IN the issue for May 18, 1927, Advertising and Selling published an article of mine which attempted to explain in detail our method of handling voluminous correspondence expeditiously. As I stated then, the only reason I can spend an occasional afternoon on the golf course is that we maintain a form letter system which includes letters proved to be effective on al- most every subject that is common to a manufacturer’s advertising department.
My original article was too long (much to my sorrowful surprise) and consequently this is in the nature of a second instalment. In the first part I covered the subject of how our form letter system is used to handle dealer inquiries promptly and efficaciously.
Now let us take posters, another of the larger classifications in our book, and see how thoroughly the subject is handled and how ready we are to answer inquiries on this form of advertising, and how we success- fully merchandise 24-sheet posters to our dealers.
I am not going to attempt to give you all the poster letters in the book, but a few examples may help you to appreciate the comprehensiveness of the system. Bear in mind, please, that our dealers pay the entire cost of poster space. We furnish the paper imprinted and place ninety per cent of the showings for the dealer. Our annual distribution of 24-sheet posters has increased from 500 in 1923 to almost 2000 in 1926.
Now to get along with our story. Say, for instance, that a requisition for advertising comes to us from a salesman. It states that the dealer is interested in Smith Smart Shoe or Reed posters, that the salesman couldn’t close the contract on the spot and requests that the advertising department follow-up. This the department proceeds to do at once, first with letter P-4, which follows:
How often do you walk into the corner cigar store, throw down a quarter and receive in return a couple of cigars or some cigarettes? And how often does the soft drink dispensary collect a twenty-five cent piece (or the best part of it) from you for a more or less fancy thirst eradicator?
We’re not trying to argue you into giving up ice cream or tobacco. We use both ourselves and find them good. But the point we want to make is this : You never notice these quarters you spend daily for things that don’t help your business; so are a few quarters a day spent for extra sales and extra good- will an extravagance?
We think you’ll say with us — No! We think you’ll say, “If we can sell more shoes and make ourselves better liked generally, we’re emphatically for a little judicious spending.”
Twenty-four sheet posters, if the order is placed through us, cost you only twenty-five cents a day for each location — frequently even less.
These colourful, giant displays have demonstrated their business building ability. The designs we supply free cost us thousands of dollars to produce. They make a vivid impression, and their regular appearance locally marks you as wide-awake, reliable merchandisers — the type people like to patronize. The inevitable result is more and better business and secure leadership.
Twenty-five cents per board per day for posters stands unequalled as a business investment. If you ever spend ice cream and tobacco quarters you should be only too willing to test the power of outdoor advertising.
All that is required from you for the test is the enclosed order card properly filled out and signed. We’ll reserve locations, imprint the posters for you, take care of shipping, posting and any necessary replacements free. You pay for the locations. The cost of displays for your town is quoted on the card. It figures own to a unit cost of twenty- five cents a day — or less.
And it’s worth immediate consideration.
WITH this letter we enclose color miniatures of our current poster designs and a special order card giving local rates and cost. A careful check of the actual poster orders received from dealers in response to this letter (which we have used since November, 1925) shows us that it is still worth its salt.
And here’s another successful poster merchandising letter used during the months of July and August.
After summer — what?
After two months of sales and cut prices (and cut profits), we’re all quite ready to open our arms to a steady, gold-lined business for fall.
The time isn’t far off and it behoves us to start planning today (even if we’re perspiring a little) on how to gain a heart-warming fall volume early and keep it late.
You know — and so do we — that people should seek you first when a crispness in the air and a red tinge on the leaves reminds mother and father, sister and brother, that the need of new shoes is second to nothing else.
But it doesn’t do us much good to have this knowledge unless we do all we can to convince the Joneses and the Careys and Clements that you can satisfy their footwear desires.
What we must do is put on a duet — tell them about Smith Smart Shoes early — and keep telling them all through the season.
The opening publicity volley is most important. If it’s well directed, and J forceful it will start business your way and the echo of its thunder will roll for many days.
How can you open up most effectively? How can you make an unforgettable first impression this season and do it most economically?
Smith Smart Shoe 24-sheet posters 1 answer that question.
For twenty-five cents (or less) a day a board you can dominate your local market not only for thirty or sixty days of the display, but for days afterward.
Get in line with this advertising now. Let us reserve locations for September or October showings far enough in advance to assure you the best locations and service.
The order card enclosed gives you full information on a local display of posters. And the color reproductions give you an idea of the type of outdoor advertising used for Smith Smart Shoes.
Talk to Mr. and Mrs. Public so that they will hear and heed. Use the re- sources we offer you to put over Smith Smart Shoes decisively.
Remember all you pay for under our poster plan is the cost of locations as given on the card. Posters, imprinting, service are paid for by us.
So — after summer — what? (if not posters.)
Occasionally we fail to obtain poster space ordered by a dealer — generally because he has dilly-dallied so long that all available boards , have been taken by another advertiser. In a case of this kind we find In certain trades special sorts of services are rendered by industrial merchants. In the civil engineering and construction business, for example, although large numbers of machines are sold to contractors, the renting of machinery also is a common practice.
This machinery includes steam shovels, concrete mixers, pile drivers, hoists, pavers, ditchers, cranes, derricks, marine equipment, and so on. When such equipment is rented to contractors, it is rented not only by companies which specialize entirely on the equipment renting business, but also by manufacturers’ agents and distributors, and sometimes by contractors to each other.
Dealers in used equipment often rent equipment while awaiting an opportunity for selling it; sometimes they carry on regularly an auxiliary rental service.
Manufacturers’ agents and distributors occasionally rent equipment which they have accepted on trade-ins or they rent new equipment as a means of inducing small contractors to try machines that those users are reluctant to purchase outright. The wide extent of this rental practice is the result of the non-continuous character of construction work and the varied require- ments of different jobs.
A contractor at one time may have a construction job, at another time a sewer job, and at still another time a road job; and each of those jobs calls for different equipment. Only a large contracting firm can afford to own all the types of equipment required for different purposes.
This practice in the construction business is interesting from several standpoints. In the first place it shows how the merchants in one industry have adjusted their methods to deal with special conditions. In the second place it illustrates one method of meeting the used-equipment problem, for the practice of renting makes possible the more rapid introduction of new and improved types of equipment without experiencing all the demoralizing disadvantages of accepting used equipment in trade.
The practice of renting equipment, finally, illustrates a method of marketing which has been developed to enable small contractors to make use of a type of expensive equipment which only contracting companies can afford to purchase outright.
”HERE is a difference of opinion 1 among those familiar with the industry as to whether the construction business is becoming what the economists call a “capitalistic” industry.
Several years ago it appeared that the construction business was in the course of changing from one carried on by small firms with little capital investment to one conducted by large companies with well developed organizations and strong financial resources.
Although no statistics have been compiled to furnish definite evidence regarding the trend, some of the men well acquainted with the industry state that there are indications that within the last few years the small contracting firms have gained ground more rapidly than the large construction companies.
At all events, whatever the trend may be, the rental practice has enabled manufacturers of the equipment to find markets for expensive machines among small con- tractors, and this practice has been developed by manufacturers and dealers working on the common problem.
ANOTHER industry in which notable changes m marketing methods have occurred during the last ten years is the chemical industry. Prior to the war a common method of marketing chemicals was by means of brokers and dealers. The broker received a commission, from the seller, for negotiating transactions which were finally consummated by the seller and the buyer.
The broker carried no stocks, did not take title to the goods, and assumed no financial risks. His commission varied for different types of chemicals; the commission received by an oil broker, for example, was one percent of the selling price.
The chemical dealer carried stocks and sold goods on his own account. He handled a variety of chemicals and usually entered into contracts with each manufacturer from whom he bought to receive a specified number of tons of material monthly.
After the war, when competition between chemical manufacturers became severe, several large chemical manufacturing companies decided to develop sales organizations for handling the large-volume business directly. Since then direct selling has become a general practice in marketing heavy chemicals and appears to be increasing in the markets for several other types of chemicals.
The dealers now sell chemicals chiefly to users who buy in small quantities. The dealers in many in- stances receive no price protection on car-lot orders; a user buying directly in car lots obtains as low a price as is quoted to dealers. On small orders, however, the chemical dealer, like the iron and steel jobber, gains a protection from the differential in freight rates between car-lot and less than car- lot shipments.
The reason for this marked change in the marketing of chemicals is partly the increased size of chemical manufacturing companies, partly the in- creased volume of purchases by users, and partly the strained relations between manufacturers and dealers over price protection and patronage control.
When costs and prices were rising, it was difficult for a manufacturer to put an increased scale of prices into effect. As long as any low-price contracts were in force any dealer was reluctant to sign a new contract at a higher price, since he would be competing with other dealers who enjoyed lower prices under unexpired contracts.
The dealers, furthermore, it is stated, sometimes diverted business from manufacturers who allowed low margins to other manufacturers who allowed wider margins. Because of the uncertainties arising from such practices, several manufacturers concluded that they could secure greater stability of sales and more orderly distribution of their products by direct marketing. Other manufacturers followed their example.
THE conditions which led to direct marketing by chemical manufacturers have many parallels in other industries. In s.mie cases, as for example those of several belting manufacturers, experiments with direct marketing have not had satisfactory results, either be- cause the demand was too sporadic or the unit sale too small to permit direct marketing to be carried on economically.
Where manufacturers have continued to market their products through dealers, the difficulty of dealing satisfactorily with the resale price problem, the demands of dealers for protection against declines in prices, and especially the practices of dealers in shifting their patronage or of threatening to shift unless concessions are granted have caused widespread discontent and strained relations between dealers and manufacturers.
Dealer relationships in industrial marketing, like the relations between manufacturers and wholesalers in several trades handling consumers’ goods, have become widely unsettled because of the conflict between dealers’ practices and manufacturers’ objectives.
The typical industrial dealers, like the typical wholesalers, traditionally have been traders, shrewdly bargaining for price concessions and looking to favor- able differentials in market prices for substantial portions of their net profits.
In some trades, furthermore, as for ex- ample in the paper jobbing trade, the jobbers have sought to control patron- age by featuring their own private brands. Such practices as those just cited often have threatened the stability of a manufacturer’s sales or have frustrated his efforts to direct the demand for his products.
FROM a manufacturer’s standpoint, market stability is essential for the economical operation of a large producing plant and for providing regular employment for workers. A manufacturer operating on a substantial scale wishes to be assured, if possible, of a steady volume of sales, both for the present and for the future. In an effort to attain stability of their markets, numerous manufacturers have undertaken to trade-mark their products, to advertise them to users or to consumers, and to adopt other methods of sales promotion.
In so far as manufacturers have been enabled by such means to stabilize the demand for their products, the scope of the trading of dealers and jobbers has been restricted.
In this problem of dealer realism in industrial marketing, by no means all the fault lies with the dealers. On the contrary, the manufacturers are fully as much, if not more, at fault Many manufacturers have not thought out logical and well-defined distribution policies; their price policies frequently are vicious; and they often fail to comprehend the dealers’ problems and the dealers’ point of view.
This failure to understand the dealer’s problem is exemplified by manufacturers’ complaints that distributors, such as mill supply firms, do not push each particular manufacturer’s line. Such a complaint usually represents a short-sighted view of the distributor’s activities.
If each distributor were to push the line of each manufacturer whose goods he carries, his costs of doing business would rise to a point where they would wipe out most of the economy in selling, which constitutes one of the chief reasons for his business existence.
Although many manufacturers of industrial goods are distributing their products promiscuously, through what- ever channels offer immediate sales, with little regard for future prospects, two distinct types of distribution are in process of development. One type is intensive distribution; the other type is selected distribution.
When a manufacturer adopts a pro- gram of intensive distribution, he seeks to have his goods carried by all dealers in each community who are potential purveyors of such merchandise. A manufacturer of shop supplies, such as brooms and pails, normally seeks intensive distribution. Likewise manufacturers of sandpaper, emery cloth, packing’s, bolts and nuts, and numerous types of supplies seek intensive distribution.
The goods for which intensive distribution is needed are particularly those for which users are likely to accept substitution of one brand for another rather than to go to the inconvenience of seeking out a dealer who carries a particular brand or of postponing purchase till the preferred brand can be secured.
A manufacturer whose goods call for intensive distribution loses potential sales under any other method. The industrial goods for which intensive distribution is desirable are analogous to convenience goods sold to consumers.
AN example of selected distribution is afforded by a company manufacturing machine tools and equipment, which markets its product through one distributor in each market center. The essence of selected distribution is the selection of one or a few dealers in each market to whom sales are confined.
Selected distribution is especially desirable in instances in which each dealer is expected to carry a full line of goods in a range of sizes or variety of grades. In such cases a dealer can- not carry complete lines of several competing manufacturers without assuming an excessive inventory burden.
I either belting is an example of a line in which dealers’ inventory requirements call for selected distribution. When dealer cooperation in sales pro- motion work is required, a program of selected distribution must be adopted, for no dealer can be expected to incur expense for missionary work from which competitors may gain the chief benefits.
The problems of dealer relationships which are troublesome to so many manufacturers can be solved in numerous instances, not by propaganda among the dealers, but by a better comprehension of his market by each manufacturer and a careful planning of distribution methods for the cultivation of that market.