKS AND BRANDS
Without advertising, which, after all, does give the consumer
a standard of value, there would be nothing to prevent individual
retail distributors from demanding and receiving a perfectly
abnormal profit, and in all probability, if it were possible in the
drug line to average up the prices that people paid for peroxide
of hydrogen before the Dioxogen advertising, and the average
prices that they pay now, it would be found that the present
retail prices are fully 50 per cent. lower than the prices that
existed previous to Dioxogen advertising, and this without any
consideration of manufacturing costs.
In other words, where the retail distributor sells an article
of which the public has no knowledge of its value, the profits
that he makes are excessive and much larger than he is legiti-
mately entitled to make. If we had a few business men as
law-makers it might be easier to inject a little common sense
into legislation which attempts to influence business methods.
ADVERTISING HAS CUT SELLING COST IN TWO
(Statement from Hart, Schaffner & Marx, Chicago):
What you want is definite figures, which appear to us rather
difficult to give. Advertising is a general charge; the only way
to estimate its effects is by general results. These general facts
we are able and willing to give you.
When this house began advertising the business amounted to
about $1,500,000 a year; there were at that time a number of
clothing concerns doing a larger business than that. To-day
our gross sales amount to more than $15,000,000; we are the
largest clothing manufacturers in the country.
We believe our business would have grown without adver-
tising. We do not think it would have reached anything like
its present volume, nor that the growth would have been accom-
plished with anything like the same speed.
Volume alone would have enabled us to decrease the cost of
the goods; but advertising has undoubtedly decreased also the
cost of selling, It costs to sell our goods only half as much as
it cost fifteen years ago; we figure the advertising as part of the
cost of selling.
As to the increase in quality or intrinsic value in the goods,
we believe that has been very decided, although it is not easy
to make definite comparisons. Twenty years ago we made
TRADEMARKS AND BRANDS 513
suits that could be sold at retail for $10 and $12; to-day we
make no suit that can be retailed under $18 or $20. But we are
putting much greater value into the $18 or $20 suit than we
could have done fifteen years ago. Twenty years ago a large
part of our product was lower priced than our lowest price now;
you see that comparisons are difficult.
But the advertising has not only reduced costs; it has made
possible higher standards of business.
You may be able to extract from the foregoing some facts
that will be of value to you; if so we shall be pleased.
KODAK’s DECREASED RETAIL PRICES
(By L. B. Jones, Advertising Manager, Eastman Kodak Company):
There can be no argument as to the benefits to the public
through our increased output, which increase in output is
due, in large measure, to our continuous, extensive advertis-
Ing.
Largely increased output means economies in every direction,
but especially in the matter of automatic machinery, which
makes it possible to turn out uniform goods at greatly reduced
costs. It means a reduction in overhead expenses that more
than offsets the advertising expense, which is, of course, a part
of such overhead.
The decreased retail prices cited below would have been
impossible on the old manufacturing and marketing basis.
Increased consumption, due in large measure to the fact that
we have taught the people the pleasures that are to be derived
from photography, has made possible the present low prices of
photographic goods. As a matter of fact, the percentage of
advertising cost to the total volume of business is much smaller
than most people imagine.
We became national advertisers in 1888, the year in which
the Kodak was first placed on the market. This first Kodak
made a picture 2% inches in diameter, was a crude and bulky
affair as compared with the cameras of to-day, and sold for $25.
To-day we sell a camera made of better material throughout,
capable of making better pictures, mechanically and optically
superior to the old one, and taking a picture 2#x3% inches, at
$10. We make another camera, selling at $2, which, so far as
the picture-taking capabilities are concerned, is superior to this
514 TRADEMARKS AND BRANDS
original $25 Kodak. This latter camera is, however, not so
well finished as was the $25 instrument.
Perhaps the best comparison can be made if we take the
4x5 size. In 1892 we were selling a No. 4. Folding Kodak,
which made a 4x5 picture, at $60. This camera had a rapid
rectilinear lens, was equipped with a rising and sliding front,
and had a very good shutter for those days, providing for both
time and instantaneous exposures. It was a handsomely
finished box but extremely bulky, was made of mahogany and
cherry, and covered with a fine grade of leather. To-day we
make a 4x5 Kodak, using a lens of the same type, but much
improved. This Kodak also has a rising and sliding front and
shutter vastly superior to that used on the original No. 4. Fold-
ing Kodak. This camera is made of aluminum covered with
leather, will go in the pocket and loads in daylight, whereas the
old one was a dark-room loader. The price is $20, as against
$60 for the original camera in this size.
I can go on similarly through our whole line and show marked
improvements in the goods at equally marked reductions in
price to the consumer. And, by the way, in spite of these
reductions in retail selling price, the discount to the dealer is
larger than it was in the early days referred to.
On films the retail selling price has not been reduced, but the
film itself has been vastly improved. In comparing the car-
tridge films of to-day with the cartridge films of twenty years
ago, we find that they are not only improved in speed and
Quality, but they are now ortho-chromatic to a high degree and
are non-curling, this latter feature requiring that the transparent
base be coated on both sides, whereas originally it was coated
only on the emulsion side, the gelatine backing now offset-
ting the curling caused by the emulsion. Instead of being
put up in black papers, the present Kodak films are put
up with a duplex paper which is red on one side and black
on the other—a better preventive against deterioration than
was the old paper. Although the retail price has not
been lowered, the dealer’s margin of profit is larger than
heretofore.
It is my opinion that this matter of profit to the dealer, as
well as the matter of price to the public, should be brought out,
because the opponents of the price maintenance system are
already trying to make out that under such system the retailer
becomes only a rent-paying clerk.
TRADEMARKS AND BRANDS 515
ADVERTISING HAS MADE YEAR-ROUND MARKET
(By F. T. Joy, of E. A. Mallory & Sons):
Since starting to advertise in 1906 our sales have increased
270 per cent. This increased demand for Mallory hats which
our advertising has created enables us to run our factory on
full time the year round, making a great reduction in overhead
charges. Formerly, in common with all manufacturers of
unadvertised hats, we were able to run to full capacity just
during the two hat-buying seasons of the year, with a long dull
period between each season.
Since starting to advertise in 1906 we have made a saving of
17 per cent. in the total cost of selling Mallory hats. This saving,
which amounts to seven cents on every hat we manufacture,
more than pays our advertising appropriation. The saving in
selling expenses has largely been brought about through the
increasing demand for Mallory hats which our advertising has
created, enabling our salesmen in many cases to sell double the
amount of goods, with little or no increased travelling expenses.
Formerly our salesmen could not interest dealers in every place
they visited; now they sell many dealers in every town and
city visited, and in quantities which are constantly increasing.
This great saving made in our manufacturing and selling
expense is largely due to advertising, and the consumer is
benefited by it because we can now give better values than
formerly, even in the face of increased cost of raw material and
workmanship. -
SAYS HIS GOODS PROVE CONTENTIONS
(By W. J. Leonard, Vice-President and Treasurer, Burnham &
Morrill Company):
In our opinion it can be readily proven that advertising of
food products lowers the prices to consumers.
B. & M. Fish Flakes is the product which we advertise most
extensively. Our price to the wholesale grocery trade is 25
per cent. less to-day that it was four years ago, advertising
causing increased sales, and naturally increased production
brought about this change.
516 TRADEMARKS AND BRANDS
The quality of this product has always been of the very best,
and our natural policy, with or without advertising, is to in-
crease quality whenever possible.
Likewise, because of advertising, even when increased costs
of raw material and workmanship at different times throughout
the year cause us actually to sell the finished product at a loss,
it is only because of advertising that we are enabled to do this.
If there had been no advertising, and if we had not by this
advertising fixed in the minds of consumers a price at which the
product should be purchased, when these costs of raw material
and workmanship advance so considerably there would be the
same general advance in our own selling price.
VOLUME OF SALES EEEPS PRICES STABLE
(By F. A. Harding, of Wm. Underwood Company):
Underwood’s Deviled Ham has always been advertised to a
certain extent, but up to four years ago a very small amount
of money was spent for advertising, and the advertising was
placed here and there without any particular regard for a
systematic campaign, and with the idea of obtaining local
rather than national distribution of the product.
In 1909 the appropriation was materially increased to a sum
which, while comparatively small, was as large as we felt our
small business would warrant, and as much space as possible
has been used since then in mediums of the largest national
circulation.
During the thirty years that Underwood’s Deviled Ham has
been on the market to any considerable extent our gross prices
have remained unchanged in the face of the greatly increased
cost of raw material, which is apparent to every consumer, and
also in spite of the increased cost of workmanship, of which our
proportion is the same as that of all manufacturers.
Little by little our trade discounts have been increased so
that, while the price to the consumer is not changed, consumers
have benefited by an increased distribution of the product due
to a more favorable attitude among the trade toward handling
the line. Furthermore, the intrinsic value of the product has
been increased through improvements in our processes and the
installation of modern methods, which could not have been ac-
complished had our sales remained stationary.
TRADEMARKS AND BRANDS 517
The largest increase in our sales, and also the largest increase
in our trade discount, has been during the last four years, when
we have spent more money for advertising. We feel absolutely
confident that had it not been for the inauguration and sys-
tematic management of this advertising campaign, our business
would be stationary or declining instead of gradually increasing,
and that the tremendous cost of selling the product without
advertising, combined with increased cost of the product, would
have necessitated prices beyond the reach of a large percentage
of the present consumers.
In other words, the only thing which permits us to continue
business on the present basis is the increased volume obtained
during the last few years.
ADVERTISING KEEPS, DOWN COST OF PRODUCTION
(By W. L. Price, Chairman of Executive Committee, National
Candy Company):
I do not believe the selling price is in any way affected by
advertising.
It is true that advertising increases sales, and naturally an
increase in sales brings about certain economies in manufacture
and purchasing of materials which affects the cost of pro-
duction.
It is not, however, always the case that this lower cost of
production means a lower price to the consumer, for the reason
that very frequently goods are placed on the market in the
beginning without sufficient or legitimate profit to the manu-
facturer and he is obliged to take his chances of success of his
selling and advertising plans, and through these bring about
through the lower cost of production above mentioned a legiti-
mate profit.
It is also in our line of business practically impossible to
advance the price to the consumer with advancing raw materials.
The price must be kept uniform, as the consumer, through
advertising, has in his mind a distinct conviction as to the price
per pound or per package of our product, and that price has no
relation whatsoever to the cost of materials; therefore when
materials go up our profit is less, and when they go down our
profit is more, and our salvation lies in the working of the law
of averages.
518 TRADEMARKS AND BRANDS
One great effect that advertising has upon our goods is the
improvement in quality and package, and uniformity of both,
as well as a decided stimulant to the liberal treatment of the
trade and good service.
The habits of consumers of our products are well fixed, and
it would make no difference whether we advertised our goods
or not, that habit would prevent paying a higher price than is
customary to pay, and would practically destroy the sale of
products which were offered at a lower price than it is customary
to pay.
Advertising does nothing more or less with us than to make
known to the consumer our products, and, of course, in praising
our products we have to be particularly careful that the product
itself in quality and appearance comes up to all that we say
about it.
I cannot in any way accede to the supposition that adver-
tising increases the price to the consumer of the majority of
advertised products.
The cost of advertising is in all cases equalized by a lower
cost of production due to increased sales, and if advertising were
not done, then in my judgment the cost of production would
increase, and as a result the selling prices to the consumer
would have to continue the same.
We find in our business that where unadvertised goods are
substituted for advertised goods at a less price, in all cases they
are goods of an inferior quality.
We have competition from goods of equal quality that are
not advertised, and, of course, this competition is effective only
to the extent of the personal influence of the salesman selling
the goods, and naturally the advantage is in favor of the adver-
tised goods, because of the appreciation of the majority of good
. of advertising and its help to them in selling advertised
goOdS.
PRICES UNCHANGED DESPITE COSTLY MATERIALS
(By Edward Freschl, President, Holeproof Hosiery Company):
I believe that your effort to collect definite and tangible facts
proving that advertising does not result in the consumer paying
a higher price is a laudable one, and I hope that you will be
successful in collecting valuable data.
TRADEMARKS AND BRANDS 519
In regard to our own enterprise I have the following to
report:
1. Prices of our goods have not been reduced as a result of
the larger output secured through advertising; we originally
placed on our goods popular prices corresponding with those
which were being received for unadvertised goods that were
equal or inferior in value.
2. The quality of our goods has been continually improved
in a general way in the ten years in which we have been engaged
in this particular business, but the improvement, as I said, has
been a general one, and it is difficult to represent it in actual
figures.
3. Our prices, both to the trade and to the consumer,
are identically the same as they were in 1904, although
the cost of raw material and workmanship have increased
materially since that time. As a matter of fact, our goods
that retail at 25 cents per pair cost us 20 cents per dozen
more to produce to-day than they did in 1905; and it is,
of course, due to the fact that we have steadily increased
our volume of business by means of advertising that we are
able to continue to market these goods at the same price to
the consumer.
Would say, furthermore, that hosiery handled by jobbers is
being sold in competition with our product, selling at the same
price to the consumer without any advertising whatever; it is
sold without a guarantee of any kind, whereas our product is
sold under a six months’ replacement guarantee; and it is sold
in most cases without a brand or trademark, which, of course,
is a disadvantage to the consumer as against his buying a
product which carries the manufacturer’s name or trademark.
Some of these goods, I will admit, are more attractive in appear-
ance than ours; but I will maintain that none of them is made
with any consideration as to wearing qualities, on which
feature we, of course, place the greatest emphasis. This ought
to be an important item in making comparisons between
advertised and unadvertised hosiery, especially at a time when
the question of “high cost of living” is receiving so much
attention.
There are other trademarked brands of hosiery (unadvertised)
on which a large distribution and sale has been worked up; but
as far as my knowledge goes it has cost just as much to effect
this volume of business by means of the selling methods that
520 TRADEMARKS AND BRANDS
were used as it would have cost if advertising to the consumer
had been the means employed.
CORN FLAKES CHEAPER AND BETTER
(By R. O. Eastman, of the Kellogg Toasted Corn Flake Company):
We can give definite evidence proving both:
1. That prices of our goods have been reduced as a result of
the larger output secured through advertising.
2. Quality and intrinsic value of goods have been increased.
As to No. 1, when our product, then known as Sanitas Toasted
Corn Flakes, was first placed on the market the package was
one third smaller and sold for 15 cents. With the increased
distribution resulting from national advertising we have in-
creased the size of the package 50 per cent. and decreased the
price to the consumer 33% per cent., so that the consumer to-day
receives more than twice as much for his money as he did of the
unadvertised product.
Quality and intrinsic value have both been greatly increased.
More than $50,000 a year is spent in our factory in maintaining
inspection and in safeguarding devices which are scarcely in
evidence to the casual observer, and which in all likelihood
would not be missed by the consumer. Only raw material of the
highest standard is used in making our products. For example,
there is only a very small amount of sugar used in the flavoring
of the flakes in a single package. The proportion of sweetening
is so infinitesimal that saccharine could be used with perfect
results and could only be detected by expert chemical analysis.
The use of saccharine in place of granulated sugar would save
our company $50,000 a year, but instead of reducing the
Quality even to this extent we prefer to pay the $50,000 a year
additional and use the highest grade white sugar obtainable.
Another feature: This year we are spending $100,000 to place
an absolutely moisture-proof seal on our packages so as to carry
the goods to the consumer in identically the same condition as
when they leave our ovens.
STABILITY IN A HARD-FOUGHT FIELD
(By Floyd Y. Keeler, Business Manager, I. W. Lyon & Sons):
You ask: 1. Have the prices on your goods been reduced as a
result of the larger output secured through advertising?
TRADEMARKS AND BRANDS 521
To which we answer, No, because the popular price of a
dentifrice is 25 cents, although our powder through price-cutting
and through merchandising factors is sold at 20 cents or less.
2. Has the quality or intrinsic value of the goods been in-
creased?
Yes, we have steadily and consistently improved the style,
convenience, and stability of the container, taking into account
and safeguarding the public welfare at every turn. These im-
provements and refinements have of course increased manu-
facturing cost.
3. If neither position can be proven, can you show that price
and quality have remained stable in the face of increased cost of
raw materials and workmanship?
In regard to this, we can show this without any qualification
or mental reservation whatever, because, although the cost of
labor and raw material have increased very much (and owing to
the fact that most of our raw materials are imported, the tariff
has been a large factor, and still is), and although we have been at
the mercy of very grave uncertainties which would have made it
very easy to change the quality of our product, using only
domestic materials which could not equal our imported ones,
owing to the fact that they cannot be produced in this country,
yet we have made no changes, believing that it was best at all
costs to keep the confidence of the public in us and in our ad-
vertising, even at the sacrifice of our personal welfare.
It seems to us that the manufacturer who advertises is a man
of stability and reliability, and not just an ordinary tinkerer
whose rise and fall is generally meteoric.
TwPNTY YEARs’ HISTORY OF THE SHAVING STICK
(Statement of J. B. Williams Company):
Perhaps it will be most enlightening, as far as our contribu-
tion is concerned, for us to take the case of one of our leading
articles, say our shaving stick, and follow it briefly through a
course of, say, twenty years, bearing in mind that it was during
this period that the cost of living rose so greatly as to cause
popular unrest and complaint.
Twenty years ago we put out Williams’ Shaving Stick in a
metal leatherette covered box with a slip cover, very simple
and extremely inexpensive. To-day the descendant of i.
522 TRADEMARKS AND BRANDS
leatherette shaving stick is being sent out in a nickeled box
with hinged cover, a container of very much greater value,
convenience, and attractiveness. At the same time the net
saving of the present shaving stick to the dealer is a fraction
over 2 per cent. of the former leatherette covered shaving
stick, and with the additional advantage to the dealer that we
are paying the freight on this and other products of our manu-
facture, which was not true until a few years ago.
A point of perhaps important significance in the present
discussion is the fact that the consumer is getting 20 per cent.
more soap in the nickeled box with hinged cover to-day than he
got years ago in the plainer and less expensive box, so that to
sum up the situation, the dealer is buying our shaving sticks at
2 per cent. less than the former price, he is getting the freight
paid on his shipments, the consumer is getting 20 per cent.
more for his money, besides having it packed in a much more
durable and attractive container, and all this during a period
when products in general were going upward in cost.
In addition to what we have said above, it is a fact that our
advertising appropriation for shaving sticks is to-day decidedly
larger than it was twenty years ago.
ADVERTISING CHANGES DERUG INTO A GENERAL UTILITY
(By H. Dumont, Manager, the Pacific Coast Borax Company):
In the case of “20-Mule Team” Borax it is true that adver-
tising has reduced the cost to the consumer through an increased
output. When borax was comparatively unknown to the
average consumer it was sold principally by druggists, and,
being classed as a drug, sold at a rather high price, as high as
30 cents a pound. To-day, through extensive advertising,
“20-Mule Team.” Borax has become familiar to the consuming
public, and its many household uses have taken it out of the
drug class, and it is now sold largely through grocers as an
article of general household utility. The retail price to-day is
15 cents a pound in one-pound packages and 10 cents a pound in
five-pound packages.
The quality of the goods has not deteriorated with the re-
duced price, but, on the other hand, has improved, as better
manufacturing facilities have been introduced.
This, I think, is a conclusive demonstration of the fact that
TRADEMARKS AND BRANDS 523
advertising does not add to the cost of goods to the consumer,
but, on the other hand, enables the manufacturer to increase his
output, making it possible for him to introduce improved
methods in manufacturing, with a consequently improved prod-
uct, and enables him, even in the face of increased labor costs,
to reduce the retail price on his goods to the consumer.
WHAT FENABLED POROSENIT TO GIVE GUARANTEE
(By G. C. Williams, Secretary, Chalmers Knitting Company):
Prices on our goods have not been reduced as a result of the
larger output secured through advertising. I might say that
this is due to the fact that our merchandise is and always has
been sold at what is called a popular price, namely, 50 cents.
Therefore, it would not be good policy to reduce the price on
our product, for the next popular price is 25 cents, or half of it,
consequently it would not have quality.
To the second and third questions: the quality and intrinsic
value of our goods have been increased every year for the nine
years we have been in business, due to the growth of our business
and additional output making this possible. To prove this to
your satisfaction it would be necessary for us to show you some
of our garments made in past years and those we are making
to-day. The increase in value means better finish, better
Sateens for facings and bindings around the neck, buttons sewed
on better with newer machines and more thread, better grade
of button stays, cover-seaming the garments throughout with
six-thread machines, and better grade of cuffs. We might add
here, regarding cuffs, that we can buy machines for knitting
cuffs for $700 that will knit more cuffs per hour than those we
use, which cost us $1,250 per machine. We use a yarn in our
fabric which is the best yarn of that number that we can buy,
and costs us in the neighborhood of 2 cents per pound more
than the same grade of yarn which other mills spin. We buy
this yarn because we know it will wear better and give the
consumer the satisfaction which we guarantee with every
garment. It has been possible through our increased output
to do all these things, and we have actually made such a good
garment for the popular price of 50 cents that we did not
hesitate two years ago (and are still doing it) to place an absolute
guarantee in every one of our garments, that if the purchaser
524 TRADEMARKS AND BRANDS
does not receive purchase price value, in his estimation, that he
can return it to us in exchange for new garment or the refund
of full purchase price, including postage.
QUICK TELLING OF STORY SAVED DAY
(By William H. Ingersoll, of Robt. H Ingersoll & Bro.):
In our opinion the dollar watch would have been a very
questionable venture had it not been that through the agency of
advertising we were able quickly to spread the intelligence as to
its existence and to put forth our arguments as to its merits.
Salesmanship and the ordinary trade channels would have
been too slow to give us a volume of production that would
have made the goods possible at the price. It was only that
we could publish to the world almost instantly our story that
we were enabled to undertake our venture.
We have not revised our prices as a result of advertising, but
we have done what is the equivalent, for during twenty years in
which there has been a constant rise in nearly all other products
we have kept our prices the same, and have at the same time
made more than a dozen improvements of great advantage to
the consuming public at considerable cost to ourselves.
We aim to maintain a uniform price and deliver the very
utmost that we can at that price. When I call to your atten-
tion that materials have advanced from 50 to 100 per cent. in
copper, brass, etc., and that our labor costs have risen on an
average of over 40 per cent. you will see that no tax has been
laid upon the public on account of our advertising.
As to the exact figures, it is well known that our dollar watch
has always sold at that price. We have not changed our price
to the public or to the trade in nineteen years. Our output has
risen from a few hundred to fifteen thousand per day. Im-
proved manufacturing facilities, inventiveness, and a constantly
enlarged field cultivated by advertising which has kept people
informed of our improvements have permitted us to progress in
the manner I have herein described.
SIGNIFICANT PRICE-HISTORY OF GRAPE JUICE
(By E. T. Welch, Secretary and Treasurer, the Welch Grape Juice
Company):
Several years ago the writer wrote an article for Welch's
Magazine, showing that how, through the increased output
TRADEMARKS AND BRANDS 525
of Welch's, made possible by advertising, the cost to the dealer
and to the consumer had been reduced, notwithstanding very
material advances in the cost of grapes. This article was
quoted in Printers' Ink.
What we have to say now is a repetition of some of the same
statements which appeared in that article, brought down to
date by a reference to the recent change in our selling plan, and
a mention of the extremely high prices which prevailed for grapes
this last fall.
In the early days, when our output was very small, the cost
to the trade on the two largest selling sizes of Welch’s was $9
and $10 per case. As our output increased prices were reduced
from time to time until the trade list in 1897 was $4.75 and $5
for the same two sizes. In the year 1897 we paid $10 per ton
for our grapes. In 1898 we paid about $12 per ton for grapes.
Our output in each of the years of 1897 and 1898 was about
50,000 gallons, and, notwithstanding the fact that the business
was conducted at a small loss in 1898, we reduced the trade list
25 cents per case early in 1899.
Since 1898 our output has steadily increased each year, and
the price of grapes increased so that up to and including the
year 1910 we had paid $40 per ton for our grapes in each of
two years and $43.50 a ton in 1910. During this period the
trade list on two of the five sizes in which Welch’s is bottled
was reduced 25 cents per case, and larger quantity discounts
were allowed on all sizes. The average cost of our grapes for a
number of years preceding 1913 was about $35 per ton.
Last fall the Concord grape crop showed less than 50 per cent.
of a yield, not only in the Chautauqua grape belt, but in all
other sections in which Concord grapes are raised. In the
early part of the season we paid $50 per ton for our grapes, and
the price gradually increased until the last few days of the
season, when we paid $60 per ton.
Some months ago, before we knew that the 1913 crop would
be so small, and therefore were not expecting prices to be any-
thing like the figures just mentioned, we decided to eliminate
quantity discounts, reduce our trade list, making the price the
same to large and small dealers. When we faced the unusual
grape conditions of last fall we thought at first it would be
impossible to put a one-price plan into effect, but it was necessary
that we revise our selling terms. One of the most serious things
connected with the unusual situation was the fact that even
526 TRADEMARKS AND BRANDS
at the high prices paid we were unable to secure a large enough
quantity of grapes to give us the increased business in 1914
that we would ordinarily expect.
After thorough consideration we decided to put the one-price
plan into effect by reducing the trade list 25 cents per case and
eliminating all quantity discounts, and this is the proposition
which we offer to the trade for 1914. The trade prices on the
two sizes that many years ago sold for $9 and $10 per case are
now $4 and $4.50. -
For ten years or so the usual retail price of Welch’s has been
25 cents for pints and 50 cents for quarts. In deciding upon
any change in our selling terms to the retail trade, we wanted
to make terms that would insure the continuance of these retail
prices. The plan which we decided upon makes it possible for
these prices to be continued—in fact, our new terms are a
reduction to all dealers who heretofore handled in five-case lots
or less, and such dealers handle a very large proportion of the
grape juice sold.
Grape juice, or unfermented wine, as it was first called, was
unknown when Dr. Welch put up the first dozen bottles in 1869.
There was no demand for the product; most temperance people
opposed it, and those who favored fermented wines of course
opposed it. The demand had to be created. The public had
to be educated—and because of the fact that there was very
little money available for advertising and salesmen, the growth
was very small during the first twenty or twenty-five years.
During the past fifteen years the growth in the popularity of
grape juice has been quite rapid—a growth made possible by
advertising. We believe that in making Welch’s Grape Juice
popular we have contributed to the health and the sobriety of
the nation.
We have always paid a premium for first quality grapes and
have accepted only first quality grapes. At $10 per ton, the
price which prevailed for grapes in 1897, the farmers did not
receive an adequate return, and were beginning to tear out their
vineyards and replace them with profitable crops. In the few
years that immediately followed the farmers did not pay very
much attention to the quality of the fruit grown because of the
low prices which prevailed. Our insistence on quality has led
to a higher standard for all grapes grown in the Chautauqua
belt, and the growers see now, as never before, the need of
proper care of their vineyards if they are to produce first quality
TRADEMARKS AND BRANDS 527
fruit. In 1912 the price which we paid for grapes was about
$10 per ton higher than that paid by our competitors in this
section, and Concords grown in the Chautauqua belt always
bring a higher price than those grown in other sections. With
an exceedingly short crop in 1913, the growers had the whip-
hand, and after we set our price for selected grapes, our compet-
itors had to pay the same price for “run of vineyard” grapes.
INCREASE IN QUALITY IN TEN YEARS
(Statement of Warner Brothers Company):
Advertising which has brought increased sales has permitted
enormous increases in the intrinsic value of the goods.
We have taken for comparison figures for a dollar Warner’s
Rust-proof Corset in 1903 and 1913, for it was about 1903 that
our advertising really began to attain the magnitude as to make
it truly national. We give below the per cent. figures of increase
or decrease in the various items.
The cloth used was increased 42 per cent. in quality in 1913
Over 1903.
Interlinings, tapes, strips, etc., are the same value for 1913
as for 1903.
Boning wire, clasps, and metal parts have increased in value
72 per cent.
The actual value of trimmings used has decreased 21 per
cent., but it must be remembered that the trimming is not so
much a question of price as it is of good taste in the selection
and make-up, and for this we now have special people.
The cost of labor per corset has decreased 20 per cent. in the
last ten years, and this is a large saving, inasmuch as the labor
is such a large percentage of the whole. This saving has been
made by improved machinery. But on those operations which
have remained the same during the past ten years the operators
are to-day actually earning about 20 to 30 per cent. more.
In addition to the above figures we have added since 1903
minor improvements such as hooks, drawstrings, etc., and
particularly hose-supporters, which item alone costs almost four
times as much as the trimmings.
The total value of labor and materials in a dollar Warner
Corset of 1913 is 37 per cent. greater than in 1910.
One of the chief elements in the quality of the corset is the
design, and where in 1903 our designing department consisted
528 TRADEMARKS AND BRANDS
of but three designers, to-day we have a force of twelve people,
one located in Paris.
JELL-O HASN'T CHANGED PRICE IN 15 YEARS
(By W. E. Humelbaugh, of the Genesee Pure Food Company):
The letter from Printers' Ink arrived at the same time as one
on the same subject from A. Stein & Co., of Chicago.
The Chicago firm sent us a copy of the pamphlet written by
Alexander H. Meyer, of the Merchandise Reporting Company,
shoppers for department stores, New York, in answer to an
article on “Price Protection and the Consumer,” recently
printed in the Outlook.
This is one of Mr. Meyer’s statements:
“I believe some day some statistician will prove that the high
cost of living can be accounted for in a great measure by the
vast sums spent for advertising.”
He also says:
“Other manufacturers of advertised articles have arbitrarily
raised their retail prices to such a limit the retailer cannot
make a legitimate profit. -
“The most advertised talcum powder costs the retailer from
$21 to $14.40 a gross, according to the quantity bought, and is
advertised for 25 cents. I verily believe its average retail price
is 12# cents, though thousands of cans are sold for 25 cents, in
spite of which price-cutting the sales of the maker are increas-
ing wonderfully.”
It is never necessary to tell an intelligent person that facts
and figures can be twisted by expert manipulators into shapes
that will not be recognized by any but very clear-eyed people.
In the letter to the Chicago firm we said, among other things:
“We do not understand that advertisers are asking for
Government protection, but that manufacturers are endeavor-
ing to secure recognition of their right to maintain prices. The
advertising talcum-powder manufacturer asks to be allowed to
fix the price of his own product, not of the substitutes made by
competitors.
“If there are 10-cent powders as good as his 25-cent article,
the people will be told about them by somebody in some sort
of advertising, and the people can take their choice. The state-
ment that the high cost of living is in any way the result of
great expenditure for advertising is entirely baseless.
TRADEMARKS AND BRANDS 529
“To use our own product as an illustration: Fifteen years ago
we spent a few hundred dollars a year advertising Jell-O; now
we spend half a million, and all the time the price of Jell-O has
remained the same, 10 cents a package, though thousands of
dollars have been expended in increasing the quality of our
product.”
ADVERTISING HELPS MODIFY INCREASED PRICES
(By J. H. Rairson, Manager of Sales, McMenamin & Company
[Crab Meats], Hampton, Va.):
The prices of our goods have neither been increased nor
decreased on account of advertising. We have been compelled
to increase our prices slightly, which was wholly due to the
increased cost of raw material, labor, transportation, and
packages.
Had we not been advertising and able to turn out goods in
large quantities, our prices, in all probability, would have been
materially increased.
The quality of our goods has been increased since we began
advertising, due partly to advertising.
We trust this information will be helpful in convincing “non-
believers in advertising” that advertising tends to increase the
quality and decrease the price, rather than decrease the quality
and increase the price, of advertised products.
WHY ESKAY'S HAS NOT INCREASED PRICE
(By G. H. Benhardt, of Smith, Kline & French Company):
The price and quality of Eskay’s Food has remained stable,
unchanged in any way as to quality, as to weight of contents in
containers, as to container itself, and in any other imaginable
way in the face of increased cost of raw material and workman-
ship. (This statement, of course, holds good only since March 1,
1901, when our present style of package was adopted.)
Our product is made according to a formula which cannot
be altered. It is sold to the public at a given price and cannot
be changed from time to time with varying prices. No matter,
therefore, what the cost of raw material or workmanship, there
has been no additional charge to the public, to the retailer, or
to the jobber; but all advances have been at the expense of
ourselves.
530 TRADEMARKS AND BRANDS
In explanation of the items of labor and ingredients: there
has been a very decided advance in the cost of ingredients. The
cereals, of course, vary from year to year, according to the bounti-
fulness of the crops. But the average cost of cereals to-day is
much greater than it has been during the life of our product.
Government statistics will show that barley, wheat, and oats are
all selling higher to-day than five, ten, or fifteen years ago. The
same may be said of sugar of milk, which is the largest single
item entering our product.
As to the item of labor, however, we can truly say that with
the growth of our business we were able to install economies in
the way of labor-saving machinery, which has reduced our cost
for labor.
To sum up, therefore, advertising has built our business from
nothing to sales amounting to several hundred thousand dollars
per year. With the growth of this business, and by reason of
handling larger quantities each year, we were able to reduce the
item of labor per package, and in the face of an increase in the
cost of raw material continue to give the jobber, the retailer,
and the consumer the identical goods, in the same size package
and at the same price every day, every month, and every year.
ADVERTISING DOESN'T FIGURE IN COST
(By Frank L. Erskine, of the W. L. Douglas Shoe Company):
When Mr. Douglas first started in business in 1876 he did no
advertising. Shoes were figured at that time probably like
many other lines of goods; the items including cost of leather
and other materials, labor, overhead, profit, but no margin for
advertising.
In 1883, when Mr. Douglas first started to advertise, the same
method of figuring our product was continued and is in use
to-day, no item of advertising expense being included. It is a
demonstrated fact that large manufacturers in the shoe business
can purchase leather and materials in large lots cheaper than
Smaller manufacturers can. By taking advantage of market
conditions, lots of leather can frequently be purchased at a more
favorable price than later in the year when the demand is
heavier. We take advantage of all these opportunities. Fre-
Quently contracts for sole leather, for instance, will involve
$1,500,000.
TRADEMARKS AND BRANDS 531
We claim and can substantiate it that we give to the consumer
all of these advantages, retaining only a small profit per pair,
and are therefore enabled to produce and sell a better shoe at a
standard price, $4.50, $4, and $3.50, than smaller manufacturers
who are unable to buy in large quantities and take advantage
of market conditions.
I repeat, we do not now, nor have we ever, figured our adver-
tising as a part of the cost of a pair of shoes.
THE CONVINCING STORY OF WATERMAN’s “IDEAL”
(By F. P. Seymour, of the L. E. Waterman Company):
The selling prices to the public of Waterman’s Ideal Fountain
Pens are substantially the same to-day as they were at the
time of their inception thirty years ago. This in the face of the
fact that both labor and component materials of manufacture
have nearly doubled in cost, taxes are higher, many items of
selling expense are greatly increased, and competition is keener.
The fact that we have been consistent, steady, and successful
advertisers to the consuming world at large is the principal
cause for the quality of merchandise that we supply and the
service that we give the public at these same original and
reasonable prices. The expense of advertising Waterman
Ideals enters into the cost of the pens, the same as taxes and
import duties which we pay to support our Government, includ-
ing the salaries of Congressmen, judges, Cabinet officers, and
others who would be without a livelihood if the country were
not big and prosperous enough to keep them in office.
The missionary work which must be done on behalf of our
company can be handled more cheaply through intelligent
advertising than by the employment of salesmen who must be
paid a living wage. As this is an important element in the final
cost of our product, we do not hesitate to state that the users
of our pens would be paying a higher price to-day if we had not
been able to develop our business with the help of judicious
advertising.
In the early years of this business all the Waterman Ideals
were sold through the direct efforts and solicitation of the
inventor and one or two assistants. The time consumed in the
sale of each pen often amounted to more in its value than the
cost of the complete pen. The business world would never
have progressed on such a sales basis unless possibly through
532 TRAEXEMARKS AND BRANDS
an enormous selling organization which could make the output
sufficiently large to warrant the minimum of cost, and it is a
certainty that the per se cost of such a selling organization
would have been (and has been found to be) far in excess of the
cost of the advertising method of securing distribution and
demand.
ADVERTISING AND MACHINERY COMPARED
(By W. B. Morris, Advertising Manager, Northwestern Knitting
- Company):
In our judgment, advertising has about the same relationship
to the problem of distribution that machinery has to the prob-
lem of production.
It is impossible to account for the tremendous increase in the
use of advertising excepting on the ground that it is a real
economy in distribution. It is just as reasonable to say that
the consumer has to pay for the machinery used in the pro-
duction of merchandise as it is to say that the consumer has to
pay for the advertising used in giving the merchandise econom-
ical distribution.
There are, of course, unsuccessful advertisers, just as there are
unsuccessful manufacturers. It would be just as fair to con-
demn the use of machinery in manufacturing because some
machines are not efficient as it is to condemn all advertising
because some advertisements are not efficient. It should be
obvious to every one that if advertising did not reduce the cost
of distribution it would not be generally used.
Munsingwear has been advertised since 1898. It is to-day
sold by leading merchants in practically every town and city in
the United States. A daily production of 25,000 garments is
required to supply the demand. As the business has grown,
our buying power has increased, the manufacturing organiza-
tion has become more efficient, the percentage of overhead
expense has been reduced, and the net result has been that it
has been possible to produce better merchandise for less money.
A comparison of the line as it is to-day with the merchandise
turned out when the advertising started will show the greatly
increased values offered to-day.
If advertising added to the cost of distribution we certainly
would not continue to advertise. If the values offered were not
greater than those to be found in non-advertised goods, the
TRADEMARKS AND BRANDS 533
merchant would certainly not buy in increasing quantities each
season, and certainly Munsing Union Suits would not have
become the most popular union suits with the public unless they
were the most satisfactory.
In other words, the manufacturer advertises because it pays
him to do so, the merchant handles advertised merchandise
because it pays him to do so, and the consumer buys advertised
merchandise because it pays the consumer to do so. The
manufacturer, the merchant, and the consumer all benefit from
the advertising.
Instead of adding to the cost of distribution, it is an economy
in distribution.
ADVERTISING SELLS HUGE VOLUME OF SHOES
(By Roy B. Simpson, Advertising Counsel, Roberts, Johnson & Rand):
I have your letter requesting data to prove that advertising
does not result in the consumer paying a higher price for the
necessities of life. I will endeavor to cover the points sepa-
rately as follows:
First—The price of our shoes to the consumer has not been
reduced as a result of the large output obtained through adver-
tising. This is due to the fact that during the last five years
leather has advanced in cost, until it has reached the highest
point ever known. The leather cost in a pair of men’s shoes
has advanced about sixty cents per pair during this period.
There has been a large increase in the cost of other material used
in shoes, and labor is higher to-day than it was five years
ago.
Let me say, however, that our increased production, resulting
from advertising, has kept the price down to a lower figure than
would have been the case with a production of only half of what
we are now turning out. No other manufacturer in America
can duplicate our shoes at our prices. We are actually selling
shoes for less than it costs some manufacturers to produce
shoes of the same quality. Our large volume, amounting to
over fifteen million pairs per year, could not have been obtained
without advertising.
Second—The quality of our shoes has been constantly im-
proved during the last two years. Every shoe has gone up one
grade. For example, our men’s “Patriot” shoe, which to-day
sells for $3.25, is as good a shoe as our “R. J. & R.,” which sold
534 TRADEMARKS AND BRANDS
at the same figure two years ago. The “R. J. & R.” now sells at
$3.75 wholesale. The retail price is $5 to $7, according to
locality.
A non-advertiser who claims that advertising increases the
cost to the consumer doesn’t appreciate the real strength of
advertising nor is he content to cling to the traditions of his
fathers.
Many of the non-advertised lines are as good in quality as
some of the widely known, nationally advertised articles in the
same class, yet the non-advertiser is not enjoying very much
in the way of big growth year after year. The constant
advertiser is running ahead of him, is keeping up the quality
; * merchandise, and paying bigger dividends to his stock-
O!CleITS.
VIEWS OF OTHERS
Several well-known advertisers, not represented in the pre-
ceding symposium, replied briefly, asserting their belief that
good advertising cannot by any sane man be regarded as a tax
on the consumer. The Ansco Company writes:
In response to your letter I will state that non-advertising manufacturers
can only sell their goods by offering a poor quality imitation of high-grade
advertised products. It is true that they sell them on the strength of the
price, and the jobber winks his eye at the quality because he has no further
interest in the article other than to palm it off on the public at a profit—or
what he considers a profit—for if he looks closely into the expense of
selling a non-advertised, cheap quality product he will find that he has
actually lost money and reputation by selling something that will not give
satisfaction.
The prices of our goods have been lowered since we commenced our maga-
zine publicity a few years ago, and the quality or intrinsic value of the goods
has been increased. This will be obvious to any one who compares a copy of
our catalogue of three years ago with our present issue. This reduction in
price and increased quality or intrinsic value of the goods has taken place in
the face of the increased cost of raw materials and workmanship.
The Minute Tapioca Company of Orange, Mass., writes:
While we have nothing tangible to present, at the same time we know beyond
doubt that the increased business brought about by advertising has cut our
factory expenses to such an extent that although the price of raw material
for two years or more has been especially high, we have been able to maintain
our regular price to the consumer.
TRADEMARKS AND BRANDS 535
L. W. Wheelock, of Stephen F. Whitman & Son, Inc., manu-
facturers of chocolates, states pithily:
We might say in passing that in the last six years our output has increased
fourfold, qualities have improved, prices have not been increased, despite the
fact that with one exception all raw materials entering into our products have
been advanced in price.
The vice-president of the Stein-Bloch Company does not
think that figures are necessary, and says:
It occurs to us that figures should not be necessary to refute the contention
that advertising is a tax on the consumer; a logical analysis should be sufficient.
Where are the figures that prove that advertising is a tax on the consumer?
Charles R. Stevenson, general manager of the National
Veneer Products Company, making Indestructo baggage, would
not cheerfully face the new year if his advertising appropriation
should be withdrawn. He says:
We are convinced that were we to discontinue our advertising, our business
would fall off at least 50 per cent., which would force us to distribute our over-
head over about half the production which we are now getting. This would
increase our cost per trunk very much more than the saving per trunk which
we would make by discontinuing our advertising would amount to.
The B. T. Babbitt Company states in a few lines the price
history of its soap. Forty years ago, it says, Babbitt's Best
Soap sold for 10 cents a cake; it now sells everywhere at 6 for
25 cents. And then the writer adds significantly:
In all laundry soaps it can be proved that the large output obtained through
advertising has enabled the manufacturer to cut manufacturing and selling
cost to the very great advantage of the consumer.
Before the system of selling goods under a trademark has
assumed its final place it will be necessary to arrive at more
definite conclusions than now are possible concerning a number
of difficult questions. Not the least important of these is the
question as to who ought to assume responsibility for quality
and conditions of sale.
On this subject there are two diametrically opposed positions
which have wide acceptance:
536 TRADEMARKS AND BRANDS
1. According to the first premise, the distributor, wholesale
or retail, of any product (identified or not) alone is responsible
to the public, in all the market he attempts to cover, for the
article's quality and for the conditions under which it is sold.
The producer has no substantial interest in his product (whether
it be identified or not) after he delivers it at a satisfactory price
to a distributor to convey to the consuming public. The vari-
ous distributors may, of course, hold the producer respon-
sible to themselves for the quality. Nevertheless, they them-
selves undertake a direct responsibility to meet the demands
of the consuming public in this respect and to distribute the
goods in a manner satisfactory to the public. Anything which
hampers them in the performance of these services reduces
their ability to give value for what the public pays.
The acceptance of this premise leads to an insistence on the
rights of the distributor to be the sole judge of his selling
prices.
2. According to the second premise, the producer of an
identified product is responsible to the public, in all the market
he attempts to cover, for the article's quality and for the con-
ditions under which it is sold. When the producer identifies
his product (by brand or otherwise), he thereby assumes re-
sponsibility for quality, and this responsibility is to the consumer
as well as to the distributor. He also assumes an obligation to
the consumer for satisfactory conditions of sale (ease of purchase,
accessibility, etc.). The assumption of these obligations by
the producer of this kind of products makes it necessary that
he have in his control the power and the opportunity to fulfill
these obligations.
The acceptance of this second premise leads logically to
some forms of enforcible control by the producer over resale
prices.
The conflict represented by these two premises is the basis
of the controversy between nationally advertised trademarks
and “private brands.” -
TRADEMARKS AND BRANDS 537
(2) TRADEMARKS VERSUS PRIVATE BRANDS
The issue between trademarks exploited by manufacturers
and private brands is somewhat more obscure in the case of
shoes than it is in some other lines, but the essential elements
of the controversy as it occurs in the shoe trade are typical.
Three shoe men who appeared before a congressional committee
discussing various bills relative to fraud in commodities in
interstates commerce, and particularly relative to bills requiring
the manufacturer to put his name on his product, gave testi-
mony presenting the points of view of successful shoe dealers.
*Andrew C. McGowan, head of the shoe department of the
John Wanamaker stores in New York and Philadelphia, took
the stand and gave his views in a straight-from-the-shoulder
manner. He is opposed to the use of the maker’s name on
shoes, and as one of the right-hand men of such an extensive
advertiser as John Wanamaker, Mr. McGowan’s views for so
doing are of interest to national advertisers.
Mr. McGowan spoke in his capacity as President of the
National Shoe Retailers’ Association. This organization, he
explained to the sub-committee, of the Committee on Interstate
and Foreign Commerce, represents the leading and some of the
smaller shoe retailers in the United States. The fundamental
requisite of membership, he stated, was the honest retailing of
shoes, adding: “We cannot better our business by faking the
public. We have spent time and money in prosecuting those
who do fake in our trade. We felt the need of organization
to prevent the public from being taken advantage of.”
In arguing against the use of the word “adulterated” in
connection with shoes not made wholly of leather, the Wana-
. ... maker manager said: “There is a principle in retailing
Pºlº merchandise and also in wholesaling it, either from
& 6 Mº- the manufacturer or the wholesaler, to keep from
diedº raising questions of doubt. When one’s mind is made
up that a thing ought to be leather or ought to be
steel, if you please, and some substitute is used, a doubt is raised
which makes the sale harder to make; and the harder you make
*Printers' Ink, February 5, 1914, p. 13.
538 TRADEMARKS AND BRANDS
it possible to dispose of goods, the greater you increase the cost
of disposing of them and that cost the dear public pays; it pays
all costs.”
A few manufacturers would have control of the manufacture
and sale of shoes, according to Mr. McGowan, if a law were to
be passed compelling the placing of the manufacturer’s name
on each shoe produced. Continuing, he said in part: “I can-
not afford to advertise for the manufacturers and have their
names on the shoes. How many wearers of shoes would go
back to the manufacturer in case of difficulty with the shoes?
You would drive out of business some 27,000 shoe retailers in
the United States and put in business the trademarked shoe men
who are with us to-day and who pay their managers $15, $20,
and $25—I do not know one that gets $35. And you know
they contend their work is done in the factory, and such manu-
facturers claim to sell directly from the manufacturer to the
consumer at a less price, but it costs such manufacturers just
as much to dispose of their goods as it cost me, because where
they sell one pair I sell twenty-five pairs.”
Congressman Barkley interposed a question: “You said a
moment ago that if a manufacturer's name were required to be
placed on the shoes that the shoes would sell then on
4dmits the reputation of the manufacturer instead of on the
*ſº reputation of the retail dealer; is that right?”
B. That would be the effect generally; yes, sir.”
Consumer Pressed by the congressman for further answers as
to whether individuality in shoes and the reputation
of a manufacturer were not factors in making sales of shoes, the
witness said: “If a man has bought a shoe with Hanan’s or
Nettleton’s name on it—and they are delightful names to
conjure with—had bought shoes that were all right, that were
comfortable and pleased him in appearance, I do not believe
you could get him to change, no matter whether he was in
Texas or New York, But why legislate to promote the business
of about 1,300 men—which would be reduced, Mr. Chairman,
to about one tenth of that number of manufacturers by this
legislation—why promote their business as against 27,000
classified shoe stores in America and about 120,000 retailers of
shoes in the general stores.”
In speaking of the promotion work on behalf of the Douglas
shoe, Mr. McGowan said: “A Curious fellow pasted on a postal
card, at about the time postal cards came out, a picture which
TRADEMARKS AND BRANDS 539
purported to be that of Mr. Douglas, although it does not look
very much like him and never did, and that postal card went
right to Brockton, Mass.; he dropped it in the post-office
without any address at all on it and, as I say, it went to Brock-
ton, Mass. And that is advertising.”
The Wanamaker representative closed his statement as
follows: “To our minds, compelling a manufacturer’s name to
be placed on an article would put in his hands a weapon that
would destroy the profits of our business. I will not say any-
thing about myself, but my first assistant draws $10,000 a year;
I have men around me who draw big pay; but we do a business
of two and a half million dollars at retail. That represents a
tremendous number of shoes, but we can well afford to do it,
even with these big salaries to meet. And we do it at a lower
cost—and I think this statement will be unchallenged—than
any distributor of shoes at retail in the world.”
A $12,000,000 volume of business was accredited to the Brown
Shoe Company of St. Louis, by John Busch, who testified
before the committee as the spokesman of the Brown company
and also as the representative of the St. Louis Manufacturers’
Association. Incidentally he said: “We job a small proportion
of our total business—I should say less than 10 per cent. now.”
That all shoe manufacturers are not of one mind with refer-
ence to proposed legislation along the line of the so-called
“pure shoe bill” (a name denounced by some manu-
Manu- facturers as a mischievous and misleading misnomer)
f#.* was made clear during the testimony of John W.
fº. Craddock, president of the Craddock-Terry Shoe
$ng Name Company, who appeared as the representative of the
on Goods National Shoe Wholesalers’ Association. Mr. Crad-
dock, who opposes any such legislation, mentioned
the name of the Roberts, Johnson & Rand Shoe Company, of
St. Louis, in connection with the effort that has been made
during the past year or two to secure the passage of bills of like
purport in the legislatures of twenty-two States in the Union.
Referring to the above-mentioned St. Louis corporation, the
witness said: “In their advertisements from one end of this
country to another they make their talk that they are advocat-
ing pure shoes and pure under-leather.” -
In the course of his remarks Mr. Craddock said: “Personally
speaking, our company would rather like to get our name
stamped on all our stock, and we do stamp it on our stock all
540 TRADEMARKS AND BRANDS
we can. On the other hand, retailers have their own views and
their own rights. Distributing merchandise is not always a
question of best values. The psychology of the proposition goes
a tremendous way. A woman comes into a store; she is not
considering values; she wants a pair of satin slippers or Suede
boots and she will pay anywhere from $5 to $7, and she does
not consider the value. Now the concern with the best organ-
ization, advertising from the factory, is willing to put $500,000
in advertising and open stores in every city of 30,000 inhabitants
all over the United States. They are crowding the small man
out because he has got to put all his advertising into a single
venture. They cannot distribute their merchandise and it
costs them just as much. Take the popular advertised brands
of shoes which are being sold in their own stores to-day. The
statement which I make is not based on figures, but my opinion
is it is costing those men more to retail their goods—a larger
per cent. to sell their shoes—than it is the local dealers, and that
being the case, they would not save anything for the consumer,
but they will gradually crowd this other fellow out, and I think
the ultimate effect will be higher prices and poorer service. It
would result in monopoly.”
According to this manufacturer, “the telephone and the
women behind it” are largely responsible for the increased
expense of selling goods. By way of illustration he
City and contrasted the conditions that confront the average
'*... urban merchant with the case of a general store-
roads Dis- k d e
jº. keeper or cross-roads retailer near Lynchburg, Va.,
Contrasted to whom his firm sells goods. Said Mr. Craddock:
“That fellow owns his own farm there and owns his
own storehouse and he can really sell merchandise on 10 per cent.
profit. He is doing $10,000 worth of business a year and it is
not costing him over $1,000 to do it. The man in town is paying
$3,000 in rent and has got to keep electric lights and expensive
show windows and buy these shoes in widths from A to E, while
the countryman just buys one width; and the city man has got
to carry satin slippers and Suedes and tango pumps; and a
woman will phone down from a mile and a half out and ask
him to send out a pair of rubbers, for which he gets 75 cents,
and it will cost him 75 cents to send them out to her, maybe.
All these things add to the cost of city distribution. It is
legitimate and the people who make it necessary have to pay
the bills, and you cannot legislate in any way to prevent it
TRADEMARKS AND BRANDS 541
unless you take the telephones out of the houses and bring the
people back again to plain, simple living.”
A fraudulent advertising bill and not a “pure shoe” bill is
what is needed in the opinion of A. H. Geuting, of Philadelphia,
who appeared on behalf of the Shoe Dealers’ Association. His
contention was that the only fraud in the shoe business to-day
is supplied by the piratical dealers who travel from city to city
and advertise standard brands of shoes at cut prices. “Com-
petition in the shoe trade,” he said, “is so great that we are very
sensitive to the opinion of a customer. I will go any length
before I will let a customer go out of my store with anything
but a smile.” The Philadelphia merchant supplied the com-
mittee with a copy of the Pennsylvania bill against fraudulent
advertising, and told at some length of how on his initiative
the Market Street Business Men’s Association took effective
action against a firm that recently opened a store on Chestnut
Street, Philadelphia, for the sale of furs at cut prices, repre-
senting that the furs were offered at low prices because they
were purchased direct from trappers and manufactured in the
firm’s own workshops. Referring to the Pennsylvania adver-
tising law he added: “Now if you will give us such an instrument
as that, we will clean the shoe business of whatever fraud there
may be in it.”
“Now what is the real objection,” queried the Chairman of
the Congressional Committee, “to having the manufacturer put
his name on?”
“I want to tell you what the real objection is,” answered Mr.
Geuting. “The retailer is the great factor in administering to
the people of this great country. The shoe manufacturer would
go backward, would retrograde, if it were not for the retailer
who is constantly intervening. He has his ears and nose to the
ground and knows public sentiment. He talks to the customer
and knows the customer's demands. It is not the manufacturer
who builds the shoes of this country, but the retailer who builds
the shoes of this country. That is the truth of the matter.
We put a specification in the shoes. We state what lasts we
want; we state what kind of linings we want in our shoes, and
as soon as we find that certain linings wear better we demand
them from the manufacturer. It is not the manufacturer who
really creates shoes in this country. We get our ideas from our
customers; the manufacturer interprets our idea from the cus-
tomer through us.”
542 TRADEMARKS AND BRANDS
Charles J. Savage, who is described as having his “energies
and sympathies enlisted on the side of trademarked advertising
merchandise,” presents the following problem which states
clearly the issue between the advertiser and the private brand
manufacturer and compares their attitude toward each other
and toward the trade:
*Manufacturers of trademarked advertised goods are waging
a war of pretty stiff competition among themselves these days,
in their respective industries, for the patronage of the consum-
ing public.
Problems of manufacture, of distribution, of advertising,
come up, and these advertisers do not all agree with one another,
by any means, as to the most economical and profitable solution
of those problems; each has his own peculiar plans formulated,
and each executes those plans in accordance with the results of
the most thorough investigation and the most ripened judgment
that he can command.
But they are all unanimous in the belief that the public is the
Supreme court, so far as buying is concerned. The decision of
that court cannot be reversed without an amendment to the
constitution of modern distribution methods—unless, but the
following paragraphs tell it.
But the direct appeal of the manufacturer, in his printed
word to the consumer, to ask for and to buy his goods, doesn’t
make up the only weapon of competition which he is
De º: a. *P against. . There is the certain class of retailer to
a Competi- be reckoned with: the dealer who knowingly sub-
tor stitutes, or attempts to substitute, another make for
the one asked for, for various reasons—in nearly
every case, for the selfish reason of a juicier profit on goods of
unknown and, most likely, doubtful quality. Some competi-
tion, this substitution practice—take it from the men who have
to battle with it!
And still the competition which the advertising manufacturer
has to face isn’t at an end. There is another form of it, and
this one is a double-edged weapon which, when driven home,
cuts into his distribution methods on one side and into his con-
sumer sales on the other. It is the manufacturer of unbranded,
*Printers' Ink, August 6, 1914, p. 32,
TRADEMARKS AND BRANDS 543
unadvertised goods who sells his product or products direct to
retailers by means of his sales force and by direct advertising,
and who puts his (the retailer's) own label on the goods.
The last method, it is easily seen, lessens the channels of
distribution to the advertising manufacturer, and also places
the consumer selling element on a strictly personal, close-touch
basis, by enabling the retail merchant to capitalize for himself
the confidence and good will which exist between his customers
and himself.
It is that last phase of competition to which this article is
given over; and it may be well to state right here that the one
and only intent is to spread the facts out on the table.
The . They tell their own story—or they don’t mean any-
Adºr * thing. One or the other.
sºn, Every one who has made a study of modern adver-
Competitor tising knows pretty well that the manufacturer of
trademarked, advertised goods has to say to the
retail dealers—whether he is a manufacturer of clothing, of
clocks, shoes, or speedometers. Let’s see what he does say.
Easier sales, more sales, more frequent “turnovers,” bigger
volume of profit, increased prestige, and er—but why not let
the manufacturer tell it himself?
All right.
Alfred Decker & Cohn, makers of Society Brand Clothes,
Chicago, recently sent out a large book of advertisements
to their dealers. The opening page is headed, “Why Sell an
Advertised Line—and Advertise It?”
The following excerpts from that talk contain the meat of the
story:
“There are numerous reasons why a merchant should
choose to sell a nationally advertised line, and advertise
its name in connection with his, but the main one
sºft is there is more money in it . . . because the
Dealers handling of this line means a larger volume of busi-
Handle ness . . . because the business is done with less
4; time, less effort, less friction, and hence less expense.
Tands & e {º g
. . . In selling a so-termed advertised line he
enjoys the benefit of a prestige that it has taken years to build
up. His audience has been made acquainted, by the maker,
with the merits of his merchandise, and unless the young men
and men of his community have been informed beforehand they
exercise no choice in the store from which they will buy.
544 TRADEMARES AND BRANDS
“Each year the maker invests a large sum in national adver-
tising . . . in constantly reminding them (the men of the
country) to seek their dealer in their town . . . in creating
in their minds a want for these very clothes. . . . The
minute a manufacturer begins to advertise in such publications
as the Saturday Evening Post, Collier’s, etc., he has set a clothes
standard from which he can never depart. . . . The manu-
facturer says, in effect: “By advertising to you in this manner
I show my confidence in my own product. I am not afraid to
have you put my clothes to the test.’ Isn’t it much easier to
sell a man clothes that he has seen advertised in a reputable
magazine than nondescript clothes of which he knows nothing?
“This in turn reflects favorably upon the merchant handling
these clothes. . . . It helps build the reputation of his store
as a place where good goods can be had at reasonable prices.
. . . . He secures not only the trade which would be influenced
by him personally, but the trade which has become convinced by
the national advertising that these clothes are the clothes they
want. . . . The big reason for advertising is not to get people
to write to the manufacturer, but to send them into the mer-
chant’s store with minds already made up to buy. . . . It
teaches people to want more things and better things. . . . .
It raises standards, educates buyers to choose the best.
If all national advertising were discontinued for
a year . . . the decrease in business in every line would be
sensational.
“Non-advertised lines seldom have anything to commend
them except price . . . a permanent business can be built
only on quality. . . . To employ the highest-
Price as priced designer, a manufacturer must have a large
%.º. volume of business, that he may supply dealers with
peal of Non-, i. tº tº gº
...t. this advantage without extra cost. . . . This is
Lines one of the reasons clothes of indisputable merit are so
strongly advertised in leading publications. . . .
The increased business the advertising produces makes it
possible to employ a high-salaried master designer.
“Thus merchants who sell clothes of reputation and known
value secure the benefit of this premier service. . . . They
enjoy the increased trade which this advertising produces.
Their clerks use on the average less time to make a sale, because
they are not called upon to argue the qualities of an unknown
line; they speak with confident affirmation about goods with
TRADEMARES AND BRANDS 545
which the customer is already familiar. This saving in time
can be traced in real money—it means more sales in the same
length of time, and more sales mean more profits.”
The clothing industry was not chosen as an arbitrary example,
but because it is representative, in a general way, of the attitude
of the manufacturers who seek an outlet through the retail
merchants for their trademarked advertised goods. But since
the clothing trade has been picked out, it may seem more
consistent to follow it out.
What do manufacturers of unbranded, unadvertised clothing
say to retail merchants, through their sales organizations
and through direct advertising, to induce them to
4rguments buy clothing which bears their (the retailers') own
p.ſ. label?. Their attitude is interesting and provocative
Branders of serious thought—leaving aside altogether the truth
or fallacy of it. It must be borne in mind, further-
more, that these manufacturers have deliberately chosen a
method of distribution which they believe is best suited to their
business; and, in doing everything within their power to execute
this distribution policy most effectively and most profitably, they
are not only well within their rights, but they are relentlessly
following out what they believe to be a sound, legitimate method
of marketing their merchandise. Everybody to his faith.
Let us bring the claims of the non-advertising, non-trade-
marked clothing manufacturer over to the light. He has a
pretty long story to tell to the retail clothing merchant. He
says, in effect:
“The manufacturer of a line of trademarked, nationally ad-
vertised clothing who offers you his co-operation and his free
advertising matter looks like a real benefactor at first glance.
But he isn’t. He appears mighty unselfish—but he isn’t that,
either. You must look pretty carefully, even under the bottom
row of logs, to find the “nigger.” But he’s there. As a general
thing, he has to ‘jack up’ his price, because of the enormous
expense of his magazine advertising. You can easily see where
you step off. Your margin of profit is cut very close to the
bone. And when I quote you my prices and demonstrate to
you the quality, style, fit, workmanship, and wearing quality of
my line you’ve just simply got to stop and think. -
“Just as a hint, why do you suppose so many clothing manu-
facturers who advertise are opening up stores of their own in
cities throughout the country?
546 TRADEMARKS AND BRANDS
“Isn’t it plain to you that by tying up with nationally adver-
tised goods you become the pawn of the manufacturer—you are
his clerk in your locality—a mere distributing machine? And
you aren’t even pensioned, because that manufacturer can drop
you like a burned-out match when you fail to satisfy him in the
matter of sales. Don’t play into his hands that way. You
own your business. Own it, then. Be your own boss. Don’t
let any man come to you and make your influence with your trade
subordinate to his influence just because he sells you the goods
and makes a lot of fancy promises which don’t square up.
Analyze your own business situation and you will see the fallacy
of playing the drummer and general utility man in his distribu-
tion orchestra.
“What does this national advertising of his do for you? It
boosts the cost of the goods, but it doesn’t increase your sales
to any extent. You may sell A's clothes, let us say. They are
advertised in the magazines; they are advertised by means of
style books, and by local newspaper advertising and by posters
in your window. Now, on the next block, or a few doors away,
maybe, your competitor sells B’s clothes. The advertising of
one firm offsets the other; you can pull A's name out of the
magazine advertising, out of the style books, out of the news-
paper advertising, out of the posters, and substitute B’s name.
In the minds of your customers there isn’t the slightest bit of
difference. It’s your store your customers care about, don’t
you see that? They want to deal with you, not with some one
they never met, who is making clothes thousands of miles away
from them.
“Now, what about this free advertising? You insert an
advertisement two columns wide by seven inches deep in your
newspaper. The manufacturer is generous—he gives
Manu, you the electro free. All you have to do is to pay
ſº. for the space. That’s free advertising matter.
.." And so it is. Free to the manufacturer, eight parts;
| Sneered at free to you, two parts. Think about it. Don’t you
see that it is you, and the thousands of other merchants
like you, who have made possible big clothing organizations
out of your own pocket—instead of each one of you making a
solid, lasting success of your own, based upon your own name
and reputation?
“Furthermore, don’t be deluded by this prestige bugaboo.
The advertising cost is added to the cost of the clothing—you
TRADEMARKS AND BRANDS 547
pay for it, your customers pay for it. This idea of the adver-
tising paying for itself, by means of creating a larger volume of
sales and thus decreasing manufacturing costs, sounds good
from a glib tongue, but figure it out for yourself. Improved
machinery and modern production economies have, of them-
selves, reduced manufacturing costs, and this saving, which
should go to you and to your customers, is eaten up in huge
advertising and selling costs. -
“Don’t be cajoled into handling the nationally advertised line
on the argument that it is easier and less expensive to sell an
advertised brand. That’s only a bait. And this is
a'ºn why: the circulation of the magazines is greatly
.."; i." Scattered, outside of some big cities, and it isn’t
possible for you to build up any such sales as the
advertiser would have you believe. Sales do result, naturally,
but not in any such volume or with any such profits as will
make the benefit to you square up with the cost of this
work.
“Now, then, suppose you don’t “make good’ with an adver-
tised line. It is taken away from you. What happens? You
have told the people of your town, over your own name, that
you believe in, and want them to believe in, the clothing you
handle, and then you have to take it all back. You don’t sell
that brand any more. Thus you lose the confidence not only
of all the people in your town, but also of your regular customers.
Another thing: your competitor may get the line that was taken
away from you and, since you subscribed to that line's goodness
in your local advertising, your customers may lose confidence
in you and switch their trade to your competitor’s store.
It has happened. You are pretty well boxed up, aren’t
you?
“The style books which the advertiser offers you—free or at
‘cost price,” according to how he can work it in each individual
case—are sent out to your customers and you pay the
Says postage on them. But we’ll waive that—that’s only
#. a money loss. What else have you done? You have
A., sent your list of customers to the manufacturer for
Promotion whatever use he may want to put them to–names
Work which are the very backbone of your business and
which the manufacturer may have no hesitancy in
supplying to your competitor, should business relations between
you cease. Then the whole book is chock-full of the manufac-
548 TRADEMARKS AND BRANDS
turer’s advertising; and, since you pay the postage, you are per-
mitted to have your name imprinted upon the books—imprinted
not as prominently as you would like to have it, but only as large
as the manufacturer sees fit.
“Your window space is worth money, isn’t it? Whose clothes
and posters do you advertise in your windows? Your own, as
a reliable merchant?. Or the manufacturer's, as his distribut-
ing clerk? That’s about enough for that.
“And now, what becomes of all the money you spent in
advertising a branded clothing—should the line be taken away
from you? You lose it irreparably; and you lose the good will
and confidence of your public with it, most likely. Money
invested in advertising should be a distinct, cumulative asset
to you in your own business. Is it? On the contrary, it is a
loss, and more, because it turns into a chronic liability.
“Here is the milk of the whole matter—and the more you
think seriously about it, the stronger you will agree to it; cut
out the advertised line of clothing; be your own boss;
# Close be independent; don’t lean on anybody; tie up to a
ersonal g e &
A. good, reliable clothing manufacturer who sells a line
of worthy, dependable goods; capitalize your own
personality; capitalize the good will and confidence and prestige
which you enjoy in your town with your customers and with
others; make people feel that because you sell the goods they are
worthy; teach people to rely upon your personal advice and
judgment in matters of merchandise; develop the personal note;
strengthen your own individuality and that of your store by
instilling into folks’ minds that you are responsible. Buy good
clothing. Put your own label on it. Then advertise it, and
your store and yourself persistently. That’s how big successes
are being made to-day—and that’s how the biggest retail suc-
cesses are going to be made to-morrow.”
If you imagine that that is putting it pretty strong, there are
certain dealers who will undertake to correct your impression.
Those are only some of the arguments which are being put forth
by manufacturers of unbranded, unadvertised clothing, shirts,
shoes, and most everything which is sold through retail stores.
And it is a form of competition which will have to be fought in
two ways—out in the open and in the dark.
The reader will understand that the writer’s energies and
sympathies are enlisted on the side of trademarked, advertised
merchandise. But what is the answer?
TRADEMARKS AND BRANDs 549
The following article was written at that time by Richard
H. Waldo, of Good Housekeeping Magazine, New York, and
now of the New York Tribune, and was printed as a partial
reply to these arguments.
The resourceful attack of a hypothetical private brander
upon manufacturers’ co-operation is amusing to one who knows
how eagerly their skilled aid is sought. In every part of the
country, and in every line of business, the progressive retail mer-
chant advertises not only because he must but because he
Wants to.
This was not true a few years ago, but many forces have
made it a vital fact of to-day. He buys space freely, but the job
of filling it is a self-renewing nightmare—unless the really clever
service of the great national advertisers is fully utilized. The
development of this service is in its infancy, but it is simply
invaluable to the local merchant now.
Thus aided, he learns how to get the turbine-wheel of his
own business out into the rushing stream of national adver-
tising—a stream that flows through every city, town, and village
on this continent north of the Rio Grande. The way in which
the early men in each locality make this hook-up lift their
yearly profits is really wonderful.
These observations are particularly suggested in considering
the well-built man of straw set up by Mr. Savage. In the
latter's readable article one observes how one pretty argument
against trademarked goods demolishes another. The dealer
is told in a breath that the “Margin of profit is cut very close
to the bone,” and in the next he is warned that the “manu-
facturer can drop you like a burned-out match when you fail
to satisfy him in the matter of sales.” If the first proposition
were true, wouldn’t the second be covered by “I should
worry?”
The essential idea of the co-operative value of national adver-
tising to the dealer has been summed up in a few words by one
of the best-known merchants in the country. When asked by
Men’s Wear (New York) why he advertises as he does, he
replied:
“Three years ago I sold $700,000 annually. To-day I am
selling $1,000,000. Part of this, not all of it, is due to the
fact that I sell and advertise Hart, Schaffner & Marx goods.
550 TRADEMARKS AND BRANDS
My name on my store in my town is worth a lot more than
theirs; I could sell it for $250,000. But their name on their
clothes is worth a lot more than mine. My customers know I
do not make clothes, and the name of Hart, Schaffner &
Marx on the clothes answers every question any man might
be inclined to ask. The combination of my name on my
store and their name on my clothes in my town cannot be
beat.”
If the above does not conclusively answer the arguments of
the private brander, I can show letters—additional corrobora-
tive and most convincing testimony—from successful men in
the retail trade. All of them have had eacperience with private
brands and all of them are now making money from advertised
goods.
J. W. Yowell, grocer, of Elko, Nev., rated at $35,000, says:
“We prefer the quicker turnover on advertised brands every
time. It is too hard to move the unadvertised. We tried our
own private label for a while but it was a failure.”
Grove & Bro., who run a general store rated at $35,000 in
Luray, Va., feel the same way. They write: “We find that
it pays us to couple our local advertising with national adver-
tising. Advertised goods sell much more readily with us than
our private brands ever did.”
J. S. Botts, Advertising Manager of the Geo. A. Ducker
Company, Joliet, Ill., can answer inquiries regarding private
brands as well as any man I know. He took up the advertised
goods idea at my suggestion some two years ago, and he fre-
quently makes me blush by coming in to thank me. As his
house, which is rated at $200,000, does a business of over half a
million annually in department-store lines, I value his testi-
mony. He will send it to any one who asks.
E. H. Leonard, the Sales and Advertising Manager of the J. L.
Hudson Company, Detroit, Mich., has just put on a wonderful
two weeks’ exposition of nationally advertised goods. Here is
the most elaborate and far-reaching piece of co-operative work
that has ever come to my attention. With his own experience
in handling private brands, Mr. Leonard couples that of his
house, which is rated at “over $1,000,000.” Their combined
judgment as to the future course of merchandising can hardly
fail to be impressive—even to those manufacturers who cling
desperately to private branding because they see in it their last
forlorn hope for survival without advertising.
TRADEMARKS AND BRANDS 551
The Michigan Tradesman covers the situation admirably in
a letter from a druggist, who writes:
“I had a man here from Philadelphia the other day
pº.t’s with a line of fine goods to be sold under my own name,
T., swell, packages and up to the class I would have to
handle or lose my trade. He talked profits and the
strength of having my own name on the labels. True, I can
sell, and do sell, a lot of my own brands, but to get down to
prices, the chap with the Philadelphia lines has but a small
margin better than many of the most heavily advertised goods.”
This druggist then goes on record as favoring a large number
of sales at a small profit, and that is the keynote of the entire
situation. It is not possible to ignore popular demand, with the
cost of doing business given even casual attention. Showing
exactly what this cost is, the volume of sales that each clerk
must make is beautifully brought out in a letter from C. F.
Adams, of Gardner & Adams, Salt Lake City, recently printed in
Men’s Wear. Of these sales Mr. Adams said:
“If you get no other revenue from a salesman than just from
his sales, and his salary is $10 per week, in order to earn 5
per cent., he must sell $13,000 per year; to earn $15 per week he
must sell $19,500; $18, $23,400; $20, $26,000; $30, $39,000;
$35, $45,500. The salesman does not in modern business trade
on the generosity of his employer; by his individual efforts he
raises his own salary.”
With the necessity of making such a volume of sales staring
him in the face, is it any wonder that live-wire clerks are pushing
advertised goods, and urging their bosses to drop
Q'ºrº private brands? Time is a tremendously important
º; factor in retailing. A large corset manufacturer
Volume lately brought out a booklet quoted by the Corset and
Underwear Review (New York), showing that the
buyer who handles $1,000 worth of trademarked corsets, turn-
ing her stock six times a year, makes $315 more than if she
featured a special brand exclusively.
Women have been so well educated by advertising nowadays,
and attach so much importance to the maker's and the maga-
zine’s guarantee, that the battle may be said to be fairly won for
the advertiser as against the private brand; and the Sooner the
remaining stores see this the sooner they will get the big figures
on the right side of the ledger. .
Even in the grocery line, where private brands have flourished
552 TRADEMARKS AND BRANDS
like the green bay tree, a clearer view is being taken of the mat-
ter. The New England Grocer and Tradesman, the pioneer trade
paper to systematically urge retail merchants, for their own sake,
to push nationally advertised merchandise, tells us that, “taking
the trade as a whole, the profits are better on nationally ad-
vertised goods, and when the grocer considers the volume of
these goods which he can sell and the ease with which the sales
are made, he must admit that they are money-makers of the
best description.”
From another angle, O. E. Carman, in Hardware Trade (Minne-
apolis), relates cases proving that merchants cannot afford to
neglect the opportunities which are given them by national ad-
vertising.
“I have in mind the case of a retail paint store in an Eastern
city. This store was doing only a fair business—nothing like
what it should, considering its location. The store was per-
suaded to buy an advertised line and to push it. The results
were surprising. Sales were large on this ‘new line.” The store
was fully won over to advertised goods.
“To-day the store is probably the largest of its kind in a city
of that size in the world.
“I know of a dealer who threw out an advertised line he had
carried for years. He fancied the company was not treating
him right. Within a couple of months he found that his cus-
tomers, no longer able to get that advertised article from him,
were going across several miles to buy it in another town. Then
he appreciated what a good thing he had had. He wasn’t long
in getting it back.”
The editors of Good Storekeeping, in reading hundreds of trade
papers to make excerpts, are compelled to notice that these
papers, in growing measure, recognize the solid merits
#.r* of trademarked, advertised goods from the con-
f...?' servative merchant's standpoint, while some errors
Goods of judgment on the part of advertising manufacturers
which have alienated dealers are spoken of largely as
mistakes of the past. Thus says the National Jeweler and Op-
tician (Chicago):
“Manufacturers generally have come to realize, on the one
hand, that false values, although backed by much advertising
and a trademark, open wide the door of competition and sub-
stitution; and, on the other, that they cannot expect to gain the
interest and co-operation of the retailer in their business unless
TRADEMARKS AND BRANDS 553
they are willing to make it worth his while. With these essen-
tials generally understood alike by manufacturer and dealer, no
‘trademark problem’ need present itself. Other things being
equal, the retailer stands to profit by handling trademarked
goods, and in his own interest and the interest of the public he
serves he should insist upon the assurance and protection that
the trademark of a manufacturer affords.”
Aptly summarizing, the Retailers Men’s Apparel Magazine
Says:
“The retailer who ignores the powerful influence of adver-
tising is completely out of tune. That advertising has brought
about a stable condition in buying and selling is apparent at
every turn. Your newspapers and magazines offer ample evi-
dence. Whether it be an incubator, a thresher, a breakfast
food, a collar, or a cigar—people want to buy and duplicate by
name. They don’t want nameless unknowns.
“Retailing of advertised goods is frictionless. The advertised
brands are called for by name—there’s no dickering, no uncer-
tainty to buyer or seller; the sale is closed quickly. The popu-
larity of advertised goods and the desire of consumers to know
where the goods are on sale has led a large number of retailers
to place in their windows a bulletin of the brands they carry.
“Additional profit in advertised goods lies in the time saved
waiting on customers, and the possibility of still greater profit
lies in the fact that you can carry a wide variety of makes, a
small stock of each, and thereby be in a position to serve a
greater number of men of varied tastes.
“Every sale means a profit—at the beginning or the end of a
season—and there’s no need of retailers stocking heavily with
advertised goods. Manufacturers and jobbers are ready to
promptly supply retailers in such quantities as suit their needs.”
There is milk in that cocoanut. The fact that small stocks
of advertised goods can be and very generally are carried has
much to do with the fact that we are going through a “psycho-
logical depression” instead of a panic. A writer in the New York
Tribune almost grasped this truth when he said: “All reports
point to the conclusion that we are passing through the dullest
times in business that we have experienced in years. That
there is no glaring evidence of this is due to the fact that we have
come to this condition gradually and not by the usual step of
panic. Instead of falling over the precipice, as we generally do
in America, as the result of an explosion, we have climbed grad-
554 TRADEMARKS AND BRANDS
ually down the side of the cliff. Stocks of goods have been re-
duced little by little to a point where much danger has been taken
out of the situation, producing a conservation of credit which
keeps such tremendous breaks as the Claflin failure from para-
lyzing the situation with fear, which is the forerunner of panic.
In conclusion, let me give the results of an investigation that a
dealers’ service organization recently made. I still had a lurk-
ing respect for private-label competition until these figures were
placed before me. -
Significant . The opinions of 1,463 well-rated retail merchants
Census of throughout the United States were obtained—264
Pealers hardware, 459 drug, 311 grocery, 175 jewelry, 222 dry-
goods, 32 music.
FAVOR, FAVOR
PRIVATE BRANDS ADVERTISED GOODS
Hardware 4% 96%
Drugs 9% 91%
Grocers 7% 93%
Jewelry 2% 98%
Drygoods and General Store 5% 95%
Music 7% 93%
Averages all opinions 6% 94%
The following phrases summarized the reasons for selling ad-
vertised goods:
“Saves time of salesman.”
“Much easier sold.”
“Better quality assured.”
“Fresher stock.”
“People ask for them.”
“Customers have confidence in advertised goods.”
“Show bigger profits at end of year.”
“Rapid turnover.” -
As aptly expressed by one grocer: “Some grocers think they
get a bigger profit on private brands.”
One simple undeniable fact standing out in this investigation
like a sore thumb is this: The dealers who are still “for” private
brands are practically all small fry and from the high-grass
towns. The live stores in the larger cities working on a straight
turnover basis have seen the light and are headed for it.
You may say that you hear nothing of this. Quite so. Why
should a man announce that he has stopped beating his wife,
even though it’s true?
* 2° , , ,
*~. wº
CHAPTER XIV
ADVERTISING STANDARDS
HERE is no better evidence that those who are engaged
in the various branches of advertising appreciate the
responsibility which modern conditions have put upon
them than is to be found in the efforts being made to raise adver-
tising standards. These efforts are in part individual, being
made both by advertisers and by sellers of space, and in part
they represent association, or club activities. The most con-
spicuous among the latter are the efforts of local clubs to raise
standards locally, and of the Associated Advertising Clubs of
the World to raise standards in two directions: first, by attack-
ing fraudulent advertising through its Vigilance Committee,
and, second, by raising the tone of honest advertising through
the constructive efforts of its National Commission.
Growing out of these national efforts there has come a codi-
fication of standards of practice for different lines of adver-
tising efforts which represent one of the most impressive cases
on record of attempts to put down in words a code of ethics to
serve as a guide to those who are anxious to keep a business on
the highest possible plane.
In addition to all of these voluntary efforts to raise advertising
standards, there has been some progress made in expressing in
the form of law the desire to protect public interests. These
laws are directed against those who attempt to abuse the power
over demand which they may be able to develop by advertising.
Within the limits of this volume it will be impossible to
discuss adequately the individual efforts which are being put
forth to raise the standards of advertising practice. There are

555
556 ADVERTISING STANDARDS
numerous cases in which we find individual advertisers taking
the position that the only safe, as well as the only moral, method
to pursue is for them to adopt and scrupulously observe stand-
ards of truth and sincerity which are unimpeachable. At the
same time, a number of publishers have come to the belief that
they assume a moral, if not a legal, responsibility for the mate-
rial which appears in their advertising columns, and we have
such instances as the Farm Journal of Philadelphia, and the
publications of the Curtis Publishing Company, and many
others which exercise a strict censorship over the copy going
into advertisements which they print. In connection with such
activities as this, some effort is made to raise the ideas of the
public as to what it ought to expect from an advertiser or his
advertisement. The work which William Freeman conducted
for the New York Evening Mail, and the work which Samuel
Hopkins Adams is now carrying on in the “Ad-visor” columns
of the New York Tribune are examples of this sort of activity
which deserves more space than can be given to it here. It
would be valuable, if space permitted, to go somewhat more
fully into the nature and methods of these efforts. It will be
necessary, however, to confine our attention in this chapter to
(1) the activities of associations and clubs leading to the adop-
tion of standards of practice by the associated clubs; and (2)
the progress which has been shown in the development of legis-
lation for the purpose of regulating advertising.
(1) AssociateD EFFORT
One of the most active local clubs in the matter of attempting
to raise local advertising standards is the Minneapolis Adver-
tising Forum. This organization, early in 1915, received a
report from its Bureau of Fair Competition, from which the fol-
lowing excerpts are taken:
*[EDITORIAL NOTE:-The real purpose of vigilance work is brought out very
clearly in the following report, viz., to lessen the suspicion against all adver-
*Printers' Ink, April 8, 1915, p. 43.
ADVERTISING STANDARDS 557
tising by eliminating that element which tends to cast a doubt on the integrity
of a whole industry. It was the vigorous work of the Minneapolis Advertising
Forum along these lines that won for it the Baltimore Truth Trophy.—Ed.
Printers' Ink.]
After more than two years of volunteer work this permanent
bureau was established in February, 1914. (The Vigilance Bu-
reau of the Minneapolis Advertising Forum.)
Its object is to reduce the burden of unjustified suspicion which,
through association with careless or dishonest advertisers, seems
to rest on all advertisers.
Subscribers to the bureau are expected to request investiga-
tions of all advertisements which they suspect contain state-
ments that are “untrue, deceptive, or misleading,” and it is the
duty of the secretary to ascertain the facts in the case and, if
the suspicion is found to be justified, to obtain the positive
assurance of the advertiser that the offence will not occur again
or to report the evidence to the proper authorities.
How great is the burden of unjustified suspicion carried by each
advertiser is hard to estimate. But some idea of this encum-
brance which advertising has been carrying may be gained by a
study of the facts revealed in the records of investigations made
by this bureau at the request of subscribers during the past year.
Since subscribers do not request investigations unless their
knowledge of merchandise leads them to suspect that statements
are untrue, the cases in which careful investigations show the
advertisements to be truthful may be considered indicative of
unjustified suspicion. The proportion of the total cases in-
vestigated but found truthful should, therefore, represent the
burden of suspicion.
The efficiency of this bureau can be judged most clearly by
these percentages of unjustified suspicion.
First quarter, March 1 to June 1, 1914, 65 per cent.; second
quarter, June 1 to September 1, 1914, 50 per cent.; third
quarter, September 1 to December 1, 1914, 19 per cent.; fourth
quarter, December 1, 1914, to March 1, 1915, 17 per cent.
If the above figures indicate the unjustified suspicion in the
minds of subscribers themselves, who are familiar with mer-
Number chandise and prices, it is interesting to speculate on
of Cases what this burden must be in the minds of the purchas-
Investi- ing public, who cannot be expected to discriminate
* clearly, but may simply suspect advertisements and
turn away from them,
558 ADVERTISING STANDARDS
During the year the bureau investigated 192 cases distributed
amongst various classes of business as follows:
Auctions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Clothing Stores (men's). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Clothing Stores (women's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Dairies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
Decorators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Department Stores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Florists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Furniture Stores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Furriers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Fortune Tellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Grocers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Hardware Stores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Horse Dealers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I
Help Wanted Ads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Jewelers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Medicine Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Magazine Agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Music Dealers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Meat Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Mail-order Houses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Opticians . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Piano Dealers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I0
Publishers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Public Service Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Rug Dealers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Schools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Shoe Stores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Sporting Goods Stores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Tailors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Theatres . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Wholesalers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I
It will be seen from the above that hardly any class of retail
business has escaped suspicion.
Of these 192 cases, 64 investigations show the advertiser to
be correct in the statement suspected, making the average an-
nual burden of suspicion 33% per cent.
Of the remaining 128 cases, in 68, or over half of them, the
bureau secured immediate co-operation in the correction of the
faulty statements—an interesting demonstration of the inad-
visability of rushing into the courts before every other means is
exhausted.
In 22 other cases favorable progress was made. In 11 cases
no definite results were obtainable, although it is felt that the
moral effect of the investigations served to make the advertisers
AHDVERTISING STANDARDS 559
more careful and probably prevented further misstatements. In
three cases untruthful and deceptive advertising was prevented
before the copy was published.
Five prosecutions have been necessary, and the following re-
sults have been obtained :
1. A horse dealer was convicted and fined $50.
2. A warrant was issued for the arrest of a special
sales agent and he fled the city before the warrant could be
served. The sale was discontinued.
3. A salesman of bottled ink was arrested on the charge of
fraudulent advertising, but escaped conviction through a legal
technicality.
4. The proprietor of a men’s clothing store pleaded guilty to
the charge of untruthful advertising and was fined. -
5. Another men’s clothing company has been arrested and the
case has been set for 2 P. M., April 2nd, before Judge E. A.
Montgomery. This corporation is said to be planning to attack
the constitutionality of the law. The bureau has placed the
case in the hands of Brooks & Jamieson, attorneys, of Minne-
apolis, and is being supported financially by the National
Vigilance Committee of the Associated Advertising Clubs of
the World. The National Committee has retained as advisory
counsel Harry D. Nims, of New York City, author of “Unfair
Competition” and of the Minnesota law to prevent fraudulent
advertising.
The bureau has assisted the Minneapolis Retailers’ Associ-
ation to get evidence of violations of the Transient Merchant
Act and other matters which might be considered as
Co-oper, unfair competition. Two itinerants, arrested on in-
anº, with formation which the bureau helped to secure, “jumped
Rºlerº bail” and fled the city before being tried.
Association Evidence obtained by the bureau led to the arrest
of 15 merchants in the Bridge Square and Washington
Avenue district on the charge of soliciting business on the side-
walk, commonly called “roping in.” The constitutionality of
the city ordinance prohibiting this practice was attacked. The
ordinance was sustained by the Municipal Court and the de-
fendants have carried their case to the Supreme Court.
Prosecution
Chambers of Commerce as well as Advertising Clubs have
from time to time undertaken vigilance work, and the following
560 ADVERTISING STANDARDS
account of the work done by the Vigilance Committee of the
Advertising Division of the Chamber of Commerce of Indian-
apolis, as reported by Carl Hunt, editor of Associated Adver-
tising, illustrates what an organization of this kind has been able
to achieve:
*Before I attempt to describe a series of advertisements which
the Vigilance Committee of the Advertising Division of the
Chamber of Commerce at Indianapolis has been publishing with
the hope of creating a desire for better things in local advertising,
it would be well to mention briefly the policies of the Indian-
apolis committee.
In Indianapolis the method of operation has been called the
“Indianapolis plan.” In a large measure the committee has
assumed a judicial attitude, holding itself ready and willing to
investigate matters brought to its attention. It has seldom
taken the initiative absolutely, though in a few cases this has
been done.
Complaints have come chiefly from competitors of the adver-
tisers, whose methods have been complained of and some of the
complaints have come from representatives of mediums.
Early in its existence the committee issued a folder to Indian-
apolis advertisers generally—taking its mailing list from the
ledger of one of the newspapers. This folder set forth the gen-
eral purposes of the committee and asked advertisers for their
financial co-operation, inviting them to subscribe upon the basis
that their advertising would pay them better in proportion to
whatever general improvement in advertising could be ac-
complished. A paragraph from this circular was as follows:
“You, like all other advertisers, will, we believe, want to do
all you can to help us clean up, for you no doubt know that
something like 80 per cent. of the people still say, when they
read any kind of advertisement, ‘Oh, it’s only an advertisement!’
In other words, only 20 per cent. read advertisements with the
proper respect for advertising. Yet, even in the face of this
great loss of prestige, advertising pays.”
The committee is just now ready to send out a second appeal
for funds based upon what it has done, and through the interest
which has been manifested in the committee’s work it seems that
there will surely be no difficulty in financing it.
*Printers' Ink, December 31, 1914, p. 47,
ADVERTISING STANDARDS 561
Probably the most remarkable indication of all has been the
willingness of the newspapers of Indianapolis to co-operate by
giving the committee advertising space for the pur-
pose of exploiting the value of truth in advertising.
This seems remarkable to me from the fact that the
appearance of the advertisements is of itself an admission on its
face that some advertising is untrue—and where was there a
newspaper ten years ago which had the courage to make such
an admission? Certainly this is a good indication.
This co-operation of newspapers has been willingly given in
spite of the further fact that the operations of the committee
have in several cases temporarily reduced the space which ad-
vertisers contemplated using.
All of the advertisements the committee has used in the In-
dianapolis newspapers have contained the following statements,
in effect:
“The Vigilance Committee of the Chamber of Commerce,
whose aim is to foster truthfulness and stamp out misrepre-
sentation in advertising, meets each Monday noon—12:15—at
the Chamber of Commerce, to hear complaints against untruth-
ful or misleading advertisements.”
I am going to quote from some of the advertisements as they
have appeared. One, under the heading of “Poetic Justice,”
W3. S :
“Oftener than otherwise ‘poetic justice’ is visited upon an
advertiser who attempts to misrepresent or mislead. He may
fool some of the people for a little while, but he cannot fool
enough people long enough to make it pay. Sooner or later
—usually sooner—he finds that justice has been done—that he
has brought himself troubles in proportion to the deceit which
he has attempted. He finds his truthful competitors growing
and prospering while he is standing still or going backward.
Truth pays.”
Another, somewhat similar, but a little more cheerful perhaps,
Wà.S.
“Most advertising is true, because the advertiser who sur-
vives is the advertiser who does tell the truth, and those who
would “put something over’ on the people do not usually last
long or prosper. Truthful advertising, properly persisted in,
and backed up with consistently good service, pays large divi-
dends. The truthful advertiser grows and prospers. He is
happy.”
Newspapers
Co-operate
562 ADVERTISING STANDARDS
Still another along the same general line was:
“The customer who comes as the result of a proper, truthful
advertisement, and finds the things or service which are offered
for sale to be equal to their description, will come again and
again. Such a customer will recommend the advertiser to his or
her friends. Such advertising counts—it builds business.”
Some of the copy, particularly at times when the newspapers
have published accounts of prosecutions, has had the idea of en-
couraging people to believe advertising. This copy was used
for the benefit of the newspapers and of the square advertisers
whose co-operation the committee has had. One such advertise-
ment Was:
“Except for the fact most advertising is true, the untruthful
advertiser would have no ground upon which to stand. If all
advertising was untruthful, nobody would believe any of it.
The advertiser who has formulated a strict code for his own
guidance and lives up to it heartily is the man whose advertising
pays best both at the beginning and in the long run.”
Two of the advertisements have appealed particularly to the
caution of advertisers who might be inclined to get “off the
track.” One of them was:
“An advertiser who attempts to fool the public may well
expect his employees to do likewise. The custom will grow.
Sooner or later his employees will fool him. Most
gººd advertising is straight. It all should be.”
Policy The other was:
to Tell t
the Tººth “Habits of dishonesty grow. The advertiser who
allows himself to depart from the truth in any degree
is on dangerous ground. Most advertisers, knowing this, ad-
here strictly to the truth.”
In another the convenience of truthfulness was argued in an
interesting way. It read as follows:
“The reason why a man who writes an untruthful advertise-
ment is almost always caught by the customer is that when a
man tells a lie he has two things to remember—the state of facts
as they really exist and the state of things as he pretends they
are. The advertiser who tells the truth only has one thing to
remember—the fact as it is. Truthfulness in advertising breeds
confidence. Confidence on the part of the customer means
prosperity to the advertiser.”
The self-interest of the advertiser was a strong feature in an-
other piece of copy, which was as follows:
ADVERTISING STANDARDS 563
“The untruthful advertiser is operating under a tremendous
disadvantage. It is only when customers come again and again
that advertising can really pay. Most advertisers know this.”
Following the first successful prosecution of an offender, a
simple, straightforward announcement concerning the case and
its results was published in display space, but on another occa-
sion—that of the second successful prosecution—the same copy
was made to carry the thought that most advertising is true.
In part, this second advertisement was:
“The Vigilance Committee of the Publicity Division of the
Chamber of Commerce has in the last few months persuaded
many overzealous advertisers to eliminate false and misleading
statements from their announcements. It has successfully pros-
ecuted in police court two firms that refused to “clean up.”
There is now probably less faking in advertising in Indianapolis
than in any city of its size in the country.”
It is not now and probably never will be possible to trace direct
results to these advertisements. It has been the thought of the
committee, however, that, persisted in, they could not possibly
help from doing good, not only through their influence upon adver-
tisers, but also on account of their influence upon mediums, too.
It has been the thought of the committee that a newspaper
which is frequently publishing advertisements exploiting the
benefits of truthfulness in advertising is a good deal less likely
to accept off-color copy.
These benefits are, of course, more or less incidental because
the prime purpose, so far as the hope for immediate results is
concerned, was to get people who have complaints interested
in the work of the committee. The advertisements have un-
doubtedly done this.
The Vigilance Committee of the Associated Advertising
Clubs of the World, through its chairman, Merle Sidener, made
a report at the Chicago convention on June 21, 1915. Mr.
Sidener, in the course of that report, predicted that the time
was near when a paid staff would be necessary to handle the
increasing complexities of the work of the committee, and that
for two reasons:
“In the first place, there is the growing demand for educa-
tional material on the part of the individual clubs, and in the
564 ADVERTISING STANDARDS
second place it is becoming increasingly difficult to reach
offenders against the truth.
“The time has come for more action and less talk,” said Mr.
Sidener. “The time has come when some central body shall
place itself in position to speak with authority concerning the
truth or untruth of specific advertisements. The time has
come when the publications have a right to look for guidance
from those who assume to tell them they are headed in the
wrong direction. The publications are entitled to the facts
about advertising which is criticised, rather than opinions and
suggestions. The time has come when the advertisers them-
selves have a right to demand that those who advocate
truth in advertising shall point out the individual offenders
and not merely include a class under generalities. The time
has come when this organization can no longer depend on
unofficial sources for information concerning frauds and
fakes.”
*The report further speaks with appreciation of the better
understanding among business men as to what the vigilance
movement really stands for, and mentions particularly the
action of the Proprietary Association of America in endorsing
the Printers' Ink Model Statute.
The work of the past year has naturally fallen under the
heads of education and correction. The educational work has
been concentrated upon the development of individual vigilance
committees in the clubs and securing the co-operation of
publications and other advertising mediums. The original
series of articles in Printers' Ink, in which the vigilance move-
ment was suggested, were reprinted by permission, and given
wide circulation among the clubs. A special pamphlet was
also printed for those clubs which were endeavoring to secure
the passage of the Printers' Ink Model Statute.
The policy of using moral suasion wherever possible, rather
than resorting to the law, has proved its soundness. Out of
869 investigations reported by thirty-five individual clubs, only
eleven prosecutions were necessary. “Such cases were becoming
fewer each year,” says the report. “Usually one court action
in a community has the effect of keeping the would-be crooked
advertiser in the straight and narrow path.” The committee
has had the services of a national detective agency in making
*Printers' Ink, June 24, 1915, p. 96.
ADVERTISING STANDARDS - 565
investigations, and has co-operated closely with the Post-office
Department.
“The foundation has been laid for a ‘Rogues Gallery’ of
fraudulent advertisers which in time will render a great service
to the mediums which seek honestly to shut out the fakers,”
said Mr. Sidener. “For several months a clerk has been
engaged in gathering data for this record, and more or less
information has now been filed concerning about 700 different
advertisers. The committee has been compelled to deny an
erroneous report which has been persistently circulated, to the
effect that a ‘directory of frauds’ would be ‘published’ by the
committee. Nothing is further from the truth. This record
of the transgressions of advertisers will be for reference only,
and confidential information will be furnished to those who are
interested.
The constructive side of the Associated Advertising Clubs’
work in attempting to raise advertising standards has taken
two definite forms: the creation of the National Commission
and the adoption of the Standards of Practice.
The National Commission was authorized by the new Con-
stitution and By-laws adopted by the Clubs at the meeting
in Toronto, in June 25, 1914. The articles of the Constitution
which bear on the creation and work of this Commission are
as follows: º
ARTICLE IV
MEMBERSHIP
Section 1. This Association shall consist of:
(a) Duly organized advertising clubs.
(b) Departmental advertising organizations.
Section 2. Any advertising club may make application for membership to
this Association, and may become affiliated by the Executive Committee.
Section 3. Departmental organizations representing specific interests of
advertising may, upon the recommendation of the National Commission, be
affiliated with this Association, but only one such department representing an
identical interest shall be affiliated.
ARTICLE VII
INATIONAL COMMISSION
Section 1. There shall be a National Commission composed of three dele-
gates elected annually by ballot from each affiliated departmental organization,
said election to be held at the time of the annual meeting of the Association. ,
566 ADVERTISING STANDARDS
Section 2. Until the members of the National Commission shall have been
duly elected in the manner herein provided, the organization created at the
1913 annual meeting of this Association, held at Baltimore, known as the
“Conference of Committees,” and composed of thirty-nine representatives, three
from each of the thirteen departments of advertising there represented, shall
be substituted for the National Commission, and shall have all the duties and
authority thereof. Upon the organization and affiliation of any departmental
organization represented in the Conference of Committees and the election of
delegates to the National Commission therefrom, these delegates so elected
shall immediately supersede the members of the Conference of Committees
repredesignate, except as herein otherwise provided.
ARTICLE XIII
FUNCTIONS AND DUTIES OF DEPARTMENTAL ORGANIZATIONS
Section 1. The functions and duties of the departmental organizations may
be such as their constitution and by-laws designate, except as therein otherwise
provided.
ARTICLE XIV
FUNCTIONS AND DUTIES OF THE NATIONAL COMMISSION
Section 1. The National Commission shall be a congress representing the
allied interests of the departmental organizations and may assume such duties
and exercise such authority as will not conflict with the duties and authority of
the Executive Committee or the purpose of the Association.
Section 2. It shall elect by ballot from its membership at the time of each
annual meeting of the Association, and for a term of one year each, five mem-
bers of the Executive Committee.
The creation of the National Commission was the outgrowth
of an attempt at reorganization of the work of the Associated
Clubs on a more satisfactory basis, determined upon at the
Baltimore convention of the Associated Clubs in June, 1913.
The Reorganization Committee, as a result of whose report
the National Commission was formed, was created for the
purpose of giving effect to the declaration of principles adopted
at Baltimore. The following is a copy of the report of the Re-
organization Committee rendered at the Toronto convention,
June 21, 1914:
This committee recommends, then, that the National Association shall en-
courage these Departmentals to become affiliated with the Association.
We urgently recommend that these departmental organizations be left
unhampered in the conduct of their own respective interests, their affiliation
being chiefly for the purpose of strengthening our Association and of providing
ADVERTISING STANDARDS 567
a method through which these Departmentals may efficiently care for their
own respective special interests.
These departmental organizations will adequately provide for the respective
individual class interests, but it is essential also that the Conference of Com-
mittees introduced at Baltimore, or some commission of like character, be given
permanent form, so that a method may be provided for the consideration and
determination of those problems which relate to two or more of these class
interests.
We recommend, therefore, that a commission be formed to be called the
National Commission, to supersede the Baltimore Conference of Committees
and to be composed of three delegates elected annually from each affiliated
departmental organization, and that this commission be authorized to assume
such duties and exercise such authority as will not conflict with the duties and
authority of the Executive Committee.
This National Commission will bring together into one body the strongest
men from every department of advertising; to consider the relations between
the different interests of advertising; to formulate united expressions on adver-
tising problems which relate to the various special interests of the business;
and to report its findings, with suggestions for action, to the National Asso-
ciation and to the Executive Committee.
It is the hope of this committee that this National Commission will thus be
of great permanent value to our organization in the inception of ideas and plans
which will have for their purpose the betterment of class advertising conditions
and relations, and we believe that it should have proper representation on the
Executive Committee.
We recommend, therefore, that this National Commission shall have authority
to elect annually from its own membership five members of the National Exec-
utive Committee, so that the Departmentals may be thus adequately and
directly represented in the councils and activities of the Association.
We recommend, also, that this National Commission shall have authority
over eligibility qualifications in the Departmentals, because this Commission,
composed of representatives from each Departmental, can each standardize as
far as practicable these membership qualifications, and because these Depart-
mentals will have a greater respect for each other and co-operate in greater
harmony if the basis of membership in each is adjusted satisfactorily to all.
We further recommend that this National Commission shall have authority
to determine what interests or classes of advertising may be organized into
Departmentals.
It is our suggestion that the qualifications for membership in these Depart-
mentals be set high, so high, in fact, that no one may become a member of any
of these Departmentals who is not conducting his particular business or adver-
tising in harmony with whatever code or declaration of principles and ethics
the National Commission may establish as a test of membership eligibility.
This plan will result in gathering together for the first time in these Depart-
mentals for concerted action those men who are actually conducting advertising
on the moral plane to which it is the purpose of our Association to raise all
advertising interests. A membership in the Departmentals under the plan
suggested by our committee will at once become something of a distinction
and honor.
The declaration of principles adopted at the Baltimore con-
vention marks an epoch in the attempts on the part of Associated
568 ADVERTISING STANDARDS
Advertising Clubs to raise standards, and is the starting-point
not only for the creation of the National Commission, but for
the development of the Standards of Practice which were the
most conspicuous feature of the Toronto meeting.
The declaration of principles, as they were adopted at Balti-
more, is as follows:
THE DECLARATION OF PRINCIPLES
At the first joint Committee meeting in the history of the Associated Adver-
tising Clubs of America, of representatives from each of the departments in
advertising, viz.: Advertising Agents, Agricultural Publications, Directories,
General Advertisers, Magazines, Newspapers, Outdoor Advertising, Printing
and Engraving, Religious Press, Retail Advertisers, Technical Publications,
Trade Press and Specialty Advertising, the outstanding feature was the sincere
and determined purpose of each department to work jointly for the promotion
of efficient advertising, in harmony with all the other departments and interests
concerned in promoting the common good of advertising, and, where abuses
occur, to deal fearlessly for their correction, realizing that only by this united
effort no loophole will be left through which the unfair practitioner may escape.
To this end the Committee believes that the time has now come when this
great body—the Associated Advertising Clubs of America—should establish
a permanent authenticated Commission, composed of the constituent elements
represented in the present Committee, and such other elements as may be
ºich Commission should deal in detail with the problem existent in
OUIT II621C1S.
We recommend that each of these constituent elements, the Advertising
Agents, Agricultural Publications, Directories, General Advertisers, Magazines,
Newspapers, Outdoor Advertising, Printing and Engraving, Religious Press,
Retail Advertisers, Technical Publications, Trade Press, Specialty Advertising,
and such other elements as may be added, be formed as sub-organizations to
the Associated Advertising Clubs of America, and that into these departmental
organizations be admitted as members only those who can meet the qualifica-
tions established by the duly authorized Commission or investigating body.
We believe in truth, the corner-stone of all honorable and successful business,
and we pledge ourselves each to one and one to all, to make this the foundation
of our dealings, to the end that our mutual relations may become still more
harmonious and efficient.
We believe in truth not only in the printed word, but in every phase of business
connected with the creation, publication, and dissemination of advertising.
We believe there should be no double standard of morality involving buyer
and seller of advertising or advertising material. Governmental agencies
insist on “full weight” packages, and “full weight” circulation figures. They
should also insist on “full weight” delivery in every commercial transaction
involved in advertising. We believe that agents and advertisers should not
issue copy containing manifestly exaggerated statements, slurs, or offensive
matter of any kind, and that no such statements should be given publicity.
We believe that the present chaotic multiplicity of methods of arriving at
verification of circulation statements are not only confusing but inadequate.
ADVERTISING STANDARDS 569
and that the time for radical revision of these methods and for standardization
of statements is the present, and the opportunity for constructive work along
these lines is given by the assemblage at this Convention for the first time, of
representatives of all the different interests concerned in this vital matter.
We believe in co-operation with other agencies now at work on this problem.
especially in the plan of the Central Bureau of Verification which has already
been initiated by some of the organizations represented in this Commission,
and request the Executive Committee to proceed therewith.
We indorse the work of the National Vigilance Committee, and believe in
the continued and persistent education of the press and public regarding
fraudulent advertising, and recommend that the Commission, with the co-op-
eration of the National Vigilance Committee, should pass upon problems raised
and conduct campaigns of education on these lines. We believe it to be the
duty of every advertising interest to submit problems regarding questionable
advertising to this Commission and to the National Vigilance Committee.
We believe that the elimination of sharp practice on the part of both buyer
and seller of advertising and advertising material will result from the closer
relationship that is being established, and that in place of minor antagonisms
will come personal co-operation to the increased benefit of all concerned, and
the uplifting of the great and growing business of advertising.
We believe in upholding the hands worthy to be upheld, and we believe that
each and every member owes a duty to this Association of enforcing the Code
of Morals based on Truth in Advertising, and Truth and Integrity in all the
functions pertaining thereto.
[Signed]
C Advertising Agents: W. C. D'ARcy, chairman; WM. H. JoHNs, STANLEY
LAGUE.
Agricultural Publications: T. W. LE QUATTE, chairman; ARTHUR CAPPER.
Directories: W. H. LEE, chairman; G. D. W. MARCY, R. H. DONNELLEY.
General Advertisers: WM. H. INGERSOLL, chairman; E. ST. ELMO LEWIs,
O. C. HARN.
Magazines: R. G. CHOLMELEY-JONES, chairman; A. C. G. HAMMESFAHR,
Joseph A. FORD. $
Newspapers: A. G. NEwMEYER, chairman; JAMEs KEELEY, HowARD DAVIS.
F Outdoor Advertising: O. J. GUDE, chairman; CHAs. T. KINDT, E. ALLEN
3 ROST.
Printing and Engraving: H. H. CookE, chairman; H. A. GATCHEL, MAR-
QUIS REGAN.
Religious Press: W. J. McINDOE, chairman; WM. SHAw, J. F. JACOBs.
Retail Advertisers: M. M. GILLAM, chairman; WM. C. FREEMAN, WALTER
S. HAMBURGER.
Technical Publications: H. M. SweTLAND, chairman; MASON BRITTON,
JOHN CLYDE Oswald.
Trade Press: CHARLEs G. PHILLIPs, chairman; W. H. UKERs, ROY F. SouLE.
Specialty Advertising: LEWELLYN E. PRATT, chairman; THEODORE R.
GERLACH, HENRY B. HARDENBURG.
For purposes of reference and record, the Standards of Prac-
tice adopted by the Toronto convention are reprinted in full
in an appendix to this volume.
570 ADVERTISING STANDARDS
(2) DEVELOPMENT OF LEGISLATION TO REGULATE
ADVERTISING
The following is a summarized list of State laws on fraudu-
lent advertising as they stood in the early part of 1914:
*The importance to advertising men of familiarity with the
various State laws regulating advertising needs no emphasis.
The following list has been compiled from the text of the various
statutes as furnished by the Secretaries of State of the several
States. It is not presented as a complete digest of all laws
affecting advertisements, for no attempt has been made to in-
clude the laws against specific types of medical copy which
describe symptoms of disease or the multitude of local ordi-
nances. The former have little or no interest for readers of
Printers' Ink, and the only effect of reproducing them would be a
slimy trail across the page, and to collect and classify the differ-
ent local ordinances would tax the capacity of a well-equipped
legal information bureau. There are, in addition, various laws
regulating specific forms of advertisements, such as bankrupt
stocks, divorce notices, real estate sales, prize offers for the solu-
tion of puzzles, and a sizable list of “blue-sky” laws regulating
the advertisement of securities. These are referred to only
when they form part of statutes regulating fraudulent advertis-
ing in general.
Of the general laws forbidding fraudulent advertising there
are three classes: The Printers' Ink Model Statute, the Model
Statute amended, and the Massachusetts form. To put it
briefly, the Printers' Ink Model Statute forbids false statements
of fact by the man who has the goods for sale. It does not penalize
statements of mere opinion, does not include the publisher or the
agent unless the advertisement refers to commodities or serv-
ices actually offered by them, and does not make it necessary
to prove intent to deceive. In some States the Model Statute
has been amended (and emasculated) by the addition of the
word “knowingly,” or by some phrase which makes it necessary
for the prosecution to prove what was in the advertiser’s mind
when the advertisement was written. Thus the publication of
a false statement is no crime unless it be shown that the adver-
tiser knew it was false, or intended to deceive somebody with it.
*Printers' Ink, April 2, 1914, p. 26.
ADVERTISING STANDARDS 571
The third class includes laws like that of Massachusetts,
which contain the word “knowingly,” and attempt to define
the kinds of false statements which shall be penalized. In-
stead of flatly declaring that false statements of any sort are
forbidden, these laws declare that false statements “concerning
the quantity, the quality, the origin,” etc., of merchandise shall
constitute a misdemeanor.
The complete text of the following statutes is on file in the
offices of Printers' Ink. It can be obtained by any one by ad-
dressing the proper Secretaries of State.
CONNECTICUT.-Chapter 65, Acts of 1913. Penalizes false
statements concerning the “nature, quality, method of produc-
tion or manufacture, or cost of any goods.” Con-
Summary tains the word “knowingly.” Penalty, $10 to $500.
ofL S* INDIANA.—Section 347, Acts of 1913. Same text
A., as the Massachusetts law.
Fraudulent Iowa.-Chapter 309, Laws of Thirty-fifth General
Advertising Assembly (1913). The Printers' Ink Model Statute,
amended by an added clause which reads, “with intent
to defraud directly or indirectly.” Special exemption is provided
for publishers and agents who accept or place advertising in
good faith. No special penalty is specified.
MARYLAND.—Bill now pending in legislature—similar to the
Massachusetts law.
MASSACHUSETTS.—Chapter 489, Acts of 1912, amending
Chapter 397, Acts of 1902. Penalizes false statements of fact
concerning the “quantity, quality, method of production or
manufacture, cost of production, cost to the advertiser, the pres-
ent or former price, or the reason for the price.” Also penalizes
false statements concerning “the manner or source of purchase,
or the possession of prizes, awards or distinctions.” Contains
the word “knowingly.” The employee who makes the false
statement is specifically included in addition to the employer.
The penalty is $10 to $500 for each offense.
MINNESOTA.—Chapter 51, Acts of 1913. The Printers' Ink
Model Statute. Penalty, that fixed by statute for misde-
IOlea, Il OI’.
MICHIGAN.—Act 276, Public Acts of 1913. The Printers’
Ink Model Statute amended by adding the word “knowingly.”
Clause specifically exempts publishers who receive copy from
others without knowledge of its falsity. Penalty, $25 to $200,
or imprisonment in the county jail for 90 days, or both.
572 ADVERTISING STANDARDS
NEBRASKA.—Senate File, 188, Acts of 1913. The Printers’
Ink Model Statute. Penalty, $25 to $100.
NEw JERSEY.-Assembly Bill 734, 1913. The Printers'
Ink Model Statute. Penalty, $1,000, or one year or both.
NEw York.-Section 421 of the Penal Code, amended by
Chapter 590, Acts of 1913. Same as Massachusetts law, with
the exception of the clause relating to separate responsibility
of employees, which does not appear. Clauses are added regu-
lating the sale of real estate by means of prizes offered for the
solution of puzzles, etc. Penalty, as provided for misdemeanor.
NoFTH DAKOTA.—Chapter 3, Acts of 1913. The Printers’
Ink Model Statute. A section is added specifying that it shall
be the duty of the State's attorneys, sheriffs, police officers,
health officers, and food commissioners to enforce the statute.
A second added section extends the statute to cover any person
“who aids another to violate the same.” Penalty: first offense,
$10 to $100; subsequent offenses, $100 or 60 days in jail, or
both.
OHIO.—House Bill 104 (1913 Session). The Printers' Ink
Model Statute. Penalty, $10 to $100, or imprisonment in the
county jail 20 days, or both.
OREGON.—Section 2230, Lord’s Oregon Law. Penalizes
false statements concerning the “quantity, quality, value,
price, method of producing or manufacture of merchandise or
professional work, the manner or source of purchase of mer-
chandise, or the motive or purpose of any sale.” Contains the
word “knowingly.” Penalty, $10 to $50, or imprisonment 20
days, or both.
PENNSYLVANIA.—Act No. 8, 1913 General Assembly. Pen-
alizes false statements concerning the “quantity, quality, value,
merit, use, present or former price, cost, reason for the price,
motive or purpose of a sale, method of cost or production,
possession of rewards, prizes, or distinctions, or the manner or
source of purchase.” Contains the word “knowingly.” Pen-
alty, a fine not to exceed $1,000, or imprisonment not to exceed
60 days, or both. t
RHODE ISLAND.—Bill now pending in legislature. The
Printers' Ink Model Statute. Amended by adding the word
“knowingly.”
SouTH DAKOTA.—Chapter 15, Acts of 1913. Same text as
1Massachusetts law. Penalty, $10 to $100 for each offense.
UTAH.—Chapter 22, Acts of 1913. Any person who, on his
ADVERTISING STANDARDS 573
own behalf or as agent, employee, or representative, “shall
knowingly produce, publish, print, use, circulate, display, or
transport any false, fraudulent, or misleading advertisement,”
or shall cause any of those things to be done, is declared to be
guilty of a misdemeanor. Section 2 defines an advertisement as
“any notice or announcement made by a handbill, placard,
sign, newspaper, magazine, or other public print, or by an oral
proclamation.” Section 3 declares “objectionable and perni-
cious within the meaning of this Act: Advertisements of sales of
‘damaged goods,” of ‘fire sales,’ of ‘bankrupt sales,’ of ‘wreck
sales’ and the like, where merchandise not a part of such stock
represented in the advertisement is sold, and all other advertise-
ments wilfully designed or calculated to deceive or mislead the per-
Sons to whom they are directed.” No specific penalty provided.
WASHINGTON.—Chapter 34, Acts of 1913. The Printers’
Ink Model Statute. An added clause specifically exempts
owners, publishers, agents, and employees of newspapers who
accept advertising in good faith. Penalty, as provided for “mis-
demeanor.” -
WISCONSIN.—Chapter 510, Laws of 1913. The Printers’
Ink Model Statute amended by the addition of a clause reading,
“for the purpose of defrauding the public.” This is equivalent
to the insertion of the word “knowingly.” A clause exempts
publishers who accept copy in good faith. Penalty, $10 to $200,
or imprisonment not more than 90 days, or both.
Following is the complete text of the Printers' Ink “Model
Statute” which is law in six States, as indicated above.
Any person, firm, corporation, or association who, with intent to sell or in
any wise dispose of merchandise, securities, service, or anything offered by such
person, firm, corporation, or association, directly or indirectly, to the public
for sale or distribution, or with intent to increase the consumption thereof, or
to induce the public in any manner to enter into any obligations relating thereto,
or to acquire title thereto, or an interest therein, makes, publishes, disseminates,
circulates, or places before the public, or causes, directly or indirectly, to be
made, published, disseminated, circulated, or placed before the public, in this
State, in a newspaper or other publication, or in the form of a book, notice,
hand-bill, poster, bill, circular, pamphlet, or letter, or in any other way, an
advertisement of any sort regarding merchandise, securities, service, or any-
thing so offered to the public, which advertisement contains any assertion,
representation, or statement of fact which is untrue, deceptive, or misleading,
shall be guilty of a misdemeanor.
In the early part of 1915 the editors of Printers' Ink issued
the following summary of the progress of the campaign against
574 ADVERTISING STANDARDS
fraudulent advertising from the legal side, as it stood at that
time. This summary brings up one year farther the record of
advance made in the foregoing article:
*The constantly increasing number of letters received by Print-
ers' Ink, bearing on some phase of the campaign against fraudu-
lent advertising, testify to the great interest in the movement
in all parts of the country. Most of the letters are requests for
information on some point which affects pending legislation,
and the same questions are coming up again and again, wherever
the Printers' Ink Model Statute is introduced. It is timely,
therefore, to put our answers to those questions on record: to
outline once more the arguments in favor of the legal remedy
for dishonest advertising, and to reply to those who oppose, for
one reason or another, the campaign to place all advertising
on a foundation of the truth.
In November, 1911, Printers' Ink made two specific recom-
mendations. First, that adequate legislation be secured in all
States, based on a Model Statute drafted after an exhaustive
investigation of all the laws against fraudulent representation
then existing. Second, that the clubs affliliated with the Associ-
ated Advertising Clubs should organize Vigilance Committees
empowered to investigate cases of questionable advertising,
and to co-operate with the local prosecuting officers in securing
convictions under the law when such action should be necessary.
What resulted may be briefly summarized as follows: The
Printers' Ink Model Statute has been enacted in eight States; it
has been passed in an amended form in three States; and six
States had passed laws based on a less effective statute. Three
States already had laws of this latter form in 1911. Vigilance
Committees have been organized in practically every ad club
located in a State where the law prohibits dishonest advertising,
and in many clubs located in other States. The Associated
Advertising Clubs have a National Vigilance Committee, with
headquarters at 920 Hume-Mansur Building, Indianapolis.
Numerous Boards of Trade and other commercial bodies, not
directly affiliated with the Associated Advertising Clubs, have
also organized Vigilance Committees along similar lines. At
the present writing the Printers' Ink Statute is pending in the
*Printers' Ink, March, 4, 1915, p. 66.
ADVERTISING STANDARDS 575
legislatures of seven States, and plans are being made for its in-
troduction in at least three others.
Before taking up in detail the arguments for and against the
specific remedy proposed, it is well to review the reasons for
applying any remedy at all. Honest advertisers
#.*.*, demand a law against dishonest advertising because
emedy . . . e § - º
I. N.i.d it is continually depreciating the value of all adver-
tising. Every lying advertisement that is published
makes it a little bit harder for the honest advertiser to get the
public to believe what he says. As the burnt child dreads fire,
the man or woman who has been victimized through a fraudu-
lent advertisement thenceforward regards all advertising with
suspicion. The honest merchant, whose goods have the quality
he claims for them, finds the public the more reluctant to believe
him if his next-door neighbor is conducting a campaign of mis-
representation. Many concerns will not advertise at all or re-
fuse to advertise in certain mediums, because it is such hard
work to get people to believe what they say. The lying adver-
tiser is obstructing a part of the profits which rightfully belong to
his honest contemporary, just as surely as if he robbed the lat-
ter's safe. It is quite true that the dishonest advertiser doesn’t
i. those obstructed profits. Nobody gets them. They are
OSt. *:
If it were not for the fact that fraudulent advertising thus
reacts upon the honest advertiser, the former could be left to
work out its own destruction. The dishonest advertiser ulti-
mately winds up in the bankruptcy court, if indeed he escapes
a criminal prosecution. But in the meantime he is injuring
every decent advertiser, to say nothing about the harm he is
doing to those who put their trust in his lying claims. The an-
nual report of the Postmaster General for the fiscal year ending
June 30, 1914, states that 364,000 cases of fraud had been dis-
posed of during the year, and that the promoters of those fraud-
ulent schemes received approximately $68,000,000. The only
thing that will stop that sort of injury is the strong arm of the
law. Preaching will not stop it, and philosophizing will not
heal the hurt. We might as well go up and down the land an-
nouncing burglary, and moralizing upon the certain ultimate
fate of those who break into other people’s houses. We could
get 99 per cent. of the public to agree with us perfectly, but in
the meantime the other 1 per cent. would be breaking into our
houses and walking off with the solid silver—that is, unless there
576 ADVERTISING STANDARDS
is a law making burglary a crime, and a police force that will en-
force the law.
Those are the fundamental premises which underlie the rec-
ommendations originally made by Printers' Ink.
The Model Statute, when reduced to its simple terms, pro-
vides that, “The person who is responsible for the publication
of an advertisement for goods which he himself offers for sale
shall be guilty of a misdemeanor if that advertisement contains
any statement as to fact which is untrue, deceptive, or mislead-
ing.”
It is highly important to understand the various provisions
of the law, and the reasons for their inclusion in the exact form
in which they are stated.
1. In the first place, it must be appreciated that the adver-
tiser himself is the one individual who can properly be held
responsible for the truth or falsity of any statement contained
in an advertisement. If any one can be presumed to know
whether a statement is true or not, the advertiser is that man.
The advertisement is published in his interest, and for his
benefit. Whatever profit arises from its publication is his
profit. Therefore the Model Statute was so drawn as to place
the responsibility for dishonest statements directly upon the
advertiser—upon the man who utters the advertisement, and
whose money pays for its circulation. The penalty is imposed
upon the individual—whether natural or corporate—who lies
about the thing which he himself offers for sale. This qualifica-
tion is to be found in the words “or anything offered by such
person, firm, corporation, or association.”
Thus it is evident that the publisher who accepts an adver-
tisement, whether or not he regards it as above suspicion, is
not subject to the penalty imposed by the law.
The Pub- Unless he publishes false statements of fact regarding
}. something which he himself is offering for sale, such
espon- º i. *
sij"i, as an untrue statement of his circulation, for ex-
Limited ample, he cannot be held liable. That provision is
only just, because publishers should not be placed
under the responsibility of advertising the truth of every state-
ment which is contained in copy which is submitted to them.
It is not fair to subject a publisher to the risk of a prosecution
for misdemeanor if he fails to verify every advertisement he
prints, when, as a matter of fact, he frequently has neither the
ADVERTISING STANDARDS 577
time nor the means of verifying them. If he accepts copy which
he knows is fraudulent he is guilty of moral delinquency no doubt,
but it is a form of delinquency which the law cannot recognize
without working injustice to many innocent publishers.
The same reasoning applies to the advertising agent, the
advertising manager, and other agents and employees of the
advertiser. Their status as agents or employees places upon
their principal (the advertiser) the responsibility for their acts
performed in his service. It is his duty to give them accurate
information in the first place, and to exercise due vigilance to
see that the copy they prepare is in accord with the facts.
The authority to decide what shall or shall not be printed rests
with the advertiser, and the responsibility for what is printed
must rest there also.
2. The law contemplates the regulation of statements of fact,
and says nothing about statements of opinion. That qualifica-
tion is also important, for the reason that the issues upon which
an advertiser is brought to trial must be susceptible of proof.
Furthermore, the courts have recognized for many years the right
of a merchant to indulge in what is known as “puffing”—the
extolling of the goods which he has for sale as the “best in the
world,” “absolutely unequalled,” and so on. Such superlative
praise is merely an expression of more or less ingenuous opinion,
and deceives nobody. Whether it is good advertising practice or
not is open to question, but it is seldom taken seriously, even
by the advertiser himself, and should not be declared illegal.
But a statement of fact is either true or false. The patent-
medicine manufacturer who advertises that his product “contains
no habit-forming drug” can prove that the statement is true,
or the Vigilance Committee can prove that it is false. The
declaration by a stock-promoter that the company he represents
“owns” certain properties can be verified. There is no room
for differences of opinion in the presence of the facts.
3. The statements of fact which are penalized are those
which are (a) untrue, (b) deceptive, (c) misleading. Concern-
ing untrue statements, little need be said. A sim-
Why Mis- ple, straight-out-and-out lie will find few defenders.
sº Nobody is compelled to advertise his goods; if the
atements * * g
...” truth will not serve him he can always keep silent.
Specified But there are, unfortunately, fraudulent advertise-
ments which do not contain a single statement of fact
which is wholly untrue. They do contain deceptive statements,
578 ADVERTISING STANDARDS
and misleading statements, but none which can be proved
ºuntrue.
Take, for example, the “gyp” operators which are sometimes
met with in the piano and furniture trade. The “gyp” rents
a vacant house in a good neighborhood, furnishes it more or
less completely, and inserts want ads in the daily papers which
state that “A gentleman who is obliged to leave town will
sacrifice his fine piano and furniture, etc.” Of course, the
whole scheme is fraudulent. The furniture and the piano are
next to worthless, and if he is not interfered with the operator
will restock the house again and again. But when any one
tries to prove that a statement of fact in the advertising is untrue,
he has his work cut out for him. The statements are, however,
deceptive and misleading.
Again, there are a number of trade terms which are under-
stood in their proper meaning by certain individuals, but which
give an entirely erroneous impression when used in advertising
to the general public. For example, a certain New York
department store, which has since discontinued business, adver-
tised a sale of “Arctic Seal Coats” at a price which was declared
to represent a great reduction. Upon prosecution under the
New York law, the store called several witnesses to prove that
“Arctic Seal” was a term well understood in the fur trade as
referring to dyed rabbit fur. The fur was “Arctic Seal,” and
the store claimed the right to call it by its name. The fact
that the purchaser was misled, and believed that she was buying
Some grade of sealskin was, of course, unfortunate, but the
store could not be held responsible for her misunderstanding of
a plain trade term. The presence of the word misleading in
the New York law against fraudulent advertising, however,
Secured the conviction of the store, which was later affirmed by
the Appellate Division of the Supreme Court.
Thus it is important to include in the scope of the law those
statements which are deceptive and misleading. The statute
which omits either of those words is not an adequate law,
for it cannot reach the advertiser who makes statements
with a double meaning, and it frequently will be found inadequate
to check the dishonest use of trade terms and other words
. mean entirely different things to different groups of
people.
So much for the direct provisions of the law itself, and the
arguments in favor of its adoption in its suggested form. Un-
ADVERTISING STANDARDS 579
fortunately it will not stop all forms of dishonesty in adver-
tising, but no law can be drawn, in our opinion, which will
do that without at the same time working injustice to a great
many honest men. Dishonest statements of opinion cannot
be prevented by law until some method is discovered whereby
men may be made honest by legislative enactment.
Let us turn now to the arguments which are made by the
opponents of the law. Those arguments ordinarily fall into
two classes: those which maintain that a law is not the proper
remedy, and those that are aimed at the particular form of law
suggested.
1. From the very start of the movement there have been a
few who declared that the best method of combating fraudulent
advertising was through the process of educating publishers to
refuse questionable copy. It is a fact that publishers are
examining their advertising columns more carefully than ever
before, and that the obviously dishonest advertiser is finding
the list of mediums which are open to him growing smaller every
year. The importance of that development should by no
means be depreciated, but for two very good reasons it cannot
be regarded as a sufficient remedy. In the first place, every
piece of dishonest copy is not obviously fraudulent, and the
publisher has neither the time nor the opportunity to investi-
gate every claim which is made. Furthermore, a given piece
of copy may be entirely unobjectionable, and the follow-up
may be fraudulent in the extreme. Even the most conscientious
publishers are sometimes imposed upon in this way.
And, in the second place, even if every publication in existence
should raise the bar against fraudulent advertising (which is a
consummation not likely to come to pass in this generation,
the United States mails are still open to the faker. He can buy
plenty of names from “sucker lists” at one to ten cents apiece
and can circularize them to his heart’s content. Of course, he
runs the risk of being stopped by a fraud order if his activity
grows too conspicuous, but he can operate for a long time and
Swindle thousands of people without attracting the attention
of the Post Office if he is reasonably careful.
Every person who has ever answered a patent-medicine
advertisement, or applied for a stock-selling prospectus, or
responded to an “agents wanted” appeal, or written name and
address on a postal card requesting “further information”
about any one of a thousand different schemes, becomes sooner
580 ADVERTISING STANDARDS
or later an asset of some name broker. The original recipient
of the inquiry exhausts his wiles in the endeavor to get the
prospect’s money, and then sells the prospect’s name and
address to a concern which deals in “sucker lists,” properly
classified. Hundreds of thousands of names can be bought
from these concerns, of people who are known to be responsive
to all sorts of fraudulent appeals. Some of the most notorious
swindlers do not advertise in publications at all, but depend
largely upon purchased names. A certain Chicago stock-
broker who is now under indictment for using the mails to
defraud used publication advertising only as a means of getting
subscribers for a financial magazine which he published. Prom-
ises made in his publication advertising were kept, though the
same could hardly be said with regard to the follow-up letters
with which prospects were deluged. If every publisher would
purge his columns of the frauds and the near-frauds it would
be an undisguised blessing, but it would not put an end to
fraudulent advertising.
2. It has been sometimes urged that a law against dishonest
advertising would crowd the court calendars with a lot of petty
suits, and would furnish a means for unscrupulous
#.º, merchants to harass their competitors. Experience
fjiāº has shown, however, that no such results need be
anticipated. In any of the States where the law has
been passed convictions have been few because it is seldom
necessary to invoke the law. The law was suggested in the
first place, not as a means of obtaining convictions, but as a
fulcrum for the lever of moral suasion. The chief duty of a
vigilance committee is not to prosecute offenders, but to induce
offenders to reform. Two or three convictions in any given
locality are all that is necessary, as a rule, to set up a very
general sentiment that lying is dangerous. The real penalty
imposed is not the nominal fine or short imprisonment specified
in the statute, but the fear of publicity. No advertiser cares
to face a public demonstration of the fact that his announce-
ments cannot be believed.
3. By far the most general argument against the statute,
and the argument which is most plausible, is the declaration
that the provisions of the law are unjust because they do not
include only those misstatements which are made “knowingly,”
or “with intent to defraud.” It is contended that the law is
too wide a departure from the usual type of criminal statutes,
ADVERTISING STANDARDS 581
in that it does not regard either fraudulent intent or actual
injury to any one as elements of the crime which it creates.
Public policy does not require, these objectors claim, that
business men should be subjected to criminal prosecution for
acts which the most careful and honest man might sometimes
commit without harm to any one. No advertiser should be
penalized for his “innocent mistakes.” Unless it can be shown
that the advertiser intended to swindle somebody, or that
somebody was actually swindled, his acts cannot be regarded
as criminal.
The protagonists of this view generally declare that they
would be quite satisfied with the law if amended so as to penalize
advertisers who “knowingly” make false statements.
Whº Poes Frequently they introduce a substitute bill, contain-
A d*sº, ing the word “knowingly” or some equivalent phrase,
*Knoºgº and specifically mentioning the kind of misstatements
which are to be penalized. These bills declare that
false statements regarding “the quantity, the quality, the price,
the value,” etc., shall constitute the misdemeanor. The animus
of the opposition to any measure can generally be judged by the
character of those who are back of it. Legislators and others
interested in the repression of dishonest advertising will do
well to scrutinize pretty carefully the credentials of those who
come in support of these amendments and substitutes. Their
motives are usually quite painfully evident.
Putting that aside, however, and with regard to the validity
of the arguments—it is claimed that the intent is the crime.
That is true, but the intent is a state of mind. The addition
of the word “knowingly.” to the text simply imposes upon the
prosecution the burden of proving what was in the advertiser’s
mind when the advertisement was written. If he lies carelessly,
or ignorantly—no matter how black the lie, or how bitterly it
betrays the confidence of those who trust it—he is not responsi-
ble. Only when it can be proved that he knew he was lying
can he be brought to book. Every person concerned in the
case, from the judge down, may be willing to stake his liberty
upon the fact that the advertiser is a conscienceless scoundrel—
but when it comes to legally admissible proof that he “knew?’
the falsity of any given statement it is quite a different story.
Judge Aldrich, of Boston, in writing an opinion for the Cir-
cuit Court of Appeals in the case of Estes & Son v. Ford (100
C. C. A. 258), recently said: “The whole trend of modern
582 ADVERTISING STANDARDS
decision is in the direction of making it clear, whether in re-
spect to food, drugs, or wearing apparel, that the placing of
adulterations or imitations upon the market, with the purpose
of deceiving the members of the public, who buy, as they do
oftentimes, upon casual inspection, into buying something for
what it is not, is a business which is not countenanced by law.
That is the principle which has called into being such statutes
as the Pure Food Law, and under it the doctrine of unfair
competition has grown up. The food inspector who finds a
bottle of catsup doped with illegal preservatives does not stop
to inquire as to whether the manufacturer “knew” the dope
was there. The inspector knows he knew, and so does the
court. When a manufacturer, with all the rest of the world to
choose from, picks out a trademark almost identical with that
of a successful competitor, the court does not stop to inquire
as to whether he “knew?’ of the similarity, or if he “intended”
to deceive anybody. It is only reasonable to suppose that he
didn’t stumble upon it accidentally, and if it should so happen
that he did, the public is entitled to protection from such
egregious carelessness.
The case of the advertiser is not wholly dissimilar. When,
with the whole vast range of truthful statements to choose
from, he permits a lie to issue over his name, why
Should, should it be necessary to prove, legally and formally,
.*}... that he “knew”, it was a lie? Even though he did
Abou, O..., not lie deliberately and with malice, is not the public
Business entitled to protection from the consequences of his
carelessness? Indeed, if he is so neglectful of his own
business as not to “know” the truth about it, he is a fit subject
for a lunacy commission, and his creditors would be justified in
applying for a receivership without delay.
Such, in outline, are the chief arguments in opposition to
the proposed remedy. As a general rule they will be dis-
credited in advance merely by an investigation of the source
from which they spring. If the dishonest advertiser injured
no one by it, he might be permitted to lie in undisturbed tran-
quillity. But his fraudulent pretences not only do injury to
his innocent victims, but to every honest advertiser as well.
The courts will protect the good will of a manufacturer or a
merchant from injury through the imitation of his trademarks,
labels, etc., thus demonstrating the fact that good will is a
form of property. Why should not that property be protected
6
ADVERTISING STANDARDS 583
from the injuries inflicted by the fraudulent advertiser? Print-
ers' Ink believes that it should be protected, and that the best
way to do it is by the Vigilance Committee, supported by the
Model Statute.
The legislature of the State of California, in June, 1915,
passed a Fraudulent Advertising Law which was in effect the
Printers' Ink Model Statute, amended by the insertion of a
clause which reads: “Which is known, or which by the exercise
of reasonable care should be known, to be false or untrue,
deceptive or misleading, by the person making, publishing,
disseminating, or circulating or placing before the public said
advertisment.” There is an additional clause exempting pub-
lishers who in good faith accept advertisements without knowl-
edge of their misleading character.
CONCLUSHON
Honesty may be enforced by law. Honor usually is in
advance of legal requirements and helps to shape them.
The phrase “truth in advertising” has assumed a much
wider meaning than mere enforcement of legal honesty. Under
this motto, honesty is being enforced, and it is to be enforced
by the associated clubs.
But the Standards of Practice which have been based upon
this phrase are a codification of advertising honor. They are
proving to be much more vital than mere resolutions. In them,
if they are lived up to, lies the answer to most of the attacks
which have been made upon this new aid to merchandised dis-
tribution.
No one who is familiar with the real substance of present-day
advertising can fail to be impressed with the power for good or
for evil which inheres in attempts artificially to stimulate de-
mand. Those who are profiting honestly by advertising do
not like to consider its power for ill, but it is this feature which
is most conspicuous to the general public. The fact that the
public sees most vividly this side of advertising imposes a
584 - ADVERTISING STANDARDS
heavy responsibility upon all to whom the future of advertising
is a serious matter.
It is difficult for an advertising man to believe that there is
anybody still living who does not approve of advertising as a
factor in modern business. Advertising men, however, are few
in number compared with those who are ignorant of more than
the bare externals of advertising. The great mass of people
who have no means of knowing what advertising is or how it
operates either believe, or may be led to believe, that any
attempt to influence demand involves a needless cost. They
argue, therefore, that advertising necessarily imposes an extra
burden upon the process of getting merchandise from the large-
scale producer to the small-scale consumer.
This compilation of articles describing advertising methods
has been made with the hope that it might help to convey a
clearer idea of what is meant when it is declared that adver-
tising is not necessarily an added burden on distribution, but
that it is an integral part of the distribution process in many
lines of commerce. An attempt has also been made to present
a few details serving to show that advertising methods are in
process of constant betterment. Untruth is being attacked
remorselessly; every effort is being made to eliminate waste;
and there is a continuous endeavor to make advertising more
nearly what it should be—the most valuable of aids to the
reduction of selling costs.
APPENDIX
Officers, National Commission and Departmental
Organizations of the Associated Advertising Clubs
of the World for 1915–1916; and the Standards of
Practice adopted by the various Departmental Or-
ganizations.
OFFICERS
Lafayette Young, Jr.
Vice-President
P. S. Florea.
Secretary-Treasurer
Herbert S. Houston
President
National Headquarters, Merchants Bank Building, Indianapolis, Ind.
ExECUTIVE COMMITTEE
WILLIAM WOODHEAD
WALTER B. CHERRY
W. C. D’ARCY
WILLIAM H. INGERSOLL,
WILSON. H. LEE
A. M. BRIGGS
WILLIAM H. JOHNS
J. CLYDE OSWALD
A. E. CHAMBERLAIN
FRANK. A. BLACK
FRANK. H. ROWE
W. W. CLOUD
E. T. MEREDITH
National Educational Committee
L. E. PRATT, Chairman (Candler Bldg.,
Times Square) New York City.
National Vigilance Committee
MERLE SIDENER, Chairman (1206 Mer-
chants Bank Bldg.) Indianapolis, Ind.
National Exhibit Committee
I. F. PASCHALL, Chairman (Care Farm Journal,
Washington Square) Philadelphia, Pa.
THE NATIONAL COMMISSION
WILLIAM H. INGERSOLL, Chairman (Robt. H. Ingersoll & Bro.) New York.
O. C. HARN, Vice-Chairman (National Lead Co.) New York.
Advertising Agents
Stanley Clague (Taylor-Critchfield-Clague
Co.) Chicago.
William H. Johns (George Batten Com-
pany) New York. - -
William C. D’Arcy (D’Arcy Advertising
Company) St. Louis.
Agricultural Publications
E. T. Meredith (Successful Farming) Des
Moines.
Thomas A. Barrett (Orange Judd Com-
pany) New York.
H. C. Klein (Webb Publishing Company)
St. Paul.
Association of American Directory
Publishers
Wilson H. Lee (Price & Lee) New Haven.
G. D’W. Marcy (Sampson & Murdock)
Boston.
R. H. Donnelley (731 Plymouth Court)
hicago.
General Advertisers
William H., Ingersoll (Robt. H. Ingersoll
& Bro.) New York.
O. C. Harn (National Lead Company)
New York.
G. B. Sharpe (DeLaval Separator Com-
pany) New York.
Magazines
C. Henry Hathaway (Good Housekeeping)
New York.
Charles D. Spalding (The McCall Com-
pany) New York.
Don M. Parker (The Century Company)
New York.
Newspapers
H. L. Rogers (Chicago Daily News)
Chicago.
Louis Wiley (New York Times) New York.
W. ºnes (Minneapolis Journal) Minne-
apoll.S.
Poster Advertising -
Kerwin H. Fulton (Van Beuren and N. Y.
Bill Poster Co.) New York.
E. Allen Frost (29 S. La Salle St.) Chicago.
John E. Shoemaker (Washington Bill
Posting Company) Washington, D. C.,
APPENDIX
Outdoor Advertising
Thomas Cusack (Thomas Cusack Com-
pany) Chicago.
Saº Pratt (Fifth Avenue Bldg.) New
OTK. •
Charles F. Bryan (2120 East 19th St.,
Cleveland.
Printing and Engraving
H. A. Gatchel (Gatchel & Manning)
Philadelphia.
H. H. Cooke (William Green, Inc.) New
York. -
Religious Press
Wºº. J. McIndoe (The Continent) New
OTK.
J. §: Jacobs (Jacobs & Company) Clinton,
Thos. A. Daly (Catholic Standard and
Times) Philadelphia.
DEPARTMENTAL ORGANIZATIONS
Affiliated Associations of Advertising
Agents
Pres., Stanley Clague, care Taylor-Critch-
field-Clague Co., Chicago, Ill.
Sec., G. C. Sherman, care Sherman &
Bryan, New York City.
Agricultural Publishers’ Ass'n.
Pres., B. D. Butler, 538 S. Clark St., Chi-
cago, Ill.
Sec., Frank E. Long, 537 S. Dearborn St.,
Chicago, Ill.
Association American Directory Pub-
lishers
Pres., Wm. G. Torchiana, 208 S. 4th St.,
Philadelphia, Pa.
Sec., Theo. F. Smith, 4th floor Eridicott
Bldg., St. Paul, Minn.
Association National Advertisers
Pres., Harry Tipper, Fifth Ave. Bldg., 200
Fifth Ave., New York City.
Sec., C. W. Patman, Fifth Ave. Bldg., 200
Fifth Ave., New York City.
Associated Retail Advertisers
Pres., Frank A. Black, care Wm. Filene's
Son’s, Boston, Mass.
Sec., Irish, care Thorsen-Seelye Co.,
Inc., Detroit, Mich.
Direct Mail Advertising Association
Pres., Homer J. Buckley, care Buckley,
Hement Co., 605 S. Clark St., Chicago,
Sec., Kenneth MacNichol, Eytinge Service,
44 Bromfield St., Boston, Mass.
Federation of Trade Press Associations
Pres., A. A. Gray, Electrical Review, 608
South Dearborn St., Chicago, Ill.
Sec., Chas. Allen Clark, American Oil &
Paint Dealer, 411 N. 10th St.
Retail Advertisers
Frank A. Black (Wm. Filene's Son’s Com-
pany), Boston. ...
A. Chaney (Titche-Goettinger Com-
pany) Dallas.
Paul T. Irish (Thorsen-Seelye Company)
Detroit.
Business Press
John Clyde Oswald (American Printer)
New York.
William H. Ukers (Tea and Coffee Journal)
New York.
A. A. Gray (Electrical Review and Western
Electrician) Chicago.
Specialty Advertising
Lewellyn E. Pratt (Candler Bldg., Times
Square) New York.
Theo. R. Gerlach (Gerlach-Barklow Com-
pany) Joliet, Ill
H. B. Hardenburg (H. B. Hardenburg
Company) Brooklyn.
Financial Advertisers’ Association
Pres., John Ring, Jr., care Mercantile
Trust Co., St. Louis.
Sec., H. C. Swartz, care Cleveland Trust
Co., Cleveland, O.
Graphic Arts Association
Chairman, H. H. Cooke, 625 W. 43d St.,
New York City.
National Association Advertising Spe-
cialty Manufacturers
Pres., Theo. Gerlach, Joliet, Ill.
Sec., E. White, R. 1001 Advertising Bldg.
Outdoor Advertising Association
Pres., Charles F. Bryan, care Chas. F
Bryan Co., Cleveland, O.
Sec., Geo. L. Johnson, care Thomas Cusack
Co., Chicago, Ill.
Poster Advertising Association, Inc.
Pres., E. L. Ruddy, care E. L. Ruddy Co.,
Toronto, Ont., Canada.
Sec., John H. Logeman, 1620 Steger Bldg.,
Chicago, Ill.
Magazine Department
Pres., C. Henry Hathaway, care Good
Housekeeping, New York City.
Sec., Edgar G. Criswell, 5th Ave. Bldg.,
New York City.
Religious Press Association
Pres., John D. Emrich, 223 W. Jackson
Blvd., Chicago, Ill
Sec., J. W. Clinger, care Christian En-
deavor World, Boston, Mass.
Newspaper Departmental
Pres., Lafayette Young, Jr., care Des
Moines Daily Capital, Des Moines, Ia.
Sec., H. E. Crall, 225 Fifth Ave. Bldg.,
New York City, N. Y.
APPENDIX
STANDARDS OF ADVERTISING PRACTICE
On this and the following pages are given the standards of practice adopted
by the Associated Advertising Clubs at the Toronto Convention, June, 1914,
for the several departmental branches of advertising:
PREAMBLE
Realizing that advertising has come to mean service to mankind, and that
Reciprocity is the greatest force in promoting the cause of human brotherhood
and the world’s progress, and
Believing that the new humanism in business demands recognition of the
fact that all men are interdependent and have international responsibilities
which can be best conserved by setting up ideals of conduct, and
Wishing to secure to society a code of advertising ethics by means of which
the members of each department of advertising can gauge their own conduct
and also that of their fellows; *
Now, therefore, we, the members of the Associated Advertising Clubs of the
World, in Tenth Annual Convention assembled, at Toronto, June 25, 1914,
do acclaim and publish the following Standards of Practice for the various
departments represented at this meeting, and do individually pledge ourselves
to co-operate one with another in living up to them as the best standards of
right action now attainable for all those engaged in the business of advertising.
Committee:
WILLIAM. H. UKERs, MANLEY M. GILLAM,
New York. - New York.
AGRICULTURAL PUBLICATIONS
Believing that the growth of farm publications, both in a business way and
in their usefulness to the farm reader, depends upon certain fundamental
practices, the wisdom of which the agricultural publishers generally recognize,
we set forth the following as an exposition of those practices:
1. To consider the interests of the subscriber first in both editorial and
advertising columns.
2. To conduct our editorial columns with truth in a fearless, forceful manner,
and in the interests of better farming conditions and better farm home condi-
tions.
3. To keep them clean and independent of advertising considerations and
to measure all reading matter by its worth to the subscriber.
4. To decline all advertising which is misleading, which does not conform to
business integrity, or is unsuited to the farm field.
5. To pledge ourselves to work with fellow publishers in the interests of all
advertising and the ultimate success of the advertiser.
585
586 APPENDIX
6. To accept cash only in payment for advertising and to maintain the same
rates and discounts to all.
7. To allow agent’s commission to recognized advertising agents only, and
under no circumstances extend the concession to the advertiser direct.
8. To make editorial merit of our publications the basis of circulation effort.
9. To supply advertisers and advertising agents with full information re-
garding the character and extent of circulation, including detailed circulation
statements subject to proper and authentic verification.
10. To avoid unfair competition and confine our statements regarding other
publications to verified facts.
11. To determine what is the highest and largest function of the field which
we serve, and then to strive in every legitimate way to promote that function.
T. W. LeQuatte, Frank W. Lovejoy,
Des Moines, Ia. Racine, Wis.
BUSINESS PAPERS
The publisher of a business paper should dedicate his best efforts to the
cause of Business and Social Service, and to this end should pledge himself:
1. To consider, first, the interest of the subscriber.
2. To subscribe to and work for truth and honesty in all departments.
3. To eliminate, in so far as possible, his personal opinions from his news
columns, but to be a leader of thought in his editorial columns, and to make
his criticisms constructive.
4. To refuse to publish “puffs,” free reading notices, or paid “write-ups”; to
keep his reading columns independent of advertising considerations, and to
measure all news by this standard: “Is it real news?”
5. To decline any advertisement which has a tendency to mislead or which
does not conform to business integrity.
l 6. To solicit subscriptions and advertising solely upon the merits of the pub-
ication.
7. To supply advertisers with full information regarding character and extent
of circulation, including detailed circulation statements subject to proper and
authentic verification.
8. To co-operate with all organizations and individuals engaged in creative
advertising work.
9. To avoid unfair competition.
10. To determine what is the highest and largest function of the field which
he serves, and then to strive in every legitimate way to promote that function.
W. H. Ukers, A. C. Pearson,
New York. New York.
F. D. Porter, A. A. Gray,
Chicago. Chicago.
DIRECT ADVERTISING
Every advertising manager or business executive in charge of merchandising
establishments, also every advertising councillor in dealing with his clients,
should dedicate his best efforts to making truthful direct advertising an efficient
aid to business, and should pledge himself:
1. To study carefully his proposition and his field to find out what kind of
advertising applies. The reason for every advertising failure is that the right
kind of advertising and its proper application for the particular product and
APPENDIX 587
market were not used. The only forms of advertising which are best for any
purpose are those which produce the most profit.
2. To bring direct advertising to the attention of concerns who have never
realized its possibilities. Many concerns do not advertise because they do not
know that advertising can be started at small expense. They confuse adver-
tising with expensive campaigns, and hesitate to compete with others already
doing general publicity.
3. To determine the different ways in which direct advertising can be used to
effectively supplement other forms of advertising and to so study the other
forms used that the direct advertising may become a component part of the
entire publicity plan.
4. To study the special advantages of Direct Advertising such as individuality,
privacy of plan, facility for accompanying with the advertisement, samples,
postals, return envelopes, inquiry or order blanks, ability to reach special
groups or places, personal control of advertising up to the minute of mailing,
and other recognized advantages.
5. To strengthen the bond between manufacturer and dealer by encouraging
the manufacturer to prepare direct advertising matter for the dealer, so well
printed, with his name, address, and business card as to make him glad to
distribute it, providing always the cost of special imprinting is in proportion
to the benefits to be derived. *
6. To take advantage of the opportunity to test out letters and literature
on a portion of a list before sending them out to the entire list. Wherever it
is possible for an advertiser to approximate in advance his returns from his
advertising he has made his advertising more efficient. Direct advertising
makes this possible. Testing out direct advertising campaigns in advance does
much to remove the element of chance.
7. To consider inquiries as valuable only as they can be turned into sales.
An inquiry is a means to an end—not an end in itself. The disposition to
º cost per inquiry instead of cost per sale has led many a firm to false
analysis.
8. To give the mailing list its proper importance. Many advertisers use
poorly prepared mailing lists, which are compiled in a careless, haphazard
manner, and never take the trouble to check them up or expend them. Mailing
lists should be constantly revised. Poor lists and old lists cost money in two
ways—one by missing good prospects, and thereby losing sales, and the other
by money spent on useless names.
9. To encourage the use of direct advertising as an educational factor within
their organizations with sales forces and dealers. Many concerns have raised
their standards of efficiency through the use of letters, house-organs, bulletins,
mailing cards, folders, etc.
10. To champion direct advertising in the right way. General publicity and
direct advertising are two servants of business, and each has its place and its
work to do. No form of advertising should ever attack another form of adver-
tising as much.
Homer J. Buckley, O. H. Chamberlain,
Chicago, Ill. Chicago, Ill.

DIRECTORIES
The publisher of a directory should dedicate his best efforts to the cause of
business uplift and social service, and to this end should pledge himself:
1. To consider, first, the interest of the user of the book.
588 APPENDIX
2. To subscribe to and work for Truth, Honesty, and Accuracy in all depart-
ments.
3. To avoid confusing duplications of listings, endeavoring to classify every
concern under the one heading that best describes it, and to treat additional
listings as advertising, to be charged for at regular rates.
4. To increase public knowledge of what directories contain; to study public
needs and make directories to supply them; to revise and standardize methods
and classifications, so that what is wanted may be most easily found, and the
directory be made to serve its fullest use as a business and social reference book
and director of buyer to seller. -
5. To decline any advertisement which has a tendency to mislead, or which
does not conform to business integrity.
6. To solicit subscriptions and advertising solely upon the merits of the pub-
lications.
7. To avoid misrepresentations by statement or inference regarding circula-
tion, placing the test of reference publicity upon its accessibility to seekers,
rather than on the number of copies sold.
8. To co-operate with approved organizations and individuals engaged in
creative advertising work.
9. To avoid unfair competition.
10. To determine what is the highest and largest function of directories in
public service, and then to strive in every legitimate way to promote that
function. -
Wilson H. Lee, G. De W. Marcy,
New Haven. Boston.
GENERAL ADVERTISERS
Realizing our obligation and responsibility to the public, to the seller of
advertising service, the advertising agent and our own organization, we, as
general advertisers, pledge ourselves as follows:
1. To consider the interests of the public foremost, and particularly that
portion thereof which we serve.
2. To claim no more, but if anything a little less, in our advertising than we
can deliver.
3. To refrain from statements in our advertising which, through actual
misrepresentation, through ambiguity or through incompleteness, are likely to
be misleading to the public, or unjust to competitors.
4. To use every possible means not only in our own individual advertising,
but by association and co-operation, to increase the public's confidence in ad-
vertised statements.
5. To refrain from attacking competitors in our advertising.
6. To refrain from imposing upon the seller of advertising service unjust,
unreasonable, and unnecessarily irksome requirements.
7. To furnish to publishers, when requested, technical information which
will help them keep reading pages and advertising columns free from mis-
Statements.
8. To refrain from and discourage deceptive or coercive methods in securing
free advertising, and to do everything possible to aid the publisher to keep his
columns free and independent.
9. To require standards for ourselves equal to those we set for others.
O. C. Harm, Harry Tipper,
New York. New York.
APPENDIX 589
MAGAZINES
We believe the magazine publisher is a trustee of the millions of homes
whose entertainment and cultivation he strives to promote, and we therefore
set up the following standards in the light and obligation of his trustee-
ship:
1. We commit ourselves, without reservation, to the Truth emblem of the
A. A. C. of W.
2. We commit ourselves to ceaseless vigilance to see that every advertise-
ment we publish shall measure up to that Truth emblem.
3. We commit ourselves to stand at all time for clean and wholesome editorial
and text matter and free from advertising influence.
4. We commit ourselves to our advertisers and agents to maintain an abso-
lute uniformity of advertising rates.
5. We commit ourselves to definite statements and to independent audits,
showing the quantity and distribution of our circulation.
6. We commit ourselves to maintaining the highest standards of character
and capacity in appointing advertising agents.
7. We commit ourselves to continued opposition to free press bureaus and
other agents for free publicity.
8. We commit ourselves to consider all matter for the publication of which
we accept payment as advertising matter, and to so mark it that it will be
known as such.
9. We commit ourselves to continue to give our constant attention to the
physical presentation of advertising, in the way of paper, press work, and
general typographical excellence to the end that advertising may secure its
highest possible efficiency.
10. We commit ourselves to fair and friendly competition both toward our
fellow periodical publishers and toward all other competitors selling legitimate
advertising of whatever form.
11. We commit ourselves to work always with increasing zeal to do everything
in our power to advance the cause of advertising as the great modern servant
of the business world and of the general public.
Lee W. Maacwell, H. R. Reed,
New York. New York.
GENERAL ADVERTISING AGENTS
Realizing the increased responsibilities of the general advertising agent, due
to the enlarged scope and requirements of modern agency service, every agent
should use his best efforts to raise the general standards of practice, and should
pledge himself:
1. To first recognize the fact that advertising, to be efficient, must deserve
the full confidence and respect of the public, and, therefore, to decline to give
.* to any advertiser whose publicity would bring discredit on the printed
WOTOl.
2. To recognize that it is bad practice to unwarrantably disturb the relations
ºn a client and an agent who is faithfully and efficiently serving such
client.
3. To permit no lowering of maximum service through accepting any new
client whose business is in direct competition with that of a present client with-
out the full knowledge of both parties.
590 APPENDIX
4. To avoid unfair competition, resolve to carry into practice the equitable
basis of “one-price-for-all” and determine that the minimum charge for service
be the full commission allowed to recognized agencies, and that no rebates,
discounts, or variations of any kind be made, except those regularly allowed
for cash payments, and such special discounts as may be generally announced
and available to all.
5. To conserve advertising expenditures by making investigation in advance
of all conditions surrounding a contemplated campaign, by counselling delay
where preliminary work must first be accomplished, and by using every effort
; establish the right relation and co-operation between advertising and selling
OTCCS.
6. To avoid, in the preparation of copy, exaggerated statements, and to dis-
continue any wilful misrepresentation of either merchandise or values.
7. To recommend to all advertising mediums the maintenance of equable
and uniform rates to all advertisers alike, and the maintenance of uniform
rates, terms, and discounts to all recognized agents alike.
8. To require information as to the volume of circulation of any medium
used and specific detail as to the distribution of this circulation, both terri-
torially and as to class of readers. In figuring the value of a medium to regard
information as to the method of obtaining this circulation and the care in
auditing this circulation as an essential consideration in estimating its worth.
9. To discountenance the issuance of agency house-organs soliciting or con-
taining paid advertising from owners of space.
10. To ensure continued progress toward better professional standards,
through the appointment of a standard of Agency Practise Committee, to
whom all suggestions shall be referred during the coming year, and who shall
report their recommendations at the next annual convention. -
11. To co-operate heartily with each division of advertising in its effort to
establish better standards of practice.
H. Johns, O. H. Blackman,
New York City. New York City.
HOUSE-ORGANS
In order that the house-organ shall have a clear field for its development
along lines of efficient and practical service in the advertising field, the follow-
ing standards of Practice for House Organs is respectfully recommended:
1. To refuse to give or receive advertisements as favors or concessions, but
only for a valuable consideration.
2. To charge, at a fair and profitable rate, for all circulation which does not
tend toward directly carrying out the objects and purposes for which the house-
organ is issued.
3. To decline any advertisement which has a tendency to mislead, or which
is not otherwise in accord with good business practices.
4. To exchange circulation with other house-organ publishers, with the idea
and purpose of increasing the effectiveness of house-organs generally.
5. To give full credit to those to whom credit is justly due for all subject
matter taken from other publications.
6. To promote originality in the make-up and reading matter of the individual
house-organ.
7. To publish nothing but the truth.
8. To promote the spirit of optimism, thereby making the house-organ
always a message of good cheer and encouragement.
APPENDIX 591
9. To avoid derogatory references to all competitors.
10. To have it understood and declared that the house-organ publisher
recognizes the rights and purposes of the respective trade publications, and
that the house-organ is not to supplant, but to supplement, the trade papers.
George Walker, Clifton D. Jackson,
St. Louis. Mount Clemens, Mich.
NEWSPAPERS
It is the duty of the newspaper:
1. To protect the honest advertiser and the general newspaper reader as far
as possible from deceptive or offensive advertising.
2. To sell advertising as a commodity on the basis of proven circulation and
the service the paper will render the manufacturer or the merchant; and to
provide the fullest information as to the character of such circulation and how
procured.
3. To maintain uniform rates, according to classifications, and to present
those rates, as far as possible, in a uniform card.
4. To accept no advertising which is antagonistic to the public welfare.
5. To effect the largest possible co-operation with other newspapers in the
same field for the establishment and maintenance of these standards.
Allen D. Albert, Minneapolis, Minn.
Lafayette Young, Des Moines, Iowa.
Robt. J. Virtue, Chicago, Ill.
Edward Bode, Chicago, Ill.
Louis Wiley, New York, N. Y.
P. M. Walker, Fort Smith, Ark.
John T. Imrie, Toronto, Ontario.
OUTDOOR ADVERTISERS
1. Every outdoor advertising plant must continue to refuse all misleading,
indecent, and illegitimate advertising.
2. Every outdoor advertising plant should refuse all advertising which savors
of personal animosity, as ours is strictly an advertising medium.
3. All advertising contracts should be started on date contracted for.
4. Every client should be furnished promptly upon completion of his display
with a list showing all locations, and plant owners should at all times assist
clients to check displays.
5. Every outdoor advertising plant should be maintained in the best con-
dition possible, both from the standpoint of appearance and stability.
6. All locations for outdoor display should be selected where the traffic is such
that it ensures the best circulations for the article advertised.
7. Care should be exercised by every plant owner in the selection of locations
so as not to cause friction either with the municipal authorities or the people
of the neighborhood.
8. A rule of one-rate-to-all and one high-grade class of service to every ad-
vertiser must be rigidly maintained.
9. Every effort should be made to constantly raise outdoor advertising copy
to the maximum efficiency in policy, ideas, and execution.
10. Recognizing the great power of our medium, we should use it for the
general good by devoting space to matters of general happiness and welfare.
592 APPENDIX
11. We believe in close association among members of our own branch of
advertising to the end that greater efficiency be attained through the inter-
change of ideas.
12. We believe in 'hearty co-operation between the outdoor advertising in-
terests and all other legitimate branches of publicity. .
13. We believe in the solicitation of business on the basis of respect for the
value of all other good media.
14. We believe in dissuading the would-be advertiser from starting a cam-
paign, when, in our judgment, his product, his facilities, his available funds,
or some other factor, makes his success doubtful. - -
O. J. Gude, - E. L. Ruddy,
New York. Toronto.
PHOTO—ENGRAVERS
The photo-engraver, realizing the importance of his calling and the influence
his products wield upon humanity at large and business in particular, volun-
tarily sets up the following standards to serve as a guide in his relations with
the public and pledges himself to observe them faithfully:
1. Being the interpreter of art and the manufacturer of a sales-producing
medium, he commits himself unqualifiedly to truth. -
2. To co-operate with all organizations and individuals engaged in uplifting
advertising in all its branches.
3. To remove all mystery and misrepresentations surrounding his craft and
his products, and to at all times welcome an opportunity to explain its intri-
cacies to any one interested.
4. To study the requirements of his customer and to give the latter the
benefit of his expert experience and advice, so that the buyer of engravings
; consider them a sound investment instead of an expense, and profit by
their use.
5. To serve the public to the best of his knowledge and ability for a fair
remuneration.
6. To know his costs, and to maintain at all times a standard of charges that
will honestly cover all costs of service rendered both in the preliminary prepara-
tion of work and in its execution, and to prohibit all gratuitous service or
delivery of value without full compensation.
7. To stand upon the fact that the cost for making photo-engravings is the
same for one buyer as for another, and that he who buys to sell again should
charge his customer a fee for the value of the service which he individually
renders.
8. To avoid the making of false promises and the disappointments and losses
connected therewith, and to undertake to do no more than the plant is equipped
to handle efficiently.
9. To educate the buyer of engravings in the technical knowledge necessary
for him to buy them intelligently, to bring him up to an appreciation of “Quality”
in engravings.
10. To stand ready at all times to do his share toward improving not only
his own product, but to disseminate knowledge concerning its proper use, to
raise the standard of advertising from the purely materialistic to the artistic,
and to add to its sales efficiency by all means within his power.
Louis Flader, George Bridgen,
Chicago. Toronto,
APPENDIX 593
PRINTING
The members of the Department of Printing and Engraving of the Associated
Advertising Clubs of the World dedicate their best efforts to business uplift
and social service and to this end pledge themselves:
1. To give full value for every dollar received.
2. To charge fair prices, viz., known cost plus a reasonable profit.
3. To subscribe to and work for truth and honesty in business; to avoid
substitution, broken promises, unbusinesslike methods.
4. To co-operate in establishing and maintaining approved business ethics.
5. To be original producers and creators, not copyists.
6. To be promotive, looking to the needs of the customer, analyzing his
requirements and devising new and effective means for promoting and extend-
ing his business.
7. To place emphasis upon quality rather than price, service to the customer
being the first consideration.
8. To merit the support of buyers of their produce by living up to the spirit
as well as the letter of these standards.
9. To develop, by co-operation with other departments of the Associated
Advertising Clubs, an ever-strengthening bond of union to the end that the
service rendered to advertising by the graphic arts may achieve its highest
efficiency. -
10. To aid in securing just and harmonious relations between employer and
employed by establishing honorable conditions of employment.
Henry D. Porter, T. E. Donnelly,
Boston. Chicago.
RELIGIOUS PUBLICATIONS
Standards of practice apply equally to all classes of publishers, whether they
issue religious or secular journals; but they apply in a very peculiar sense to
those who publish religious papers and who should stand for the highest possible
ethics; therefore:
1. We believe in truth in the printed word.
2. We believe that religion is the most vital force in the world and that the
religious publications should conduct their affairs with a scrupulous desire to
measure up to the standards which religion prescribes.
3. We believe that the religious paper should be faithful to its conviction
and not allow business expediency to swerve it from its purpose.
4. We believe that religious publications should be kept up-to-date, edito-
rially and typographically, and sold on their merits.
5. We believe in eliminating personal opinions in the news columns; in being
a leader of thought in the editorial columns, that criticism should be construc-
tive.
6. We believe that unreliable or questionable advertising has no place in
religious publications.
7. We believe advertisers and advertising agents should be furnished with a
verifiable statement of circulation.
8. We believe in discouraging the “Me too” form of advertising solicitation;
every publication should stand on its own merits.
9. We believe in lending a hand with all other organizations and individuals
engaged in the movement of business integrity.
594 APPENDIX
10. We believe in service—service to God, service to mankind—and that the
religious publication is under obligation to encourage all movements for a
better mutual understanding among men.
Walter J. McIndoe, Charles Stelzle,
New York. New York.
Samuel Reis, Boston.
RETAIL ADVERTISERS
Each head of a retail enterprise should dedicate his best efforts to the cause
of business uplift and to this end should pledge himself:
1. To consider, first, the interests of his customers.
2. To insist on the courteous treatment of every visitor.
3. To permit no misrepresentation.
4. To discourage careless, slurring, or offensive statements on the part of
salespeople.
5. To avoid misrepresentation or careless indifference in advertising.
6. To see that comparison values in printed announcements are with prices
previously prevailing in his store, unless otherwise distinctly stated.
7. To avoid the use of such expressions as “Were $10,” “Value $10,” “Else-
where $10,” “Made to Sell at $10,” “The $10 Kind,” etc., where their use
would give a misleading impression to the reader.
8. To resent strenuously—to the point of withdrawal, if necessary—the
“make-up” of his advertising in a newspaper next or near announcements
offensive to good taste or of a debasing nature.
9. To demand of each newspaper evidence of the approximate number of its
readers (based on copies actually sold), their general location and character,
and a statement as to how they were secured—by voluntary subscription, by
solicitation, by premium or gifts.
10. To urge on newspapers that the same care should be shown in admitting
advertising to their columns that would be shown in admitting news matter to
their columns or in expressing editorial opinion there; that the newspaper
should feel itself as responsible for the verity and propriety of advertising and
news in its columns as for its editorials—always giving assurance that he will
welcome just criticism of his own advertising.
Manly M. Gillam, F. A. Black,
New York. - Boston.
SPECIALTY ADVERTISING MANUEACTURERS
The members of the Specialty Advertising Department of the Associated
Advertising Clubs of the World, recognizing the sense of personal responsi-
bility and co-operation as to the spirit of the times, subscribe, in the following
standards of practice, to their obligations to each other, to the people in their
. to the advertiser who uses their goods, and to the great consuming
public:
1. We recognize that with the rapid advance being made in the appraisal of
the value of the advertising mediums, that the interests of the user and the
maker of specialties are identical. It is, therefore, our aim to so study the
needs of the advertiser that we shall not simply make goods for him, but shall
render him a valuable service.
2. We each pledge ourselves at all times to avoid effort to secure from buyer
APPENDIX 595
or seller a contract for either merchandise or service that shall invalidate a
similar contract then in force.
3. We pledge ourselves to carefully observe the rights of each other in original
ideas, models, and sketches, proposed for specialties, whether these rights are
safeguarded by law or not.
4. We pledge ourselves to reject all copies submitted for use on specialties which
offends truth, decency, or propriety, so that when an advertiser is justly barred
from the use of other mediums he cannot so advertise by means of our product.
5. Inasmuch as most advertising specialties are made to order, we pledge
ourselves to employ salesmen only who adhere to truth and moderation in pre-
senting claims for our goods, thus avoiding any suspicion of misrepresentation,
and, furthermore, we shall insist that every order shall be made in the factory
to conform exactly to sample both in material and workmanship.
6. We pledge ourselves, in the interest of both the salesman and buyer, of
advertising to promote in every way possible the conviction that common
interest of all concerned rests upon uniform prices and quality, and upon ren-
dering the same service under similar conditions to all users of specialties.
7. We pledge ourselves to maintain proper factory conditions, and to consider
and conserve the physical and moral welfare of our employees. It is our desire
not simply to follow in this work, but to place each factory devoted to the
making of advertising specialties in the front rank of enlightened progress.
8. We, each, pledge ourselves to the adoption as soon as may be possible of
a comprehensive factory and sales cost system to the end that capricious and
senseless variations and changes in price may be eliminated in the interest of
fair trade and the protection of the advertiser.
9. Finally, we pledge ourselves to hearty co-operation with all other responsi-
ble mediums, with every organization and every movement, of whatever kind,
looking to the real betterment of the advertising business, because it is only by
broad co-operation and understanding that the best service can be rendered to
the consuming public by whom we are supported, and for whose benefit the
business of advertising exists.
Charles Q. Peterson, Theodore R. Gerlach,
Chicago. Joliet, Ill.
Lewellyn E. Pratt, Henry B. Hardenburg,
New York City. * Brooklyn.
SPECIAL STANDARDS OF PRACTICE FOR RETAIL ADVERTISERS
WHO USE THE “TRUTH" EMBLEM OF THE A. A. C. OF W.
Adopted by the Executive Committee of the A. A. C. of W., Chicago, De-
cember 10, 1914, as the pledge to be subscribed to by retail advertisers seeking
license to use the “Truth” emblem.*
Each head of a retail business should dedicate his best efforts to the cause
of Business and social service, and in his advertising should pledge himself:
1. To tell the truth, simply.
2. To avoid the use of language which has a tendency to mislead.
3. To avoid making claims or statements that are extravagant, or carelessly
indifferent.
*Applications from retail merchants wishing to use the “Truth” Emblem must be made to the
Chairman of the National Vigilance Committee, Mr. Merle Sidener, 920 Hume-Mansur Building,
Indianapolis, Ind. -
596 APPENDIX
4. To guard against any form of advertising that does not conform to the
highest standards of business integrity.
5. To see that comparison values in printed announcements are with prices
previously prevailing in his business, unless otherwise distinctly stated.
6. To avoid the use of such expressions as “Were $10,” “Value $10,” “Else-
where $10,” “Made to sell at $10,” “The $10 Kind,” etc., where their use
would give a misleading impression to the reader.
7. To give careful consideration to complaints from customers and to be
ready to make good any faults in advertised articles or to refund the purchase
price when the purchaser’s dissatisfaction cannot be otherwise remedied.
8. To show a right spirit toward competitors by avoiding unfair advertising
competition or disparaging references to them in his advertising, either directly
or by innuendo.
9. To resent strenuously the “make-up” of his advertising in a newspaper
next or near announcements offensive to good taste or of a debasing nature.
10. To subscribe to and work for truth and honesty in all departments of
advertising to the end that his own advertising be given the stamp of greater
reliability.
STANDARDS OF PRACTICE FOR LOCAL CLUBS
Some of the local ad clubs have adopted standards of Practice to which
those who apply for membership are expected to subscribe, and for the sake of
bringing into one declaration the experiences of many clubs, the Association
has adopted the following, which some clubs print on the reverse side of mem-
bership application blanks, including in the application a statement by the
prospective member that he subscribes to the principles set forth:
We pledge ourselves to remember that advertising is and should be, first of
all, an exponent of the square deal, and that it is only when business men put
the interest of the buying public first that they take the best advantage of
their opportunities.
We will not, at any time knowingly, do anything which will injuriously
affect advertising, nor will we carelessly speak ill of any advertising medium.
We will work together to the end of making all advertising more truthful.
º it will then be more effective and of greater benefit to the buying
puplic.
We will exercise care, individually, at all times, to see that every advertise-
ment with which we have anything to do shall measure up to the plain, simple
truth. We stand firmly for constructive advertising and condemn, without re-
serve, all forms of destructive advertising.
To each other we pledge patient service toward the upbuilding of adver-
tising in this community.
To all business men of this community we pledge co-operation toward the
advancement of the community’s business along sane and proper lines.
To the public, whom we as a club serve primarily, we pledge our best efforts
to make advertising the servant of the people in the truest sense.
THE END
INDEX
Acker, Merrall & Condit Co., 241
Acme Tea Company, 241
Adding Machine, Burroughs, 38
A. D. S. Stores, 246
Adulterations and Misnomers, 581
Advertised Brands and Jobbers, 293
Advertised Goods Favored Over Non-
advertised Goods, 510.
Advertiser and Consumer, Contact
Between, 11
“Advertising and Selling,” 84, 90,
289, 318, 340, 366, 373, 378, 379,
384, 452, 457, 463, 494
Advertising and Selling, Department
Inseparable, 125
Advertising and the Consumer, 3–43
Advertising Appropriations, How
Divided, 61–62
Advertising, a Wasteless Way, Di-
rect, 463
Advertising, Direct-by-mail, 462–493
Advertising, Epigrams on, 70
Advertising Forum (Minneapolis) and
Its Vigilance Work, 556
Advertising Gives Consumer Stand-
ard of Value, 512
Advertising Has Cut Selling Cost
in Two, 512
Advertising in Agricultural Press, 373
Advertising, Development of Legis-
lation to Regulate, 570
Advertising Devices, Good and Bad,
489
Advertising, How Much to Spend in
- Retail, 58.
Advertising Investment, Average, 60
“Advertising Is a Tax on the Con-
sumer,” A Fallacy, 509
Advertising Magazine, 373
Advertising Man’s Relation to Others,
188
Advertising Margin, Figuring the, 363
Advertising Mediums, Developments
in, 372–436
Advertising, Mediums of, 159
Advertising Mediums, Year’s Prog-
ress, 376, seqq.
Advertising, Motion-picture, 410
Advertising, National, 70.
Advertising, Needs of, 9
Advertising, Newspaper, 374
Advertising Order Form, 124
Advertising, Outdoor Display, 374
Advertising, Paying, 55–58 -
Advertising Plans, Special, 51
Advertising, Policies in, 45
Advertising, by Premiums, 374
Advertising Problems, Analytical
Methods in, 340–371
Advertising, Psychology of, 365
Advertising, Retail, 44
Advertising, Sincerity in, 483
Advertising, Skepticism of the Pub-
lic, 9
Advertising Standards, 555–584
Advertising, Stein-Bloch, 165–167
Advertising, Street-car, 408
Advertising, Necessity of Continuous,
18
Advertising, Timely, 52
Advertising to Head off Complaints,
37
Advertising, Trade Papers, 375
Advertising, Truth in, 3, 583 -
AEolian Company and Complaints, 39
Agency Plan, The Exclusive, 171
Agricultural Publishers’ Association,
9
Agricultural Press, Advertising in, 373
Aids to Salesmanship, 88
All-package Grocery Stores Com-
pany, 242
American Advertisers, Association
of, 437
American Advertising History, Re-
cent, 6
American Car & Foundry Co., and
Safety Bulletin, 30
597
598
INDEX
American Newspaper Publishers’
Association, 419
American Telephone & Telegraph Co.,
3.11
American Tobacco Company, 494
Analyzing Dealers’ Needs, 147
Analysis, Advance in Methods of,
31.1—371
Andrews, E. P., 88
Announcing versus Advertising, 46
Appeal, Emotional, 367
Appendix, 585–596
Appropriations, Advertising,
Divided, 61
Arbuckle Brothers, 178
Associated Advertising Clubs of the
World, Chicago Convention, 58,
197
f Toronto Convention, 112, 482, 428
Associated Advertising Clubs of the
World, Work of Its Vigilance
Committee, 563
Association, Retail Merchants, 68
Astor, Vincent, 258
Atmosphere in Advertising, 485
Automobiles and the Automobile
Market, 24
Automobile, a Utility, 27
How
Bank Consolidations, 258
Beale, Jr., B. J., 193, 213
Berg, W. M., 287
“Black Cat,” 123, 124, 125
Black Company, H., 126, 147
Birthday Gifts, 484
Boasting, Bad Effects of, 168
Boot and Shoe Chains, 252, 253
Boy Scouts, 166
Bradley Dry Goods Store, 70
Bradley TKnitting Co., 70, 72, 78
Branded Goods, 190
Pranded Goods, Protective Feature,
552
Branders, Arguments of Private,
545
Brands, Consumer’s Rights to Know,
155
Bridgman, W. H., 90
Brodegaard Jewelry Company, Fred.,
254
Bulk, Buy in, 4
Bulk versus Packages, Relative Cost
in Buying, 4
Burroughs Adding Machine, 38, 312,
469
Burson Knitting Co., 116–118
Business Administration, Harvard
Graduate School of, 45
Men, Village, and the War, 94
Business Letters, 129, 147, 162
Business Research, Federal Bureau
Advocated, 313 -
Butchers, 255, 256
Butler Grocery Store, James, 241,
269
Buy in Bulk—Not in Package, 4
Buy, Making It Easy to, 472
Buyers' Earnings, 188
Buyers, Satisfying Needs, 476
Buying Sense, Systematic, 281
B. V. D. Underwear, 88
Calkins & Holden, 153
Calkins, Earnest Elmo, 153
Campaigns, “Ready-made,”
of Failure, 356
Capper Farm Papers, 89
Car Advertising, Changing of Cards,
401
Cards, Classes of, 50
Car, Life of a, 26
Carnegie, Andrew, 258
Carroll, J. A., 298
Carson, James B., 65
Cash Register Company and Com-
plaints, 41
Catalogue as Creator of Personality,
481
Catalogue Construction, 486
Catalogue, Keeping Alive the, 475
Catalogues, Loose-leaf versus Bound
Books for, 479 -
Catalogues, Representative, 470
Catalogues, Sub-titles for, 469
Catalogue, Uses of the, 468
“Catch the Eye” Names and Titles,
33
Centralized Data Departments, 311–
317
Chains Helped by Public Markets,
243
Causes
Chain-store Problem, 67
Chains of Coal Stores, 257, 258
Chains’ Selling Advantages, 275
Chain-store Methods, Typical, 262-
265

INDEX
599
Chain Store and National Advertis-
ing, The, 229–287
Chain Stores for Cloaks, Suits, Etc.,
257
Chains Taking Jobber’s Place, 265
Chalmers, Hugh, 8
Chalmers Motor Company, 8
Chamber of Commerce (Indianapolis)
and Its Vigilance Advertising
Work, 560
Changes in Consuming Conditions, 24
Charts, Technique of Graphic, 461
Cheney Bros., 11
Cheney, Horace B., 12, 13, 15
Childs, R. S., 16
Circulation, Distribution of, 394
Circulation, Fireside Glance at, 456
Circulation, Judicial Views on, 443–
452 -
Circulation, Judging Quality of, 393
Circulation Standards, Advance in,
437–461
Clearance Ads, 148
Cigar-store Chains, 247
Cohn, Ernest, 30
Colgate & Co.'s Nursery Talc Samples,
407
Complaints, Advertising to Head off,
37 -
Complaints, Telephone, 36, 37
Complaints, Utilizing, 37
Composites, Two, 73
Concentration of Stores
Fields, 260–262
Conditions, Changes in Consuming, 24
Construction, Catalogue, 486
Consumer’s Answer to the Consumer’s
Attack, 6
Confectionery Chains, 253
Consumer, Changes in, 24
Consumers’ League, National, 8,
Consumer's Memory, Length of, 11
Consumer’s Right to Know Brands,
155
Consumer’s Viewpoint, 34
Contents, ix
Controversy Regarding Nationally
Advertised Trademarks and “Pri-
vate Brands,” 2, 536
Co-operation, Practical Newspaper,
424
Co-operative Plan, Results of, 124
Copies, Sample, 395
in Other
Copy, Changing, 32
Copy, How Worked out, 74
Copy, Rationalization, 367
Cornstarch, New Uses for, 33
Correct Answers in Cheney Memory
Tests, Percentages of, 13
Correspondence Course for Dealers,
Cost of Living, 10
Cost System, Ingersoll, 161–163
Counter Displays, 120, 121
Country Store Business,
Secure, 99
Cream Separator, De Laval, 89
Crofut & Knapp Co., 157
Cross Company, Mark, 181
Curtis Publishing Co., 89, 311, 313,
556
Dairy Field, The, 256
Data Departments, Centralized, 311–
317
“Dealer Helps” from Retailer’s View-
point, 108
Dealer Helps, Useless, 152
Dealer Helps, Uses of, 142—149
Dealers' Co-operation 122
Dealers, Correspondence Course for,
127
Dealers’ Needs, Analyzing, 147
Dedication, V.
Definite Message in Each Display, 118
De Laval Cream Separator, 89
Demonstration Booths, Sampling
Through, 408
“Demonstration Shell,” 128
Demonstrations, 204
Departments, “Service,” 36
Department Store and National Ad-
vertising, 183—228
Department Stores:
Power of President, 185
Records of Sales, 187
Retail Distribution Still a Crude
Art, 185
Specialty Store Problems, 197–228
Specialty Stores, 192
Des Moines “Capital,” 79
Detroit, Advertising Methods, 205,
206
Displays, Counter, 120, 121
Displays, Window, 116, 124
Disputed Medium Questions, 418
How to
600
INDEX
Distributing Organizations, Types of,
6
Drug Field, 244–247
Drug Field, Popular Device in, 179
Druggists and Department Stores,
250
Du Pont de Nemours Powder Co., 312
Dyeing and Cleaning Chains of
Stores, 256
Eastwood & Son Company, Wm., 151
Eberhard Company, George F., 115
Eliminating the Jobber, 72
Endorsement, Getting Professional,
408
Exclusive Agency Plan, The, 171
Exclusive Agency, Department Store
View, 174
Extent of Chain-store Movement, 230
Filene’s Sons Company’s Methods of
Business, 197—204
Eye Accidents, 28
Eye Protectors, 28
False Eyes and Causes of Blindness, 28
Farmers’ Business Demands, 99
Farmers’ Course and Country Life
Conference, Wisconsin, 90
Farmers Not Going Back, 86
Farm Implement Chains, No., 259
Farm Power Papers, National, 89
Farmers' Sales of Produce, 92
Farrington, Frank, 93
Federal Supply Company, 242
Field and Problems of Regular Re-
tailers, 82, 93
Field’s and Advertising, Marshall,
158, 354
Firm Names, Memory Tests on, 12
Five, Ten, and Twenty-five-cent
Store Chains, 248, 249
Flagler, John H., 245
“Flat” Rate Advocacy, 428, seq.
Food Committee, Mayor Mitchel’s, 6
Food Products, etc., Sampling of, 405
Food Supply Committee, 3
“Forces, Selling,” 455
Foreign Commerce, House Committee
on, 67
Form Letters, Bombastic, 149
“Forward Law of Thinking,” 369
Fowler, R. E., 127
“Franklin Co. (Kan.) Association,” 87
Furniture Field, 257
Future Department-store Develop-
ment in New York, 193–204
Garrison, W. W., 304
Geisinger, J. J., 349
General Stores, Goods in Demand in,
95–97
Gimbel Bros., 354, 355
Girard Grocery Co., 241
Goddard, Charles H., 247
Goods, Branded, 190
Goods, Profit-marked, 191
Goods, Trademarked, 190
Goodyear Advertising Methods, 166
Goodyear Tire & Rubber Company,
I66
Gossard Company, H. W., 126, 134
410
Gossard, H. W., 126, 134
Graphic Charts, Technique of, 461
Great Atlantic and Pacific Tea Com-
pany, 240, 244
Grocery Chains, 239
Grocery Field, Peculiar Situation in,
178
Guarantee, Use and Value of, 18
Guarantee, What is a Good? 18
Guarantees Analyzed, Instances of,
19, 20, 21, 22, 23
Hammacher, Schlemmer & Co., 176,
177
Hampton, 89
Hampton, Commercial Association
of, 88
“Hampton Plan,” 87
“Hampton Plan” and Some of Its
Advocates, 89, 90
Hardware Field, 259, 260
Hardford, George H., 240
Hart, Schaffner & Marx, 145, 147–
149, 163
Hart, Schaffner & Marx, Clothing
Guarantee, 22
Hart, Schaffner & Marx, Dealer
Helps, 143
Hart, Schaffner & Marx, Window
Card, 144
Hardware Field, Conditions in, 175
Hardware Field, Ease of Distribution,
176
INDEX
601
Harvard Graduate School of Business
Administration, 45
Hat Chains, 253
Haubold, Arthur, 89
Hazen, Edward W., 8
Heath, Mrs. Julian, 6
Hildebrandt, Wm. G., 153–154, 160
Holeproof Hosiery, 181
Hollingsworth, H. L., 365
Holzhauer, Charles, 120
Hotchkin, W. R., 217–228, 358
Housewives' League, National, 6
Hudson Company, J. L., 204–208
Hughes, H. M., 288
Hunsiker, Alvin, 292
Huyler’s, 177, 178
Index, Pictorial, 473
Index to Cheney Memory Tests, 13,
14, 15
Individuality, a Merchant’s Asset,
148
Ingersoll & Bro., R. H., 161
Ingersoll Cost System, 161
“Inland Storekeeper,” 93
Inventions, Unsuspected Uses of, 31
Investigations, Trade, 314
Ingersoll, W. H., 237
Watches, 388
Iowa and the Mail-order Man, 85
Iowa Retail Dealers’ Association, 89
Irvine, James M., 89
Jewelers’ Association, National Re-
tail, 66
Jewelry Field, 253 -
Jobber and His Private Brand, 98
Jobber, Eliminating the, 72
Jobbers and Advertised Brands, 293
Jobber's Place, Chains Taking, 265
Jobbers Who Paddle Upstream, 294
Johnson, O. K., 151
Johnson, Roy W., 468
Journals, Technical, 389
Judiciary, House Committee on, 67
Julius King Optical Co., 27
Justice, Department of, 68
Kahn Tailoring Co., 30
Katz, Joseph, 18
Kayser Gloves, 181
Renosha Hosiery Co., 122
Riefer, A. Wm. F., 162
Kirstein, Louis E., 197
Eroger, B. H., 240
Kroger Grocery and Baking Com-
pany, 240
Ruppenheimer, The House of, 145, 147
Larimer, H. G., 79–81, 88, 109, 110-
112
Laundries, 255
Leonard, E. H., 204
Lessons in Salesmanship, 130–134
Letters Bombastic, Form, 148
Letters, Business, 129, 147, 162
Letters, Follow-up, 491
Life of a Car, 26
Liggett Company, L. K., 246, 253
Lincoln Principle, Abraham, 63
Living, Cost of, 10
Loose-leaf versus Bound Books for
Catalogues, 479
Louis, George S., 167
Lucas, A. M., 115
Ludlow & Squires, 175
Lumber Dealers’ Association, South-
western, 85.
McKelvie, S. R., 89
McVey, Hugh, 78
Macy & Co., 193
“Made in Detroit Merchandise,” 205
Mail Advertising, Direct-by, 462-493
Mailing Lists, Revision of, 164
Mailing List, Starting a, 48
Mail-order Man, 85
Management, Scientific,
Manufactured Products,
Memory Test on, 13
Manufacturers Discontinuing Private
Brands, 290, 291
Manufacturing Policies, Retail, 71
Mark Cross Company, 181
Markets Help Chains, Public, 243
Marshall Field’s and Advertising,
158
Mediums, Advertising, Developments
in, 372–436
Mediums of Advertising, 159
Medium Questions, Disputed, 418
“Meet me at Hudson's,” 206
Men's Clothing Chains, 250, 251
Men's Furnishing Field, 251
Merchant Dislikes Word “Dealer,”
167
100–107
Cheney
602
INDEX
Merchant Knows His Field, 170
“Messenger,” 38 -
Methods of Analysis, Advance in,
31.1—371
Methods of Management, Modern,
I00
Miscellaneous Suggestions, 148
Missouri, 85, 86
Missouri and the Mail-order Man, 85
Missouri, University of, 84, 86
Mitchel, Mayor, 3
Moller & Schumann Company, 163
Moorehead, J. R., 68, 85
Mitchel’s Food Supply Committee,
Circular of, 3, 494
Replies to, by Well-known Ad-
vertising Experts, 497, seqq.
Motion-picture Advertising, 410
Motion-picture, Divisions of, 411,
SeqQ.
“Motion-picture Industry and Its
Advertising Possibilities, The,”
4.1.1
Movies and the Theatres, The, 415
Murphy, P. F., 181, 182
Names, Cheney Memory Tests, 14
Nash, F. W., 178
National Advertisers’ Plans for Se-
curing Wholesalers’ Support, 298–
308
National Advertising, 70, 93, 254
National Advertising and the De-
partment Store, 183—228
National Bill Posters, 124
National Biscuit Company, 494
National Cash Register, 311, 312
National Farm Power Papers, 89
Nebraska and the Mail-order Man, 85
“Nebraska Farmer,” 89
Nelson, J. M., 69
Newman, A. W., 145
News Material, Photoplays as, 416
Newspaper Advertising, 374
Newspaper Co-operation, Practical,
424
Newspaper’s Power, 426
News-stands, Etc., 258, 259
“New Ways to New Business,” 166
New York & London Drug Company,
I'79
New York Central Lines, and Safety
Goggles, 28
No Natural Store Advantages in
Store Chains, 276, 277
Novelties, System of Buying, 283
Ohio Hardware Association, 65
Oil and Gasoline Store Chains, 255
Oklahoma and the Mail-order Man,
85
Olus Underwear, 215–217
Onyx Silk Hose, 181
Outdoor Display Advertising, 374
Owl Drug Company, 246, 271, 272,
273, 286
Package Goods, Reputation and, 7
Package Habit, 4, 499, seqq.
Packages, Wastage in Buying in, 3
Park & Tilford, 241
Parsons, S. R., 58
Past Sales, No Sure Criterion for the
Future, 356, seqq.
Pauperizing the Dealer, 122
Per Capita Figuring, Technique of,
321–325 -
Percentages of Correct Answers to
Cheney Memory Tests, 13
Philadelphia, Wholesale Drug Com-
pany, 247
Perkins, George W., 3,499
Persuasiveness, Table of, 371
Phoenix, J. J., 70
Photoplays as News Material, 416
Piano and Musical Interests, 251, 252
Pictorial Index, 473
Plan, Ralston, 406
Plans, Trade, 87
Policies, Price, 75
Policies, Profitable Trade, 74
Policies, Retail Manufacturing, 71
Population as Business and Sales
Pivot, 318
Post-office Department and Circula-
tion, 395
Powell, J. B., 84, 87
Pratt, Llewellyn, E., v.
Preface, vii
Premium Advertising, 374
Price-cutter an Unstable Reliance,
296
Price Policies, How Dealt with, 75
Prices and Standardization, 25
“Printers' Ink,” 3, 6, 7, 8, 11, 16, 18,
23, 24, 27, 31, 35, 41, 59, 65, 66, 70,
INDEX
603
79, 87, 93, 97, 109, 112, 116, 118,
120, 122, 126, 142, 143, 144, 145,
151, 153, 160, 163, 167, 172, 177,
184, 193, 204, 208, 214, 217, 229,
237, 238, 248, 252, 257, 263, 267,
273, 279, 286, 287, 292, 297, 298,
299, 304, 311, 312, 313, 314, 345,
348, 353, 361, 363, 376, 377, 390,
400, 405, 410, 411, 418, 420, 428,
437, 442, 443, 452, 464, 468, 475,
476, 482, 486, 489, 497, 509, 525,
528, 556, 560, 564, 573, 574, 576
Printz-Biederman Company, 127
Problem, Small-town, 84
Procter & Gamble, 311
Products, Cheney Memory Tests on,
13, 14
Products, Names of, 12
Progress in Retail Advertising, 44-81
Proprietor, Broad-gauge Store, 62, 65
Publications, Following of, 456
Publicity Association, Technical, 361,
477
Purchasing Power, Pithy Suggestions
On, 49
Pure Food Law, 582
Quoin Club, 494
Rankin, E. W., 89
Rating Agencies, Attitude Toward, 97
Rate Card, Inefficient, 436
Rate, “Flat,” 423
Rate “Inside,” 422
“Reasons Why,” 128
Records, Sales, I19
Regular Retailer and National Ad-
vertising, 150–182
Replies, Curious, 15
Report of Mayor Mitchel’s Food
Committee, 6
Reputation and Package Goods, 7
Restaurant Chains, 249, 250
Retail Advertising, 44
Retailer Controls Situation, 152
Retailer's Field and Problems, Regu-
lar, 82
Retailer through Consumer, Getting,
170
Retail Merchants’ Association, 68
Retje Redress, the Small, 265–
74
Revision of Mailing Lists, 164
Rexall Stores, 246
Ricker, Carl J., 45
Riker-Hegeman Corporation,
246, 269
“Rising Costs,” Problem of, 150, 151,
356
Rock Island Railroad, 85
Rochester Advertising Club, 151
Roemer, C. F., 89
Rosenwald, Julius, 258
245,
“Safety First.” Crusade, 29
Sales. Force, Supplementing the, 464
Sales Force, Training, 134–142
Salesmanship, Aids to, 88
Salesmanship, Lessons in, 130–134
Sales, No Criterion of All the Facts,
Gross, 355
Sales Records, 119
Saloons and Liquor-store
256, 257
Sample Copies, 395
Sampling of Food Products, Etc., 405
Sampling Through Demonstration
Booths, 408
“Saniglas” Goggles, Propaganda of,
29
Saks & Co., 193
Schaffner, Joseph, 143, 144, 160
Seaman, Inc., Frank, 452
Second-hand Car Market, 26
Selling and Advertising Department,
Inseparable, 126
“Selling Forces,” 455
Selling Problems, Analytical Methods,
325–340
Service, 36, 38–43
“Service” Departments, 36
Sewing-machine Field, 260
Sherman Law, 66, 68
Simmons, J. C., 242
Sincerity in Advertising, 483
Slogans and Sayings, 13, 15, 17, 33
Slogans, Cheney Memory Tests on, 11
South American Business Opportuni-
ties, 94, 98
Standardization and Prices, 25
Standardization of Retail Business,
277–279
Standard Oil Co., 311
Standards, Advance in Circulation
437–461
Standards, Advertising, 555
Chains,
604
INDEX
Standards of Practice, 583
Stanley, Wisconsin, and Its Trade
Problems, 90–93
Starrett Company, L. S., 121
Starting the Wheels Moving, 128
State “Percapitarithms,” 320–325
Statistics as Applied to Advertising
and Selling Problems, 317
Staulcup, M. P., 116
Stein-Bloch Advertising, 163–165
Stevens, E. H., 37
“Store Personality,” Developing, 52–
54
Strauss, Julius, 175
Strawbridge & Clothier, 193
“Successful Farming,” 78
Suggestions, Miscellaneous, 145
Sullivan, George L., 24
“System,” 45,46, 52, 54, 100, 313, 326,
356
Taylor, Frederick W., 101, 105
Telephone Complaints, How Handled,
36, 37
Theatrical Chains, 258
The United Jewelers, Inc., 254
Tinsman, Robert, 180, 349
Toledo “Times,” 65
Trade Journals, 74
Trademarks, Cheney Memory Tests,
14
Trademarks, Special, 295
Trade Papers Advertising, 375
Trade Policies, Profitable, 74
Tradition, Breaking Away from, 362
Trade Investigations, 314–317
Training Sales Force, 134
“Trenton (Mo.) Idea,” 87
\ j} as F.Y.
ºft,
2.
Truth in Advertising, 3, 583
Types of Distributing Organizations, 6
Tyrell, W. H., 71 -
Underwear, Olus, 215–217
United Cigar Stores, 245, 246, 266,
270, 277, 311
United Drug Company, 253
United Drug (Rexall) System, 247,
248
Useless Dealer Helps, 152
Uses of Dealer Helps, 142–149
Viewpoint, Consumer's, 34
Volstead, A. J., 69
Wanamaker's and Advertising, 158,
217, 354, 355
Wells Fargo Company, 37
Wenzen, John, 457
“What Do You Know About Your
Own Business?” 163
“What Is a Good Guarantee?” 18
Whelan, George B., 245
Wholesaler and National Advertis-
ing, The, 288–308
Wholesale Dry Goods Association,
292
Window Displays, 116, 124
Winsell, John, 317
Winsten, H. J., 122
Woolley, Edward Mott, 184
Woolworth Company, F. W., 248,
279, 280, 285
Young, Lafe, 79, 428
Zimmerman, M., 172–174, 208, 229
THE COUNTRY LIFE PRESS, GARDEN CITY, NEW YORK
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3 9015 O5866 3504
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