RQW MANUFACTURER MARKETING PROGAMS BUILB BETTER DISTRIBUI’OR RELATEONS EN THE FQGE INDU$T§Y Them. {m- i’hc chmo 0:? M. A. MICHIGAN STATE UNWERSITY Carl (1. Sander 1 9 6 l LIBRARY Michigan State University Iv-\A.I HOW E‘JAI‘IUFAC 401116 F- I’GARKE TI PIG PROC‘E-lflj-it? BUI LD BF. TIER DISTRIBUTOR RELATIONS IN THE FOOD INDUSTEY r ‘.‘T x '- r“; 1 q.- rfi P51 ‘4 t‘- B‘ .. .- -‘Z‘L \,7 J- Submitted to Hiehiggn State University in partial fulfillment of the requi?ements for the degree of 7 ~ In ,-‘ w‘v« -‘—- rare-1:. MP.» mm 0;“ A11. La Department of General Cuerlculum in Food pistributien 1951 Approved: THY .IO‘ (J ,3 O .71 .l_ ; . _. “'1‘ A w .l _ .y fit} , l . (i .i. . o L . . y a? .\. , o E , _ i V Vi: l a ; . d . m... N .V ,t PQBCIHtACT? HOW MANUFACTURER MARKETING PROGRAMS BUILD BETTER DISTRIBUTOR RELATION? IN THE FOOD INDUSTBY by Carl 1. Sander This thesis purports to discuss the various aspects of manufacturer marketing programs in order to determine what effect, if any, they have in developing better distri- butor relations in the food industry. haintaining sound distributor relati'no is becoming increasingly important in the 1960's, and manufacturers are beginning to place more emphasis on this facet of business. This thesis examines the relationship manufacturers have with distributors, the general feeling distributors express about various marketing practices, and recommendations as to how marketing program? can be improved or initiated which better serve ristributors. Research material for this thesis was gathered from three main sources: (1) A review of the major food distri- bution periodicals from January, 195%, through July, 1961, in addition to articles appearing in business, government, and trade publications. (2) Personal interviews with food distributors and manufacturers throughout the United States where the author had experience working for Scott Paper .2 Carl G. Sander Company since 19,7. (3) Personal obs rvations the author recorded from his experiences. The conclusions reached are as follows: Manufacturers should give more attention to creating better distributor relations because: (1) The concentration of an increasing number of supermarkets accounting for the major share of the nation‘s food business into the hands of fewer, but economically stronger, supermarket organizations. (2) The need for manufacturers and distributors to work collectively to achieve greater progress in food distri— bution in the decades ahead. (3) The need for both to work cooperatively in capturing a larger share of the consumer's dollar spent on food. There are four marketing factors which help manu- facturers build better relations with distributors. First, distributors want to sell products which have consumer demand and return a satisfactory profit. Second, distri- butors like liberal discount terms and more efficient deliveries which allow them to keep inventory to a minimum and increase inventory turnover. Third, advertising con- tracts, deals, coupons, and allowances help distributors sell more product, but the work involved in the handling and administration of these incentive programs often times offset the advantages of increased sales and profit. Manu- facturers should try to eliminate additional workloads .. 1 ’ I” ,,..-J ~~ 'l .. a 1 ._,,.~J- .,, . ...-.‘.. - .. .-...¢.. . . u ”1., . . ..’,..~ .- ... ‘ (.0 Q r ‘ A m k.) (lil‘xJ. e .L. }_J C) Car required to handle incentive programs. Finally, salesmen should be trained to be marketing men skilled in under- standing distributor problems and capable of providin pertinent data and information, as well as merchandising ideas which increase sales and profits. Inter—industry conferences and the manufacturer's willingness to help distributors solve their problems breed confidence and good will and create the proper climate within which to build the finest, most advanced food distri- bution netwcrk the world has yet to see. .wa-r ”A .yo-I .. n .' y- I unn'd. vofi—ov- v-5‘.. 94b. HOW MANUFACTURER MARKETING PROGRAMS BUILD BETTER DISTRIBUTOR RELATIONS IN THE FOOD INDUSTRY by Carl G. Sander A THESIS Submitted to Michigan State University in partial fulfillment of the requirements for the degree of MASTER OF ARTS IDepartment of Marketing and Transportation Administration 1961 3/03/6'7/ ACKNOWLEDGMENTS In the preparation for and writing of the thesis, the writer was aided immeasurably by many persons on the faculty of the College of Business and Public Service at Michigan State University. Especially h81pr1 was D?- E. A. Brand, the writer's counselor in accomplishing the thesis. TABLE OF CONTENTS CHAPTEH PAGE I. INTRODUCTION . . 1 Definition of Terms . . . . . . . . '7 II. THE PRODUCT . KO Quality . . . . . . . . . . . , 10 Value . . . . . . . . . . . . . ll /‘ Advertising . . , , , , . . . . . c J F+ HI Pro' }_._1 L0 t . . . . . . . . . . . . H \31 Conclusion . . . . . . . . . . . U) H LU III C (IYERE'TA‘S OF 13.1:1E o o o o a o o o o o o H Discounts . . . . . . . . . . . Quantity discounts . . . . . . . . H I._J Cash discounts . . . . . . . . \‘. \_,: T U1 rompt Delivery of Merchandise . . . . M ‘O Conclusion . . . . . . . . . . . IV} DEALS--SPECIAL INCENTIVES TO INCREASING Derls Benefiting Primarily the Distributor 31 rrlqe Ei-‘V'e —a.X"-T:3.3] o o o o o o I I o 31 Count-recount deal . . . . . . . . 33 Promotional allovance . . . . . . . 34 Cost reduction . . . . . . . . . 3A Ho Increase n cost . . . . . . . . so CHAPTER PAGE Dea ls -Lesi1gned Pr 1‘2 aimil for the Cons u2er , 35 The cents- off the package deal . . . . 35 \ Multi-pack deals. . . . . . . . . 3c Free trial offer. . . . . . . . . 3n Prwnniiuns . . . . . . . . . . . 31' Direct sampling . . . . . . . . . 3o lanufactucen Distributor Attitude on Deals. 39 Conclusion . . . . . . . . . . . 50 v. COUPONS . . . . . . . . . . . . . 5; "a _} Vfli.a i: A 63 C;uip< 1s . . , _ , , . . . 5.. Problems Concerning Coupons. . . . . . 55 Attempts by the Grocery Manufacturers of America to Improve Coupon Promotion anc Hand 111153 . . . . . . . . . . Cl 1 Coupon Redemption at Super Valu . . . . f» Supplier Consumer Esucation Program . . . T7 CV W 110 lLJ-r‘ K21 SDI-1 o o o o o o o o o o o ‘1’] :) VI. COOPERATIVE ADVERTISING. . . . . . . . 82 0 CT‘ L0 [D The Advert Hsi g Contra Purpose of the Advertising Contract . . . SS Controversial Subjects About Advertising Contracts . . . . . . . . . . . SS Conclusion . . . . . . . . . . . 98 ‘VII. DISl LIBUTOn—LAJUFACTURE RACTICES AND THE FEDERAL TRADE COIIM SSION. . . . . . lOE VIII. IX. Federal Trade Commission Cra ck Down Unfair Practices to Continue. With the Robinson-Patman A (3031011181er 0 o o o o o POINT OF SAIEIIUNHUTTISING . . ct. Manufacturer-Distributor Attempts Violations of the Robinson-Patman Act O II The Role of Point of Sale Advertising Conclusion . . . . . . TH” ROLE OF THE SALESNAN . . m‘ - ’1 fl“ " y The Purpose o: Sale‘men . . f"! The Salesman‘s Fole—-A Two Fold Central buying offices. . Sellino at retail level . Factors Restricting the Usefulne Salesmen . . . . . . Distributor Buying Decisions The buying committee . . Decisions of the buying committee What's Wrong With Point of Sale Advertisine C“ IQ S to Comply The Salesman in the Sixties—-A Professional Salesman . . . . . . The Moral Obligation of the Salesman. Conclusion . . . . . . v PAGE 102 109 H e4 24 DJ M.) I Q R) \O O H U) f\‘; .4. I J-‘v- k .1.- “put .—--- CHAPER X . C 0 NC LUS I OI‘JS . BIBLI OGRAPHY . APPENDIX . vi P AGE ‘-« -- .4 ..a -,\ -...- —. ‘-.. . ..~ 'u..\-g ,‘JJ . ' L ‘ . -.... ---_. ' ‘ \ .. .. "' ~-.~-‘_ » o<_ ‘ .- ." V‘. ‘\- .4 . .4--. _‘___j '1 ~‘ --.- — < ‘ "' -.. ,.._'-I ~ -,.- .3- ‘_~ . —- _ l 4 "' -\..‘,, . H \V". 3 -\._ . I . ‘ l , VA. ,- “.. ‘ .7' -.‘- - . o. . < ”N '-—-'1 '-o ‘ ‘. .. .\ ' __‘ Y.» . , . ~. - \ 4 . l . ’d’ ‘- ’ ._ -, . . i. . . . N“ ‘ '3 ..._ . :- v- "‘ -. _\ ,. | 1" . >~ o O . . .. ‘ ‘ . .I .Q .fi,. -. ... ._ ». . .m. a. - . ‘. ,. ‘0. ' 1 . s . s s ‘ - —. . f x \ CHAPTER I INTRODUCTION The food industry is one of the largest in the United States, today. The Chase National Bank's bi-monthly economic review stated that the industry gets the largest share of the consumer dollar.l Currently, food outlays are running at a rate in excess of 65 billion dollars a year.2 This is close to one—fourth of the total consumer spending in this nation. Spending large sums of money on food in this nation - > \ ‘ ‘v‘ |l. I. .. A ' w’a.y_ .J. ._. 'v._ .a V I § u . r I ‘.~ 5 ‘r1 The growth of large food distributors has been receiving public attention. The Federal Trade Commission's study released in May, 1960, pointed out some very interesting facts concerning the growing power of retail chains. The report revealed that since 1929, food retailing has developed into big business. Stores with sales in excess of $300,000 a year accounted for only 4% of the total grocery store sales in 1929 but, in 1958, accounted for nearly Y0%. Corporate chains acquired almost 2,500 stores by mergers and acquisitions Two—thirds of the total stores were from 1949 through 1958. acquired by ten of the industry‘s largest food firms.0 The Ifiaderal Trade Commission's report has drawn the attention of Scnne members of Congress who are advocating governmental <30r1trols to guard against monopolistic tendencies in the food industry . The president of one of the largest food manufacturers the nation discussed the growing threat of large chains in iri Charles G. CFIEB company's annual report to the stockholders. MOrtimer, President of General Foods Corporation, remarked irl the 1958 annual report that the steady increase of the CCDTICentration of buying power in the hands of fewer grocery (ii—SVEributors poses a serious threat to food manufacturers. The“Se powerful distributors, Mr. Mortimer revealed, control \ pqe} 6Marvin Caplan, ”FTC Issues 338 Page Report," Supermarket \‘8, Vol. 9, No. 21 (May 23, 1960), p. 1. 5 their distribution channels and through strong sales emphas s, 7‘7 push their own ”private" labels or brands.{ Sidney Johnson, marketing consultant, compared the situation of fewer distributors controlling more and more supermarkets to that of a funnel. Mr. Johnson pointed out that products must pass through the narrow neck, representing distributor buying offices, to reach the food stores doing the largest part of the food volume in the United States. Therefore, Mr. Johnson recommends that manufacturers make a strong effect to gain the respect ahd cooperation of the large distributors to insure the study flow of merchandise 'to the market place.8 In addition to the growth of the supermarket and the C<>ncentration of food store sales into fewer distributor <31?ganizations, sound relations between manufacturers and dis— 131?ibutors has a healthy effect on the nation's economy as Eveall. Through mutual cooperation, better methods of dis- tIT‘ibution food can be achieved which benefit Americans I‘esulting in a wider variety of improved grocery at reduced <3C>sts made available in modern, efficient, and pleasant E31lpermarkets. Paul Willis, President of the Grocery Manu- falcturers of American, asserted that the food industry keeps \ 7George Lieberman, "Supplies Threat Seen In Chain Com- DEitition," Supermarket News, Vol. 7, No. 16 (June 16, 1958), D. L10. T: 8J. Sidney Johnson, Marketing Consultant, in an address C) the Food Distribution Class, Michigan State University, April 30, 1956. ("x production and marketing facilities in high gear and main- tains a high level of employment to help off—set the effects of economic slumps in other areas of business. In the past, lhu Willis recalled that the food industry acts as a stab— ilizing influence during periods of reduced business activity by providing employment and offering food stuffs at the lowest possible cost to the consumer. Thus, the manu— facturer and distributor have an obligation to the American people to work together to perfect a better food distribution System particularly in periods of business recession. Every Saving made indistribution costs can result in greater values for'the consumer and, consequently, more business for the fkbod industry. Relationships between manufacturers and dis— tlcibutors should be properly cultivated since an "all out" teeam effort and cooperation among all segments of the ilidustry offer the best opportunity for continued success in Thaiking contributions for the betterment of America's food Iilidustry. The author purposes to discuss the manufacturer— distributor relationship in the food industry in an attempt t3CD determine how both, through mutual understanding, can PVCrrk collectively to preserve and improve the most efficient Eirnd economical method of distributing food. \ 9Pau1 Willis, "The Food Industry—-A Stabilizing 1Ehfluence," Food Mart News, April 15, 1958, p. 1. Definition of Terms Throughout this thesis, the term distributor will be following types of distributors most 10 used to encompass the prevalent in modern food retailing: Chain 0rganization--An organization operating 11 or more retail stores. ——A person or persons owning 10 or less Independent retail stores. —-Retailers who are owner members of a cooperative wholesale buying group such as Certified Grocers, Associated Grocers. Cooperatives -—Retailers who are members of a volun- tary merchandising and buying group, sponsored by a wholesaler and who operate under a common name, such as IGA, Red & White, Spartan, Super Valu, Clover Farms, et cetera. Such organizations are commonly referred to as voluntary groups. Voluntary Groups The author wishes to state that he has had the good fkbxstune of working for a manufacturer, The Scott Paper CRDrnpany, whose dedication to the consumer, distributor, and fYDCDd industry is above reproach. The Scott Paper Company k151-53 expended great amounts of time, money, and manpower in an ef’fort to assist the distributor to better serve the public. Although the material presented in this thesis does rlc>t3 necessarily represent the thinking of Scott Paper Company, tzkha author sincerely believes that an attempt at this time to E: . . . )CFNDund on ideas concerning manufacturer-distributor relations \ Pies 10The Editors, ”1960 Annual Food Report On Food t3adling," op. cit., p. F6. 8 in the food industry would have been most impractical without the valuable experience gained while working with this company. Information for this thesis was obtained from a variety of sources, and the author is grateful to those who unselfishly gave of their time to be of assistance. However, a token of appreciation should be given to Super Valu Stores, Inc., a progressive voluntary group which the author had the privilege of working with for two months to grasp a comprehensive under— standing of a distributor's operations and problems in the grocery industry. The mere fact that the reader may formulate opinions arni judgments contrary to those which are to be presented is ant so important as long as one realizes that the guarantee to greater achievements in food retailing depends upon an LUnderstanding coexistence between the manufacturer and d i s tributor . Psalm Mflz3 . . . For they got not the land in possession of their own sword, neither did their own arm save them. . . . CHAPTER II IHE RODUCT Perhaps the most important factor in developing good ’“0 o1 {istributors to 5.); distributor relations is the willingness sell a product which ha consumer demand and appeal and sells fast enough to produce satisfact:ry profit. Distribut:r and the value the consumer. ‘ (,3 1’}, interest depends on the p.oduct Sually, a manufacttrer‘s reputation is inherent in the “eat deal of admiration is given to the manu- product, and a g1 .facturer whose high dualitv product is known and wanted by fine consumer. Distributors welcome merchandise with wide Glistomer acceptance, and mo they are most likely to teike on the new product of a reputable supplier than a com- IDEiny whose name has not been established in the food industry. The major barrier distributors raise when considering of space and where :3 Vfifiat new products to stock is the problex t3O put the new items in the store. With the average super- 6 shelves are THEir‘ket selling approximately 5800 items, the pEiCked and where to put new products poses a serious question. Either the new product replaces an existing one or space is rnEUde by cutting down on the amount of shelf space allocated 13C) other products in the store. Therefore, manufacturers QC>IT1plete against each other when introducing new merchandise «v. . r- - ,~ ‘7 U .. \- ».. ._ ‘1 '\ .'u .,. n .4 .u . \ l ‘1' 0 e.-. O -..‘ <\ w 1“- I --__ c ,0 .n A- ' - ~.' en ’A._ r I . I . ' n . Q . I o -. ‘ . o .~. ~ 4 O s o ' . . “I -. ~‘ ‘-) .3- I“ I .. - v‘ - .... --- 1 n. -- \ '“I . - IO and the outcome depends on a number of factors which will be covered in this chapter. When observing the variety of products sold in the supermarket, one might recognize that certain manufacturers sell a number of items. Companies, such as Proctor & Gamble, Campbell Soup, General Foods, General Mills, California Packing, Gerber Baby Products, H. J. Heinz & Company, Scott Paper, Libby, McNeil & Libby, come to mind. All of these companies are reputable and their products are purchased by countless Americans. An analysis of product programs reveals the principles which are employed by the major companies when ilitroducing new products. These principles are summed up by fflie formula used by The Scott Paper Company to explain the Sllccess of a product franchise—-QVA=P. Explained in words ttiis means quality, value, and advertising, equal profits. IEELch principle will be discussed individually. ClLlality Quality is the factor by which all products can be éTLUjged. It provides a basis for comparison. Quality Sig- nj«fies the efforts and toil of countless employees in various (zeiENacities working coherently to produce a product which 53a-‘t3::lsfies the desires and needs of the consumer. Quality standards must be rigidly adhered to if a 1PI‘Oduct is to fulfill the wants of the shoppers. Once the IDJFCDduct is placed on the market, the manufacturer has a 1311blic trust to maintain quality standards which the consumer ll exPects to receive. Any carelessness in keeping quality controls may be detected by consumers and discourage repeat purchases. Unfortunately for distributors, there have been occasions when consumers decide it is more convenient to complain to the supermarket manager rather than to the manu- facturer. Naturally, distributors wish to avoid agitating the consumer and look unfavorably upon suppliers who allow ”inferior” merchandise to reach the market place. There have been occasions when manufacturers, whose products drew adverse criticism, found that distributors turned a ”deaf ear" to new product presentations even though the new items were of high quality. Even though apparent discrepancies Ffiere corrected, the suppliers found it extremely difficult tc> get back into the distributors‘ good graces. 'VELlue Quality is important in the success of a product but 53C) is price. Therefore, a happy medium must be reached ITEigarding how much quality the consumer is willing to pay for. EDipressing it in another way, the supplier must ask the cllueestion--how important is the quality image in the consumer‘s n‘iJfld, and will she pay a premium price. Often, consumers v’i—lil pay more for a product if the quality advantages are ea«Silly recognized. However, if the quality difference betiween competing brands is not easily distinguished, price beQomes an important factor.. If a manufacturer is to be ESIlClcessful in inducing consumers to pay a higher price for ,. .I.:-.- " "('9 I _',.. --'~ ‘ -_. -..~ -- l .... . . .-..‘. ‘-~ _ .4 .-.. A4J .. >\_—— .. .- .4 . equi— . . ---- ~ .. l ' .~>..',- . - 0 b4 -" at- w ..-__‘ ’--~, J . I ,0 .. .1 u A e ' ‘1 . ‘\.~_I .-.' ..' .,,‘ . ,_ . . ’_. _ _ 1 . i _ ~ - ._ h -I. . r'c . ’1‘ _ --. g . . . -. . ‘-.‘ - ' .1 .. 1: ,_‘ , ._ _ w _ -._ 7 ‘f - 1 v‘ e e , . - . . s- VA a u _.‘. ~. 1. .-1 '~.. . - . . v '5 H .-:L l-~ a“. . ‘ 1 . l . ‘ l .‘ ' ,‘i ... 2“ ,- ‘-- .F‘ ..,‘l a. | " I .7< l - .‘ 12 a product, there must be a marked difference in the product which insures the consumer‘s brand loyality. Thus, it is reasonable to assume that quality plus price determines value. The more value a consumer receives, the better the chance a product has of becoming a success. Certainly, distributors are anxious to satisfy customers, and manufacturers who are able to offer products of high value are sure to reap consumer patronage and in turn merit distributor confidence and support. Advertising Contributing heavily to a product‘s success in adver— tising, the stimulus that sparks demand for a product. Quite frequently, one is attracted to advertising messages bom— barding the public from various advertising media. Adver- tising helps to attract attention, create interest, and Stixmflate decisions to buy. Without advertising, many of the lfinading grocery products in today‘s supermarkets would not luave achieved the success they now enjoy. The advent of ”self service" shopping in modern super- malflcets places the responsibility of making buying decisions SQLuirely on the shoulders of the consumer. This decision Cari be influenced by compelling television commercials, color maEEiZine and Sunday supplement ads, or haunting radio jingles. confronted with endless varieties of merchandise, consumers ma'37'be prompted into selecting certain brands because a manufacturer spent time and money to create a brand image in ”he fShopper's mind. ~\.-‘ , . _,..- . r- 1")“ s.-.n~4 .A\ :m - .1' o l 5....- -., ‘_" ,4 .. . a , - ‘ -1 _ . Di. _._.4 ,v ‘ - r -...,_- J .""'-I tun-l . ~v-..\__>- R. o. ‘ r- ;_ -\ - . -.. . -‘1 - I ‘—. ‘0 9- ._’3 p.“ -- v ‘R K.. - _\ ._ '¢,._. - -\. -,N-,. . ‘- 1.. k. ‘ t v ' -”~. 7 ‘ - " -4‘- . . JV "F,._ I..- _.‘ . h ‘\-A ‘. a . ‘-. ~ v" .~. ...’ - .~‘ \,>~ -~ . ' A . “ ‘Jx, ~ v’._.. .‘h \ n q . ,. ~ _ ‘h '..... . ‘ H . <-_ “.u _ . ‘4‘ ' ‘ ‘1 ' .l ', '.,_ . "- ”'‘ . ~ I ' " '._ _ ‘1 '4 ’ s - 1 . ‘. ‘. ._- . q‘ .. ’ a y - n _ . . o. 1.. . a ._ . ~ - . e 14 thereby resulting in more profit dollars to the operator of a supermarket. The moral of the story about a "fast nickle beating a slow dime" certainly applies to the supermarket. Lower prices enable more people to buy a larger number of items as well as spreading purchases over a wider variety of grocery products assuming the consumer adheres to a fixed percentage of the amount of family income which can be spent on food. The percentage of profit is important to the distri— butor, but so is turnover. Manufacturers should take both tnxrnover and per cent of profit into consideration when pricing merchandise to the distributor. However, there are Stxill a number of distributors who actually do not quite urnierstand where profits come from in the food industry. lhotv often have manufacturers heard retailers say that the péermentage of profit is entirely too low without considering tkhe turnover potential of the product. Malcome P. McNair in hiJS study that appeared in the June, 1957, Harvard Business Efiifigiew said that retailers have become slaves to percentages. SOmething stands in the way of clear thinking. Continued eIT1Dhasis is placed on percentages of sales instead of dollar eaJTUings and the relation of dollar earnings to investment. Imr‘- McNair suggested that retailers stick to making dollars, fiJid out what returns come from an investment, and get to lihudw and understand turnover.1 IT“~+ : A. 1Malcome McNaire and Eleanor G. May, "A Revolutionary BIDFIroach to Retail Accounting," Harvard Business Review, Vol. ., No. 3 (May-June, 1957), p. 105. 15 In answer to the question what makes turnover, one can safely answer ”merchandise that sells," In most cases, dis- tributors say that it is the sure and dependable day after day sellers that create turnover and not the goods that "move slowly," tie up capital, and subsequently result in lower dollar profits. Too often, "slow-moving" merchandise, termed hidden profit leaks, take up valuable shelf space that should be occupied by merchandise that sells in greater Quantities. In the final analysis, turnover is what makes profit in the food industry. Refer to Appendix A for a rmathematical explanation of turnover. Egyiclusion In conclusion, many factors play an important part in 1N11_lding a market for a product, however, four basic ones arwe usually adhered to by the established manufacturers to inssure the product's growth: Quality, Value, Advertising, anti profit. Quality and value go hand in hand offering Corlsumers a product worthy of the prices they are willing to p367. A product which is able to offer "more for the money” ha£5 a better chance of attaining a larger share of the market 113831 one whose product characteristics are not as easily idehtified by the consumer. Advertising, the third element, creates a market for thfi? product by building a product image in the consumer's rnirki and encourages her to purchase it when shopping in the I upe rmarke t . 16 Finally, profit is essential in the over-all mix of a successful product. Needless to say, the higher the total dollar profit that can be made from selling the product, the happier the distributor. However, profit is a combination of two things: turnover or sales velocity and mark-up. Relying strictly on per cent of mark-up to determine what items to sell does not give the supermarket operator a true picture of the dollar profit return if turnover or case move- ment is not considered. All four of the above factors are dependent upon each otfiier. The elimination of any one can adversely affect the Saflles of a product. Suppliers incorporating these basic faxztors into product programming will not only create a fi¢rm marketing foundation upon which to build a bright fLLture but gain distributor confidence as well. Mr. J. 0. Peckham, Executive Vice President of the A. (3- Nielsen Company, stated in the 1959 A;_C;_Nielsen Marketing Eflzgrations Report that the new or improved product was the mcDSt decisive factor affecting sales gains for a product. :33? new and improved, Mr. Peckham meant any new brand or an improved version of a present brand that incorporates some f'c‘itlrly substantial added value that the consumer can recognize (Vefiby easily. In addition, products which can be classified 843 premium brands with added consumer values of sufficient irn‘portance to command a higher price than most other brands W1‘th which they compete have the effect of expanding the I _.... .Il ’- -.. .nas J .1 ' o ..,._ ‘~ v . "o _ ' ~ "~--..:. -.“ ‘- "u- \ - " A- ' ..1 ‘\ "\ “‘.a _,.~ . ‘n n *. '_ ..‘ . - a. w. , .‘o ‘ . . ‘ . » _ p l v s ‘ \ l I ‘ I" l ( . O V..- '-~~ . -.. r. ‘-.- - . ~ , L ". ._i .. .i ~i. IJ' dollar market for the commodity groups in which they were introduced and not merely to take business away from com— petition. Tonnage, as well as dollar gains, are evident in many instances as consumer usage is increased through product improvement and additional marketing effort of these new brands.2 Therefore, the product plays a most important role in gaining good distributor relations. With supermarkets selling nearly 6,000 items, it behooves manufacturers to offer products which give the consumer a better value for the money and not similar values already received from existing products. Unless this condition is met, the so— called "me too" products introduced as new will have only temporary success and at a very high marketing cost. Needless to say, if manufacturers introduce new products which not only offer better values but expand the product category sales as well, they will receive a most cordial acceptance and vote of confidence from distributors. As lmhs as manufacturers can maintain and increase added con— stfP value through product improvement, fair pricing, and Well u...~ -~ l__. .nn"“ ‘- f A h ~I . . . \' e r, - . _., . .«n - u‘ “‘v'~~ --~I .... . . -"";x- -.' ._ A- ‘_.1‘ ._ I-q" . ' . w...“- .v ._ -... on,” .I IV. I '1 —4 ‘ w, . v \ _ u - -:‘ ¥ . _‘ . .'.‘ Q: V - 20 date of invoice. Net payment will be due in sixty days from date of invoice. The change was made so customers can facilitate distribution and capitalize fully on consumer advertising for the new brand. In addition, Scott Paper Company allows the same terms on promotional or deal mer- chandise when distributors stock up on merchandise to take advantage of the reduced costs or extra promotional allow- ances . 2 In addition to receiving prompt payments from distri— butors, suppliers find that cash discounts encourage the turnover of receivables, reduce bad debts, and help manu- facturers to detect poor risks. On the other hand, most distributors are satisfied with cash discounts, however, a few sfltuations have arisen which have prompted distributors to make suggestions for more liberal cash discount policies. One is the matter of check handling expense incurred by distributors when reimbursing various Suppliers for each Shipment of merchandise received. A spokesman for a large Midwestern chain suggested that manufacturers allow them to Write one check per week, per manufacturer covering the total amount of merchandise received the preceeding week and still take the cash discount on the total amounts purchased. PI‘esently, this particular chain's accounting department 2Chain in terms of sale policy published by Scott Paper Company in a letter addressed to the food industry dated February 9, 1961. 21 remits checks to manufacturers for every invoice on the date specified to enable them to take advantage of the cash dis- count. Perhaps this means that they write three or four checks on different days of the week for one manufacturer. Possibly a system allowing this distributor to write one check for the four invoices due in any one week would reduce the check handling expense for both the manufacturer and distributor. Already, the Stockley Van Camp, Inc., company allows distributors to pay for merchandise once every thirteen weeks and receive cash discounts on total purchases during this period. While on the subject of invoices, the test of Trade Egactices Recommendations presented at the fifty-first annual meeting of the Grocery Manufacturers of America set forth three recommendations. They read as follows:3 1. Distributors have stressed the importance of working toward a standard invoice form on which all essential information such as terms, discounts, quantities, and the like would appear in a uniform place on the invoice. This would facilities the job of the accounts payable clerk in processing invoices. Such standardization could result in savings of hundreds of clerical man hours, and eliminate much of the confusion that now exists. 2. A distributor committee is now at work on this and will submit a recommended format. 3. Bills of lading should be attached to the invoice, Where this is not possible or practical, the invoice should show the rail car number and routing instructions. \i 0‘ 1 Q 3Steve Weinstein, ”Urge More Realistic Co-op Allowance,' :Eifflfifirket News, Vol. 8, No. 49 (November 16, 1959), p. 37. 22 Since most terms of sale grant cash discounts on a specific period of time usually commencing with the date of invoice, there are times when the invoices become payable to earn the cash discount even though the merchandise has not been received because of a delay in transportation. Thus the distributor must pay for the product before the contents of the shipment can be checked and accepted. How— ever, such complaints are hard to completely eliminate and, today, all manufacturers will.gladlyreinmurse distributors for any shortages and damages discovered in the shipment. If merchandise is damaged in route, manufacturers can file a claim against the carrier if proof can be established that the merchandise was in good condition when loaded. The Kellogg Company recently initiated plans to enable distributors to pay for merchandise from the date the mer- chandise arrives at the customer's warehouse. All of Kellogg's invoices are post dated, taking into consideration transit time. Thus, distributors can take advantage of the Cash discount from the date the merchandise arrives in the 'Warehouse and no longer from the date the goods were shipped from the manufacturer‘s plant. Needless to say, distributors like the idea of paying for Kellogg's brands ten days fOllowing its receipt in the warehouse so they can turn a caPload order before paying for it. Some large distributors are working on Kellogg's money because they sell the merchan- dise before the cash discount period ends. 1" R) U) A buyer for a large Seattle, Washington, wholesaler, Mr. Ed Lake of Associated Grocers, made an interesting statement in 1958 about the way cash discounts were figured on deal merchandise. He stated that a 2% cash discount on a case of soap powder with a 4% off label reduces the case cost eighty cents (from $5.60 to $4.80). Thus, the per case cash discount is reduced two cents (from eleven cents to zero cents). The cost of warehousing and shipping a case to the stores remained the same regardless of the cost. There- fore, Mr. Lake suggested that distributors be permitted to discount an invoice on regular cost and not on the deal price. A purchasing director for a Southern Voluntary chain raised a technical question concerning the proper cash dis- count which could be taken on an invoice paid prior to the commencement of a price decline, as well as the procedure of refunding money. It appeared that the director paid for a Shipment of coffee on July 15th for $1,500 and was notified on.July 30th that a $200 refund would be paid because of a Drdce reduction. Another shipment of coffee was purchased in August for $1,300 and when the invoice was presented in early September for payment, the director noticed that the $200 refund was deducted from the $1,300 August cost, thereby I“Eiducing the bill to $1,100, and the cash discount from $26 to $22. The director claimed that he should be entitled to a 2% cash discount on the $1,300 or the contracted price of the coffee. He was losing su cash discount by deducting the 2A 2% on the $1,100. With a twinkle in his eye, the director thought that he might have another argument for keeping the $A cash discount on grounds that the coffee company did not promptly return the $200 refund in July and, therefore, he may be entitled to keep the $4 as ”interest" charged to the coffee company for use of the $200 for two months. A pretty far-fetched point but appropriate in reminding manufacturers to make prompt payments to distributors on all matters, such as promotional allowances, refunds, discounts, and other incentives which are due. The General Foods Corporation announced in 1959 that they were offering a new cash discount policy on trade and consumer deals which should remedy the complaints voiced by Mr. Lake and the Director of the Southern Voluntary chain. Henceforth, customers will be allowed to deduct cash dis- counts where applicable from the gross amount of the invoice ‘before deduction of trade and consumer allowances. Cash dis— counts are to be computed before any adjustment for trans— ‘Dortation or other miscellaneous charges and allowances. Standard Brands, Inc., and The Green Giant Company have initiated similar policies. Perhaps an explanation is appropriate at this time as tO why distributors express so much concern over cash dis- COunts. The reason is simple-—cash discounts together with \ ( MGMA Blue Bulletin No. 885, January 5, 1959, p. 3. Published’b’y the Grocery Manufacturers of America, Inc.) advertising and promotional allowances account for a sub- stantial part of the distributor's net profit: Prompt Delivery of Merchandise Distributors are conscious of the fact that inventory should be kept to reasonable levels and geared to turnover of products at store level. Excessive inventory may create financial strains for the distributor if he must wait for long periods of time for the merchandise to move put of the warehouse. Money tied up in excess inventory might very well be used in other facets of the business and help keep to a minimum the costs of borrowing capital from outside sources. Manufacturers are cognizant of the distributor‘s con— cern for maintaining proper inventory controls and some have taken steps, costing large sums of money, to give better service to distributors. The General Foods Corporation has constructed sixteen food distribution centers throughout the United States to give distributors delivery on assorted 1H3rxis within forty-eight hours after receipt of the order. A maJiufacturer of fifty-two diversified products, General meis now maintains stocks on all of their brands in each distribution centers to better serve the trade. Prior to the distribution center program, General Foods was shipping Various products from different mills. It was not uncommon for a California distributor to wait three weeks for a delivery of dog food from Iowa or a Miami wholesaler to receive a carload of gelatin and cake mixes from Michigan 'before two weeks' time.5 The Scott Paper Company also established shipping depots throughout the United States to provide quick delivery as well as assorted brand shipments to their customers. As a result, distributors can keep inventory to a minimum by ordering assorted Scott brands at more frequent intervals. Advancements, such as these, have enabled food distri- bLItOPS to operate more efficiently. A major cost factor in a cdistributor's operation is obtaining capital for expansion EU1d the construction of new stores. If capital is borrowed, tflie cost can become quite substantial, especially if the Fuation is in a period of a "tight" money market. Therefore, cnie way in which to release funds for planned capital expan— Sixwlis to keep inventory costs to a minimum. A study con— cjucted by the Penn Fruit Company, in 195A, revealed that (aver two-thirds of the merchandise stocked in Penn Fruit Estores sold in quantities of less than a case per week. This prbmpted Penn Fruit directors to consider a more efficient method of buying merchandise so as to keep inventory require- ments to a realistic limit. A fifteen day inventory program Was instituted. Buyers were instructed to work with manu- faCturers and establish buying and transportation schedules. Of course, buyers had to exercise judgment so as to keep -\‘_g 5"General Foods Warehouse," Wall Street Journal, XLI, NO~ 106 (March 15, 1961), p. 11. total costs (merchandise and capital costs) at a minimum. Scmw inventory had to be kept in excess of the fifteen day policy limit because of the nature of the product and the transportation time required. Suppliers able to perform within the fifteen day schedule contributed to developing more efficient buying practices at Penn Fruit and at the Sane time greatly increased their own prestige and reputation twith the distributor. The director of purchases at Penn Frnait revealed that this modified "hand to mouth” buying Checreased capital requirements and reduced capital costs. Constructing distribution centers requires vast capital Iwasources and not all manufacturers are in the financial Ekasition to develop such an expansion program. However, all Huanufacturers should find it good business to maintain fast 811d efficient transportation services to distributors. fianu- :facturer salesmen should endeavor to keep buyers informed on izransportation criteria and solve transportation difficulties EiS soon as they arise. Salesmen should check periodically with receiving clerks and warehouse personnel to determine the period of time shipments are taking to arrive. Delays Could be detected and action taken to provide for faster and more efficient transportation. Constant policing is neces- Sar’yif manufacturers expect to provide the best possible SerVice. The amount of confidence and respect earned more thall compensates for the time spent reviewing shopping Schedules and determining the most appropriate means of delivering goods to the distributor. ‘ Mr. T. G. Harrison, Chairman of the Board of Super Valu Stores, Inc., spoke about transportation in the food industry at the fifty-first annual meeting of the Grocery Manufacturers of America in 1959. Mr. Harrison talked about the possibility of manufacturer and distributor working Inutually to reduce warehouse space requirements by as much as fifty per cent by fast dependable deliveries. His major cormern was the great waste of time, space, and money inher— errt in current transportation practices. As one solution, MI“. Harrison recommended closer scheduling of shipments from file manufacturer's plant to the distributor's warehouse to Iwaduce the time between the arrival of the merchandise at the Vfiarehouse and the time it takes to deliver it to the stores euid stocked on the shelves.6 Mr. Harrison pointed out that warehouse turnover of Inermhandise has increased tremendously. In 1949, a turn of ter1times a year was considered satisfactory. Today, eighteen turns is unsatisfactory and twenty to twenty-two turns are acceptable to Super Valu. In order to increase the turns Still further, manufacturers must work with distributors to Effect a more efficient system of distribution. In closing his Speech, Mr. Harrison read the suggestions received from the buyers from Super Valu's five divisional offices as to kKNV manufacturers could better serve the distributor: \ 6Weinstein, op. cit., p. 37. 29 1. Have manufacturer's invoices carry the same description of merchandise as that contained on the buyer's order particularly on deal pack mer— chandise where manufacturers often designate a certain deal by merely a code number suffix in back of the brand name. 2. Buyers like to receive invoices promptly. Many come in weeks after the product arrives. In many instances the shipments have been disposed of before the buyers get the invoice listing the price at which it was billed. 3. The traffic department in the distributor's ware— house needs manifests of rail and truck load orders. Even though they may be included in the cars or vans, copies should be mailed to the traffic department. 4. If a deal pack becomes available after a buyer places an order for regular pack merchandise, but before the shipment, the buyer should be notified. 5. When a warehouse in a city is served by more than one railroad, the carrier used by the distributor should be utilized by the manufacturer. COUclusion Making it easier for the distributor to buy is most imDortant to manufacturers striving to better relations with Una trade. Quantity discounts enable distributors to take adNQintage of lower prices and the savings are usually passed onto the consumer. Cash discounts provide a lucrative o SOLl‘r‘ce of additional income to distributors, but are not used “3 reduce the selling price. Both discounts assist distri- bUtors to compete more effectively. 7Ibid., p. 39. 30 Another factor helping distributors to compete is the ability of suppliers to deliver merchandise in the quantities desired on the dates specified. Suppliers capable of rendering "first class" service assist distributors in main- taining predetermined inventory controls which keep inventory sitocks to a minimum,yet avoide out—of—stock conditions. Ceyrtainly those manufacturers who want to help distributors arui try to adhere to distributor suggestions will undoubtedly Iweap just rewards for their efforts. CHAPTER Iv DEALS-—SPECIAL INCENTIVES T0 INCREASING SALES Vast amount of money is Spend developing, researching, axivertising, and distributing a product. Additional money 113 spent creating consumer demand for a particular brand. TWliS is true of new products as well as those which have txeen on the market for some time. There are many methods maxudtcturers use to increase consumer demand and force dis- tributors to stock items, deals, et cetera. Deals benefit the distributor as well as the consumer and as a result play an important role in distributor merchan- diSing programs. This chapter discusses the various deals arui what they are designed to accomplish. Distributor Opirdon about the manufacturer‘s "wheeling and dealing" prac— tiCes will be discussed, together with suggestions as to how deals can be made more effective and acceptable to the distributor. The description of deals will be divided into two parts: those benefiting the distributor and those benefiting primarily the consumer. Deals Benefiting Primarily the Distributor Pade Allowances) The give-away. One of the most popular deals is the g1Ve-away, i.e. merchandise which the manufacturer gives to [3 distributors in return for orders ior a f 1') U (Q 0 H. H) } _Jo ( v’ :3. C q L4 pl (3 W 0 fl 0 u , ( ’ :5" _-'o 1 ‘, ~ 7’ 4__ 7. I'.‘ C‘ cases, such as tne one Iree uan every tea cases purcnased. .J The free goods are eith~r identical or diflerent cases from k the merchandise purchased. For example, a canaer may of one free case of corn with every ten cases of corn ordered. To promote a different item, a case of canned peas may be m iven away. Actually, the give—xmgycan be construed to b a m U) stributor receive }._Jo Iweduction in the case cost, 31108 the d eeleven cases for the price of ten which reduces the cost {Droportionately. However, in order to take advantage of the ggive—away, the buyer must order in quantities specified to \ v Iseceive the free mercaa: I Alsa. ,4 F) H. m The give—away is dos gn d to encourage distributors to {Dromote the item usually at special prices. Host distri- 'butors try to take dvantage of the give-awai. In addition, ggive-aways are used by manufacturers for ”forcing new IIPoducts upon distributors as in the situation of a free (Rise of peas for every ten cases of corn. Today, independent supermarket operators can take eulvantage of give-aways since most wholesalers reflect the dead.irlthe price of merchandise by reducing the cost aGeordingly. Thus the independent owner does not have to bug; ten cases to take advantage of the give-away, whic ”OLKLd be prohibitive for many smaller volume grocers. when the CD (I) Give-aways are popular with di tributor b‘x co vovo 1 t o Io ”:11 JuJ Ianlimited quant ties prior to tne termination oI tna L U U) deal. Thus they can either continue to sell tne deal at reduced retail prices, or elect to sell tne items at regular prices and thereby make a larger profit. Distributors prefer floor stock price protection on ixaventories at the beginning of a deal so that merchandise (on hand is given remuneration to equal the deal. For example, ixf a distributor has 400 cases of corn on hand at the begin- riing of the deal period, the manufacturer would give the 0 iree cases of corn on a one free with isen basis to protect the inventory stocks. Thus the distri- lautor can remain compe”itive bf selling tne exist'n' stocks U, o.» |._J 0’2 1 Eat the deal price until the deal merchandise is delivered. 32f protection is not given, the distributor may have too many (eases of regular pack on hand which might prevent him from ‘baking advantage of the deal price altogether, since deals axe usually limited to a four week period. In addition, distributors may have to stock both regular and deal mer— chandise to remain competitive if no protection is given “which ties up capital in duplicate stocks. 1 Count-recount deal. A count—recount deal is designed tO pay distributors a promotional allowance on the number of Cases sold during the duration of the deal. This method prevents distributors from stocking up at the end of the deal period. It is to the distributor's advantage to promote the deal merchandise during the period in order to get paid a larger promotional allowance, since distributors i u get paid on the number of cases actually sold. An inventory is taken at the beginning of the period. An inventory is also taken at the end of the period and subtracted from the anmmnt of inventory on hand at the outset as well as mer- cflaandise purchased during the deal period to determine the zactual number of cases sold. For example, if a wholesaler Puad a hundred cases of cake mix on hand at the start of the. deeal, purchased 300 more, and finished with only 50 cases on rmand at the end of the count—recount program, he would Iweceive payment on 350 cases or the actual amount of product scold during the period. Promotional allowance. The promotional allowance is ciesigned to encourage distributors to promote at retail level. lit is intended to accomplish the same objective as the give- Erway. Usually no minimum quantity is required to receive ariallowance. Allowances are paid on a per case basis and £111 merchandise shipped during a specified period is covered. Ilsually, floor stocks are protected and the promotional allowance is paid on warehouse stocks. It behooves distri— ‘butors to promote the deal merchandise in order to earn higher allowances. Cost reduction. Instead of a promotional allowance, manufacturers may voluntarily reduce the case cost for a limited period of time. A case reduction has the same effect as the give-away and the promotional allowance, in that dis- tr‘ibutors can sell merchandise at a lower price to the consumer. 35 Increase in cost. The increase in the cost of merchan- dise acts as a stimulant to get distributors to increase puimhases prior to the price increase. Usually ample notifi— caifion is given so distributors have an opportunity to "EStOCk up" at the "old" price.‘ Quantities may be limited or Luilimited. It may be to the distributors‘ advantage to buy tueavily so as to keep a competitive pricing position. How- exzer, the availability of warehouse space and/or capital may txend to limit buying. £§§als Designed Primarily for the Consumer Whereas the deals discussed in the preceeding section Ciepended upon the distributor to pass them on to the consumer \Jia price reductions, the incentives which are to follow are IDassed directly from the manufacturer to the consumer. The Iiumber of consumer deals offered by manufacturers has tripled from 1955 to 1959, and increased six times faster than the actual tonnage movement of grocery store commodities as H 'presented in the Twenty—Sixth Annual Nielsen Review of H]. Retail Grocery Store Trends. Of these deals, the cents Off deal is by far the most popular. The cents off the package deal. The cents off the package deal enables consumers to purchase merchandise at a diScount. The label tells how much the consumer saves. For 14- C- Nielsen, JP., "Twenty-Sixth Annual Nielsen Review of Retail Grocery Store Trends," 1959, p. 21. ON LL) example, the label may read ”3 off” which means the product can be purchased at a saving three cents below normal selling price. Suppliers reduce the cost of merchandise to the dis- tributor thereby enabling him to maintain his regular profit margin while offering the product to consumers at a reduced price. Multi-pack deals. Multi-pack deals are a popular nwerchandising device. Multi-pack deals contain two or more items packaged together, one selling at regular price and the other at a reduced price, or free. For example, soap companies often band four cakes of bar soap together and advertise "Buy three at regular price and get a fourth one free." The distributor cost is reduced to enable him to maintain a normal profit margin. The products are deal packed by the supplier and cases are flagged for easy identification. ' Free trial offer. Manufacturers induce consumer buying by offering to refund the purchase price if the label or Some other product identification is mailed to a designated address. The consumer declares the purchase price and in turHis reimbursed with a check or coupon redeemable for Casfii at any supermarket. In some instances, the refund may be Isadeemable only on an additional purchase of the same prodlufix Either way, the consumer receives free merchandise. LA) “(I Premiums. Premiums appear primarily in two ways: packaged with the product or write-in offers. In the first method, premiums are placed either inside the package, such as a toy boat inside of a package of cereal, or attached to the outside of the package as in the case of a sponge attached to a package of soap powder. There appears to be one problem with premiums of this sort, they are limited in ‘use. Some premiums cannot be placed inside the package “because of health restrictions while premiums attached to the outside of the package may be removed by careless handling, by accident, or even pilferage. 0n the other hand, premiums are used effectively via the mail method whereby the consumer mails a box top, label, or other means of identification along with a sum of money to the manufacturer and receives a premium in return. Break- fast food manufacturers have used this type of premium extensively——most notedly the offering of silverware. When B. T. Babbitt offered the first premium back in 1851--1ithographed pictures for 25 soap wrappers each——he Started something which today is considered by many companies an essential part of sales promotion. Generally speaking, experts agree that if a premium is not unique, it had better be litilitarian and related to the product. On an individual basisg cooking and eating utensils far out number all other prehniums, as revealed by a survey published in the June, 1959, isslhs of Food Business. According to the survey, the ten 38 most used premiums are: Item % of Companies Using Silverware 41 Stainless Steel 39 Glass Utensils 31 Cutlery 30 Aluminum Ware 30 Applieances ‘ 27 Plastic Utensils 22 Pens, Pencils 21 Picnic, Barbeque Items 20 China Utensils 19 Direct sampling. Direct sampling can be accomplished ir1 two ways: door to door or in-store sampling. The placing Of‘ samples at the consumers' door is extremely costly, yet prwibably the most direct method of getting consumers to try a EIroduct. Soap companies have placed all sorts of soap Prcxiucts on the door step of millions ofconsumers in the United States. Home sampling of new and improved products has become 51 I‘apidly growing $200 million a year industry according to a Iwecent article published in Printer's Ink. Recent trends noted in the door to door direct sampling method of marketing inelude: a shift away from mailed samples as a result of I’eszent increases in postal rates; the use of holders which Eire} attached to doorknobs for home distributed samples, since the; method of personal presentation with a sales talk has ‘beCHDme prohibitively expensive.3 \ a 2Editors, ”Premiums: The Who, What, and Why Among Food rnj <3rocery Manufacturers," Food Business, Vol. 7, No. 6 (June, 1959), p. 32. 3Aber, Goldberg, and Nesfield, "Notes on the Grocery ih?a&ie," J. Walter Thompson Company Bulletin 11—16, June 15, SQEEL, p. l. The J. Walter Thompson Company's Marketing Research Department published a few guides to sampling designed to bring about greater efficienty in sampling. These guides A are: 1 Include enough of the product to give a fair trial but not enough to delay initial sales; ’ 2. Include, if possible, a coupon good for a discount on the purchase of the sampled product; 3. Distribute only in areas where the proportion of prospective customers is high; 1+ Use caution in sampling products which are already established as an antidote to falling sales since samples does not seem to permanently halt a de- creasing sales curve; and ES. Distribute samples of the new or improved product after the products have obtained distribution in at least half of the supermarkets in the area. Manilfacturer-Distributor Attitudes on Deals The number and variety of deals employed in the food ihdllstry is larger today than ever before. Therefore, it is essESntial that manufacturer and distributor work closer to- getflaer to reap maximum benefits from them. However, neither the} nehufacturer or the distributor is satisfied with deals. Mariufacturers feel that better distributor cooperation in tkke handling of deals would justify their cost and obtain ObJeectives they are designed to achieve. Distributors be:Lieve that manufacturers could make the distributor's job easei.er by reducing the amount of time, labor, and capital Fleaded to handle deals. \ ulbid., p. 2. 40 This is the era of "wheeling and dealing." Deals have become a potent marketing tool used by manufacturers when introducing new products as well as stimulating the sales of existing ones. Deals are becoming more prevalent in product cmategories where quality advantages are difficult to distin- gniish. When consumers can not notice any appreciable quality cfiaracteristics between two or more competing products in tile same price range, there is little chance of their txecoming loyal to a particular brand and more reason to txelieve that their choice depends upon advertising stimulus tfiaich influences buying decisions, such as television and IYldiO commercials, coupons, cents-off deals, in-store dis- IDlays, and promotions. The trite saying, "We can't live with them and we Ceua't live without them,” describes the manufacturer's dilemma. Surveys and studies conducted by numerous research a~8;encies have revealed that deals increase the sales of a prkoduct temporarily, but very seldom on a permanent basis. One study published in Printer's Ink, stated that deals usually produce an increase in both sales and distribution ert such are illusory. As soon as the deal is finished, thus sales curve starts on a downward plunge, leveling off at Also, there 51 IDoint or two below the pre-deal position. 155 a.similar decrease in the number of stores stocking the item.5 \ (3 5Wayne Mooney, "Are Deals Worthwhile," Printer's Ink, ctOberu 1953. p. 33. 41 For a number of years, Mr. J. 0. Peckham has been observing the effects of deals in the food industry, and concluded that consumer deals produce only temporary gains. In addition, Mr. Peckham observed that deals load regular (Histomers with cut-price merchandise at the expense of fixture sales, result in progressively smaller temporary geuins as the promotions are repeated, and will not stop a number of units to the case should definitely be COVeIFEBd with buyers to prevent over or under ordering of quant3jgties. Where possible, buyers would like to have more th an, CDne opportunity to order deal merchandise, since they 50 Cannot always estimate accurately how much deal merchandise they can sell. Also, "one-shot” deals requires distributors to tie—up too much space in the warehouse, particularly if buy%ers over estimate the sales potential of the deal. As an aid to warehousing, it is suggested that all deal paclc merchandise be specifically flagged by manufacturers so iyt can be separated from regular stocks. This will help the XNaIehouse personnel to make immediate distribution on the deal. packs when shipping orders to stores, thereby benefiting both. the supplier and distributors. Conclusion There are various types of deals offered by manufacturers each.Ipduce results acceptable to both. However, a better un dear‘standing must be developed on behalf of manufacturers 52 and distributors as to each others‘ problems and suggestions in order to maximize fully on the objectives deals are , intended to achieve. A list of recommendations concerning deals was adopted jointly by both distributor organizations and the Grocery Manufacturers of America and presented at the annual meeting of the Grocery ianufacturers of America 18 in 1959. The recommendations read as follows: 1. Manufacturers are requested to give distributors from four to six week's notice about forthcoming deals in order to give them an opportunity to dispose of their regular stock, and so they can plan tie-in promotions. 2. Distributors feel that manufacturers should allocate enough cases to each distributor to stock all stores with sufficient quantities of merchandise to justify promotion. The proper quantity can be arrived at by the manufacturer and distributor working this out together, thus avoiding under or over buying. 3. There should be a fixed policy on the part of the manufacturer covering the following points: termina— tion date of deal; whether distributor can place one or more orders; what manufacturer considers final shipping date; and assurance that the deal is over at the termination time for everybody simultaneously. 4. Distributors have expressed annoyance about over- lapping deals on the same product. Having two or more different deals on the same product in the warehouse and in the stores at the same time creates confusion and irritation. Sometimes overbuying brings about such a condition. 5. Any deal should be practical and desirable for the distributor as well as for the manufacturer. 6. When distributors take in the special pack merchan- dise, their regular pack becomes dead inventory. This ties up money and uses up warehouse Space. They feel manufacturers should give them sufficient notice on forthcoming special packs to enable them \ 311 18Steve Weinstein, "Urge More Realistic Co-op Allowance," I“52§i£market News, Vol. 8, No. 49 (November 16, 1959), p. 37 to reduce regular pack inventories aand give them extra dating on the deal inventory, or on the special pack shipment. Distributors are particularly concerned with over- lapping markets where deals are offered to one operator through his buying office or wholesaler in a given area without similar benefit to another operation whose buying office or wholesaler serves him from another area. This gives one operator a price advantage over another and works hardships on the distributor. It is recommended that when such plans are made, especially for selected test markets, manufacturers should advise distributors in the adjacent areas concerning the tests. CHA TEE COUPON? What Are Coupons 'Hoture:%3 stinnfihite Coupons ar a means by which manufa sales as well as introduce new products. Coupons have a certain redemption alue which, hen presented to retailers or mailed directly to suppliers, entitle the hoLier to either a cash refund, free merchandise, or a discount from the cur- rerit retail price of a particular product. Coupons are made available to consumers by three main tbods- pr’nted in newspapers, magazines, and publications; placed inside packages or printed on labels, rappers, boxes, Coupons printed in magu m"il Gard containers; and direct .c Zines and newsp: Lper as well those mailed to the home $43 (/1 enable consumers to redeem them on the next purchase of the COLHlOned product, ho we*v er, those laced inside packages or pplfrted on the wrapper usually require the shopper to make ‘ t vs"; a o o I o O IDurcnases: the first time to obtain the item and the CO - ~. 0 'uFNDn.and the second to redeem the coupon espeCially when the Cloupon specifies a cash saving "good only on the next DUr> Q}lase" of the 89 me pro oduct. Altho ucgli coupons are p: ima:ily designed to stimulate consu FW7, they \J D? ijllct sales by appealing directly to the are also an eflective means by which manufacturer dist: ibutors to stock and promote brands, some "I //' :3 ljldLMZG for the first time. Since coupons afiord consumers monetary savings, most distributors, particularly retailers want sure that the couponed merchandise is available to make especially when the coupons are backed by powerful and com— pelling consumer advertising prograis. In addition, coupons provide merchandising opportunities for distributors. The vast amount of consumer advert1s ing placed behind a couponed product practically guarantees a fine sales incresk the product particular y when ristributors support the coupons with active in-store promotional activity. February of 1958, a local New York Food Chain -teen couponed grocery products for one week and In early featured nine— in their advertis’ng that consumers were being coupons totalling two dollazs. Co successful tion, that the Dilbert Quality Super Valaet the promo— recorded a new 1 high in sales volume for their fifty- seven store chain. Effigplems Concerning Coupons Basi 1cally, there are two problems confron Of (Zoupons in the food industry. They are (l bUtCDP's complaint about the cost and trouble ) of handling COLlFNons, and (2) the manufacturer's concern over mis- iedemption poactices. Both will be dL cussed together 4.1 b r . . ecaillse of their relationship to each other. \ , _, 1"Dilbert Features 19 Coupons in Ads," ‘~4:i: V00. 7, No. 7 (February 17, 1958), p. 1 ma rk et 5 v.;;, Although most distributors agree that coup:)ns stimulate prmoduct sales a1d lend themselves to exciting and dynamic p;comotional programs, there are times when distributor Qtuestion their value. Perhaps the majority of distributor ccwnplaints center upon the problem of coupon handlinn esxoecially at retail level. There are three main st: iri vflzic v—v‘ 1 0 “up ns are handled before distributors are reim- errsed by suppliers. Fi1: t, ll‘ the }_J I'l‘n—f: Pa }_. s) (D ,LJ (—1 'h—J Ho } w .J \l) 5.“ S\ Ct (flieckout area where shoppers pay for mefliciar ndis e. Checkout (mashiers must count the coupons, deduct the monetary value (of the coupons from the shopper's grocery bill or give them Cash for their value, file the CL upons in cash regiSter (irawers or some other container, and in some instances, inspect the shopper's order to see that the WG‘ChanlJC for which coupons are being honored is purcho sed. On 01Wo .ded Shopping days when customers must wait in line to be H. 1 4.” checked OUU, check out personnel are most likely to for- get about inspecting the ne°cba dise so L8 to speed up the (”‘3 Check out operation. TlMe‘e ore, it i 0] not uncommon for distributors to redeem coupons for cash thus causing manu— facturer protests. The next stage of coupon handling encompasses coupon accounting. Coupons must be sorted and counted before mailing them to chain headquarters, wholesaler accounting departments, or directly to the nwnufiscture‘ or 01€Li_ C house. However, this step is a tedious one for many distributors lOt having an organized coupon l1illir“ program at store level. There are many independent supermarket operators who keep coupons in cigar boxes or other container* and wait until the box is full before sorting them. The term "cigar box" acco unti:1g has been given to this dis- organized system. Progressive minded retailers count and separate coupons at the close of each day, some of the aid of coupon sorting bins as devised by the Grocery Manufactur- ers of America, in order to conserve man hours, reduce coupon handling expense, and maintain accurate coupon accounting records. The third stage of coupon handling involves the billing f cou to manufacturers or redemption O ' C5 C, :3 C3 zsnd mailing agencies. Some distributors wait a long time be fore :receiving reimbursement for reaso:i of pure carelessness, 1 1 {rich as improper mailing adore; U) U) (D O) \J v—v: §.) 3 (D d‘ F‘ H 'r 4 .J H 'J :3 \ J {L , J (D L‘ U) K. ( H v— 5...; a.I"."iotion into a "cents—off” deal (described in the previous V ChQIDter), thereby preventing the manufacturer from obtaininv .1 1“” the results a coupon promotion is designed to achieve. As StatREd previously, an on package coupon promotion encourages Corlsdamers to buy a product twice. Coupons removed from paclfages may give the product an undesioable appearance and mas; Given give the impression that something is wrong with t},- ‘ 1 C . ' ’1 “3 IDroduct. Shoppers Should be given the opportunity 01 de . , . . ijiing Where and now coupons will be redeemed and not be :1 "force* ,.J v.1! LC CU: I f manuf ye (a C, {l - ‘r ’ ‘I .. T“ .v. ,. H... hi s‘( .V . oruwo ;tetl 9 . o a. _.I' a _.W,.. 7?. \J T}. 7.. . 1| 1 g a 'J a"! r t" o] 3 iuf1*t ‘o‘ . . .1 ... 1.1. ,. . .. r . 1 1-,“ 3. {VJ .ll «1 .1... n a...» v.4 _ 1 . L ‘41. — .1\ IA _ . . . a L» l v v a ... . 11"! 1.7 .fi Q"'o'. ».r .' V-— .., L). r: 3) "r "l ‘ ,, .‘. ‘ V..WJ 31L? 0 .A- C" A) W~s involved and no add tional warehouse space, storage area, or shelf space was required for products being couponed. The study uncovered some mayor aspects of coupon prmmro tio . which cause problems for distributors as noted beelow, however, the objections to c upo ns were chargeable tc> handling difficulties and not to coupon promotions as SLich. Problems occurred in the l. The increase in recent years in the number and veuriety of manufactui er coupon prow>tiwns. (“O . Differences in size and condition of coupons cause halidling problems. Coupons torn out of magazines. news- papers. and pa Mae appea: at the checkout coun'er with ate. Distributors Cf‘ ft; tugged edges and in a dila pidated reczommend that coupons be issued in standard sizes and forms 33 that they fit in cash refister drawers. most distributors do .Not like to handle coupons which have to be cut out o He‘HAPZDefl" MAEQZIMES c rdooard pacl cce Coupons sh» be IDrinted so that distributors have little trouble deter— '7 " n n I ‘V -. ..\ . r‘ —/\-. ,7, '7‘ ”‘1 v - ,~ .7 e —\ x“ l— ,— v~.-. . .-. JiFLirm,tne monetart value as well is the product to which 9 Q m C (J. appl es. 3. The absence, in most cases, of a really efficient )‘r’p 9-“ ._ V (1 s , ., 1 O _ _ . I . __ ’ ”1 V 1.. ’ h v_~_ “etiLoo LI handling the increased volume of coupons at the ‘4 V'Lje CJICI l./J{1,l"€hL MSG level. h n SGNA Coupon Study, A Report Prepared by tzie Grocery a Llf"“cturers of America (New York: GLA, 195 ;), p. 5. 4. Variation in redemption methods of ranufr' such as som ma11ufa,turers redeem coupons only through “slesmen, others require distzibutors to me il c>uporo to tide manufacturer or coupon redemption agency. The problem of‘ prompt redemption, one of the most important in the eritire coupoa'nr operation, was concent' “'3 ated arnrnt smalle1° Iratail stores where tne vclume of coupons on an individual 017fer was small and where salesmen’s call: 1-e irce ula: or o . n__ 1.. . irrirequent. ”71‘ ”V ° O. u ".134 rum '3 7 "° o - P t ("9 1‘« 9‘ ‘ ”T; 1 q 1 1163 opeCJllC LLJLH A, - 1 1. .1 1*” el 18 c1. 11 LHJ \‘L,_e 37:: -' 9.111}? r' C t1).:)'31’;3 l. {ioLQior1 t3qo cx1d vxos: a. Use un orm size coupons (no lorger than d bill size) on paper stock of sufficie1 t we and texture to assure easy handlin, . L1] 1.1'. es if _n, on c m1pons-—giving the s ace to essernxbil iId/t.uatitx1:1bout tflve coiqxni. Coupons in n uspapers and magasin 3 Coupons pa sted o11 package, or pal M A ' LO h " V/v v 1 pacncqe, or requiring 1utilat packs” Gusto ner or retailer si1n tures tn coupons. Hultiple attached coupo1 attached to an ad. M \ti: W Go Wherever practicable, establish face vglue denominations at easy t3 Compute standard amounts such as Efl, 10¢, 15¢, d. Wherever practicable. establisii an easily identified 'family" format to be used in co1p1os for all company products. \ blbid., p. 5. ,1 H: l'. [\J {D 1: pee lo: Redeem coupons p c. Where redemption men, gn.o Jiie f:: whereve° reason d. Fe for ”exempti n, operation. Distributors The distributor can '1 . 7‘ '1 . if. . '.1 v (‘1 1‘ y V l. A blhplllled eyoteu reporting at S‘ore 1 E A oim i s 9m orl end to the jejevption of COIN l t WV’tiY v" ““ mo ‘1" I3 ”la u on iuea to Noun CONUDHny tlmost went out ermenmtiil Pam Industries “91' cooking iis oyefiy Ctlled emption Pr9cticeo- :nni t tile £Y7QC3elfy >1 bps? o Cistnibutors self e’cressed lil'ng coupons 3nd provide mailing tructions. romptly. “ulel ption 1:1 t““ou (‘0: _/ Cistributor to submit coupons sorted in Qty 'ay unicn fi S bio rp'-_dws ‘v..-.' -‘ an..." I. ' - e Mlfidllu- coats by ouo, inr: of ,ccoxltixl, :thil,. :no of cu111t1115, Cgllxxtin , 113 rte33. 1 the dbhilce but i 1119t put coupcn 1Uf 1. Q) t ;1ve:‘ tn1;; Ln<3 because o1 uH‘ D I) , nc., a small company, put a Pam Dry Fry on the market with a Cfifl’coupon in the Re der's Digest as well as selected news— mipEifr tb su,1out the nation. A few nonths later, the Dr? V“. r, A ,_ . . 3 Q - _ - ._ r :1 0 1, ‘“flhpkihy was nit so baoly by a plague 31 m1s '8’81DL11HJ, lrfily cash redemption, thflt “ab cfbligated, in S»m Gas 3 (D e Czflea l ‘ r 1 [Lgl i‘ts or stock inste ShOEDFNerS clipped the cou '0 it stopped the promotion 0 d .31 to reimburs retailers w ) S Apparently drove ~d not buy the '35 tne ccuqxni to check;ufl:<3lerks, :nui receivedi checkout clerks,in many nstlnnes. just diC not bother to to see rflmetner tne {HYJIHCE ygnz'bcugnt. 1&1t even Pflmfll clxerks were aware of this irregularity, they loath to risk 0 r—v p , <, 1 0 -'~\ 2*“ “ ' _ v‘ ‘r . ‘ .. .'-. .'I ‘I‘ ‘ . — . ‘1‘: . r—‘1 If 01 GJanb customecs by regectinq the CodEQAU. LAC“ qu1sse1 for) l ’3 .\ - , 1'; 4“ 1" -'. :‘v y" j - \ . ; I" ..-, loult ode tne misreuemptioo, one 1 '13:]. l ¢ alooutifim was s of“ Pam Industries, Inc., thought it was sue to two factio 1%3t31ler sbets it with his expedient oversight. Tne :fietsilers' orientation is toward the shoppel g a ques ion 9b ut the shopper‘ W 5“ L; Q (D Ho L4 1 0 p (.2 F43 {—1. O) L—Jo :3 kunflesty at tne checkout counter is not s pleasant prospect. - q‘ . ‘ 3‘ ' ‘V " O ”x I __ I ‘ 1 _' _. \\ _‘ ' ‘ :: 1.: "_ V gis'eiemption has become so se31o_s Since 19 c tnst \wx I-_‘v V v- H. , ‘ 0' '_ __ _ . 5‘ r _, A r‘ ~v __ a w _' . y“ ‘31,“ a- q d o '.' ‘7‘ f. ‘1 .11;1y ugnulgcturers mnfl LLVP t» oiop the “mole business o1 (3 ’~ 1 ‘ ‘\ -. '3‘ -. 'r . a “‘ V- ’—‘ 4 ,4 ‘3‘ — ‘... l , .7 1 " . . r. w ’- ‘ .-\ ‘A [-1 ~-1:pon19~ gnu 5o b;ck to tne olo send in the box top and 1;", L" "-- V _‘ _, q ,. , r” A 1 .- r71 ,_ O O n _ _, , _ 0 ~9ta your money back ofier. gnis came to light 1n April, GETS of America proposed a direct action csmpsign to stop COLHDOH misredemption in tne stores. Er. millis explainet ,.2 (D {,1 (/1 }..10 :5 CT‘ (D Cl I.) H. CT ( 0 >34 \ 3 CI“ ( r C? (D (,4 ,1> ?—‘ tnaxt coupoLing was big busi: terl billion coupons are Cistributed in this naticn onnusllv (‘1‘, f‘ ’_ Q‘ _’ r“ r __ _‘ I _‘_ . I 'A §__ '1'. 3 Y _ _‘ l f‘ _ 1_ ‘I 7“}, '5 m" ‘1 ‘_‘ a'le shoppe: s in o it witn we“ iooocent weceo loo QUQ tn f3?“ Wedempti-n at one billion dollars. If the m1 s‘exempti AM~ {Jcnn Lync., "Cknnoul I isredempti D” :Pimery Fryfl'llo :d.Busin me [2 CT‘ {—I—LJ Cf 1‘. i when Poul Willis, President of the Grocery Manufactur- "\ a ‘yr‘ ' firx 1" ~’ or’lol enl..1 «Lumiluc u1lre1‘ Because of the serious problems ’eonltldg from coupon misredemption, tne Grocery Unnufnctiiel' of America deC1dei to No some U “in: about it. In T *cn 19b0, Porl Willis revealed the Grocery 1cnu’9ctu9ers o1 America's plan to combat unetnic s1 p*1"t1cco such so 9t tenpts of consumers ' I~ r“! .- ' ' —\ ~ 1. ,.—- - ~ 3" v.'-' '— 1— ‘~ \‘v ‘ . F0 . V. to (inofl 111 o11 tru: ctnxpcn1s .u1L.1 ui; b1.yi1nf tn1e 3p£3c11 1e .. 1 .‘ m, . ._ a -. ,.-,-n ,._.‘ . ,. 1 ., o , r9 1, 4.2 - , products. Lhe Cot proigsm 51” to be run in _outnern California L1nd would be nivw11'mted by consumer advertising '1 . r4 ‘ :I 0 — x ‘ r" f") « . rq ,— (j 1 " — .16315neu -13 clecr st.-1 1111 be pistex 1nd -e«1: P-e:3e erdeem coupons only when product specified is bought. d111dow posters and shelf cards were also planned to be plxlced in appropriate spots in the store. '1 Wile GW 3 Gel“ 1.1.1.11po C tL1"”‘e H 0 m T Ah”) ”i C q 0 ”WM" “P“ 1'1 "'70 V6 n «I - \ .. J 1'.Lv‘[. 2.‘l- Law I ... .L h) V.— A ..LL, .1. g... k) p... ~IL;).- R». A L; .4. got; under Wey For one tMlP“ the Soutz1ern lel ornin ”UFNEVMM1Wet Oper«tors Committe, composed of members accounting fol” ;over ninety per cent of tne food bus 11ess in southern C“;L1¢fornm :1, objected to the plan. According to operators \ 9 . - q, . JLes Gilbert, 'GLA Ollers Plan to Cut Coupon Misre- deli“ ' H IN \,T ‘ ' 1 "‘ ”- ‘Fytlon, supermarket news, LRPCH 28, lynO, p. 1. present in the committee meeting, an overwhelming majority > 0 cf the members Voiced vociferous opposition to th‘ (D U 4‘3 ('1 I-J' O f couponing. Several members suvxested that the pro - C) idea lems arisin: from couponing could only be terminated by I endl‘“ the practice of this promotiena~~ device. ln essence, - 4...... the men ers felt that manufacturers should not attempt to 'cle1n linen" without first te 1'1; to their own and trying to eliminate the many malfunctions in he11ent in couponing. The members were just tired of bothering with the handling problems characteristic with couponing and felt that they should not have to be burdened with trying to educate the consumer for something that the manufacturer was responsible for in the first place. The Southern California distributor committee countered the Grocery H:1nufe cturezs of America plan with an eight IDoint proposal designed to alter certain manufacturer <3o1mp hing practices. Their feeling was that the manufactur- Girs should help to eliminate the costly handling costs and .) riconvenience for distributors before to ckling a consumer p. education program. Along with the eight point proposal, true committee stated that each distributor would strive as .H lfidilidu1ls“ to eliminate coupon misredemption but dz believe that the i:‘1iti:1tion of the 115.13. consumer ed11'1.c:;1tional U ‘“ram would be suitable at this time. The eight point pf’Q'posal program submitted by the committee, and later “\u r4 . ‘x o «crvs‘ \- J;— k. s L I. "N 1 m (131u1f1 l . ,1, w t -. '. 31;;c111; I . -‘ 5" 118 .1 ‘-(~-. -‘u) f“ “'1 L, 1;; e (‘I L r“ ‘V 7 1.. D - ,. _ . {3'03 V« J p1<3 1:3...f v‘XKNH , _,.,. ./ n" --.A .1 , é- 1.-. ‘3 DC? .‘w‘ In .33, "J Tn January, 1961, Paul Willis 1L1uneeo that the d1s .... -- no r ~~ n" ‘ 1.. , ‘w -'. . ,1, L.‘ _ .1 3‘1 , 7 Q minulacturer prflDbluHo oo '\ tributor‘s coso 11 ‘T‘ J Pc—l b—I‘ F ‘ J ._.a ‘1’ $.44 [J H- b—~ D—’ r coupons will be the subject of a stud y launched immedia under the sponsorship of the Grocery Isnufacturers of America. The qnalvsis will take about five months a1d cover J es across the country. 14. supermarkets in several major cit The study will be conducted by the Arthur And rsen Company, Chicago management consultant firm. Once this study is con— Dleted, it is hoped that valuable conclusions can be obtained which enable diz3t1jbutors to reduce coupon handl’ng l }_...J (I) costs and inconvenience s me de 1 the e1 ght point pro; am about T3; _0 fl , V, .3” . 313. t.1.L)1 l '.‘. “I. L.) coupon cleari11g houses. Such houses were established to L); H. C) I acilitate coupon h ndling for both manufacturers an( tributors. The A. C. Nielsen Company was the pioneer ’\ ,. ~ ~’~ n - . -, no -- ."1 I. w . "V ~ .1 . c r. A « (-1 the Culpru clearin; house business HUGH 1t set up a house exsrly is 195 . 1e J1else1 plan was designed to get dis- tmfibttors to conte'ct to se1o all coupons to the Kielsen CcnnporngTuz ring House (TKXHI) for redemptipmn ifluo clearing ncnlse sorts the C1upono, immediately returns the check maJofooctureze :u31mell as distrdjmit rs wonderrmizdusth r he o han offset by distribut11 0&3433 lnC’0~u‘s achieved was.” 9 1.3“ ~" . ' “:thkltion and ill W111. Steve Weins tei "Coupon P sh Recaptures Limelight ‘« Q (“1‘ 1 (January 5 V '1‘ 15 T7 Stamps,” Supermarket New , Vol. 1 Sift Retailer Co.t in Processi1g Les Gilbert, "GHA to ’ s No. 3 January 10, " Supermarket News, V31- 10’ A) t '7) "7113 'vv.“ NJ . ’1 1 f 1 L) t q ,' 3:“ (.. O ‘». — “'11 1 "r I 111°C .J .4} I . (k ., . «.1 144.. ‘11 El . ~ _ d i ‘ W138 1313 those scept ~ A e til . a». v A . . l . v. 7 .11. . 11. J A; 1-13,. 11111. . ‘l-C ‘1} 'W LLK.) 'v ‘ \ / " upo \ -1ue .ubs I-) ('1 “1’37 v- . 1 ets. V U ‘ ' , ‘3 a ‘V “a .' " {3 1 . 1"!“ i I"; ‘Q l _. K C‘ 1 JO?“ 0 -e 1y r. C. q I 9 L 5 C [13110 v '<‘ “n e 1 g \.- Kro _l -U W l l H‘ i 1:) a t ., C1. (111 di E? .1 .1 . a', k . ‘IJ J. T \ A 0.1 a a .. u 1.. ' 1 call . 1 o l 1:. , {'1 A 31/ i I .J, l .4L .. 7 1|. 1 1 . g .‘L . I 1 ,1 c - :14 .nt. . .I A ~ g 1' . 1 ‘I . .url. ., . - . .1 .a ,, at C 1.4 r . .IJ O 19.: 1, 01 _w 1 J DWI“. I«I.J _ a I i \I. _ ”.1. 11 e .v0 a) \1 I] A v r . .C ”Q \I n .» «“1... ,TJ ‘IA. .14. .9. «i _ I; te O ‘4' \r J... Tl The NCCEI makes it possible for manufacturers to shut down their own redemption services. Some of the manufactur- ers usinr the custom serVice are the Armour and Company, Corn Products, Inc., Helene Curtis, Aluminum Compsn of America, Reynolds Metals Corporation, Kimberly -Clsr1: Corporation, iloito Salt Latb‘ny. and mgnr oti‘ie1s. * 5k>re than ’+2; mo ntldctr’e'“ are using the cooperative (« only receiving, counting, sorting, and C) VB T3 H L :5 Fl 3.. H. C H. :3 (.J H redemption cf coupons turned in by member ll Jribut‘r“ Lo reports are preasred other than total coupons redeemed. Some of the companies who have usei this service are the H. J. Heinz Company, Pillsbury Hills, I;r1c., General Foods Corporation, and Coca-Cola Company. In its initial six month plan, the Nielsen Clearing Iiouse plan charged distributors one cent per 001 on redeemed. IIt sought to get half of this cost from the retailer and tflie other half from the nunul-ctu°ec This would have :wesulted in an increase to two and a half cents in the ms nu- facturer's handling payments and they g:enerally be ll:ed. Nixelsen then attempted to offer services for a fee to non- pal7ticipsting suppliers. This attempt also fizzled and Hiefllsen now gets its entire handling charge from the dis- tutikfiqtors. Distributors are Charged on a sliding scale GEFNEIEding on the number cf coupons redeemed with an estimated 9 , 363“““ne CHLfiAe of about a penny a coupon. \ y 1‘CE‘.tusrt Ch°jer "W ie uiels en Coupnn ClGIWTQ‘ House," 3 £252§;;§H8iness, Vol. 6, N . (AP i1 1953) P- 13- n the business using the present 14o T1n ee banks are also Nielsen.fknnmala of‘cflr1rging orflj/ the dise rilunxn°s for the redemption for a charge of less than two cents per coupon. The banks are the Be nk of America on the West Coast, The Federation Bank and Trust Company in New or1:, and the La Salle National Bank in Chicago. Lr. Thomas Purcell, trust officer in charre of the coupon clearing service at 1he Federation BanL eJMl'Irust Co"m11n;:11 New Yo1L fee ls that banks are a "natural" for navalint coupons because t1 ey deal with bards which are li1:ened to coupons except that coupons in the food industry are of smaller den1m1hct11r”. 5;. Purcell believei t‘nat with trained personnel and years o experience in he ndling bonds, banks are in a sood position to offe a fine service to the food industry.13 Recently there have been sey eral smaller firms setting 0 rv-n . 11p clearing houses on a more localis' ed bo' s1 is. 1ne manu- Lfecturers are concerned over these smaller houses chazging 11' her 1r unili ng rates thereby upsetting the relatively stable ‘St11buton—r1nufacturer coupon relations with distributors atrtempting to have the two cent allowance increased so they WiCLl be left with some money over and above the face value 01 the coupon after paying a clear‘ng house. With this in T . a _. _.o _ .-_ .- A InllCi, the Grocery Manufacturers o1 American attempted to ‘ s {hoards or n ‘" -o-s s 1 1c so” Sc as to “Gt: Ia 3ta 4 a f all clea 11% h u e t1 f ll t \ l . L 3John Kovac, ”Coupon edemptio 1 §~33§iflflgrk et New , Vol. 12 No. 4 (Narch 14, 1933), p. 3. (,1 prevent if po1 ible the rising cost of coupon clearing operations. The proam1 covered six points: (1) cle houses should keep distributor and manufacturer services completely se arate tr nsactions, (2) that the monuf:1ctm11er should not pay more than the two cents handling charge he pays when dea ling1 directly with the distributor, (3) that there should be no discrimination between the handling of .L. coupons of different marufc1tuce s, (4) that the confidential nature of redemption statistics must be observed carefully, (5) that the cleari 1ng houses must accept some responsibility for policing redemptions, and (i) that the clearing house '1‘; .4. must supply to me nu1actu1er on request dfu1wfl wi_ n on thei financial ability to support warranties 1nd guarantee obligations.lu The Grocery Manufacturers of American Coupon Committee rioted that it loo1:s with fav:r upon the basic ilea of Choupon clearing hood" es establi Ws1ed to sinmpl fy distributtrs hsuodling roblems and hz7sten rei bursement provided there Wflfis no decrease in the manufacturer's control of coupon Pechemption and no increase in the manufacturer's redemption 0053t8. The group recommended support of any clearing house ””ElCBh met the Grocery Lonuf ac turers of America's standards. 14 . 1 D ‘ Steve Weinstein, "Coupon Clearing House Do' s and o‘- ‘ ' ‘ 1:1 ‘ts Set by GLA,” dupernm u1Let News, July 14, 1959. p. l. ,/ Coupon Redemption at Super Vulu In Iinneapo li , Ninnesotd, Super Valu ”toieD Inc., discovered that many retailers were not redeer mi coupons with manufacturers because of the inconvenience and exessive to each individual supplier. As a O O (D CT 0 i—b ‘\ H H ‘_.. :3 Ir p—vw! ,i) C'l sponsoring wholesaler, Super V1 lu coioide'ei it a duty to their dealers to set up a coupon redemption department to handle coupo for Um rber stores in order that the retailers ould get quick turnover on their coupon investments. The coupon redemption department has been e/finped several times since its birth, the lost time in 1956 after the Grocery “onulocturers of Americu' ostudy on coupon“. Super Volu recommends that dealers sort C’HDWIS daily and mail them to Super Volu's coupon redemption depurtment every two weeks. roe coupon redemption department then makes payments to the :Petailers within one week of the receipt, retaining only a ‘two cent handling charge per coupon for this service. he coupon redemption depo1tment ot°onily elcou° ges Cieéller cooperation behind coupon promotions and :ec wrmends ttkit they aggressively Inercho.dise the coupon items in the Stilres. Often times, letters and soles bulletins are pre— paleQ by the coupon redemption department and sent to dealers concerning coupons. Super Vslu's enthusiasm for COLAEDQn promotions is evident in the following letter sent to s:‘3‘Llper leu member stores in June, 1957: P;‘ esently, there are around 300 different 7wencr Lndise Coupons in our seven state area, not including loc 1 go comparni s, 1niich.£rme beijn; d1£31311b Luxm1 by' 32:13u1u- facturers. Of this amount, more than 100 of these are to be found in the shoppin3 a1e1 of any 3iven store. Yet, an 1halyais conducted by your Supply Depot's Coupon Redemption Service, seems to indicate that the number and variety of coupons redeemed by our member stores varies a 3reat dea . This holds true for stores of approximately the same volume class, as well as all stores 3enerally. This leads us to conclude that either maximum utili:ation of an important "sales 3immick” is not bein3e ploited to full adx ”store or coupons in 3eneral are a nuisance because of t-m additiorol Work entailed in their redemption. In either C1se, we feel that a change is in order. The use of manufacturer coupons in your promotion and merchandising pro3rams represents maximum us are of an important sales 1*n1ck. Your cost of utilizatin3 koal- this ELEIBS Infirnotipni tool.i;3 insimniifirnnlt civ1173eu to the capital outlays made by the manui facturer to piomote Ms product. Uhy not or pitali.7 e on these promotion 1s, then, by foll win throu3h in your own operations? Iiost manuf1ctucero provide: 1dvance notice of a new item bein3 couponed. Let's use 1: indow posters, store banners, prominent in-store d‘splays properly priced for the 1wpromotion period to inform the public. 11111 the {Irope follxnfi thro/ 3h {Hi all (ooupcml itenm: 11e feel certai that a "traf 1fic builder" will be created. This may well be true, are probe 1bly your thou3hts at this moment, but these coupons are still a 'nuisance. I‘ve for3ot to redeem them throu3h 132 different manu- .facturers in order to 3et my money back; besides, the 'tine invo ved in communicating with each other can best 13s utilized throu3h other means of promotion. HWait a iinute” is our response, ”Send all your coupons to iour Coupon Redemption Service thus you are dealin3 111th only one concern and besides you aave coupon Clapital turnover on a very frequent basis. Yes, you too can be known as a Coupon merchant by EVQur customers and profit by it. More dealers each Ciay, our service indicates, are becomin3 conscious C>f the fact that coupons are here to stay and thus c1re turnin3 a ”nuisance” to their advanta3e. For the Iberiod September 9 throu3h December 31, 1956, our l7edemption service handled 399 lots of coupons from (fur affiliated stor No the first five periods tsb is year (th1rou3h [flay 18) we handled almost 1.100 Qts, representin3 a et1i dollar volume f $i{,366. ed 0 a H 1 (”Ar total volume amount to only $34,742 in 1955 Glad $50,857 in 1950. Fu: time analysis of this service indicates that there are only 279 dealers who have really taken advanta3e of our ”noisince el:iminator." This means that there remains approxima ately 400 of you who can a so become coupon minded without entailin3 the nuisance factor. , Super Valu helps their dealers in handling coupons by providin3 coupon sortin3 bins for sorting coupons plus redemption reporting forms ~ith which to list LithIlS . to al cash value of coupons by del) in Further pro 3 ress in st: pp n3 malpractices in couponin3 was reported after 'in a»“eement between the Grocer Manu- facturers of America GNA) ard tne National A wci tion of Retail Grocers (NARGUS). The merchandisin3 “mittee of b I‘ D 3. ‘~ :79 1.1 S I <_ . . v7 S L. K1731]; . 0' c 3:1ku (f: 11 It: . WATGU” n1 a e eitit11e 1f C A cintly a _ ozel t*e C A c'tion, the NAEGUS ccnnmittee recommen ied several other points for the GR 5'“ These points included elimination of coupons 1:“) der tion. U1 1.x. CO! paiited on pacrareo and minimum use of coupons in neaspapers anti magazines. The committee also asked Chaim? be reconsidered so that adequate compen be nuide to distributors to cover 1wwndli13 costs. ShoLle be notified of all coupon deals at the sum as ti) eliminate possible competitive advantaMe Attention manufacturer WEB, f“ f“: m ' ' ‘7 n 7“ ' i> L~lo© focus ed on the po si “11 1ty 01 the pUtthla3 premiums inside pacLoxes and not outside since the lattEEXr type of premium shrinks shelf space. Amon3 other C ' '7" P1 0 1 OUFKDIW recommendations, the NAnGUo committee recommended \ 15"Th he Coupon Beccnwnt Super Valu Di3est, Vol. 1, so, .7 (June, l95/), p. 5. 4 that 1*11nu:.1cture'“m do away with requirements of a s1gns1ture Of e1 tner consumer or di.3 tn1b1to3; establish face COUpon in easy to cozu ute amounts; keep multiple coupons to a minimum and do not attach to e1ch other; instruct sale snen to retrain from 3usve3t1nr to distributors particularly store operators the misr1-1l1n of coupons; enco raHe everyone, from store personnel tr rough consumers to handle ate cler1rly the value of coupons as currency; and to ind1 mm; coupon to the consumer. Suppfilier Consimer Education Progr1m Three m111nuf1ctu1 me°s attempted to launch a consumer educertional prog°am in Southern California with th “3 f) H . . , . o qu111461ed" bleSS11ngs o the touthern Californ1a Supermarket ( "r—' Opelatcxrs Committee in the fa l of 1960 des i5 ned to reduce m1srep1wesentations of coupons. The Proctor and Gamble Com— pany fez1tured gr cery bfzéj stuffers offered to distributors wit11out charge along with a special leaflet enclosed in COUPON eeriveloaes mailed to the home. The leaf let's front page is tflqemed "Don't Embarrass Your-Self or Your Dealer." Inside tslue leaflet is this message: DO Eyliay Fair. Your dealer will be glad to redeem your COUEMDI18 when you buy the brands called for and you will Sebékaxving money on top quality products ' C upons are ““‘H157 of giving you 1 ch;1 1nce to try our famous chfiuctJ at Célxsh savings. We want to continue to send you these \ 16% man New Accord Reached on Coupon Practices," Super— ‘ ‘L {et I‘Ie '—————' r-~—___1_323, May 16 , 19a 0 p. 8. \L’) JV- an“ “1 f—‘ \X--Kj 1 V\ ,"\ ' w I 4_ u“. ' - I —\ V C If. '» ¥,.-V_, 1‘ '- 1 . ”I no ’\ ;~ ,- .. u ... —\ n) ,a i thi" i conta" r ’ .J\. Hi 1 L .‘ “-3 31%; actively enrofinp in coupor (fltivitics. In October, ‘ L... r.- ,_,) ,4 J M9592, The .all Street Tournzl reported that between 7 UDCD million dollars worth of coupons are granted to con- ood "Tl C‘ rv C‘ 1,' “y " 1" 3‘ l' row . ,- -\ ‘0 otuurt ~oryer, monoginq editor oi l EhiS' ress, wrote tkot over one billion merchoncise coupons L... H. .25 F4: (J L) {.1 CT 0 .w J (D P H O \ )l H \0 werne “edeexe Coupon: bezm fit both distributor und manufacturer. ‘Nornnfocturers coupon merchandise to stimulate soles as well as :induce dis tributo:rs to stock and promote particular 'braxids. On the other hgni, coupons p: oviie di tquutylo Zitti excellent merchandising opportunities with which to tdkxe advantage of effective m11uif¢ “tuoe? odaer‘i.iig programs Slipporting the cmxp-oned znerci‘uuidise. Hot-never, '~.~Iit‘n the trezraendous increase in coupon ‘i431<1ity in recent years, two problems developed. On one honCi, n Hnuf cturers complained about consumer and distributor miszreademption activities particularly consumers redeeming Couchon” for cash without purchas in g the couponed product. n.) V T" o o < a '1 o t o fiderl pressure is applied Irom manuincturers, distributors letle—iate thut coupons are somewhat of a "nuisance" in that the Czost of he ndlin.; them in addition to inconveniences O ‘ V‘I‘. ° ,1 I _ 3 o ‘ ’ o ' 1 L&%“3:Lgh the advantages Mthh coupons fife d981§n€fl t0 CI) 0 .L- Attempts Em TJe been mode by the Grocery I"Uf;CbUTefS of finnerico std v: rious distributor ‘Tode associations to fostner joint manufacturer-distributor conferences to out" difficulties chars cteristic of coupon pfifikf418. St?i(€8 81%? “bein fig mode in allevis ti11g many coupon malpractices. In 1596C), the Grocery Manufacturers of America together with dijstxributor trade associatiozs set forth on eight point EH” €91 em established to eliminate the costly honrling prob- lenns sand inconveniences encountered by distributors when redheenning coupons. In addition, the Grocery Manufacturers Of'.Amnerfica.is currently conducting a study to determine disatzéibutor costs in honiling coupons in addition to devel- Tlg; methods to keep such costs to a minimum. C) Ho D - The advent of the coupon clearing house has been ( 4 N berl€3f¥icial to the food industry since it plays an important P0143 in facilitatins the P1”1l 1ng of coupons for both the erlllf'F ”ctu‘er sn:i distributor. Tony clearing houses have °prfilr1gjup since 1958, and development his p:T ompted the DP" ’1 ~ 0 ~. I J °<3E>ry Io1ulcctur Ts o: pne'i a to set fortn a list of Some manufacturer have taken steps to test consumer ed r\ . -. o W o u‘3cxtional programs created to combat misreoemption prac— ti 06333. If such prog rams prove beneficial, the Grocery V 1a . 1 ~ ~ . nufacturers of America may recommend expanded application Of 1 0 QOnsumer indoctrination proteins thToug n out the nation. CD H Despite all of the dissention encountered in the food iruiilstry, coupons are here to stay and will continue to peanTorm an important role in food merchandising. However, majcinmnn benefits are yet to be achieved through closer mariixfacturer-distributor understanding of the problems ijrvcolved and each side's willingness to work mutually to allxeviate the pitfalls encountered in coupon promotions. CHAPTER VI J COOPERATIVL ADVERTISING L‘ i318‘ Advertising Contract The advertising contract is an agreement between the L maqulfacturer and distributor in which the distributor agrees tc> :Ldvertise the manufacturer's products in return for a spezciiied sum of money. The advertising can be done in ruemnspapers, radio, television, or handbills. Payment to the; distributor will be made upon receipt of a proof of Ixarfiformance as stated in the contract, i.e. dated tear SYMeeets from newspapers, a copy of a handbill with the dis- triitflator's certificate of the number distributed as well as the: ciate and method, and a copy of the text of each announce- merft with certification by the station of the date and durwztsion of the ad in the case of radio and television. The ContPact may establish particular time intervals durin V; CT‘ :3. (D J yeal? in which distributors must advertise, that is on a monthly, quarterly, semi-annual, or yearly basis. The amount of money paid by the manufacturer is deter- minexj in three major ways. The first and most common method is a. Specified sum per case on all merchandise purchased by t ° 91 0 on o o -. he Ci'lStrioutor during the speCiiied time limits designated in . . tFKE contract. The amount of money paid is determined by the? quantity of cases which the distributor buys. This metfldod is based on volume, and the more cas s the distri— buinor purchases, the larger the sum of money received. This fornn of payment is characteristic of the majority of adver— tisxing contracts issued in the food industry. A distributor rueenjs only to advertise a product as often as stated in the coritract to receive compensation. For example, if a dis— tixiloutor purchases EHOO cases of facial tissue during a tflqrnee month period and signed a contract which paid 10¢ 'pei? case advertising allowance, the distributor would rwaceeive $2MO for advertising according to the terms of the coritract. Distributors like being paid on a per case basis since tkfie eamount of money earned often exceeds the actual cost of EMTVeyrtising a certain product. Let us assume that a one CcfilLunn inch ad in a full page news aper ad costs approxi- Imitealy sixteen dollars. If two ads are placed for a product on iseaparate dates as required by the contract, the distri- butfisir spends $32 to perform according to the contract. If the Ciistributor is paid on a per case basis, sales volume on ‘tfie particular item may return an advertising allowance far éireater than the cost of advertising the product. The second type of payment made in advertising con- Tj- - 1 o " t*a01:s is done on a national line rate payment schedule. 0‘" . . . . 1 Acdlri, @he distributor is paid a sum of money based on can ' . 0e Kharchases, however, he must show proof that he actually spent the money granted to him on advertising the product. te and there are {:3 Payments are based on a national line r no requirements as to the number of times a product must be advertised. Taking a hypothetical situation, suppose a dis- tributor is entitled to one hundred dollars as a result of kmaying a certain number of cases but spends only fifty-five dcfiLlars advertising the product, the manufacturer will reianurse the distributor only the actual cost of adver- tisxing which in this example is fifty-five dollars. Because of' iJicreasingly higher newspaper advertising rates in recent yesirws, this method of payment is becoming less effective fol snnall volume distributors since the cost of an ad may 03313 inore than the allowance earned. Large volume distri— mltCDI‘S can accumulate some savings by placing an ad at 10031]. advertising rates, which are usually lower than Witi_cxnal line rates, and billing the manufacturer at the natfi;cnaalline rate. The third method of payment is a flat rate paid by 711‘ nfi . _. mWHLLLCICtUrEPS regarrless of the number of cases purchased .8. b‘ A 1. O '. 0 f} ‘O.’ O I */ t11€3 o stributor. Nith proof of periormance, distributors Ca. . r '1 o .510 I . ' n COllect a ilat rate as spCCiiied in the contract. Eth‘e J Itmaly small volume distributorg, particularly individual U C) .Jt:)7‘a . I“ . _ L , ,_ O 1 gang ‘ _ h j r 1- 1‘ W _ p _u “ ‘63 uperators, like bM‘S method because the amount paid iii :\‘e 3 r ’7 _‘ ‘- ‘ .- . fl - ‘ -- '3 ~ - . r % Arut derena on UWTCLXJCJ. i; purchases were EH8 keY .‘i i: F“ t x v ‘ ,.'- ,, * _ ,L_,- ,I ,i ‘ a Q 1‘37.) ‘J:i ‘ 11.. ‘ 1 $9 at \ je 7\7*3_ ;"./:, I. ‘13 XII—L‘L - E :3 1 l‘\1] \‘ '7 ' l' V - . v .- . . '1 , J...>i W ,I '_ ,. w r. .. .7 . ‘ » . .., ,I I "T ‘. v v;.‘ 1 ,\ \ ,~ ' . ‘.’ v _ v .o .. ‘ 3— ‘ I .‘ v , -- ;iflhe ;ice c }413 i fix L8 1-1Nagtioi.nyr?ooco IJJTLJJBfi. 1,- -/ Of the three methods of payment, the first one di”— “ - - O —, “1 - ‘~' nr~CV rfi.,fi .V‘V crsseo or ' eirrburs ing aiot~ibu or) on a per case as o is by far the most popular among distributors since more money . _. ,1 no .. ,r - i .,,. d, ‘ - - -. ~.-~ : ,fl, " - or. cvo be earned irom the manulacturen over and above the cost ' - _—’-—-. r‘.‘\ >4 "' “ t‘r . fhlrpos of the Auverblolu: Contract ?undarentally, advertisinq contracts are desivneu eiwee‘ Lte a product's image be ore the public via the d stri— "vv —" . . 1 «>1; ‘,."‘ -grv v ‘~ *4 —_> ..' . . , V lotitzgo; s aaxveirtiABirn; p :;h; ’a.13. -.uiiL_;<%tiLxe-.a gisili by ’ - A L . fl . A « rQ -. y“ A. ~, *‘ ~ ' ‘ ‘ — ’1 Q " - ~. \ a :nrd asre; iuin. med ;. It tiiers one hptdfld ul ,ettiuf f‘] I: :— ’3 t. ‘a .‘fi r3 3 I“ r7~ _ -r' ('v 10 r“ +-1-‘ “I '\ r‘. r} ’1‘ f" '5‘) «.‘j y’,‘ ‘7’? .1 1' .1 ~1- '\‘ C“ “.113 -\-'v1 \Jk’ -— L—~KJJ_51: 84(Lps. \’ U117: Ly ‘ ;..e _‘-'r‘1l{s2_,g—'— \‘.~ ‘~) J\_'.._ e *e blea~ .. 8-; J3k31-]_ 6‘4 i. S 7' J ' o (D «3, P.1- C. . L) \ ,..2 O r x e «J b—“ :3 "U ‘ “I :4. l ,4 p.) o q 0. "\ ‘ T“ "\ ‘ ‘ » ’l "‘ IN “\ “ r: . CV g". . ’\ ,‘ ,~ ‘*,._“ 1", . ." ‘ 0"'\ o. r' “I", . ',‘ *, ii the .;thei iimlflm, dlu t ilnitog.) -ecofijligfiz the :ulponé— t.” ’]C e ,-\ ’1 -Tq ' a} .'.1. .-, . , .‘ .\ .. l. ,3 r. (a 4" . ”3 .1 ‘. .1}- ,1 _o 4‘ x _, _ 47‘ ~* oi thei; euflaflClfli the sale oi meicnaooise and leel that; tflieir services should receive just compensntio’ from I", . o ‘ ~ - - _ --' _u _ W ‘L_ 7‘ _ '1 '1 . t~e I? “IllLutCCfllff‘ VILL the {alve;diis is? cornnxict. lhi aLvixiticn O ‘1 F -q t E" (A .- - .. l ' ‘ t“ QkDritract proVides a source oi revenue. acme distiibutors _~owances and cooperctive advertising funds to pay lo: A . 4‘ v‘q‘v? o 7' ‘n ‘x r ' " I 1‘ 7 "iii 1" f“ r A ‘ Y _, intire ade rtis int bu Ldeet, otmejs LLwfiBtl‘pJQIlt over and . . TAIDCDve their ad expenses. some smaller volume operators lfiel Y _ A . g 1 '1 1 3 4311 allowances he v'lv in order to afioro adventis ing 'n the f‘lrust plice. The Associatinu s1 Nttitus “five“tisers can ”cc;1 L —\ A ' . Q , I“: "r ‘ . 1* ‘. i ' ‘ '1 . “ . f" ‘ ‘ C" 4— '. ‘v " " "‘ studv en ceuperstive alvegtinin5, suu it lo intesest u; ts \ I ' I ‘ "1 ‘ ' ~ ("1 q . r‘ A I ‘ rv ‘éq « -’ r‘ 4" . '~ w 0‘ '. /\ p 1:! - —. ,5” f1 note the Lusmero LECSlVBJ by tme Asssc Ltish 31H suppl_eys c;fiice°ui1v“ ”e *Wl i“v‘ U""“: cm~mwvmvt’ve ui‘etti. l'1”‘l { 1. ... . ‘ L; .. 1 ‘J x, ‘v .. L O.) _ L r 5' x, \,t l V .‘ 'LA. A— j w L F O J . 5 m m of ans ‘0 Fetlrs OILS :uep"°te-. "V ‘ _ 5 —-. ' ‘ 5n _‘ I , 5" . 5’ I " _ o 1‘ 0 5f '2‘ ,«1 :35! . ttimulite ce ileir a stsjt LuJentisiu5. 399 '1 .T‘ "\ l‘ I: b’ 1* I" . 1“ z, * a . ’. F‘ ’.| "~ 4 1;“ - I‘J .: . _! MC ce L :10 ML]. 1 h‘l JO. El o 11,5 pl : " '“1 ' . .L ,. " . -. ' 4.. 5 ..‘ '. _.L. -. ,n _. i q , .0 /J r ..~’ :3. :tianlLte (M3;L ler’iz we cs Lil 5ust.;_ ll. i9; l ‘ " ‘ 'x v —" I, .I 4. Le ellrs CCNlBlUfl€1W3 IWlifie s lflld .:TT K ‘ -’ (“Q :'~ I‘ v v ' -. ‘W -’ ‘,‘ n 1H! ,’ I If! E. ch‘OOl’ 0 11C Cl 3'1 L]. .L “I'Uloiiufi awn; ’- ' . —- -9 _ . 1" F I 0. Helps meet c mpeti ion. :5? r‘,‘ 'N‘ ’ 1‘ i' (L. I) ”J 4’ o (3’16: .1183 L) \31-r‘3 -3 Li. C) 5. ~ ‘1 ‘ -. ‘N i— . A ». ». a 5' -‘ < v I . a — .1 , ,5‘ .m , v1 ' I— ' 31 ‘ "A “a L “L ~ 1"" L. ’1 As Olmtwlbutg38 :-uu l.>.e. Lui tne t-c31 tsuL u ’3 ° * A "*4 ~*\ ‘ " ° 'N :3 r. V- 1' - L - f "t ' .*- 1 5' 1" r? t". .m 1* leaviea_;' ~at:;:%3s ;L<3c 3UWlb1115 LL.- t.m3 ‘1-LLJ.)Y1‘£; L igyiii LL;-L \Jf t.1e b] 62‘ ‘3 ‘- P? r,‘ “a " 3'. I '1 v 1 "f t-M :3 2 39 i 2“ “an - " ~ r] 4" j 8 13-7, :3 '3 Jr 4" .q . 4" Ji 1“ t :1 _ Lin.) _1. I Lexu! L) L» -L'L1.E_._Ll_1e\) . . 35,—; \_, _~;_ K,._.t.) \_)i. LIV ....r,3\, K. L) U--\~ U V‘L LJ ._ 1 . - - fl "1 - ‘1 x ‘ ‘ r «N (- V ’ -1 7r} -, r- ‘ but:>:’ pressure sill be exe te L we MLquLCtu3e_s ief wage H o 5 Q -\ H 5 ”-1 ' v o g n ~ _\ 1“ . 4_ V ’3 r: .. A 5“. 1 _ q o L. L'. . j ’7‘ libel‘C—Ll T‘ 1 $11)]le CU' b;"iC b’ -’.-1€‘._,1§;119L1 C4.) llb bile an.) [-1 - - w '1 — 1" 'N i\ 3*. 1 ' "v ‘\ \ ‘ ‘ " OI eI136} ”'3 L1 tail) ‘f‘a 111733” :3'_et;; . .113th y’, heme If.;i.LlLl" 9’: p t 27 -,~ [fl - I 5 v I ,3 77 _,, ,_0 fl _0 v. ,1 _ . . $16 [3 v (w r- C" r_ ,1 r\ {11— o ‘ 5‘ r0 H 7"1 {fl LJ‘ -.,.LL, 11 (Eye View Lu ,C_3‘b_1:.-,LII-- built ,2, 0 LL.) Iing; “€131;ng Mlle- b ' f 4" —»3,-7 _ 5" 5 s o v 5" o \ 7 , ' ' o a... _ W“. 5. ' _o 4__ n 10 \3Lfivfei” to 55Lin LyLLt;UJNLtt pe ‘LUl‘flLfll p_;vnstiLnLLl ""n'." "r r - (L ,J , - 7- o . L- ,7 - .0 i . ~ . L . _- , .i p-v:~1lfl B emu new pcmquct intysfuctixns. One sUppliey t‘} (‘V '1 \vk) desertilseyj the CXMltPaCtS Cg 7'” 7-,- . ‘ o 5 - i” . A. . ... . r ' r“ r pfl-‘(leut _, Lizitn CQJJC—BI’ELC' ve :.uve_:'tisiu5 WeLLtu “e :L U Iri‘?ettufii fCl‘TWLSU gi_splsg%3, b;Wuyi elijr film] 1“" o o .0 o Cth>1e priCing and stbe? bene; ts, suppliefis csspecs ti 0 :J!‘ 0 ~_ 0 _ _ o o 5 5 ‘1 3 :‘,, -- , “Imam” ,0 L SP tnei: sppBeCietisn f0“ much b age: tbim5s Vlt the m. .. , ‘“3 ’EirtiSing contract. 1- L3 a an -3 . 4L -1 H; '4 r 4.1 n. }- .jr‘ 415.1 a - ( A .3 ., 7.,4‘.‘ c 0 .. -._. ~” ism-211i 9 -11.: K'CLL pen tei , $.41th .3 11.18..-.) i Vi bu - L p Ht. Lie tis1115, , ‘ *1 J ,m " . F\ M 5 r _ *7 x3.” r—F "afjf Vsl 558, do. 3 (:tb”ULCJ ad. 19/:): p. £3- 'fhe3e £333 3 fer :mgnnftmrbi3e;ms :h3 1351133 cgmfilmzcts - H - L. ‘1 ,1 . - T", _ ' - '1 , . .3 _ ' 4 - Arm-t1 -r as 3 me t3: meVice. mc3eig oecguae thpzflt 33S QL‘GE -. 4-. - .—~. -. -. a“ "i ,. , 't33an3 is gxenscuieen3Lnfli 1317:33ne Ironiicnés f! to 3ffe3 the same. Mh3t type 3; CJnsume3 3eop3nse is received fBOm the advertising nM 33m io no t nea- . . ma -‘ 1 - -- 4-. I -. « —\ (‘Q ’\ w. '— -A '3 .“V 'N -2 vv 3'- . -. ‘4 a 1 Hflllntflifllng 3330 gelitiezt. QULLE p3ooibl; tnis line 31 "I A ' A. - ‘1 --~ - <- — ,1 r "w - '-“ o - “0 ~- \ , ~ '< V x ,\ !. g ,— ..- ,1 3egr~3nint coulu be inte3p3ete3 33 notnizé m33e thn hind- cmAtSB’ t3 the t3ade. . ‘ ' --‘ 'x ' *7 .\ A 5‘ .ra . 1 ~ . 4 .v- -' ‘, <-\ y- One spokesmgn for 3 in: e 3333 p3oce3333 féunkly >ante. Zhis is tic 133lv C5" L4 I I J ,t d C’) C, C H w L); H. C) ‘3 U S C‘? {-4 | Q‘ .4 C m :3- r-" {,1 'U f ( l Fete manufacture3s 11338 p”34uct compete hitn “ 1"?“iet” 3f i1i_3: ones. In instances whe3e a b33nc does not huive s 33ng can? ume3 acceptance, the m3nuinctu3 33 must H EXUAL’ 313ng" with dis t3ibut:33 hoping to get p133 tL)H c3 QiSFKLan a not specifically called f33 in the udve3tising HA Ouit121c2t. While waitinw €33 3 p33m3ti3n, the 1wn31 cture' 1 Vflhethe3 33 not “ive‘tising C3nt33cts a3e beneficial fil SLAEDDliOTF «a stt 3 waste 3f money is 3 CO ”t1‘flfl Sill questgi n “hi h each supplie3 must decide £33 himself. Haw- eve3, Eln unde3st.3ni'ng of the Ci3t3ibuto? OPGTEC19NS and h.” nyiwqa,3. . . . _. _ ‘ *~quin§ cos 3 33e effecting the cost cf caing business lend J - J~5U7i3ht to the questisn 3f the imp33t3nce Cf 3 =3 l g) :7) “ -. ‘ 2 ’3 «N' '3‘ :3 a" ‘ ‘A 4‘1. 1 . '. ‘ ‘ "a 3 * CUJ’JEEPtlEth1 centixmfixg t3 tie 111:31c 11 .1 |ka” e a.. tne cij_ss‘t:3ilmitcr3. Tfiie ‘thzwast; of“ exne:* ir33133131113; c:%1t:a it; slnjeli- nuiiéltet cpe3sti3ns has cstse ed ope3at33s t3 wc33y 3b3ut nELiézécwe1‘113ofit nuy3gins. Ilisirm; 13b331<31sts, Fflgflie3 BJCEDEBMSGS of 3bt3i n; capital, mate3inl, and maintenance :gDeniditu3 s and expensi e expézsion 3pe33ti31s, as well u :rthe3 COS‘S 33e sQUOezing the 333fits of di‘tiibnt33“ L (1:) m A53 :1 3esult, dist3ibut33s 133k to “sauf ctu3e3s 133 assis— tfi>ric363 i11 ijitrtyiuciiig, }33cum3ti1:g, :u1d :131m33ti .singf'brenuls. iBessixies mc3e libe331 cash discounts, te3ms 3? sale, and } . '-" " ‘ _,- fl} ‘1:- '-'~.~ h [-‘A r 1' -'~'-. 'v . ,7 ‘ -- n - 7. (w ~11F%}L€39 1;xn: t mszgixmg, tne 1313e3L113135 contiuifisz33atides) , tVKB cost of adve3tising n3ti3nnl b33nds in the snpe3mn3ket (*1. 1 . , o ‘ 9 -- *“73113 be p313 £33 by m3nu:3ctu3e3s Since they benefit £30m Q“e t1311ngtsllowsnces :313'usuully 3ec:uwmxl 3s 3tne3 ii"! (“a x 1.1 11 . -1 , ,1. 3.. - ,1 1. 1, . .111, .0 1 1 J... ‘\=x1me taxi cént :Tibnte ;a) 311:;cng b€J€YM4y~flJe 1333 cern: to :3 ‘1 ‘63 dist3ibnt33‘s net pzclit . As 1333 dist3ibute3s continue 3' 0 the Exxile ‘f‘ly13 ini,31 paweru tit is 1¥ELSOKRXXU3 to (D V ’0 (D (r (3 H. (1‘ 'U wc3e i.st~ibnt11 p3essu3e 3n manufsctvcen" t3 sub— [I] [Jo 13 :139 r'S‘l‘ibUtO sdve3ti main: 21nd me°c13 ”LL. @33533ns t (3 } .1." .b ,-‘ r 4—- 11— -- ,1 - a a .. 1 —. 41 ,» ,7 ,1 n . A -1 K . 7. . _, ’ ~ ~ 1elp olfset tne Slulhg 03sts in 1:33 st33e Upe33t13ns. “.1 ~\:;;£§:3ve3sisl Subjec ts AbQUt AjVe1tising gantpgctg By now, the 3e3de3 has p33bebly detected an nndertane C) if ImuniL:3ctAL°e1' dixsccn1te11t writ}: ccmipe231tijna xxxve1‘tisi113. plug s-ently, it is 3 subject of Wide dCbQUG :3 expected. ‘ — ax ~1 . 1‘ d V T ' -’- f“'.v' ' . 1 I 1‘. ‘0‘“, r: 331/ 3 .4u"~'."~ '_Y“/‘ “11(313e 1933 stilLl L 1e»;:3 311,11en 131 t1e 11113 1 3u1ot_m’ 113 ’fi‘ - rx 7‘ ‘ ‘fir " a. :"1 ~ -” 1’“ *" 4“ --- 1 “L -’1‘ 4- *7 L211 111p .LHV , 1111105111133ev'te 1 ti 1313 G #811277 1\)11L'.1.1_' 3118111, 311 C‘ Wye .L‘:L ui re -1 L- . 3A 1 (“x r- ' A 13‘ vrfi v. r- -. r‘ -‘ A, “a m :3 7 I" -. m ' r~ 4 w. [A EBQb Sin; 1; t3k131 1113 L d 1133 neceouLfly L3 eutLbligu n" ‘("\ "' N ‘I' ‘. "' \ ". H. q 1;fL;1c:1111€ JJALJS 11e ‘J 0-3 1“} (1 )4 H r—4 ...-l $17 H H (‘1‘ A .J i-) (1 O O } ,.) C} (—1 c: «D _ I '4 0 d H r.) ”—3 11.: I.) (D O .11; H. C”) :77 av,— 1 "I “ ' ”N r‘ . " '. ' ‘1" V ' "n‘ "‘ " ~ ‘ ' ‘ n x'" 1" ‘ )‘ . '7‘“: l" ‘ ~ I.“ . L”‘ A: 1"" (“V 11113 1éesypia1oijj1lh. 31 15L} lflll141153‘ LL C m1u1u e13 1-1;1m33131e .fecfto M11531 the m3nuf3ctu3e3 wh;le building 33les £33 3 bzvti33113 -¥eED€3::wmna,igrna'becwuise gr? the IL133e £3313e gn;113:¢xat e3 x N ,1.‘ ,« . > .. 1 r.~» ' _O __ __'.‘ 4-1., 1,. ‘1 1‘11 i- ba’ £1gmwpbell -:ups. 1313 13 33 exceptlgn thme: tn33 the 7" 1 fl.) ‘P ' __ __{‘ ,, . [N a. -:» w: *“ilf? , 133 moot m.Lnuf3 Ctuge~o 11th ndt ne3cly tme E n;e 01n— I“ “~ ‘b‘v K , . _ _ 11‘ fq ‘”ie“313 533303i3e 33V33t333 must vielfi semewh3t t3 3ist3ibut33 ‘\:. w L , a e C‘ . ‘ " r'\ -, r“ - *fl 4" -1 r v . “ . <1 zw. l I 3“ “)11;b 313 31169 13ve1t1313g CCflt?;CCo. T fr». -. vw ,7 '<-‘.. 1‘ ' 3 ‘1‘ >7, .f" -. rx _‘1 V .1 -. .~. ‘1 f,’ . ' ‘ , , - . i- . -, 1311315, Lne CQHERuVGBQlGS 3331011te3 Nita caope33tive ' {:1 ‘ " r ‘Ki‘ 0 - _— 1‘ "I .. ._ - >.. I -. -r .u m r'wg ‘. P" 4'1, J‘f‘”“‘ ‘ ' ‘ " "‘ .‘1' "N 'F "" 1_ “’ tllfe V.‘ :)l IEJL 1511016111111: 11. u;1__?.t11.)ll_:.C3 b;).’.’;,’ 11753th711 3‘11 bile $713218 V D 1:) 1‘ . ‘ \_,._ I“ o r_ _"_‘_ x r_ x r. > ’3 Hy o ' £-_ I 1‘ ”(a _‘ »--- 1‘ “'13: '1' m. V o ’1 3~ _9 p . \j/j a Ffid sis :ljeicy/Ipiilt d CWNS, there cieagiimzriety Ci7_a3a33ns yfi157 :manufacturers offer advertising contracts. However, thp31Te is one csntrove rsiil matter which, regardless of manu- fticrtzurer motives for usiny the c;ntrect, is cniricterietic O H H4 ,J l—lo L 9 U E r_.' :3 Cf (“J Cf; CT" Ho ,1 the cogperition received flimmI di.?'t:fibutere 8L ning the cantrfict. Firmifactu;e:s cleim trxlt: distributors eTe only too emrer t3 earn maximum allow— arueezs, but are lets willimi.‘j to per )"I to the satisfaction ‘31 tlie supplier. Feme yet the impression that distributars Teg21:?d aavertisina allanances as "pennies from heaven"—-n :U102T::tive syunce of incgme. | 'r‘ r; (‘3 f)? C‘ "j n. 1 ‘. l” ‘ 1w . w (1» xx ‘3 '1 ' n 1‘ .731’] l T no -' 2’! 1 '1'- --_‘.l L». LJ J -1 LJ63 } kiefl»...-.l.- 1;.) :1 1 Uli LJL’UHV ‘-.AltJ J- L J~-]_E«-.’,. t.) it} 1. “.e {'19 7’" F“ u‘ I - fl 0 ~ ,r“ ' .‘n,'» -. a‘ ' '3 l I‘ w ‘ '- ,‘~I\ I T t“. ,e‘ r -,. ' . r" . , a “*‘v-lflnwise gnu M€g¢tlgtlflg e c NLJJCU. Phe @Jfleftloln dire 4-, “—1 ON") I" -‘-1-'-- ~1w — a-q w -' - ' 7'73 17'»N'~ o -. «’— . CleJ LuL LL 1~L75€ ‘f\lL nx;; 57;”;31q) l1; tne ;ulQ:x,DJ .gtatiai t}fi . ". "V '\ a V l“ ”1 - 1* 4‘1“ ~-$ ‘ . T ' ‘1 ,_‘ -. - ‘ \ All: dlot~ibut3Ts tiLe eavintzge 3f supplierb olnce tney ‘ (*- “ —, r\ ’3 V a", 7" " r"‘ . ‘ 5“ '\r‘ 7'4 ‘r“ . 'v‘ r' W“ W ‘7‘ ' I '. ‘ 1' '- '-:‘ -" '2 'j ‘ . ‘V‘ f“ {1 (.7; 3:134.) Link). “b7'_7~L-LL34;>'€QL1~‘) JV.;..~ i‘:‘:v..ll-lL1:r( pv‘k.) «(3.1.3-1 l—Idk) -IJLL‘JCLIS #38'1 :1” ‘1”‘0 1 - ‘3 . _ "‘ ‘ ' /3 v 'v '\ 7" \'1 1‘ V" l‘ ‘. ' ("Q '1 1"- 441» x '\ - :— ,,- .4» " \v‘v r‘~ Y ~ - 181. 111 Lin, (Jump-LIE}. . up :1. ,.'eol.1-Lu, MM, CL’HIJL'JITL ;.:.._:.‘«7 be itten MCTe to scrtic ET the :istributor than the supplier. 7; -'- 01'”. q,“ n o , _ o _ of _ 4_ O f ‘ '_.-_ - .. . -1. T “w.ple if n3 mention is mace in tne cantrnc ;; to tue m. . . r1 :1 . 1 lrlllnum Teqnirement 01 tne Size of a newspaper am, mere V‘r‘ :e m . _ j “l .«t'. _ .,r q_ ,_ _ q IltS‘i ian of tne prouuct—-no mattteT new small--ls preoi of pet: .. . . w , « iformc nce Mlth tne large varietv of preaucts to caver— tizz "I. o 0 ‘V o 10 fir-)9 : I a 63, cictributors fine it Qllllcult to at lees mention tl‘yle‘rv o 1. 1 h. in tme newspaper ad, let alone nevcte feature s)ace It<3 Tzlieni. f ' - « "i N ‘ ~ <1 1 ._ r, ,- r“ «q I ~ :xdvx"1ces. 213 u 1m;tte:‘ J: l.u3t. tillo IJLP icLfiL;T crynx1 3 l . 3 . - - , t ”\A , - l“. - - n -- ,. ‘1— (aeteu maximum case allggunc 3 Ten one suptlLer ln- two ,3 - /’\ K H F. _I ... - o 11 o ' r ~— "* 1 _ H q o " fl \ t—fv \ _ (n1 J imsxlilicaids.rsoa i.»uJ, "wed Ebfléineou. fiul. :, J 3-J 1‘ ] m. " _ r A. _ u N “p f.‘ cw (1.4 , 19/ j) , D . (3 . (L)3 ('\ K.) pq—A ,...) Ho ? go },._1 }_J 4 “i ‘0 LL [—0 C J (’1‘ 3 1 .J ~J J (‘1 L, 4 cannot be blamed for poor ccocxperutive advertising performances because 31 c“t all #4 ~l“\/ K) acitwertising chtructs are so LTitt that the diTtTibutcr - t.) __'_ [—1 d: ‘1 Y" ,- o . . «'1 (”363(13 to uevote amount ol spice nonullyC mxoted tc> feature items once 3 Quarter" to collect llluunce on 31_]l ti1e (xises ENLTCJ‘Texi froni‘the salppliLJT dujfigu: the (Ton— tITCiCJt peli oC. The phrase, _ duount of spice normallv deaxnoted to feature items,” is co “t1rei by Nw“st manufacturers t:> Icexn a one—inch column e1 foT a $119 -- k) H }—Jo ,.. 1 _,. H, 2 ,-. . —‘ - e_ 'b 0.11.1343 when L time centrect does not specify exact unsunts of space larger ttniri one column inch. Almost always, the manufacturers' coritxracts call for a one—inch column ad performance f0? ‘io- triloLflxue to qualify For allowances is * :3 H CT ,C —:t L; F J 1 o u w 1...! (.3 H. W W m d- d- (D g (D 5 5 L) 1 it (D p... Lét’zéixi; corl :YlCt is too blnui“; oT restrictive for UQ”P tie in» pur- poseas bec tuse the D“VlSl in the contract require certain QIJWV1+C‘ of space be devoted to products u' specific intervelr (I: 31—. r-n‘, ‘5 1 ”e”i%illitxx1 for ccuflxm ct fesfiniTes. ' I" a ‘ w ”’1 - T .» ‘,- “V ,- -~\ .—-' .. ~ « r" IX. :gp;u;e€uflull 1;)? EuQLKSH :‘anllljlelffi , Inc., pTeT“ u ccncexufi about the e u U U H Q \. t CH etereotgp ed IGJHD pe: ads and ’"b eels? r- A‘ l ’ "i, I J, do otners do, that nanuiilcturers' contracts 9' for): er- .. . . .... .. QTY“; tnis situa tio11 upon the ui st: lbrtii . Mitn the num— be? 0 0 r) '1 v ' ' 3; Chontructs in eliect a‘ NETsn Foedliners, tne pwnefiuun 0 1 . ~~ ‘ l ’7‘ I‘ l‘.-.‘ t" "_ I r_ .H «. i" ‘."‘ ‘._ “13‘“ V"\"\ _ 1 ' a. .’ -’ segul‘mL t at ledxflJ‘LnCJLj llehfi):flmob be plcmhdmaxesch LQGK ,. k to keep uT w’th the commitments oT pToV'Siohs 9; the con- trfiz ts. ZWKNIty itenusgxac week; 3K3 coht'ruxai, is ChitiTely ‘too many to festuTe in just she week. Richard HuxehbeTg, PTcsiicht kf Eagle reed Ceu wrufl past bTeseht Cf the Supe999~Vct Institute, rev es ed at ttua Fifty—fiTst Annuil fleeting of the GToceTy ”mwfuciuwcls f t1x3i‘upegmuufloet litatitute EHLTvey *Jlrich showed that the 97e: a”e food chain ”as offeTed 300 zlc‘veTtisihe cohtTucts. Of tb e 300, 260 weTe accepted anC jectiohs weTe buseu on such Teisohs as (D b H P1 (‘1 :4 O p" .L L.) {.4 ilfiiusffi cieht sales movement, buTfi ,hs ome ”€001“ __ - n 1‘ <, . -~ I “ fi- vw Q . .‘1 -. \\ fl ""1 -_Vr '31 ' KW — w, . ”A -. 5: F11,“ .-x . 4" 311“ I (1 131MB peTlCuiulhce FLKTVlolcdh) heme Lilo 31:141. Tue CCIIMLLCUQ 1 _.z I ~ c v — v9 ,.1~. ,- ‘ r L_ If.) fl' j ' —L -, w 1“ ‘ ~\ —‘ , a I '~ ',' , ~. —, '3 _ /: -- «x ’-‘ w,“ ‘ u~~<3 t;m><1mnple:: uxoufi,u3;w:. :gumehbelu . lne rug ccnuLfiicts f—Jo :10C3epted by the aveTege d stiibutcl in a yesT meant that 13»C%HO pTometicmusrfimi to be schedulemxifiyhfli uveTaged to the adveTtie'ruv accumulate fer us lOUg as 1 year before spenj’n; it. Xx. Ifiaennis suggested that res”rictive cl:uses,such as specific Chaises of pejformmnce 'Jd definite umpunts 3f 3Fl0€ required LAD e devoted to ; guns femtuce in an as estisemcrt be Efl3lmztched fyam the manufacturers‘ cen“?scts alte(ether so :3 tC> eeliminste cluttered ue uds 113 sJ-csllei soup ban type axis £33m fsgj store giveTtisini. T”. Leemis fuTther recem— *h-fhied that the distributor Lnd manufnctuyec's sslesncs I71-3-1'titsin close Cimwunicative ties s3 that bsth can sit down aruj arbitrate as to the best time to run a feature pjswutien. ‘u‘fant to pm ‘ftELted in the cantfisct. I" -»— -\ q l“ I ‘_‘ 13‘)",- u p.122-C1L1C'. L, 1. if \\v :Qte tflKB predtmfisinare tflMUi th ‘0 1.“ Q .1 4"}! Q ”I 1"“ ”."3 o b. ' rm NF)“ T" ,.. ‘7 -. .J. .1.‘_, ’ \JlkJ J... l LICK)" D .k;\,;,bl I“; 3.); vr u e w J e number oi time: v p‘11i“"C3:icipziz’lts in the Latiousl Association of Foau Chains 1957: i Super Valu, 1“ requirements ‘7'. Q.) Sept- Hspkins, Minnesota. _..' - . O. ' ,- a—l a ,A‘ ”xi-n '-. Lg. must LHUNiLiCUUJel'g)CMHLwQJCLS. I‘\ that puovisions be changed 0 permit a wider cnsice by the ibistjibutsr of the advertising media and the timinr cf tme }_J )4 J m 0 U 0 5 Q; m LL ('3 O H r—J d '3 ‘(J .3 C? V‘ I4. {3 x) d p (‘1 31mg. The chain personne ( A‘) H H C: {1: .3 _ u —. ¢ — , -, ’ m. a . .\ »,. —' » ,n l... . . .fl - l—‘ ,— s. V NlQGD PEN e for satisfying tne TGlUiQCHeHLu uf CA- o ogmeiéstive : (-2 STSiJDHlate tfixrt certmin :mmuuflw: u v . “4., by l J. u, “ ,.,.° -, a. In\)rufli ;_';g HGL ibQELlelel to paneller inceptians ave? i lease? perieu 35 t we. "1' ¥ .. *‘n , x « , .9 J ‘ 4‘ '-: 14- 4—.‘ .. '—.° ' ‘ a ' lne JA:c membegs clllnei at Lse nbl$flba heeblut tuet r ~ ‘ up.“ .W Dr , ' . ~.- _. ,. i ,7 1 .o f. ' -v .0 ~ g“- _ j _. ,.\ -. , r _,- r1) . bertxi hhflflflltCCdJela fit} Ulutfltflflfi c coula Le:$>;,}3ltey beneiiixs f“: o ‘ c o o P) o 1 ' $‘ w , _ - _.—,‘ 4— , r ,, _ ' r‘ ,. .‘-.'_-,. 1 - - .__ ~.- ,. .1 .r ,c , 7 , ,l ~kDJ: coapcyltiwe daveftltlhé il l Hese penegllly sea mpec t“ unset present day needs. The clinic participants noticed, “OVMS‘ver, tnat changing the centrsct is & csmplicsted problem CJchne manufacturers’ contracts must be made applicable to iiijitritnlterts to Exitisffig ttmz legtfil re Rfil383£fl1t3 cm, the - fer u lunge food 5 stfiicuter in the United ‘4‘ at “" (‘1 v 7‘. . v-. .'\‘- - -n ‘~ -. ~ .~-, ‘ - ~ ”v “ c' - —‘.- x ‘ ‘ '4 - 1 ccteis an? misnes to rennin unenymuus, s¢_c taut ne gett i :ui' tires 01 heaving Kinufucturers conplsin ubsut (:1! \ fl _ . ,-‘ o . o w. A v.“ ' I H ‘ . . - u JA;C blinic Uflges JQ—Up :lex1bility, Supermarket ‘ l A . . ‘ K” _ ,—. ; ,— 7 (\ c (MLSCU 5%. 19:0)! p. l. ' -.u ' ' ,9 ~ A | ‘ . 1‘ s *' 'v "' 1,‘ - j .'; {‘13 1 r lj-r w 4". _ . 3‘1"“ ) A‘ ’a . . r‘u T101: ileU‘C-LflL: 451181-] IT.1lled/,:D &.L);)Lil 1....C.\:|] 11.4.}. ‘17e:.)bLS-_1,;15__ Cc,l.EL14.iCT3LJ *‘D ajiéi laid blame at the eet cf the supiliers. He ccntenced t}1a t if a tenulsctucec does not obtain vslue received from time: money which is expended for csepe eritive advertising, it 143 probably the fault of the munufscturey. The trcuble mast 1:L1 :e ly arises because of the terms of the live°ti inc cen- hich may be toe broad, and may net re1ui1e specific trafitw :‘fac“wnces on use part of the distributor in ender to escn 'U W exi ' -~r“ ’ ".:1 "V r‘“:‘ ya f‘FWJ .« "Y -- r\~ A“ ‘~E3€3rlsecy, CQQ :3 J1 NhLCGLTLllo, Aimdihfinpelunwtlfdl fife;‘cAnU rx‘ ““ ~’V€3 these cw: ts f)? the support and caeperstion which diatvv- .lfl .n 11.1“ fl.i_ MM MM.W. ‘ ~- 101173330 {3111‘ ce 13811111) tne “VLZLLILfJCDL1.:.)e;‘ o 5;"p‘-‘t‘:);’.’,sz1. 731 c nicltuxian, ‘the :uiorgnz1its sncflaesszui saifii thud: he 1“.) Yr‘ig"}‘lty 11""? 1'38,” 5" l 1’We (j W}i'.r'1(-a .j 3'1: {18? ‘ C1. 1111-” {7' tq tQI‘VI'r-fi V‘] L C‘ b 7 _ A be‘ ‘ ..-— V 11. ‘..~.;. - C...) _\,; _,L f U p9 V |‘t‘v—.. LIL) I (I o ’ .0 “‘1‘ 1.. 1.. ,~ 1“ ll . .L3 3. L'ch-J'KED, Lu} \J. :- -4.ucturers that cog1per tive adveit tnm . 1 . . . .. . 355 little or no value is received by tne supplier. he ,7 l lyelieved that this is an alibi on the sect of ”ne maiu- ftscture? for not having set up the necessary sugervisien runner wperji mjr s of csepevetive advertising meney and not flil‘flffig p1'WJidemi the l4h313, Imite1ftils, :uid {Dwegitun to nuflce 7 ‘tliee expenditLre of these allswunces truly effective.‘ In tn Fifty—firs Annual Heetinq cf the Circe?7 Ifizlifiufncturers of Ameuicn in fsvember, lQSQ, the subject of " " I“ 1". ~v .-~ .-' - v «1 ."v > ,1 A ~ -.« ‘u 1‘: -? ‘ f - ‘ 1 r ‘,' f‘ 1‘. ~.. I — .. C u? Cnpel‘uil 3 t; _1‘xe_3tlol.1; ....:,:1 1.1.1 UUJIJCQ _._ 4.11-1 ;;. 01:,1-m131e te Lexi, FJ. v ( __, - ~.—- " fi '7‘ ;ns Mfld presented. ;hese f“) :31? tine ‘truiu3 pltU3tl1N3 :mzcgqunezyhit 62 l. T xi: the flied i;1h1:t:3' Vintn: the 11. e ”L‘"1p gt’ve Tencnundising agreeueit" ("CIA") cayeifiini iny ujringewents for idvertising Lfli promptiannl igxee ents bet'een wunuf;ctu9c?s uni dis JDULV-‘. 2. CLMWI C? A ég'etx'e'nxs sinsll Cisfiiuzz (-) ‘the 13:;w(>1u1 far specific iverti lip seBVi es end (t\ t e p,y- VPDto :3 * ' ‘ ml 0 stributors feel tiznt curve nt "Coopecutive Kencmxn— sins Agreements” which qenerell i‘ t L i pution to newspapers, nun tibills, are wince: paste s sbnuld be braseened to i: elude isuis, tele isi n, f or dis svs and cuties? promotions. (1 <<.‘ 211—“ 34. list~ibut.is uni nugmi 1,93U1933 eggee tn CLt mLISt be peyfs)w«nce 3f contract and e iiien per“ “Innce SL 1bnz;itted before the minuLict ' should be expected t3 pay. LU . Hr: nufecturers cantend that they sneuli not be CL]1€ 1 upon by distributers to pay “extfie m>1me for partic— ipating in their special events. Es: such ext~e payments legally 3bligste manufacturers to afier p: op>nti1nutely equal pidment ts all competing dealers, LHKMBM is impracticul. \ 7lesson-3d interview with pefsnn wishing to remain :31”13nnoils. .1 5Neins tein, "Urge More Realistic Co—Op Allowance," ‘<~;£13£., p. 37. (‘\ ‘JI 1.0. 1.1. Conclusim ——-—~_~;:;_ (Seaper3tive 3ive~ti3' 3midist 1L11Lf::c t1I1%3 :7:‘ JurIgf 1):;gt1 .3 spec ci3l events Hi ich 1M3 ‘he perform3nce “ appl’ed t3 the regul3r Agreement” 3V3il3ble to ) pe:fiiod'c“xllg':mlc xhe: 3ecess3:V. H. -.___ .333- chbe33t17 mGHCMQQJLLl prepri3tely em3mate iron , | ‘ \1‘ 1 w "\"nfl mm] 533‘ ”3 J 117‘1'" ;\.\t Tag r, '\‘.\‘v‘—? ; ,3” 1 I '_ 11$)J .lv“ J, »\.J.Lk_,' ..A";,__ » A A" 21.; ' ’ 1‘, C a. pxyment" ahetld be sepx: a. . ‘ ’ ,3 o ' 4‘ o 3“ 130tu~e3 to he Ulhb’llH 11 *4. U’ ‘I ribthP. lif \‘I. EELG (338311—11) -‘ x . . C';o‘:‘:/ etlILF: $IVIV‘ ""IlL .n‘Lv 1] l‘xunAg 8 f ‘ - f7‘ .1" __ .3 DH 1.5;, L] 5. “t "I To the fllflfllfQCEUTel’ 3t the 13c3l 3? store level. ('1‘ source of revenue. -ue 85+: 0— ‘0 1 34H1 ll3om mistribttore, tne con '88” .8 Ul' 1-". C tU WUf w; oepey3tlve Leficu333ii_ tile t8" . H) :1ci; vixeri :nIcii 'C33pe"3tive 8 l” C L’ 131 ”‘1 "1' 'j'D'Y‘ F' p - / aealers. I IN‘ , “:1 *, 4 p»; —_ _L » V] A “ 1 _._ t.‘ , . Cd 13 "”077. “(T' .1. "(jg \-«b‘) 1“:be L118 3dverti3ing contr tr3 8 ct will xpect better i, . - nave to ..j3UlYiblTCQLHK' AIW \e :31) L2: .1} C1 c3331t1333 33 l f.“ _ = 1.1L.) 3; ‘ ’. ‘D I)_1_I\l\’ 3 pr ”\ " ’4 ."a \Jrl‘:~e.‘. ‘1 .7 '3 L1 in; ' o ‘- In. 3"“ {Jl_“ ' . .Vq - ‘— 3‘. 3' L» :uch 12:31L1— ., . .‘ /' _,_ 1 yeudesea. .‘ V 111 x7 COED be ' l \_ ,4. .3 V “ice 2’) — .— cifilné »0 3s 3 upeci ic-lld 333 e eX3ctly Nhnt perfsrn3nce is; expectei from the distributor. In aidition t3 m3kin: ch3nge$ in the centrect, theee jjg still 3n3ther may n3mu1“ turejs C33 tecure S3tisfyin: £36213fee::nce ffiflmn distritmn,mxszmij this 1Kxnlmib’biljirz lies igjgtklt} wmhu1¢CLnnea3 33lesmen. Peflhc; as 3 ”333 3333 :33u- f"3 CttU‘mM* ' Cim33l3ijn;3(3b33u;113t gxettirmj theiu Lne3’Hs vgueth C’Wllld be :ectifieJ if the 33le3ve 3 weve t3ught t3 encou33ge {Yifistriout3~n t3 3fveWtiee i3 3 “3333 accewtable t: sup- gfilixers. S3lesmen 33,Mld be injgctrinated to use the cgnte3ct :33 :3 '“t331}' in (ecu'fi_ D Kfimctigxis -Iui 3C3: 1e3331 t; (iegxxid sslxely In 3llm3’ 3cee t3 sbt- distribut3“ caspe33tion 'EKfeari ‘th:33“3 f1 Fi‘s nilflJtc- Sis; :3 F31 LJIV°lrtlEY°fl§? ccnitziujt, Lyfilezswer m“3t still be able to sell prsmytionm 3ver and aboxne the mi: iwuw requivements stet 3 in the ccnte3ct. «1“! to g nizxp effective ULUUIibU I ct cxmlte:“‘*Jitkliwxlesnmni,'but fl . ‘ 11L" k.) 3 ve3lize the impoctt3c1 3f ellin“ Values an tfliezir products in 3 m3 I1ner th3t m3kee the 513 m the - n 33pe- re L “(lew' and benef '.PitnIt3:‘ 3.0 in the liESt plICe. Then tIe .3le3men sh: {\T‘n‘ "r ' 3 1 o ’ 0 5' — ' ‘ ”‘Le4’ Tihe centr 3ct 33 33 33 e; incentive to aisteibutwce DWI-”“1"? ‘\ . -3 1 . r“ r ~ , ‘ _‘ fl 0 ,,. * L J- \,/.r.-1\J t l; 1?»: '11 1:1 b‘liill‘js . .33“, f: lat-181.1! datlefifIJEII Clive bltflt :3 {1 basfi C (W H 3 1- 3 ~ ‘1 (‘3 fl —. , .\ ,v < ' ‘7 ~F r" . a * 1oellluy p‘lflClple 333 le3n toQ much 33 334 Htioin, COIlt‘:“-:_‘1_ . f __ 1 :_ . 1 ,. .. 3 1 . 0,3 1 r, ‘- C233 t3 uecu e 093m3313n3 334 fe3ture 033e3. 3ti3: 1 l?8 cer- its 100 I:.: C4 l._Jo (—1.. L) U E I} d ('1 Tii3tribut3rs b3ve 33 3b cc33tr3et dem3333, h3wever, 3~lesme3 033 be succe331Ul i3 3 eacx lin 33ti3f30t3vy C3: t113 by selling the 3e33)33 [Q (m £1313 promoting 333 fe.3 tu~i3I thei? products and then Cnaifitraying the 3dvefiti3i3; 31 3333ce3 bile diStribU‘3r 033 ~ ._ 4 . 7'. .a,93 by d3133 33. (D 3 P3Ul 33333, Vice President 01 3C3tt Papev C33p33y, gmicze t3ld Se3tt 331e3me3 3b3ut the l3v§e diatribut;r 333 ‘Pcigxer C,mb"“v be f3re the C3mp3nv initiated 333, but, 333 H (7 :7, '3 _ I ‘u ., .331l_€3:33:313 Lip. / 1 cuesseeq 3b3ut e33pe33tive 3l7erti3ing, C33tract3 3r~ hefie t3 0 ~ - T" " I r‘ V" 1" ‘ .,~ .1. 1‘. " '- . ‘ ‘ v r - A “~ I — « 0th~\’. l1u3t3e1°139 33t M 3:11 (fiflirens ;u%3 33p,;7Iuitb tun; CAM— .. 37.x ‘ __. I.“ 1 _‘ _ V y ‘ -9 _V 1". y—- I I_ w 1‘ _ ’.‘ r v ‘_‘ o o D~AC?t wlll 3epenq Up33 idm it 13 :1 te h 33: uh3t 3peCifiC I" '“ C‘ . I“ * V‘ r: i " '3 u \‘n‘ . ("4 a If? r‘ v‘ "‘ :‘r ‘ F . '"‘ pLBFWd~Je it 13 13te33e0 t3 3tc3mpli3b. my. J3me3 333L13, 1‘3"???) . ‘ 1. ' V --3<3_;31;7 3 ‘HTj 3<3 F’I e.:inenit Iditwi lfIllxsjiuiy (33:133ngt1133 (313 MC?! V. m 0 3 m o *1 . ‘1 - - ' . ~ -- - ”A ' I ’ EDI e313e3t 31 :3Qem33t 931:3 C3333y3t133, ”lie 3 3t3te- I I 1“ f) L4h'03 pTetty well sums up the opih 13:1 31 most munu- 3.) O (T H .i m 5 3 Q i‘.’ if E _ , 1- ,‘ -, . 4‘ _ _- ,-., A“ -3”, - '_ I, ll 30:35:.3‘38 ‘CJ 33ve 9131-3111:} Curl .333.” S . 1312?; _; q . A1 K”‘ ‘ a 71 r‘ _. ~‘ ' I (7“! ’_ '_‘ .’:‘ l v ,—‘ w “'3‘ r lfl‘lue uUCC€uo. 333T .Jechl Iecyet -33e «-3tt I'Les ‘3 - I" ‘ ’- - J . - — ' H “ .3 . «3 v ‘ HI- I, l ‘ ‘ ‘ A I — v- _ ‘1‘ ‘ ‘ TV 0-,? 1‘: 1. Y8 ‘o JF‘J‘? 0 P ‘6’] II J‘.’ ‘ 3 ,L-11~ 9 urx 1 o 3" / - vi 0 ‘ (3 :1 L i -2 tfllizion f3? their products at Tide: C tezjievificn pfflj‘flm " °- 9 T’s—i 5111.:L., EfipjjljjfleLl L 3 “1:1 Schedule these fixl‘fef‘ifliflf perhv SIANV“ it up this .a Ccvtuiterpart local adv I 3:7113ut0r's NMDLMTC fkirfiious p?educts. Efiiluiwances enable Spe C taculrtzr b:?2.:3i3 inqprw3ssion L'Ji t h ;;:ut the .: T V _ t , r V’ *‘3 7‘, 1:1 -1 Vlwiluei , \.I Q l . 3 ‘T W ‘{ ' Iv, -,—. J _o onl o .4 1'“...— 1 n ~‘ V ~ M n?" ' - -, Gays Cafe Q'Vei7 $31611 mil; (D ”n; t ff. cm, 1d . :0 , 1 1.1.1. J~ C. tisin; to w‘ n ‘H‘ \ c t ure 1" :3 gufie believes . I“ m; L nu ”:°t“"”) - ' *‘16‘ r 4‘1‘ r‘ ‘loLi7LU e o 01 [me o l‘} 1,1,: ~,~ ,m *1 v . "W (N r: -7 7‘; (~11 .I. In 1.»; .‘.~,.. .le8 1,24 \Je- “T” "j‘lr “ "V]AY1V". r; ~» (“n . “(Una—Lil, m p; eagl>eoii I1 3 (3‘ '2 ‘x v ‘7 H *0 -tLuJ J . . I . A. _ +4 " o i _ o . _ _f, Sling g_ 11h Jibutagr , ,_ _ . ,- 1, 7". ‘ 1N” Jamu,s Cexn e. I ?ee n _. 1., .0 . ' ., ! y. a Mgduiactuge” S t P113. t r) I ‘4 IP‘ _._ g4. K; k .l r”! TS 8”" ture ~‘\ ’T ”X "3 7—3". , \_,‘ \x J(_/ _.. a _‘Q Q “ ‘ ‘ " \ at? w rt. w 2‘. '3 rs" lbut;”~Jflg Jiqe time xx ._ 1 7-» r 5 v- 3 (\ 1 1‘": — ; —.~ — } 1 " " y .\ ~71 ItiLLE/LE’ g3. «.4. .. 358.. \ ilk). ‘1‘); e iLfllifiCnflfit E 19i:)5 p- E “¥?:eakfixmr of f‘ C 73b? f‘ :117 (3" 5114“ 3 T‘ T‘ _H OVIU 19:“: ‘1 V- E’JJ VB 1‘ - ‘V 1'5} 1" ! :tsul t tiSil’i I V‘ Di . '4 1 —r N..- i- T ‘u 'e I V l k 4 *7 K :1, r'.. <-. ;. lI: A '3‘ l.) . 15"- y-A ‘1 ‘ I". p‘1l? . 'v" (T. C. ..‘ kl- .g, LLKJll- UL) ., H "-1 'x f“ a :1‘ )3 .1 C C1111? TE 1:3. VI I DIIE'I‘R BUT R-I-..:WH»1U”U 2:?- PRACTICE-IS 11310 7““ 371:): 1.51.- TEZADE CST-'1‘ GIT-1 _._-‘._A _._4 ‘ fit: me} 231-: of the 3.1-1. The 3:31.1133111:1e1‘1t 121-23 been adv-.112}; the .. 0 (fl /‘ . '- - —' —' 1‘ l— . -'- fix 7 '6.“ ~. 31 4 ,- r- . '——. , r“ «v; -.7.I" .9 1~ ‘ -'r . d 3- 13 ’51 11311110..“ 3e 1-3. til-311.1 3.111 1.113.1- 1333.0 tic e.) 1.2;,- ..11_0.1 11.101.1- * ~ 0" D“ — - D - 2‘. t 9- - - ‘.' r~ \ ' "w -, ,-‘ _._- “4 -.r 1 Cure 3:) 1. 3,113.0 :me 1.1-1-011 3i but we; iii-1t: 1e3 . :11e-1«.~t:1 d l"""-‘ ' «\ “vv " —\I\ " -’-1'. -‘ ‘. _‘ ._‘ r‘; "-. - ' e I lug-,9 «lune 11:0 :1 1- .Jt-b1-1t 21“.;- . CuUple-i -..it11 12ee 11 0 1111- petition bei‘x-zeen 1:1: 1-111120131-13e33 , 11.11:: i1‘1f11-1e110e-i 8:13:1e 11.31111- (1‘ 14- I ‘ V H. C 1‘ 1"}. (D C!) LJ (‘1 i. U C 1 HJ ‘ '-- —, W- ‘ . 1 , - .q ‘2 '- —' ~ u ,Y r“ 1 - -’1 r " u‘ I .20 Luz-eye into 03:1:-:.1._1_0t_111=, {DU-D 30:13.. 30 “_o ‘3' J__‘ - _ _ _ :1 'n‘ r I -_ /‘ ~ .. v— _ “ (fl fi_ .. QiWMJPibutars. Under Lne L¢EOHful eye 01 the :e1eril Tgime {N ."-‘ .‘ -.. -. .w, - P , -." v, ‘ ._ . ,_‘ _ r‘ ' - - _0 V v ' xfluhnuiusipn, MQHJ of thege unfiir Qut'VLtjES nave been r r A . ‘ x-Pr1 —>(‘1 .1'21“ 1 ' - , 1‘» . r\ *— (J V-.(" ~ 5" detected 11111-1 ;.:--:.'L1€-I_’.;) 1.1::111e01 t3 ce.-:.se 3,1111 18.8.1.0 . The pr’pUnC ‘7’1‘ 0 ,. ‘ . --»le the gm, ve ermzrtent 1.7.1-11 be t.'2.1-:i:1;; 111 11131113213 :-.=.110:.=.2;1 t0 4&1 01' tne Robins:.:.':-P:2.t1':1::-:1 Act __ ‘ - h ‘l’ I ‘P‘ _ ”fl ('1 1‘ (N " '1 '..‘l _ ._‘ 'R‘ _ 7V . ~~1 'AI‘ ", I. ‘. ‘. '1 l n ‘ ' In genie: 133 -11113 1111-1e3ot.n.-10. tzie ,z.*e_:.__,3:11_:1,~, Len-1:2.) tne _A‘v- (4r (,9 13f the Robinson—rstmsn Act will be helpiul. The Act Eniss sed by Cs1g-3s on June 19, 1936, as an amendment to seaction two of the Clsyton Act. Under the provisions of ‘tkne Robinson-Petmsn Act, there are a number of trade prac— tion 0 ‘tj-Ces which are declared illegal And subject to jurisdi u”) :3f‘ the Federal Trade Commis.ion (which shall be referred tA Ho 5155 the F TC) Gilb0?t W611: Senersl counsel for the Assoc "O on o: National Advertisers, Inc., explained that the Ho t 113 U’ 5181C purpose of the Act is o Interpret the vis {1 us micle ttls-t starts when a large purchaser us s its economic bA-:Oir1n- power to pry pre;1e: entiul t:e tmez1t 1'1o1n suppliers. This in turn er1hdnces its competitiJe position arsihit ijts sr'dlile1° Quid 11eru3e ilesxs f”:vcn°e:i c:AA pet:it;:n:s. It thus stts ins an even more uvmilth position i: the ms:1:et Lh’ch enables it to cwrnpel still m-e: ds ci e 1 : ter .Avocitisn from suppliers. The mAvement to w3r monopoly is :1es dily apparent.* The -A:t “pposes 11KB trend tXNfliFd >1qi»li.ti gmssitior1 13y EDZWDhily’tiru: ceidxiirl(discxrindAMAtignis i1: {Favor :Af gnie Chis— tonmers:us against its competitors. Sub-sections (d), (e), and (f) are the pertinent sections of the Act which bear Uporl CLAAperative Advertising Although neither uses the tePVNS as such. Sub-section (d) covers the situation in vhic11 :1 seller of goats becomes, in turn, the purchaser of pTOVNDtZionu l faci lities or services from dealers. In other WOPdES, the dealer, for compensation, supplies advertising acilities for the manufacturer's C T'T‘ T ‘ 0 o ‘ “K3i‘clruwl Aisinr, =11 x.) .1. w _4 benefi t \ , lGilbert H. Weil. "Legal Aspects of Cooperative Adver- %UEL," Ass>0istion of betionsl 2dvectis'“s Inc., April, J, F). l. (Phsmplet.) bub-section (e) covers tne canverse Sl“uQUlQN @1 sub— Exection (d) gnu deals with violation” in which the gelled lxiszul . . . to pay . . . fut any wervices 03 facilities . ,3 -- \m ' .. ..., - . w “4.. , . n " 5‘ . A.“ erliiel tesmo tu all Cuupe itlui CUanhLPu. . . nub—sectiug o 5'1 3 _o. - g.' 7‘ ”O _._F " "-("' (e2) likewise )?OVlQ€S simply cunt it Lh¢ll 0e UHllufUl . . s; :7VlCe 3? facilities . . . upgn terms not accgsiei t3 all *fi - ”V - -- -~ - - , -. .—~ “,1' —. - ' 1‘ ', H r! 1' ,- L‘ pxwL‘c we 5% an prupostiuullly equel te3m3 . . . BJUH acacision (j) and (9) '4 pa U 7‘ ' .3- ‘- ~' “W :‘ j 7-1.. ‘ ' ecily twat alluueicee hflu §hjm€NCS naiFat: be nxyie t1) carqxetiing Ciyztizweis :m1 pinniirti4nigllg; e {Htl {D be. 15% W Sub-section (3) states that ”it shall be unlawful . . . to knowingly iniuce or receive u disc;mi irlztieu in lie majority 3i complaints issued by the Hezel_l ‘vuie' Comxisaion in the food industry seem t3 cover three 1"“. r V, ,_ :1 _ o _ v o ., fl ' ,1 ,_ V“, C‘ _ '_\_ ‘Wuul TSJDes ui Viulationo: (l) mnere minuiictuneé fill t3 ‘vyrx‘i(.. h‘ I . “““e V V..' o _ _ .V 1 - f. _ o k“ —Pe€3 fanO gnu teLGVlolum CQmMGBClalQ on thich to iuveitioe D011.0:‘Lted the manufacturecs t3 bnv time it regulac “ates, a W ‘F. W _9 . ”I. r‘» ‘_' '7‘ r\ {- w" (“a o \ :1 w" - . 1’ o _1 - '_ _ _ _K _ ~ ‘ _\ I _0 ~ ‘ I ‘ ‘*f¥3.7jr%;.nu aflngJed JJMNACGLGINS Une lgrfiabuye r°nmqtidno L . .... General Fends ' 1 g- 1-. FT r :1 CT‘ CT .3 (D Q I “ 'r’ L) < (D (T ( : ;. o—J W ”.3 U (D fi’ .1 Q (J '17 .5 H. . - R w x. O .- \ "W. C‘ ' 147 K—“ e e 1‘L ‘3 D " C L D L e Supepmmyket ' (, ND. 20 (May 19’ 1958 W O} 7 ‘4. Chgrporatieh, Sunshine Bisc tus, lhc., Piel Brethsrs, Inc., Phidsoh Pulp and Paper Company, P. Lcrillsrd Cappihy, and ESLu1k1st Grewers, Inc. The examiner of the case, Abner E. Iljypsccmb, feuhd that the suppliers were really paying for ,‘ 9d 4-:“ee advertising time the chains were getting from the net- rrcwrks even though such payments were met paid directly to tjrie chfihs. Accerdihg to the findings such ecreugemehts ~ -, —A— ._,~.- Kriislste sub-section (d) of the Eebihseh—Pstmsh Act through iJcfilume cus‘emers who were conietihv with the chains GQK 211433 bought merchaheise .0 -fi A. -. p “-7, fl,“ .- 1-. a r o ,7. 3-- ._ 'lto, thereLcie. Lgklnfi the UloCJlm- . ' 1“ R . v v 1 v.-¢- (“'1‘ v-rfi 2‘,“ . v ‘, A ~~ -‘ ‘ . \ . iricztcghrzillsxguuge? Luihinlul. lhe eyluguzer ccuujluuecz‘thst J ESECZtiJfl (1) makes no distinction between a benefit cshferre‘ ’5‘ ji_rwectly {uxi :xe cumzferreu.ixuiirectl In ada‘tish t3 the Giant FOSd Shopping Center hc Eflld the Grand Uhien ases. cease and desist croers have beeri piveh to J. Weihgarteh, inc., Heusteh headquarters Chaigi, and the Behher Tea Company, a thirty—feur unit chain “itrl headquarters in Burlihfitch, lows, by the Federil Trade (kmmtj_e~'-q ”:r ‘ _ 4“: Ciscrinihmtory allowances frcm supplgiers. it the same time, the Cemmissioh ulse issued haWU‘ -.. ~ 4— . —‘ ° . A. -. . o l _. .. ' .° . . . . m Q W): ; ‘ ; {. _ ~. _ 11;) C; D it ._ L g A. : “ _L .15» «’T‘ _.L \ 1:)".«VA - _/ v t) C *rfES W‘Ql“3b the supplie ' “” Well a” “iV‘rv 'llw~qMces (.2 Ct l-’ i—‘ {0 U. L U H L) }_J '\><<.‘ l O 23' a (‘J m 3> O\ [—10 \o f——‘ 7:- \ U} LC! t-J G 8 «Wu. r... l .2. a... e _ .Q ... 1 C ._._ 3 Wu . . h.” _.d Pu .. .1 3 m.. 3 T. 4. e v“ 8 its” h.h.. it e.h . 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' " ‘v 'I ,< ,’ ‘.‘ raLue 1° tzlgzn Leg; film; L u up 13‘; J mie L. m _L .4 -1 U. _ . ‘ ~‘.L u. - u - ‘ r» , ,‘ 2 °,., ” .', .~ .'..I. ...I 4"; , .° -_. , m a x 4.‘ " \thK}? flJlI]. tjflgg LLMLme LAM? e; x30t1w431etn. 3* Due uM,s8ufl; ' ("1 O F» 1‘ —. 'fl "‘1 . ‘ 1 Q“ '7 7 1‘. ‘1‘ ~ 1". ,,-‘ ,\ ‘7, '~ , ”x , v '1 _ "W 4- l "I“ '9 x ‘~ precentgw 0:; olnce tile mule. a,» 11.-"I Lu: 1129.39“ ”LI; ' r f ' r ‘ (It ‘ -- ‘ r‘~.f v - ~ . ' -.- ‘_‘ q. '_ g} ven ammo: C")-1V€fj the ob e 83ml '1 1- ..31. _. . k :E» _ we I ~ . g I 1 ‘ A - w , . . , 9‘ 9 b 1 71 V ,‘ a '\ y‘-, «3 — —- 9‘ _ r; ,:-w t " a 5 (WV .‘ , FT -, .7. ,1 - .. . ‘ . f . ‘V , {U ,1 4‘ 1‘ :'_ -U _'U_ ‘, . T. ELLL’ Ilia/1 k1,”;1 ~/'\,"I.1:‘ti.!_b ‘Jee ~---t) . iv “7' 4', -1 -~ \ “ ". "y‘ -‘ «"1‘. ‘ . L "r P‘ '.' ‘ 1"“ —‘ ’V‘ " >' .1"' . 18 (J 001100.131]. eh ijv”J_Lfo (31113111 bLtBG~ _L-A U L-‘Je‘J. s)“ tile _,. _ .... . - " I " ‘_ " _. ,‘ __ ,:‘ . ’.. v- V" r| -\ 1" "\ ,0 "\‘ :eSULtS 31 CW3 we? ”.LC obHJlC.;CTHTJ3TLC% 3h Lugit: 03m- Initteee, one by tie F iteyu ;: Empevmg bet de'ogxniicinr, and the othe“ Ciltuetefi by NiLll m f. ;1;ut, a fifiyketfimg and rede coune e1. 14?. L“ut Sdt in on buyinv cemxittee we ixnpgnfitel1t <3htuin.:3t:ure :gnji ULKJV;‘;LLqC913 e;3ne:x1i :12 CCN.§xvni!e 3 xwe fie :1n13: g t11e n: ti ert':3 ” e i (D C? :_Jc ~«I . P) V :2 U ' J r_J R) study. Half 3f the ’ leading 20 333d Chl’ne. anee were gmfinx ty' bVD ten tad . two were Pmerg the top five, of 35 _ 4 ive e C hit "“ 3' lune tell in excess :3 370.003 '3 an 3th ..4 3 ’- .L 1'? 'Buyey3 13 not have fue ’HB 33 t: “ceett SprLiB' 3 Cfféflfifs {cfepeudentgy but .Ca can :iVe 3181‘ L :8'3 wn*:- ority t: regect them uitifint submissi:n t3 bupiv' a? mittue3 according t: an article pre'PiflS ”n Tupegngxket ”e“3 1m discussej ’0 "Ne e3 on the Grgce y ”‘ude,fi ; er -t ,311 .3 L ‘ ~ 0 ' < y . - v ‘a , - ... ‘.‘ «F , r - - -p . '1'. '\ 3H. -1 . 7 . {K F ,A e smallest camp my REG 3 UqIUmG \; UppfifiglggoGLV $wU.QOU,QeQ. 1 _" v I? _ r- 72’). 1 ‘g‘ 3,) b . J‘s.’ w p1txblct i Ljpre Buying committees a; reducts, selecting of buying ruiningjxfltich putmtlc's SUKB to be difflD'cVGF In many distributor O“5&N:Z;t30fl, buvlu‘ ‘ L. m q _ 1 _ _‘ '\ 1 ‘ o A r o 1. precuct aaleo figureu “HG determlbe .ul» " . V J I‘ u‘ ~‘T‘ a '-' "I - ‘ fi‘ 0 '- {j ’ 4" alsceutlnuta. P”lefbu br‘- ‘L be see t: H ...) F) L-Jo 5.124 .l—lo Cf.“ C4. H- _...J L) (7. C?“ L; \o 0 C? \L) y a 11"V7'T'y " ("1 \‘v , vi ‘f"f" " " 07,7 ’3 31 3 (:3 9' .~ _L/ ‘1‘ ..1 ...- . liA \. ..... .5 I e L) . _ .../d -.. A . — V .L. _ r'“ . ' J- . y , “r“ "‘ - - '1 3 ~ n 'o \ - a 7 q 3 “g t :3LJFbe_33. 111 Ole; c \ce 1 11,3352 ”Lana” » -. n -0 , ., ~ ., .flw . a -a - _ " L. . 1- l -‘ \ .1, . .- 3 . .3 13ezllllig llpcxl tnle L1uuxcel 0‘ L 3 lLRFJr- he‘lye c~71.nn 1e :33. Iteetingl ZJJHJ‘VPJW one t: 31x 1 u‘3. II““"I; :iltetee 3 ' . , . .7 . ,1: -, fl . '- . / , 3 —. ' ,- ,- --2 .7- . . 1.., ‘ 1---9. . 4-1 _l—EeI-‘IL; ,«4 “we IOVLW;“.1 ‘110 {—3.1 k 41/ e v . - "e|.‘.)"-t- \JAI - ..Lt l 'EJE‘J , ...__L l x be .;_ J - 2- J L. . at H , ‘ '-. - .0 1.- '_ ‘ , Iqlrulteis 1e n, er ‘0 e $11 CUA3. ..3 3:3 (=v!,1_ fi,es lie 3.. 4.13 . V, mm ,3 . C T N ' 0 '1. . , , ‘ w J ‘ enac tly we same a 1:313 1:1 my Me C Le .. 11m. .1 u 1... . th fi 'Nv'r‘ ’1'. P, 1‘ . 3 «yr “.1”? "(3 I "Va: 1 ,-\-..V « '-‘~~ q 1n e b-§bL 1 13m Camp -uu tme tfloup. .cke _ um; ow , p ”-3 ‘. . 73.2 -- 11 ,- --"A 1* l.-- lcheJQ; t3 1x3 lQUJKILDH tum; cenm.yttee w3ve ifi/E c.fi1-:1: o 1 o _r_ C" _o (,1 -, I '5 ‘ ~.. n r- — _ A“, ' 7 I; _o ‘tltlesz che Pge3luent in onlfite 31 .Ul,3, 3 1,11 ’~ c o 7-0 - ,_‘ O ‘ .- 1_ 1 '1‘ V, r a 3 4‘ ejnl Advertlelng; Elce Pheeaxmn;ttm1 cm 3:9 3; tgce - ' T ~ _‘ ' «A P‘-., « .- x .1 '1‘ 171' ‘L‘ ~. fin ¥ n ’; r ’\ r \L' 13y ‘the er.'WQLCGl‘.HLQWDScHL;ggln€LJJ1 nesei lfl ‘eg I ‘.. Ehllletin 6—01, March 31, ljul. to the otbev membevs 01 LN I’} ‘r‘ 1" ‘ ) 9 -.L 14‘ p - y. ‘ " 1 r‘ {A 1-7 1:, \_/ .) \4 ,1 V ‘1 V ! c ..3 .* ‘\ 1" 7‘ »u ”v L \r ‘J ’C’ ' I T‘T‘fhn .« .n ‘J J‘u ‘x/ > v : .9 '- "W a .7] . '4 l; 4 -1 L t; i J. 1‘ 1.) ‘ 9 - - . 4a ' q _, . _ g . ", . _ ’V 1.1“ , .Lb _L- 1112/4. - . _ A 9 (:3 ‘1 V ' . 1., __ u 4- - - , C ’1 ( * v". .3 " ' ’-\ 4' f-) ‘3 _ . tat ’ K‘ (.1 .JC . O l . ‘- ' ’3 V ' ’3 r "\ \J L} . , C f (v 0 3 r\ ‘ a - 1 -~. 1 - at) ... C, - 1 '" i _‘ 7‘ .3 _- \J ‘ — ..... ‘- . L \J Vice President in Chang '4 \ I . x\ ~". .“‘ .q'v —, "~‘ "‘ . ~' (\0 ' .‘r‘ ','\ ,“ V ' . ’ ' ,“,'1 —. ‘1 ”l ‘y ~ Opei’tltlviio; flafeiwtlolilgil 1'.,L-‘.‘FL.‘:;e-z; p.020 , ..lx._,1.l- 11. h‘ N - a ‘ . , ~‘a‘~—\ W \ -, 1 ‘ ~1' ~u 0" -< ‘_-—. \ . bales P3\metien lenoyefi; ;13 tLe ‘Dliqnih: cc. aw c c: w at cqfli nwn”ofl cw. a ha 1m ‘ OJ. 0 e b .’ .alex.~ ’ p K. 1.11-06 , .. .- \_’- u . - ._.' 1L) . x-'\’ U.J. ' . 1C‘ o 1"," \‘s'. '-"3' t'; f: ."'-,Q'rq..t v- -" o 1'3111‘9' .3‘ 0 L110‘ , _1—\1.L1\_, * , \II -Hlflle , K vlfil‘-‘ [2L1 51L; .~ ~14);le‘«r’ , 1‘\.,‘ J ‘71 \_, 3 Ev ' ' , A, F10 £10ch . A nuntefi of Pegsen3 "TG been *iveu t3 0 3'7 4 v- . _ o." 1 ~ i . l‘ .-r T: ‘ " ’ 7 0 ’":~ 0" C-%33L1Cfll c- twigir1‘ LQ'H .ttecy). r .xexe . Lne.‘j "'a“ -' - a - "Q . inertia e‘lleo . r" - . . A L M ‘\« .‘ ,.' ‘7 A 5 ,7 3 w 0' ‘\ '\ ."_ .~ . -- . .-.? .i’emave Lfle {3115113 1393.13.11.41 .. '31. .1 _ . J . - g3 .. , ' _ .--c ,» , 4- .‘.. - \ ‘ . . c-x91eu en tlenxl .Emjwphefle; t .tmcupre-e ._ . ‘ 3.1 , F ,_ A“ 3-. fl- .'_, ., 7‘ :3- 1- -‘ a in tne pl3t ~39 been 41‘ J77Lb en ti J\t tne a. ‘13 prexmnit n tugyay's pe;finny.l 113p from unduly influencing n buying iecicien. most distn’butore believe thtt p'fidicni l} a better hearing from : cim ittee than $354 buyer' . 3. To help otnre gnu fielj personnel the buying spenetian at heaiquxxtece Chriufii or rotating pert NKfilt of some ctw£1141c¢nni23ti3n3 tflwrfl' this im ortent because of the €313 ana ridiculuu :1 1'1 a compuxy‘s buying pol tztives to stare and fiell pe‘3\nne7. 4. To cap’tulize HQ the c:llective hr 1 C Jcenv r ‘3..- c , . '3 '_ 1,1 l. -3 L A < .I '- 1,1; 11: L. e t ’3 ~’ ~v' k! ‘L-L_ ’ ‘1 l ‘_ A..._U, ,w.‘ - ‘- ";yipf‘ 1 ,L/ Li xv Hellfiréfl L11 7 " .9 T.— ». ; -1 I. 4.1-1294) _' o a. v ,, . ,. _ _ - L. ,L 1) 7'9 a £7) U L o, l O '. \,*-‘- -\- I‘ ~ m.bluLn ct ' f .2 . 7‘ " 1'-1.1 31.1.1177 :1 1' NY .' f'v -a' "4 unlexgtquz . 1 '81.: e 231-411. t: F" ‘ v~ — . { O H RM :3 '. iv 1A1.~..- v V 5. To provicw for the orderly continuity of the buying opeL"ation a.nd the pe:‘petuation of 3 well trained and experienced buying stiff. To handle the horie of new products presented C\ . tPibutors each week. The Netionnl Association oi CT CH 0 di ETOQd Chains estimated that, in 1935, as many as 6,090 items Leere offened buyers. c Buying Committee veet~yed proceed in the same manner 'Ilth nearly 911 food di -tjibuto:s Cumoles o passed st‘nong committee :z:c::.‘t::e:-.: 31.3512; x-sith such b..__-=..‘-'.i.c in; 5:92:1- cLtion as its cost, e? cent profit, advertising pvogrsm, gDcxint of sale mitevisl, pvomoticnal gllofiinccs, terms oi agile, how item is packed, competing distributors handling Loinoduct, comp:ic;ble pcoducts, i: iioii shipped, and special features of the product. fest Ais- ~al.s13er1 to C?o:zp>u3te 1): odiu3t iitfoiimiti:w1 W W H. U' c Cf" o I U) i e ...2 s P CO CT‘ :5 (D H. H ._) H.) L) i I... c 1 (..J I- ._ .J r .3 t .. Cf C 1 ..1 re. Cd (-0» D \ >4. ( 8 U (‘4 O Actnlally this sheet is a valuable ssles aid ion it 31 Salesmen to menshsll 9.11 t‘: e pe: ti _nent in 3:1- tion not linxitxed to the product that the committee should have in arrixning at a decision. LVhen considei in; 3 product, a committee usually tastes it, iii the case of food it appetite appeal, consistency, side by side with co::1petiti*~.«'e Y) - o: '1 p‘OdUC3t3S. Committees usually get reports on the item iTJW sl‘ .. . . “*ltiy’ research labs or the home economics department. 13"“ " “”1: 11308 ZI.=3...LQ-‘.;, (in 11.373 At times, the majority o- no is“ l r‘ -‘ v ,‘ 4" .7 . - -,-7 r R: ‘2 “I" \ . -‘ Ff! ,~ d ’- 1" a, 7y ’3 ._1 vqr‘ >. < - approve ., a new piouuct, but, becluoe oi toe buye-'o 1 1th in it, the committee arrees to test it in a limited number of stores. These seems to be a grcuinq trend among com- :nittees to let a product prove itseli at the point f sale ‘whenever there is a doubt, et CB‘LZQ. so liave designed a test store group where such product tests tlxo iniyiiigj c;wn— . A 4— } - — e ‘1 A I J x: '- x) [J l‘v _._ L...‘ sire regularly scheduled, while it 3 Inittees select the stores at the time they agree on the test Finally, a vote is taken in a democratic pcocess and m 14? the majority appfiove, the peoduct is accepted. nrittee decision is binding in that buye1o ,innc cor'ignote a committee decision. Usually when an item is 1w—.~. 'tllrned down, ‘istributors Tequire WEHUE®CUmleT3 to wait at g - 7 . _- -.- .-o s- _. 0. -.. ' fl - o v'- ._. leeas sixty days befose yECDnfildefllHE the ssme item. 1.. ‘fln‘. " ‘. "I "‘ ‘, I“ c 1" L.‘ ,-‘ -. ' 3 1" manuiacturejs oiteo ass the question, n! tflie product pfiesentation, the l: ’1". -. .r ,1 - . 1 1-_,- . e n .1 ,_, .73.. , .° " 1.9”. 21 :salesman from tne home o_' ce: mCCQJani to E111 nigut, Ho Incest buyeTs prefe“ that the local salesman make the presen— téitjxln. In this matter, buyers uispla a loyalty o and a 5%nnpulthetic understanding fot the salesman who ”plugs away at 11113 Job, week-in and week-out, faithfully performing retuzilie duties. They believe that when a manufacturer h a n81” ‘ppoduct to be presented or some important in:o3mation to b6? ‘brought to heir attention, the local salesman and not Emofficial from the "headquarters" should be entristed with the r ‘iESSignment. Since buyers are the best judge of manufactu er sales practices and techniques, Bill Niqut listed some of the mayor errors that buye e1s believe manufacturers make in presenting their pio4uct and pr:motions. First, a manu— facturer should never presen' a product that has not been properly conceived, properlv tested, and properly marketed in the c0131"e1's interest. Secondly, a manufacturer must '"think retail." He cannot sel isnly think of the supermarket simply as the point of sale for his product. He must recognize that a store is the point of sale :or the retailer and develop his (the manufacturer's) nw**et1ue strategy and plans accordinxly. :inally, manufacturers must find and develop new techniques for interpret i n; to buyers the short and long range significance of their national and local product advertising campaigns in terms of the buyer‘s interest. Fer too many product presentations on ”sales pitches” have bee11 built entirely around product _L advertis1ng. Buyer have become immune and indifferent to r“. I , ‘ '1 Decisions of the buying committee. ine do Ci: 1 ns oi tine lNiyiiug cunnmiijtee.r;1«e j11s 533 co1nhiuir‘*'to ngunifactnire1mi ems the w.1 M11 js of the committee. This is a natura reaction tc>eaxpect from a manufacturer whose product has been turned 8 . . William higut, "Buying (,‘.o‘:1::':11ttees,‘H :ooo Business, // 1‘ __ . .—- ‘N f‘. I... 1101, to, do. 4 (April, 19;51, p. e;. .’ down by a buying committee. ImmeViately, manufacturers question why it has been rejected, particularly those who spent time and money researching and test marketing a product. As mentioned in the receeding discussion manufacturers a. J demand, and they have every right to know, why their product was turned down. Perhaps there is a good reason for the committee rejecting it, however, there might have been vital information withheld or even a quality demonstration for— gotton which, if considered, could have encouraged the mem- bers of the committee to accept the item. Again, one never knows what goes on in the committee. Just as a salesman forgets to show a quality demonstration to a buyer, so might the buyer fail to reveal essential facts which a-e extremely 33 important to the committee to consider in order to grasp a lxatter understanding of the potential profit earning power of a product. “‘4 r The one answer which buyers most often give a manu- fkuiturer seeking to find reasons for a product's rejection ii; the problem of space. With the shelves of the supermarket buléying to capacity, the question arises as to what item in tkma same category must be dropped in order to make space for the IMBW one. This reasoning is logical at the moment, but halwily suitable for the distributor who wants to take advan— tagxa of the vast opportunities which are coming to him via neleoroducts. Perhaps a better approach should be taken to this.11roblem of space and its influence on the acceptance 161 of new products. When one thinks in terms of replacing one product for another within the 8 me product catego ory, he might be limiting the dollar volume and profit he can ear: by making the switch. For example, suppose a distributor was presented a napkin which was revolutionary in quality and designed to increase total paper napkin s.ales in the paper department. The distributor has the choice of buying the napki 1n and squeezing it into the paper depar ment or else discontinu11 a W another paper napkin brand. Host likely, the di: tributor elects to discontinue another brand rather than a” another product to an already crowded department. gain, it is this idea that something has to go if a new product is accepted. If all of the napkins are selling well, the distributor may be reluctant to discontinue any brands and may even decide to delay approval of the new napkin. This is discouraging to manufacturers who have gone great lengths to perfect products which will product sales and profit for dis t1 wibuto Perhaps the fallacy lies in the distributor's reasoning that something has to go. Perhaps an alternative might be to enlarge the department or look to other product cswtejo11ies for possible discontinuance. Too many distributors do not go beyond the category in which the new p11oduct belongs to look for products to discontinue. There mi; ht be a possibi— lity that the new napkin migl ht earn more dollar profit per dollar invested than a certain brand of canned fruit juice, l 1 d ’T' I“ A ,~ ‘ fl , a “-1 . v‘ ’1,’ a“ . 1‘ ¥ ,7 a "~ , ‘ -v {:1 -' 1,!“ f“ . (V I --, I . 1 | I ~, 11‘”. :1de pQ‘.‘Ide;‘, (13;; I. OK _‘ 0-;‘jll': .11 Cotllmij . ‘1_L1-C‘e 1-11.4731101131L w \J ,4 \O L) f are interested in increasing sales and profits, this searching out into other deparsments and developing a metaoa f H» 1 of compar n profit contribution per dollar invested o1 all c the products in the store, with any new product might be worth exploring. v An awhilysis Cd? the lkni‘s Sttkhg, publixnied tar Wiper- market Merchandis1n1 1n 19cc. 1evealc€ that jul items ut of a total of 3,431 stocked in the grocery section accounted This is only 11% of the total items otocfel e’1ni , ~TT f the profit. Perhaps the 3,#31 items could be ranked according to dollar contribution to total rofit starting from one and going all the way down to number 3,~jl. Then 0 (D (_I ’ *3 L: :J F.) fl d CL 6 "' v 71 ‘3 ' 1“" , 'r' I ' 1 .'w‘\ ‘1' ’- 1'w' H." ' ultn this master saeet, buy1ng cohmltt- o ' " 1m to net ...._ \4 a 1! l-) . I '~‘- ‘V ‘V .-. {—1- }_1 x w potential profit contribution w’th sim- 1 ‘ _o , .1. 1. _ '_‘ _, ,1 .1. (‘1‘,\ .' f: 1‘ 3,1 _\‘ .0 ..-, [f o I_‘_‘ ,’_ «,0 J_ __ , Inine whether a produCt should be leCqfltluUei. e11 e3 nlLLlfl I ~ . . or without the category of-tne new product thich has been r‘} on «,1; r“: r‘mo'ne I; “who '1. ’3‘»? (J ' L.“ tor-1 b t!» 1.70 wr'm ~ ‘w r; 'v 3 '3 1.7“. fq’] L.“ .... g; . uk. _;_..I\,,_. 1..-.... L; -1- b-v . 1L.) _ _ 14}. V- ‘J Ecllla) ll”. ft; ,Lao-J .13.... _j’! electronic computers capable o1 ranking individual items by gxrofit contribution, however. as yet these c mpanies have P a . 1 — - - , jThe LdltOTS, the Fabulous Jon's Study, sapww o 'T‘ Nezmfliandising, Vol. 25, No. 8 (August, 1900), p. Y Tfliezfie committees t even cent item al1. ays kept an ¥-— problem CCNISLUHGL‘ It s CQHCGTH ~ 7 C ‘VAJ I.) V J..- on any an item in k that over t? n7“ V- sisted and warehous 1‘3": :L concerned times, analytical term w more emp n as procedures are becoming being pla have bee urned down dem: Cfl 18 ced n occasio Cl 1'18 " I test marcet stu consumers initi n product for die :11 Lie—...... .‘ when oi _' ,1 8 proved that y bought and test area. Certainly satisfyin in mind when buyers Tu Le nev 1nd. interesting to ing buying distributors 1rder to take on Io-thirds of the umittee members ing operations. 21.1171 th Marketing: a hen on the "\ VI 0 on space and all, it is the sales whic- ' V‘,‘ where to put it on note co"“1tteco thing 1'} (.Iv the survey ‘1 \.\t v . 1» whicn fl- in te1mu3 ne 1’1." 0 N e . average buying la ...; . r- ... ’1: 1E l O I :1" 1* - "a 1‘ 7-1 uuilbUbCi GCLSDfl (P, < (M... - 1., . ,. o L‘eplli‘C Z H.138 L ,‘p 4:"... products, CO responsibilities Only Elf of the Merchandising- not enough 6 L “J '1‘?" \vV-L ‘9 the p CTGSS ”fiOLMlt 10 Perhaps objec _p 1, Q1 pace lnrge per C filfiffiv 1:162”) E; but the ,_ 71.13.111.315 :WDG i-ecntififlxig :nxove; revealed mmittees con- in buying reube*~ were Perhaps this sible for be putting t1e buyi 1L sis much empha;i :‘l After U: tive of 10"Notes on the Grocery Trace, J.Jalter Earketing Feseagch.Department, Bulletin o-bl, March 31, 19cl, p. Q. ‘V ‘ ' - \‘fi r\ rfl 5'. ‘q a x", ',,1 ‘ ‘.4 \ fix» 1 :1 '~ ,‘§ I\‘_ r‘ *A food eiStributoL:.tnml all Lepa-toezhx..uumold be 584381 to support this goal. In some instances, mijht not the tai n . . um -- a. .,n.,,- none be wacsing the dos ? Certainly seems that “my, Judgin; i. o C) x.) the buying committee decisions these day“. 'v’a W x a‘ ' 9 _1 ‘L‘ -. 1:11' "1 [1' n ‘P‘ '-'i ‘. (7‘ f“. "‘ .1 " . 1‘". " ' 310 mel C Lip any , belie V88 ole-Lt ;...-;11t,l_-:.€__,b1}..- 8.3..) ;;:.:.-.,)L.1_J_.._1 De L- l ‘J 1,.._.. ..‘. -.'.,~. toe re: :xn1 why btuoxi_ K I U” [:4 are H \ o) for their approval. Many products presented t. mittees have been mark t testei, end. 1 ; ‘eoult. *‘ou- factur rs feel confident that they will be success- Mr. Arney advocate es that buying comnittees tell manufactu“3 . . . SHOT“; 9.0171 (J U) ( D !_.1 }_Jo k J (D 1 p 0 Lu . N ’ . — . . fi‘ '4' ctl y nny a pro: t is regecte . r would do two thin s: bHV1rg c mu’tteeo oulz ' 3 t1 it the proper app: oisetl to the item before rejecting it, and secondly, the manufacturer wou had been given his product, whico he might have spent millions of dollars We elopints. This helps the m~zuoictu , ll know what to do next. “'1 Rho. IIa.r:riusor1 r . Ihiruiiri L C; Htti n of Wholesale ers, urged that dis ributcrs *4. :1.‘ O O Assoc 1! should accept an obligation to become market enlargers. M 1 1'“ ‘1" I 1“. ,‘fl , .1 ‘1 T"!’ “. “4‘ :, ddQQGSulDE the lQLl nation 3 11 ’e ;l In this role, distributors would make an effort ‘o find the H O ,_ 1 ,. _ " m ‘ _ ‘~ “ “ o ‘ right’ new products to sell and promote and l uo1n them as opportunities for extra volume and building customer 1]-,- q H -1 r“ ’1 H " r fi— I" 3 n ‘1 r. . (-1 ' ‘- h. D. Alney, A PLQPCQAl, .upe- ruet ae C--mJl,1m~ Vol. 22, No. 2 ( ebruary. 19:7). p. ‘0. fin Q .Q 1 I‘qI_ I ... 1-1x, . _ .. ,nr-‘—‘,‘.‘ ‘7- trai 10 into the Stores, rat: ler than neg rd tn He declared that manufacturers who do compete' make large investments in product development [“1 t \ 4 re l 're <-..— H , .‘ - V . " .:3CZ-LL‘C11 53.113 ..'_0' 3H entitled to have this pm° duct see "the li“ht of Cay” vitmvur so much resistance from buying committees and individual Mr. Dunning suggested that distributors tative stores for testing new items. "It see‘ \ C0 aid the Scott Paper Company executive, that, in these new products lie“ a gre- which distributors are lookinL f you can find within the conpines o1 and at a price whic h will keep costs prices far lower than they are today literally have to ”force" he; products int by expensive T"“ner’ :s.1 h) A novel approach to solve the lack of p by salesmen diring buying .ommittee meetings b'L277el1S. use ..Al by the Washington, D. C. branch of Saieway Stgr branch experimented 1th the use of tape recot, 1'1" salesmen to be hear: by the committee. Nr. 111‘: "" ' O selli Til '1 Ill 1 1 _o 3 C1 .1. e I Sm \ ”7 Q ‘»V\I‘J ‘ (38 . "18 "o represen- 5‘. ‘qr‘ r1 1" ‘Ha “.7C‘ -. .L ! LK. J1]._ 8-- U findew“io, 'Vice President of the safenay branch claimed that the tape recorder alfords the salesman an opportunity message before the buying committee, and at t bring Safeway management up to date on what 1“ food business. Mr. Anderson pointed out that to he s) E”. e t his .., . same time 1'18 13' in the should be used with tape recordings, as it is impossible to listen to all sales presentations because 12" market New , Vol. 10, lIo. 12 (Na rch 20,1961) Closer Supplie e“, Retail er Ties StreS' Super- ' . ...- ’ O limitatitwns. Only rimnl the iter;i¢3<:onside:€fii‘to'be of ficient importance should a request be m7de to use the recorder. If this method is successful, perhaps other Safeway brar ces will find ’t ad wntat" ous to use the 13 recorder. Aside from the sho H7tc7mings voiced about buying com- .. mittees, they seem to be here to stay and manufacturers has f1 better learn to live with them. If the number :1 new tems k.)- continues to multiply and if the variety of products sold in the feraae supermarL:et C7nt17ues to mount, it seems quite likely that the importance of the committee will become greater gn7oducts (uszappoifinnrities not pnrditrns, then Si7ffllflilfl sup— pliers look at buying committees in the same frame 3: mind. Actua ly committees offer three unexcelled sales opportuni- tie" for manufacturers: (l) inere is the opportunity to get a hearing for a product that is p17ope1 ly conceived, pr ope 7ly tested, and properly marketed in the cozisumers‘ interest. (2) The opportunity to capitalize on and get full value for the trade selling job that a manufacturer had done in the {xist five, ten, or fifteen years. If one manufacturer has ‘worked diligently at creating warm trade relations and has _] "3 -- "m ' Q ,_ _ _ O , 3 3 Safe eW7y Suppliers Taping ltem Sales Presentat1ons,‘ Stnrermarket News, VOl. 10, No. 3 (February 1, 1961), p. 1N. a record of good service with ”oneixcrLeto and chain store ope17 ators, then this manufacturer has no cause 1or concern. On the other hand, if a supplier has not done these things, then his competitors have an important advantage. (3) The last opportunity and challenge that buying committees offer is the modernization of sales methods. There are two areas 1n which manuifactu1ers may be vulnerable and which require p immediate attention: the training of the sales 1orce--buyers report that any salesmen do not kno E'w coax, and whine; and sales pl.n11r" techniques. A11 super— markets are not alike, neither are distributor organizations. ms h -v o .. _ OTB,’ _71 , .. '\ _H \ I‘v'_ ‘3”. r. .» ,7 -.. . ' , ' ' ,"~ 4‘.“ _o r. “I _o _{1 1ney all d111e1 11om one ahct e- and because of bLlo u11— l__J 5.4 ”I (4.4J \ K 1 p- p—J U CT C)" (D {—1. k} V L, “I LlJ {.41 l—do CT fere nce, they cannot be so the same tools and methods. For example, some buyinr com— mittees are bored with the flip card and/or the slide-lilo presentations. Distributors want to be sold as indi71du1 u. If n_nuf1Iturors are to be successful in the fuIJu: e. they must know the differences existing bet een distributors and tmnv these (ii ffe m'xnroes (Hui be :ai:pted.ixo the nyau1fzctu¢€x¢‘s advrntiue The importance of buying committees can be summed up in the word? of R1 cha:d G. Zinlmerman, publisher 3: Super- market Merchandising: No product or promotion chn gain admission to at least 83% of the nation' 8 supermarket's without the express consent of the buying committee. Yet no more than 800 of these buying comnlittee members pass jud:- ment on products that go through 7,2Ul stores imi. lv11, lio on according to the resetrch - annual sales of 7.5 bil ”1 fl . ,1 ~27 - ..‘r‘ - 7" "' .-\ H ‘q~. -. a sanflp stuc1e1 by Inwui.1snc uGXCH nui 1M2. . . . Y ‘ . . ,1 w _ ,,- .' a; 1n 7 " g" "I "‘ ,q “r 2"} a 1" 2 x :3 ‘- 4'1“] ,., ._ A V \ - .. u . . My \, r - \. ..1 1 He <3 is IL“) p316; Eo ::_tcn {,1 t .1 1p . »Cc U ' - . -‘ ..r—V /‘ '1 ... v\ ‘ I —- \ F‘i manufacturers. 1'vmol eta11111 is n ion e 4 lccje ’ CL If'15_‘i.3 L3- Zfllfi’fife UL 1’11." EUlffl? is :Lzuass , p 1 o A ,— __V- . o1 r1.3ectc-1's of O 1 C: C '2‘ federation of ap: oned grocers. industry just as the grocery monuf: production ind_1stry. When the boar l :— 1‘ c) H O P' :31 O .L-'- U ct :33 C] the name bra Iii co1porations of gn policy, the‘ would so we? imilar nigh policy makers uio s ."ittees. . . . In the last analy n c p; 7 H ‘-—_J 0‘1 ‘N’ ( H. d :2 . 3 (D :3 (D C) C! (Q E committee whicn holds tne lease on that c' Picture the dilenima of the focc 11t11butc_. “day Manufacturer. are ma1keting new products for sal at a ralxid :C1te. T3115 INGCUlS tnxit, in §U°diixiorl t;2‘the ‘traxkiticnrzl tasks of buying and maintaining balanced inventories, buyers and buyi n comm1ttees must devote a lot of time to the evaluet1cn of new products ans tne re-evaluation o ‘ ‘ 4" AW" ’ ‘\ V ' . “ ,‘L'fi ; (N I 1.T‘. h l\"~,—‘ "Fifir ,* ",‘I V ones, auunp'1’1n1 nem 1tens tint H1ll sell an; mane money, (H _‘ 1 I .0 '__ '1 “ I ‘VO 0 a I‘ _‘ ~ ‘ u f" ‘ ‘ F '1 aha, :lnully, Q1sco>n71nu1a, L: a tw t 1o n t sell. 1ne Luper Valu Study,publisned in Progress17e Grocer 1958, b1i r—4 ..J 'O H 5., CT 1, ,3 x 7 t D ”O i J ’ J (-3 U C? (L) H (D C J Luct pic tu1 :2. the buy er's level: 1 r“ .3 .v- I -~ ‘7' 1w mzL ts la weeks Per been Number Offered to Super Talu llE: 9g Number Accepted 233 24 During he twelve week period, 1,152 nex products were offered to Super Valu, Proiectinr tnis fiity-twc weeks, this 1U RicM ’ Super Inarket p. 00. r‘ 9 L9 IteCLLS 2ib o1” C I. out 5,000 offerirgs year ’1 the average number o1 items the avergae superm' If Super Valu any other today. or oréq‘ accept every new item offe ed, stor and is eh“ woulC have to double each year. Obviously, ll products were not accepted bu’ E33 iten:3 .ere. over“a ye:u?'s tirue,fi7upe:‘lflilu.-unis cxaiut l_“_:0 to their pre-printed order book. This i the i salesmen in tie sivties.“3 A sign.tuwngg in {SE} 33::ce :d‘EkaiZC'nt. , Siuoer"Juli1's tnflzncli irlliiIRie,4oo lfij, liicEw ipijly the salesmen's approach to modern selling: “"f sell your product to this c:rrpg;V, outline our a way that it will snn us row we 0“ un « be Emmi so that cme fill be sigma gnxigiiz to bur th1*1 sign accurately points which salesmen must follow if they "1 the lQCO’s The sales mf.;n' s role and obtaining the goals and objectives selling study and determination. be broken into two main areas: iriding and information upon which d _tors can r: Jrr“ " E‘upelfl THTE; 1e Editors, furm3ticni Cr: peiuxinern; u". r: 1.7;: ..Ak‘, _\_/ A " ._ _o f’ ’31:;‘8 3:51.. :fil. p‘xxnzcts “,‘ “... ,0. '_ y; ; iELlng de_c“ibeJ ‘1 L1 "'~:1IJ i;:> chh Ln )ucr 1 y -~. ‘ J“ J l] 38 L2 ‘3 v“: 1 "in n f‘ i j 1 3 I», J \— I * fl 0 . 5' 3 - 1-4 1 1-11 A {‘4 *J. “.1. tr; bu S '3 L1 Tl Cl ,N ye Urocer. Januar', 1958, p. 6 buyirnjenri merwflnurjisijuj'aec1s11nrc and 13t1t1at11njtraeas (J £11 which will d sales and profi business. Buyers and buying com1t ittee me wb r‘ of the nation's leading food d‘stributing organisations are execu— tives, and. as such, are expec ed to make decisions. They are trained to avoid emotional thinking and stick "o the lac s. Belore any skilled executive makes a decision, he C?“ U ’3 ( I’D k I (’3 (,1 91 .—J nuist ::i r st: feel. cornfiiierlt thaj331e iris ch.:iA :i3n A p.‘ which to base a decision. After he has made a cecision, he Hurst km: suawe thaisiie nx‘ie 1316 cu133ectszane. s3 :; resnilt, i3 modern 133d executive wants and neels help in making (D C? (W ( }_J (D cl (i: ( ...) C1 '0' 1‘. Ho 1 g 0 S p. (D l. (D decisions. Herein lies tn ;oday's salesman must be an expert. He must be a con- sultstJ‘to his curstomezns;3n pffiflflllCfilly’c,M3?3ttflJmT from to shelf management. He must be qualified to present and d'scuss every detail about his product, his 11rogram, shipping date, pr.i4£x3,sdiscounts, et cetera. He should be able to show why n1s products are pro the distributor to stock and feature them. Finally, the salesman should be qualified to o sales and increase cons uve ‘ traf' suggest li margin tie— in itews that c:‘ n be fe CU‘GJ Jitw his particular products; and provide c:~eati7e plomotion and advertising ideas and other helpful services. Salesznen can help bu3 rs structure tl’ e burlnn situat on *— wheniflmm/make buying decis ic 18. They cs n p: esent pe: tine nt infor.m :tion to help buyers feel cgwnflxhnit to m3xe sound decisions. Eyen3uslly, buyers will le3rn to "lezn on salesmen who help them solve their most pressing problems (D t—lo (—1 H 5.: CT‘ H. by presenting fscts 31d d3t3 3nd so s 13uctu3fi 3 th so ttmfl3'buye133 c3n ijitelligxmitl3’:u1313mm3 their3pxxisi ble courses of action. Tie xuestion ojioes. *h3t 1o buying 33 ittee me he‘s believe to be the most import3nt fuctors they the elves must besr in mind when conducting their business 3ctivities on the growth of the 'rgsnisntion. second, keeping pace . —\ , ‘ -' aw «*3, - 12“ c1 1.x ’ -. r ~ «0, ~‘ Va -. 1 T: .3 4,..\ g, -_~‘ ' r, —. .2 a V . Wlth Competitors lo wn Goothlal 13ctofi. 1oo1 _et3 llhi sseeims to txe 3 fr litic thizsine 51.x; wiifii quixnily (n.3ngoxi; ccnn- “ H . petitive con3itions. 133d distributors do not like to £311 therefore, decisions must be nude which enable distributors to keep 3h 3d of competitors. IDITJdLMBCES o13 plTDHK)tl(N11]. p:mog:wrn;3, bniyiiig (lihtfiltlYBETB exfiiliuz the program in ter of its value to the consumer. They vxnit to compare it with competitive oiierinss. 1: they want the facts upon which to bsse sound decisions. M: ..J e PH b—H (D ’33 Actu3lly profession3l selling s not new; it is simpl :3 refinement of the most basic aspects of selling. The :irs , there is the growth :3ctor. The entire food industry (1) lies the fundementsl concept of professicn3l selling. asking for the or er. Equally as important is the ability of the sclesmun to handle objections. In other zones, the basic steps of a sale, i.e. the approach, aeveloping inter- est, cpeating a desire to buy, and closing the sgle, still :3 apply i‘ pnofessionil selling. The one t l . . _ H . _ ”I ., fl , 7 _. _, “a ,_ _.h ixive (leflhlte Oi Imooe;n1 coznnxne;‘. l_J LLI€BQL£XICL Ll 1 o , _ H H ,, .~ 1 ,7 -‘ I .-.... F: :3 - " f: .- ,7 _."a o H _n ,_ “ ans figure sppsoscn deplngu .; lltt gnu l1 n'e looi executives. Ekumiomernxilly, in ere :gre professional selli g: l. Knowledge-—All kings o must know all the facts about his product, market. consumer buying habits, customers, et cetera, before he cgn effec- tively sell distributo? executives. 2. Setting objectives and goals. Salesmen must know heir own problems and what must be done to solve them. 4. 3. Planning steps to achieve these obiestives which involves applying knowledge to these ob'ectives. To the professional salesman, this usually involves preparing s Visual,written presentation for buyers. k. The sales pnesentation must be made to the "right" people, in the right mood, in a business-like minnen, with .an air of confidence. E. The llo"-t-r\ “h is the final step Th,s involves calling on executives to make cert-in that each understands the program an1 the part e’ch pliys i4 it. This may inclucle coordina ti ing the program ith stofie personnel as well. The success of professional selling lepends upon the manufacturer's information to be y to furnish salesme ith pe tinent rpr sated ixito ..tleu 13°e EMit t1 mi orul written repor 8. Some manufacturers use s:les plaise'i th1o ugt.l hout various sales diVisions to maintain 1nd pFQVllO essential facts ard data to the field sales f:rce “me planners even prepare individual customer rep:r a of a confidential nature for presentation by division 1 11103 1}}; :1 LAM _ers. One weid cfi7,p.* Jfol” :37, Ho. ll) ODctobezg ii}; if «\J (ljfi) ifChurlcs R. Boyle. Bulletin No. 2. Kissouri V.lley ‘Valley Foof Distributors AssoCiitL>n June t, lgcl, p. Z. Profe.'i)nel sel'ill should be used at botrx. the head— quarters and store level. Grocery manufacturers should develop a sales force equal to the ‘ask of making key con- acts with di nibuto. executives in order to meet the q demands of modern food distribution. Hr. Everett smith, or] ° ‘ " ‘ Director of the KcKinsey mr;:%.eging researcn llfh, pointed out in a speech before the Fo1ty- ninth Annu: l fleeting 01 the Grocery NclnuLL‘ ictr3enc of America that today's cistrict sales manager earning $3,000 a year was hardly able to form a relationsoip with a distribu‘or e Aecutive eafining 33 ,000 and that manufacturers should place executive caliber sales- men in the field apable of dealing With pro lems on an 1...: (,U (3 executive level. E. H. finderson, Vice President of General Mills, had this to say about executive type personnel run-in; the L... nation's largest supermarlzet b0. Here's one area that can put money in the pockets of the lanuiactu3er. r.Ve a good hard look at your coverage and the men VIhO are calling on the large supermarket operators. The manage rs are big business men, not corner grocers. It takes. a diff ' a " o as the Super Valu study pcin nted out to d. with these executives. It is imperative that be equipped to talk the language supermarket understand todc‘3y. 19 18HCurb Costs, W00 Public Gfi‘ November 19.195!) p0 3”" 19Ibid., p. 36. Manufacturers are beginning to realise that fewer yet more highly trained personnel will be required in food dis- tribution tomorrow. Mr. J. 0. Peckham, Vice Pres ide Lt o the A. C. Nielsen Company, declared at the Annual Nesting of the Grocery renufactu*e3° of America in 1953 that a l the United States do nea: ly .— mere 12% or UM,500 stores iv 70% of the nation's food business and estimated that by 1950 fewer stores,or about 3o,000, will do even a greater share of the food business. (This estimate pp°fv r es toe 1990 figures li U '0 ,o 'Wr 3 (T) CT. 0 \o O 0’ C? (D l J H '3 ‘3 K; 11 C0 d . thesis.) Therefore, manufacturers will not need and cannot 3 U) ’3 -/ _W " '\ . f ‘ _‘ < L'N ’__ \ _._ _..‘I ‘ __ ‘ ... .: Q ~ -- alien: to cover thousanfls of stores represented in the m 0 q ' -- w /' '. ' L'v‘ \ “x "" ’3' ”I *3 J' n, /‘ *1 r .‘TV - 7 ~ — ‘ ' ' of the Stores dOlfla only JO; oi the food sales ;oiume. Sidney Johnson, xriting in '9 mr. Peckham by stating that suppliers will proba 1y restrict their store coverove to the top supermarkets and reach the renuxmrun; stores tth>Lth ixnolesale1fa:dmi thus {warniqy reduce 1 F0 their cost of _ellin~ The cost of maintaining a sales force re; surveillance if manufacturers inte Ki to control selling costs. A study conducted by Sun's :ev doJ. 0. Peckham, 'Plannin: Your Marketing Cpo_itions for 1959 and Years Ahead, " Address before the 50th annual Zfieeting of the Grocery ha nuL3 actu'ers of Ame rice on Novem- ber'll, 1958 at Waldorf-Astoria Hotel, New York. 21J. Sidney Johnson, "Kore Complementary Mergers,?e er flalesmen Due in Next Ten Years," Food Business, Vol. 3, No. (july, 1955 , p. 16. ‘sz r) '3') '11 111 IncLL LL ..J 19:}, estimdted tth eLch solesan's call on 1 - - ..1 .L . a L. _ .‘ "r 0' "r _ J . . ‘-‘_ _' —. :1- iood store cost the anuLLcturer $l{.:4. LLJEJ, tuLs L L :2 . - is closer to $20 per coll. There Lre oo any stores sales volume Lre too small to wurrnnt s sclesan s cLl Manufacturers wont salesmen to spend more time cLI the larger supererkets where merc‘n LJLSLLQ Le‘"‘:es pa formed by salesmen resuli;iLLLU%yLUer soles, thereby jus Obviously, if monuLLctu°ers intend to employ the pro- _. fessional approach to selling, they will need better trained 1 and more skilled s slesmen th Ln they hove now ’f tney ore to secure distribution for their products and keep the interest of food ristributoL‘ controlling most or the notion s Logd Williom Applebs um, in on article oppenring in The Harvard Business Rex mie: states ULLt less sell ir : will nec SSLry in the retLiler-wholesdler Lnd supplier relLtions of the future. Toe Lcr“*er type snlesmnn' will be rep.. by L retoil mercthdiser who Hlll work out special disp o , ‘ r" ‘." .'.. _. 0 t . r— .. a” - -.. —’. (- ,r'f . f“ F K.‘ _ Y_fl .4, I 3.111 pL‘OLHDLlOf‘id £33 $33.18 3803:10de . J £311] ;(.w;',.-;,e_" 1', .ygTje his book Sellin Groceries :et il, L statement which 1 similar to Hr. Applebs m's reosoning. Ir. Edser believ A 7 , - H I“ r71° .7 .-.,“ ' IL L? .L my ..L lLonan LieLniy, Ch; Lllhe LnLL InLe LLLle..neLL, 2’7 o o I 1 (‘1 ' 3Williom Applebaum and DLVLd Carson,'”oupererke FLo ce the Future ' HLrerd Business Review, Vol. 35, Ho. Cfie :vfli— —Ap1’flJ_, 193;),p . 131. r ... . em and Modern Industry, Vol. b5, No. 3 (Hitch, I95/ (,7 ts I" I L L: ttmit tflie ifiititre isalxasnuui r:ill.loe"nrne fl oix:t:#ibxr;iori eJnQeLTt, (..1. a 9 C C) u C J L_) C i C, I _J }__J 'r3i11ed and e1uipped to show Key dis Imercluuid i; eaznore {yrofdixiblyrzuid 1J1 g:%r;te:*‘/:1LLre . i ost salesmen will be able to set up complete pnwnwct departments as we ll as compe lling di :é:pl';2.ys;s in {fillpe3111113118 ts . Turr'led out to pasture will be the old drummer whose stock in trade r—‘y‘j I R ‘ o 1..! was tne latest crop of funny stories with a final ap 51 , V _ . H 0 ‘ - A.-. ’ « I 1 ior an order Just to pfove he'd been around. This decline in "hard" selling or high pressu:"e tech- smeh is not only (1) ? p. (l) ni1ues 3 s ociateci with the drummer typ‘ characteristi, of the food imid may but for the economy as a whole. A number of important marlme ing p‘ocedu‘es atti— tudes, and tools have been developed or pejiected in the decade since World War ll. The media of televisicn, use 31 improved pa Lckase design, motivation research, supermarket marketing philc sophies, m1t1e11tic11 concepts and methors, erpansion of opeiaations research, and availability oi date processinr equipment are major factors in re-exphasising Sales e1 need to be well trained to quaii dising experts. The selectilg and training cf the right 10m Raser, Selling Groceries Retail (Philadelphia: 3 Publishing Company, 19:5). p. 3o. 31s Hard Selling Out of Date?, " lazaaemcnt Review, “o. 1 (January, lQSY), p. 33. Jr., President of the J. B. Williams Company, revealed that each mistake in hiring salesmen costs the co:npa :‘1y about $6,000. Add to this figure an estimated $30. 000 difference .3 71"} I"‘.’\r‘1 tlwo 5.": '“ tq‘yrq to)? / mlced Ilakj-Ln'l ($4.1I-J AAKJ .LaJ...’_J x,~I‘LCJ xDQL-l J. |.(_Jo in sales between an ex 3 the total cost of one mistake 1ppWDKi‘ tes the yearly salary a . 26 - _.- a. . 01 a top executive. hr. Lipscomb believes, as do many top manaLewent e} :ecutives, thzt one of the most important objectives for top management is the proper selection of men for key jobs and proper development within these jobs. '0 I“ \. Business boils down to Im~npo her since m3 n gene: ,1) ‘l /’v‘ H “I, *4. t 8 ye t t .-.) ’ things do ne tirou*h people, the success of ma1»iemcnt is based on the caliber of the people employed. When setting up training development programs, manu— facturers should endeavor to emphasize the “service concept" to salesmen according to Sidney Johnson. Mr. Johnson thinks sales men must under sta a how to increase the sales of an entire commo o ity group in which tneir p: odLm t falls and not merely present retailers with p7omoiivns or merchan- q I 79 . . 1, '. w". \ r :_‘ . Fr 7 1* . 1' . -_r A 3,7!“ r" 7‘) . r (‘1 n3 ideas UJlCh emphasise ohiv toeir own b_anas. tales— U H. is D; H "- p 7 7 a _0 ~ H , ‘ «" ,r 'x ,"v ' f a :A. ' ..L ‘i'l .1 1L1..IA‘ ‘4'e -~‘- 1. K: . 1 men should be trained to assume a sea M attitude so hey c;' an unde: :3'and problems of supermarket f F‘J (D l1} (. ‘3 i Q] (T (J (D l l P. H ‘ 3 K' (D _ -. , ., - ,3 .0 ., , A operators regarding brands :n r4 o them. Salesmen who can preser t prom tions built around hf dtid Walzer, ”Signif icant Food Business, rood Busitess, Vol. 4, No. 1 (January, 1956), p. 21. 2” 1 _ (J7 idney JG 3311, 'How to Overcome D Amitaggoriinn,” Iliad Pn.w nir ”(3 s, 1,3 l " n8 p. (- O 17.11081” , 19:: ) 7, voriety of profits for dis important ro e offering promo H.) sales 0 Norman R: described the s are humo n being? consideim te tre their problems Bringing t Ho H. 0) Ho rrison Dunnin the duties of Vice President in chnrge Scott Paper, Mr the United Stat organizations, store managers, _ ..0.,. 1 ...“, growing cosine headed bus 77 V products designed in tomorrow' tions a porticulor supplier' Lbb, ales el to _c1ie17 rvivim tributors will undoubtedly super ,,,,, licflz‘tini tmiise salesmen .71 .\ .. whose only purpose C‘ 1""! 1 O A 1'1.11::1_ 11163170 l") Y? O vlCG Presiient oi Ste role in ne sentence, "Dis ributors (J :.on's _- h. .w. “'14,. r ., ,.-,_ ' - 7. respon. hits dppreCiition to LJJ and the y C" k) Ltmcnit {M1 the p1:n_t of‘ljhose E“ “e’ een vnno see t t3 solve them.”‘: V «J and nelp t e“ ...»— section fitting to discuss the ob.C ervo tions of 1% of the Scott Paper ComponV. Upon assuming of marketing for . Dunning 'roveled five months throughout es talking to countless hesCs of retoil f'Jd merchandising men, superviso‘s. heid buys“), and stock cle:1:s. He found the the :ipiily and i dependent groups contsin sound. Jolif, iii—sssznen :d1o vxsit ix) cornrict in ell“ -fikuirs qr) |.Jk)q of honesty, fsirne qu li the Their patience is ”orn thin by houis ;e so— -1 H 1 '1 Y ‘ " called order tuyer salesman who call every seen ior an 8Iornon S. Pobb, "What StopNO m1; thop Pxpects of I?alesmen, Food Bus’ness, Vol 4 (Pebrudry, lgiu), (.2 o p. ordep. use thirty and rarely if eve' 1 C13 )C L) Q (.44 distributo: )unniilg tlken by suppliers better serve dist? 1" gnu actu: ‘. S b “D tn m _‘ 11.11 13;.) .1 1 {I t3”- Salesmen n to distrib gfiedt “ pni 1" Dunning 3’1 ‘ . 1 ‘1. better job advocated t3 qufi ibutoio e-. ' 1'1 :‘U. 1:1 138 t y elimi t the sxke Filed t0 'Wfi A ~L \4 pp33tud3 3; H ...-Ili—S p01? J; 211(63 13113'i r::f J j— filly/1.1L} '1 fv ~. F) |--“L 27‘ L'Au'LL . £311 " fic, eed to be 11t:ués 'tJ e3 bonuses losaphy, concluded ‘ Q develop 13‘ 1‘“ 110 51‘, 4' me and that the ..-.-1 - .1111 111.2 171. '1 _. 1-». MG 1..” i: QZLj Julu be ...) 7'} ‘1 J— \ Hier] c: '11 J’O Q '7‘ {’1 Qp‘.v\4 p ,0 ,_‘ :3 .0 .. 1 .1. 1 13.1.1-1 —\ 1.. , - , _1.’ e . Tney con '3 (.1. truit tiie 77"“ tribute: :1: e full Of lesme itin 11 {_._} L QCA followir '. v. \ "-‘ - W VI r .1 . . A 1. x- L) .11... V ¢ 1.1 db "V 311' . o e; , 1 --‘-~._. and ways t xceen eed cept e '\ msre effective 111.1133 fl- -:Wel ti31-1ipc bet We: 13111.1 tuitio:1_;1 be 0 :.J1.A.l em J to —~.. ‘-’\J 1‘» I -§ ... . Juli 20 _r’ .L (3- olngafzp.; , Virginia, :1 ’1 c1111 Ewanulacturers June Dunning, t3 the 1e”1c., t“ - _ .-\ ’2 O 7? ll Vice Pi'esis'ient cf aid-ve:.3r W111 138 meeting 0 I l-“‘ t: {‘3 , M 138108 qust quu (3 "‘ two 1'1 ‘ Ccitt Pap West 1'1 All\( ‘1 lity, 8:“ cf the Groccvy Qulphu? Springs most buyers Uould prefer t3 nail to the talesnug’c heme or office. But the Smart men, the manacement m; .H_ , . -«H r7 . A A t m 9,3, a . ,‘~ ‘ ce. ', V.Y’ ~ -. r .l ‘ , c1V1li33t1on 3nd m3Le Ameing 3 bette_ pl ce lJ n3lcn to The good pr3ctioner oi the 3rt o: sUlesmUnshio en- desvors to unde:st3nd his customers' ”3p1;;t1 n3. wants, needs, motiv3tions, 3nd hebits. He tries to alter these in such 3 wxy that the customer will crove greater s3t13- fsctdxnis. iHo.:e ever*, the ggood :3._e31:31 kncnns t ed: the (NAS- sxllesnnni kium s thllt tzma CU.W..lYeT IWJSC tma the :huige ;3_ the satisfections 3nd not the sm"l esm3n. S3 esmen should possess I::J cert3in troits to become 3 success. Sony pe hove 3n3 lgzed the successful s31esx3n in 3n effort to precipi L1 - I ~ r \ ’ -. , . " ~n .' \ I ,~ ‘ ' H ' 1 .“ , *0". ." (- —" . "' - f u > 1"" these 'n3r3cteristic3. O: the mhlULUddC Ql {u Llllem dis- Y —, 1 'r A r “ » ‘.' r“ ‘ ~7."' ".' ’ O!‘ -. I, l 4/1 covered, most C3n be nor;oue3 ooun o tuo: :3lt3 3nd l.Jo (D ( D m b 3. (—1-. ..3 C—r ( .1 Cen‘toiji Ethiie Elichsnbimficey'bc l H' O ‘2.) Cf‘ H‘ C) ed 53. O p be the one outstsnsing quslity found in many succe esslul 31Russel Doubmen, Sole smonship 3nd Tvpe ,. (New York: Appleton-L Ce1tur* —Cr oftS, T;nc., 19393, D. 33. salesmen. Faith not only in the sectarian sense, but f3ith in the ml ‘mzn'< country. competitive system, comp3ny, products, and himself. For these, the salesm3n must h3ve f ith in Goa. P to Successful selling can be defined as those men who dedicate their lives to better serve not only their cus- tomers but f3mi y, communi y, and God 33 well. Omen Ellis writing in Printer's Ink, piecess, "After 3 ifet me of }__.l selling, I can tell you th3t the thing which gets :Mesults is doings Met n: for others,"3 \/ U) The Golden Rule is just as spplicr ble in 33lesm 3n- -customer rel3tioaship 3s elsewhere. One very successful 33les1113n remerkeo, "Thot when you meet people, you must be sincere in trying to hem any 33y you c3n without seeking their business. I: you ore sincere to yourself as well 33 to others, you will not have to sell—-p€Ople will buy from you."* ’33 distrfilmitors, tflma sslesyuui is 'Wiue compnigfl' for many never get 3n opportunity to meet other co1p ny men. It: is riot iniconunon 1x3 ffiorj dixstrfilN1t3133 foirmingj pi __:1nC about 3 manufacturer strictly on the b3si3 3: their reli- tlfl)lShl[)lf'th.EXlleShfifll. EEnNquciNLrerfixzzre cumnfiiz hit of“thiu, About Himse ) .1‘ 3”0 en Ellis, "Advertise°s Profit 1m; t Wto Serve Best, Printer‘s Ink, Vol. 240, To. 0 (February E, 195%), p. 80. “L . o o O ’1 " DLG. H. Loeb, "Sincerity-—Basis OI 1lesvwn‘s lech— ‘1 niqu ”," The Commercial and Financial Chronic3l, Vol. 115, o 72 November 12, l95377 p. 1551. 1‘—‘[ a}; CD and strive to select indiviruuls who will portray the com- 3 pony image. Howev r, selection o the s--celled right man" is not the complete answer. This selectee must be properly guided in his daily endeavors. ihlS moral guidance should come from the compnn*-—from the pres dent through the solesman's immediate supervisor. Nembers of management y-. are “esponsible for setting the proper policies and examples. Whenever a sales manager or company official receives a compliment from a distributor about one Oi the company salesmen, they, too, should justly ieed prouo than likely such compliments are their rewards ior setting high stannoros of business conouct one beheVior. Conclusion 9—- A p-‘ + —~:,¢. A< .'\ ‘ - A f‘ w "1 . ~. {‘1 r: ’\ 2 A (’\ . . — "1 ' , - - -* A -I ‘. -‘y ,. . . Of the mony pz‘olebblenm 3.1.7. DCCLJ.D,;I31311E;) 13:11:11-1.531 ‘..:11C Inen fill their places in our economic system, selling is 5.4‘1 O ”7“ Q d‘ one of the most important but often least understoo ht) .ess o ‘toc> on; fey» tkmz suc\ ( to do the things formerly associated with solesmen--s glib tongue, a vast store of jokes, a worm hiniclesp. and a hearty ‘ < ~ . \ < r‘x 1‘ as, .—, A '< x -. , r-~ ‘~ — x H slap on the back. In foct, the 93ml oi the oil school salesmen was merely to get the goods into the customer's winds and the monev into the salesmnn‘s pockets. There 1 a ._4 crre still salesmen whose experiences originated in those v“ r“ days, and tie}! st’ll try to win by luck rather than by *3 cwareful application oi selline principles. I? i4 \C) F" .... T~\(11; 1‘7 ' f“ jfio e (:1 (j i ,wlj (‘7‘, 1 PV‘ Ff ', 1'3“?!) t '3 ‘r'lfiIN 711 f7 ‘y’l 1’. If; !:‘ r. -.-\ e "" t ‘9' *',j/:) 117 -. \JKV‘) k...‘ p; .1. 3.1») x. only... hQJ'VVa—Jh-v _i F-) .t L'..4L .L-~k_) ‘H‘. 11 -..a- L . J mi fferent at itude about his profession. He realizes that the very essence of solesmgnship is persuasion—~uhich implies voluntary participation by the person persuaded. To men, s lesm affifll people to buy, at u mutual profit, the“ which he has to sell 2‘ C ‘ . ‘ ‘ I” \ r‘ , -. Selling moy be classi r_...! o ,7 (D {J 5.4: H. C1 C O. (D profession, depending on the skill, know- of the pers;n doing it. Selling as 3 ;ob or trade is simple and commonplace, but as on analytical and adv sory service, it has the standing o: u proiession. Lne question as to whether, in any buyer—seller relationship, it reaches the professional level is up to the individual salesman. ’1 ‘A S *v‘ r‘ ‘1', . -\ "v‘ r\ s . ~. ‘ r‘ 3'; V, W ~ 1 (N (j . .. 1 The ale smon sto;ti.5 out in see-cn gl success in the I ‘V lood industry should bear in mind that the proper m (D :3 CT <‘ = H attitude is essential to success. The proper mental atti- tude in selling is simply this: when the sa_e‘"'n brings another perSc on some thi ine that contributes to that person's well-being, the salesman renders him a service. The dexree of success a sole smen attains will be in direct proportion to the amo unt and kind of service the is elven. words, salesmanship and service so nond in hand. Thus today's salesmen is u painstakiny, uel incividuzil Tflio considers himself in a pro-ession just us - I“ ~ 1 1 o f' ‘ -' -"‘ r A 'y“ - 1' L“ ‘..""' ‘r " C' ’ a ‘ ' “r" "‘ ‘ ‘p‘ create {nu} set1s1*rriis CLunxniers .hnits. {Uhl he -eiclma. l f} '3 this goal by a careiully pl nned IXivcedu rexs involwflxr; exnxry‘ive pflguuiing, pm unctirni,.and presentation. - o . iaooern sileoxtnsiip is bsso; 3.21 I .1 ..L C" l; (D '6 F l .3 P) i a '2 ll (D ( customer ssti sfa ction. It considers the salesngn not only as an instrument of the sale but actually as a part of the picture, for along with the product, a customer buys the services of the sales‘in and the manufacturer. Salesmaxs hip is a proles sio n established on the basis of service. When the concept of the salesman is that oi O r') Wivii* the mom izlum o1 sntis 00 m customers, he is render up a pre life. When evei ry sale must be mutually profitable, then ' 1 v sound and lasting relations between the customers and t- (D l salesmen representing his company are established auf the (\ .—‘ , r r t. (‘4 > ‘L‘ I\ ‘. “ '3’}? r“ “y "‘ Ax . v , - r". "\ ‘v J‘ - .1. “ " salesman serves his cusp to 8-0 and his comp Ly lul_y by lyrirringj‘theni togxathel? irlzi Ciflitlfhllfhf fluxoitibltz re Jlt mecclanxi~ing specialists trained and equipped to show dixstrdjmit;>: s Runs t:».3elJ.:no;%3 pLNof’ttdoly ruid 3J1 g;vx;te:‘ xmoltune. CLLlecnner11nLu3t iatrdjze 1:7 Luriezwotriid tile (lied: itnit 1°‘s aspirations, wants, needs, problems, and motivations in order to better serve them. Manufactur rs who are successful (I) in impressing th service concept upon their salesmen will reap the benefits of distributor coopere Ltio and a lasting friendship as well as justify the existence of salesmen. The American Nov of life has given people freater opportunity, greater security, and the highest standard of living ever achievek by any people in the world. It ha}; takffil tlma ccxopeztaticni of‘ toriomxn, fa1om3rs. tinixsstrigfil- ists, inventors, scientists, and the consumers to make this k.) I 1" "K (“1 l ‘ r "i W- q“‘ 1" -' " " ' . v 4' r“ 4* ‘ - ."I possible. put the oplPk so recesQary to mo ixlte all these .._/ \ -., . . - .’-\—_'-—‘ ’1 ’U- \-P) - ‘ I. _ ‘ .3, . " 1”"? L316 pliLL“ bu. ;-I:l:\,};j1\. |__ . HTI‘“ ”flufl‘“ . -..) _ }_J P. (D 3.). groups to action is supp' THAPTER X CWDEKZIILCIWJZI? .. The need for developinx be‘ter manufacturer—distributor C“ relations in the food in.ustry has never been more urgent. Both have a responsiblity to the nation as well is to eacn other to effect the finest food distribution system in the world. As America hurls itsel; into the and new hor1«ons in science, economics, and world relations N manifest themse ves into reality, it is imperative that America successfully meets the challenges she will encounter. Each facet of our divers lied economy must be prepared to make its contribution to this nation's continued growth. The United States food distributicn mechanism, known to be the finest in the world, will be called upon to further the growth of America's prosperity by perfecting an even better method of distributing fooc to all Americans at the lowest possible cost. Certainly this responsibility to America can be accomplished with manufacturers and distributors working side by side to acnieve these goals. The supermarket industry has made many outstanding contributions to the growth of this notion. It has provided the American people with the most food ior the smallest 1 0 share of their disposable income in history. It has given ... lear‘ of quality in frest foods and perishablos; ' t 1- q n . 05 1,3,; f0 f‘n “ray." r3, wzc‘ r} V1,; 111 ; ,1 J] )0 {ELVWV «1 fl :1: l n awe " 7‘ i“, _"l‘if l .ngk) '3‘. 'v t .( | £1...— ohltJ - k) L-A.& K..- .... \A‘ .1 u; «.x .. h.) -4 K, __ ‘,.‘ ,J . ,, (J .4 -. -- .- L . 1‘ I" "1 ( v ‘ ‘ 4“ ’r , vfi "" . ‘ ,Af‘ \ "‘ brooier markets; it has laJ: SICJ toe AhefilC,m ”oxen a range and values thx world; curl it has en“d1dnai the food iir:hmstry npl/smwao lith better wages, more benefits, and brcmder opp.‘b1 ities. Yet, tomorrow all of these accomplishments fill be yester— ‘ay's dreams come true. But what about tomor*3v‘s hopes? They must ccmma‘true, too. Cfmnzcrni, if supplie“ms:h11udis- tributors work tarether to brinv about still greater inno- VQLl‘Nu. When the President of Cupermdciot lnztitute, Eictnnxi bane um, g, eufiiresse’ ‘ixe Tnernrhafourtlll.riual (Rhiventitnlzof the ldnytitute in ay gm? 1991, Eris 'ev“mlx. '~€ f ll sums the need contribute iner performance in the years ooeal. 1r. Maxeiber; avefisge isn' t g ood enough. . . . After lLll, verage is m rely the beSE of the :orst and the ' "I ‘ ( " . xfi I"! r " ‘7 .—.. ' --v . I-r‘ ' "--(- 0 M1 the be in . . . This i. tnl indust;grinhlt has 3 Q I I, 13:10 a ways scorned vesade It s an indust~y rhere t1e uncoleon man, with an uncommon idea, sought the uncommon may to success. It doesn‘t propose to settle for the so—so may or the status—duo way, no m ttec hovlisou l1 coruiiticnl axye. . . . ‘eqixriing lfitflfsbcfiflw3 :Lveinzge zmancujoucxit,Sgilarrrlng;21nd ileaahert41ip, :‘ anrni ll C(H1V8Hiflflfl1 o1 'tne saux33:usluet -Distl th3 o111a1y {,ljflcl, Chicago Illlno1s. “9 along with each other. In 19:3, the .nnual Meeting o1 the 'President's Conference Cd‘iflueikitional Association gr Chains brought together the presidents of manufactrrers and the top e: {ecutives of the SupEPmDLTICt o1 “vn11lt1o1 to discuss how better relations could materialize. This meetinr was known as the " SLumnit nmretiiug" ans indiuztry lxrideiuzxnet and talked, many for the first time, about their particular problems. The results were reported to be dramatic-illv I‘D successful. The 1959 Annual Neeting of the N 2tional Asscc11ti2n " O of Food Chains provided a manufic tU‘el-'l tributor panel to Er L_J. r) ”f ct with some H. U 2‘ I ,J mi OJ exchange ideas and express marketing practices in the industri. The speakers all voiced the hope that continued interchange ;“ ideas between J p the two industry lev els would lead to gradual improvement 0 v J *‘r - 5 .. _ Of lNdUSETy plactices. The Annual meeting oi the Grocery Manufacturers of America in 1950 also provided a distributor- manufacturer panel to further the opportunity to exchange L1. ideas for the benefit of those attending the meetings. Ii.) 1. “_ 'V‘ ‘ fl (-1 I .. 'Y ~,\ .... f1 fl‘ . w j '_ ‘ P‘ r‘ W , H -lp01111N1.;UOHG, .Ioint 11un13try Crfiho ,o .1r3cessiifil, (w U 1 w 3 l .uperw rket N n", Vol. T, No. 10 (larch 10, 1933) o. l. ”‘ j‘ x ’1. ° u .... ' -. - «A. p, I? . F. J m1 EC Annual fleeting :epo t, Supermarket AEfiQ, 1' 1‘ 1:: r“ _. r1 ,'_" ~ (no . \tT'O l o 8 3 1‘33 0 I ¥ ".13 (‘._)C tobeL‘ 5: L? 3 191:( "j h (_+ -~ “ — ..-\ ’ ‘. * "‘ ‘YT - r- 0. 1" A Leaman and Tobias, 1 mistinc la ‘ . (Niper— ., ." ,. 'v' _. 1. .: In ‘W‘—‘_——_ Imirket lmaws, Vol. 9, :Rfi.~4 (OCt1be1 Y‘aie 'qizeist:Lori 51s ta) ilCfiJ vnzniiii . 3. -—~'_.'.. .1 hei7 ope7nuions and tL subjects covered at the various inte: and panels mentioned above highlighted I v ‘- ‘6118 II I ., .... ‘, ,. 1 L10 turera idustzy M T1810 C CI L'l inter,; resfanted ill tiiis “thesi iss. Llnrufncfinirein3.ure 'unxre cm? the need to creute a warmer friendlier rel: tLul)113 'ith dis- tributors and mnnv hnve already given the attention to distributor needs when develop n Herfieting policy. No longer cerlrnnn1i cturers tflfiin{:hi the st~1ct te m1 of selling but must emphasize marketing. The difference between marketing and selling w appearing in the Hurvs:d Business Review Has to s production does move the product. is selling, not marketing. sophiscated and complex process, difference between and indeed gene But what ("h ' 4|: . :nlaeting .I-; “ate great p: essure usintlly Z-i:;;r}ceting gets ignored. selling is 5’1" Q LLA'Ul 3:78 The Lets enp i/ed being Q . ‘( LA. ... m C) 1‘ e than somatic. Selling focus s on the needs of the seller, while m._netin. on the ne ds of the buyer. Selling is preo occupied with the seller‘s need to convert his product into cash; marketi with the idez of sstiSEVing the needs of the cuotcne: bv HQLMQ of the pi oduct and h fhole cluster oi thin s :3 Jointed with creating, delivenin‘, ind consurin: it. C“ I.) the be t contribution Perhaps "7/3f‘; ", JD”. - I‘HILUU about impm* J '1 ' _l , A.‘ r . ‘ L .LC‘CLM’GL‘Q (3;:in INCH“, M their marketing operations so bhdt tfley can meet the chdllenges of the 'oO's Fifty years and, selling ‘ 3 : -,7 _‘fi _0' ”‘7‘- O 7“ H ,1.. v .‘ J ‘ 0,, a *Tneodore LeVitt, nerketiz1L i.y.ooi Harvard BUdllen: Review, Vol. 38, No. (July—Auylst lQCOS, p. ;C. 19 essentially personal salesmsnShip. An understanding 01 people and their motivations is still essential for suc— cessful marketing mans ge unent. But in the 1960‘s, the s1les manager must operate in a totally diffew7e1t e.vi:onm3nt. Earkets have broadened and product lines have length enei. Competition has increased and consumer problems have become .4 I' L - 7 ' 5' "L o 3 ~. fl 1‘... C‘ . :1“ r . P» r" 2’. fl ,3 .7- more diifi cu ult and complen. fine sales manaael c: toda C. concept H- C1 J (D H H ’ .3 (“I C $— ‘4 ,_J 0 p1 must be a competent e necutive of business as well as hs‘Lve a complete understanding of his products, his markets in which he is selling, and his cus— tomer‘s problems. Mr. Thomas B. NcCabe, President of The Scott Paper Company, recommends that leading manufacturers set up what in effect would be an institute of marketing communications to improve existing techniques of every kind and develop new ones throughout the entire range of marketing activities. The development of improved technology in marketing will lead to a broader und rstanding and a more effective use of effective use of marketing res earc r poses that the institute be sta_1ed on a lull t’me b sis p o p irt'ilv by educs to m7 in the social sciences and mathema— t H. cians recruited from our great universities and from industry. 1e funiament l flnllfli? as developed would all be publi ished. Everythi11g published would be available to all business firms, just as all medical Siscoveries are available to the medical profession. The institute would 19f be assoc i;ted with one of the nation's leading unive7si- ’ L. ties. With the need to be better 7han average and the nec- essity to develop marketing improvements, mnnulocturelg have been making sustained strides in the field of customer relations. Already, mzu’nlfacturers are consultlox distri- butors about their needs and problems in an effort to tailor marketing pro+17ams mutually acceptable to both manu- cooperation in the food industry is the GroCLrv Manufacturers of America, whose dynamic P dent, Paul Willis, has 'eken tile initiat ve to establish liaison wit ,7 o r. 7--,- .2 , ' .._.“. .'-_ ,1 1 distributo,s ani ("t dete17mine how both levels of the industrv 3®Ulfl mesh more 0 smoothly. Speak’ng before the Twenty—fourth Annual Super Market Tnstitute Con veotici, Kr. Willis emphasized that '1 F1 "' 1.- -—. - leamwork among m nulactu7ec° and between manuLaCturers and distributors is an important key to continued growth [I of the food industry." He cited specific milesmtanes Oi 1 progress gained through united effor s such as The Trade Practice Yec>mwendatio1 developed by the Grocery Kahu- facture rs of America and six national distributor organis- ations; the recently de eloped eight point program for C"Marketing in a Changing Economy,“ an add: ess given by Thomas B. McCabe before the Sales Managers hoJKCLdtion of Philadelphia at the celebration of its 50th anniversary, January 11, 1960, Philadelphia, Pennsylvania. mp wing couponing practices; and the fistional Pogo ference program to achieve a better public understunr of ED 0d e.s ting for bester living./ Further steps of gn’ninw coopers Ltizon from distr' have been taken by s few msnui iCtU‘ec hrough the estab- lishment of a Director of Trade Relations. The rise director of trade relations in corioru‘e CirCles has the trend of greater supplier sensitivity towurd the H1et i er and wholesuler. The men who hold this post aqoxflciru: £1111. tixne 'to :seeni Cfllt 'trma pixobl_e nus tluzt £3t”fll€ between their headquart,rs and the effective marketing oi L—‘o , J (D 2,;‘4 their products by the distributor. The job has been paying- <1ff for°1miny ccmnxriies ill the fkurn of betfirx? trade :flaldtilnué. In addition, the information gd’nec irom distributozs produced added sales and p1? fits with more e marketing of the products these executives represent. d: One of the greatest pitfalls i1 selling that hard manufacturers encounter in the food incustry is determining " 0 dis ributor problems. The Fcott Paper Company found thei cotfibi ncfl: do ifl is CH1 theijfi o?31 so ifliev CLJTideCi a initiate distributor seminirs where both the distributor a and Scott Paper Company cou d exchange ireus. The seminars, 8” ,r Effort to Fulfill Red Conscientious .u e :s .'l. 9, No. 1 (November T, Noted, Supermarket Ne Q. ’3 z. '0 ’O }__J ore 'U L] 'i .97e7‘f‘o ‘5'} J- ":3 .. ... J&|\./'.LLJ‘J 19630) ,. 199 a th111ee d1y concentr1 ed course in hum1n rel1tions p1tterned after the advcmced 1111111,;jeznent course at the H1111!'115:‘~:1 Business School, were held 1t the hozI e office of Scott P1per Comp1hy with seve11l of the comp1ny executives in 1ttend1nce. The groups were kcpt purposely sm1ll with from eight to twelve distributor executives 1tte11diruj Tcott Paper Comp1hy feels that these distributor executives know more about their problenmsirrhu the nrur1f1cture11shri bv lmfibping to SCJJKB their problems, tnis helps to find 11s e11s to some 31 Scott P1per Comp1ny‘s problems as well. Mr. J1mes Rankin, President of Foremost Daires, Inc., feels tflu1t there ifBCLLfihal inite rmxr” for inte1umxrmmhiic1tion between m1nuf1cturers and distributors Just _ike developed by the Scott P1per Comp1ny seminars. Ir. Rankin believes that distributors should m1k an effo rt to {o to the M1nu01ctu1ers to outline their m rhetin objectives with the hope th1t understanding. ill encou-1 e w11u11CLu- ers to design marketing progr1ms which fit distributor marketing pl1ns.g The author has attempted to discuss various subjects which have caused distributor dis WQlteit to Wet1e1 with recommend1tions by both distributors 1nd m1nuf1cturers _s to how these problems c1h be solved. The necessity for _ _ 0 ... u A. 7‘ fl 0 "‘1‘. "_ p .9 fl (_ : ..' o _ _v. wDPklng tohetner to solve (ls1x-eeme1 s as ue1l as pl1nnin5 for greater successes in the food indust try h1s never been C T‘ 0 . h _ o -. J"NfiFC Annu1l Meeting neport," op. 01t., p. ll. gPeut P. Leaders in the food induoth 338 pPoud oi tnCiP accomplishments. Food otoPe sales ewntiuuou t3 Pise in 1960:Pe;10hing a new high of 52.9 billion dolliPs. This we? 0 n ,J r- '1 ~ . an iDCPease 01 4.59 over 1939 and neePly oouble tue amount '3 1 'x )l 10 fivv ~ - v... . — r " ' . - m. -r, ~ -- -— IeCOIded 13 19w9. Ho 8182, gfleltefl uenieuemeute MUQL be the rule than the ez-zce ation in the VERTS :iLEiegcz. - d 'fhixz t.‘ N33'23 CLfll Ix: qumneii ug> wiixl a. D;illllnf 11% CO from one of the industPV's outoLoIC Ins pioneePo, 1 uvnxmic individual vflm>sxvaed many yeaPs us fflxxybkent o“ the National T Ass ocietion of food Chuins-—MP. . tIxa Aruuiol..tit11>h.l [L3o:-i;1t L.Jo - . '7: , ‘ .- In .. Mr.” - w 4L1 oi -usoo C lglfl I).m3etl.u; iJ T T-' .. 'fll" ', 1’ I“ /‘1 " ‘~—‘- ,-‘ ~ ""3 l " .' I‘ ' r~ 4 I ~’ '-. lQQSh LuP. Ilgiul JGCJLLPCJ, CgioulCLi L Le -fill 5:».C.te;'eg ( ‘, f ‘. (11" I 1’; n ' ‘ ‘ “ "‘ ~ - {‘1 ~ g” ,' f' -‘ ’,' ' “T rv‘: ‘ ". C" . legel°CunLJ3 Oi tne CQHHABMBP'S oollaw‘IAg: foou? _Jllu, it seems to me, 13 the real Challenge of 10?obePt w. Nuell , ”GroceP: Sales Up H 5% in lQuO, Ifiaich All.l‘MK3]{igh oI ELB.C Bl11j_011,HPPOFTC*r Vol. HO, No. 4 (ApPil, 1951), p. :l. 11H. -.. .. . n H ., - nl;C Arnuul beetle; nepoPt, op. Cit., p. 1;. BI EU OGEAP} {Y Books Doubman, Russel. YOPK: Ap Sslesmenship and Types ' ' 1 ‘ I “- J“ ".7 ,. '* D C‘ pleton—Centu1y-C3o1ts, "Conscientious Noted,” RickenbackeP, Captain Eddie. wnet A SJlGOW‘“ Sn ould Know About Himself. Chicago: Lne DsPnell PP ess, lQZo. ReseP, Tom. CellinC G1o<3ePies Petsil. P“il:d lpmid- The CuPtis Publis Mn Cgmpiny. 195:. Ziunnerwwzn, 1%. EC. .1 1e C11pe1‘lfid.ioet. ’He: 'Yorfltz ‘13}:1'.-Hilfl Book Computms Inc., ljfl,. PePiodiculs O O _ _ ._ ‘ 7‘ '1 .. .1 - ““1 ' ‘ Applebaum, William and David CL son. uper1PK3ts Pace toe FuIAAPe, "'Hw:“131%i tflflll e;3s fieviis , T731. 3:. Us. 3 (iQ‘Cn-flp'll 19§{),p . 131. h - H - , -, ‘~.L. ~_ APney, n. D. "A PPoposel, Lupe~m~1het HePcn ullullk, Jul. 22, No. ‘ (FebPunPy , 195?), p. C. o k‘ 0 fl . n “\‘_ [I ”W _. .1, H _,~ ‘l' Beines, Don. "gupplieP o FeCP Snell mental, uperL- et pews, v 1. 9, 23. 23 (June 25, 19cc), p. 1. ‘ r) (N _ 1 _ H , ,_ hfl _ t I] 0 r13 , ,4 'Buyers CerP CO me i “ 3 '~‘5‘1eb’-“1€fl,~ NW3 ‘mLLPLet '-;ePc.-1.:1na_11s1.11:3., r‘.‘ 13r— SeptembeP, 1934, p. up. . ‘I‘r‘ ' ””7 1 I m ”V "t filt’fljx “'n ”a " Caplan, L1PV1n. PIC Issues QJo PM e Fep31t,upe;11*yet I‘Iell‘ffj } X73 1 o 9 , ITO . 21 (air/Ky £3 3 19'._O> 3 p01 o 7 T‘ r‘ ‘ r‘ 1 q ““1 “1 Y “r”? ’. F‘ . " ’L“ 1‘ CaPpenteP, hus. "hnst's AHGAQ Iol P-O-P AU/e-tlolhg, PPinteP's Ink, Vol. 255, No. 8 (FebsunPy 22, lgff), d: p. a). .11 . _ ,. ..1 _ mm ,1 H ,7. , , - C cseP SupplieP, RetaileP Ties stPessed, gupegn.:Let he.s, Vol. 10, No. 12 (UsPch 20, 1951). p. 3G. r] SupplieP EroPt to Fulfill Resu HComplete Text (June Jame s . ‘vTOl. Cooke, J o Supewmq” 9t Ne 3, J01. 9, No. l JovembeP I; 25. of FTC Guide," Superstet News, Vol, 9, J9, e, 1960), 19. 1 v o 7—: 1 _o . .H *4 1 _ . '1pe1k 1ng of POOQ BuSIness, rooo Business, No. (ZebPua13, 1955), p. 10. Public GIA -Ql SupermPket "CuPb Costs, W L j Clovenxe 19,19imfif p 3w; \T :39 3 JO 0 «11‘ U kfl O "IkilberfisiFeainxPes 119 Coiqu1s 131 Adz.fl' SruxaPmfigflaét 1k; 3, Vol. 7. No. 7 (FebluaPy 17, 19537: p. 1;. “Dunuway Seeks FTC Settlement,' C No. 20 (Ray 19, 1956), p. 1?. lfPPe1u3e. zigrfliei: Expansion DPive, 1 (FebluaPy, 1955), p. C' . #1 v v " r ~ ... 4' . ' \ «...—- E1110, O'.~.-11e. A11 781°t1 38:5.) PL‘Qflt 1.91%, o - .' " - ' -1 w . _- ,il 7 - P111 1‘: 138?." S Til}: , v J l . C '14.} , PIG . t.“ ( C D "£1,111.72," , 1) 1 .. X , p . "I ", . new. -.-. 1 s.. mJH~ -. -. -- . u w P.._u H H :1 A;1in C1u lkHS ,P1oe on PflCCICeS, Cupermxruet He 3, "'T- ‘7 1' ' w-r ‘7‘ ‘ w r; h r— > H vol. 3, No. 4 (deflflLmflf.;j, l9 9 p. l. - . .. H-—~ ~ .. -~- » . 1 Gufiel und Pi clznell. F-” but “LQTI to 3113 3y C“ plzifltn - .. .. . . - H - - . in “P1 Allen ulce llifestd BIC 111*K8, LVFE_T.LJCGLI;P3“33 ‘ l _ , W"T;\j_ . 1"") 4.1.3 0 4 (CI TLLI \g‘L ~— :" . 19(7—1 )’ 1" . 1. . 1 ,- ‘ A. - . - ~. n r GaPel, APt. 'FTC QuePies «my necxile-s, ung'e . on Ue-ls: .0 v 1* _ _ ,‘ _’ *r“ ‘ ‘! .V _- > 1r/ 4‘ \' _‘ -\ NFLFC HlES “all OP »P ham, supe'w Puep me u, fol. 9, No. CY (July H, l9jO), p. 1. fl 0 fl " fl". - 1 :N '0 .3 __ W +— \ O “ ,.\‘ ’_‘ " o ’\ _‘ d g _ ,—\ n GilbePt, Tes. GAA to g1lt -ep.11e1 CELL 1: PJJCLnulfl .1 m _ L. H - - . . -- . . ,4 _ 111119.111“, ._H 1 JG TIL-1:118}: t; C HTS .. ’Jl . lo , T: 0 Q (.T .-U -‘J 1 , l9il), p. l. v11. 9, No. R (Hovemb r H . __ , _. A _ . , ..-, . Cite Hquony 1n GMA 1% he .1 SuperaPket He s, Vol. 9, Ho. 1M ( H ‘ ’ '\ . . p. , ..- ’ 1 . '- r1 ‘- 1. w - ,. . GPA OffePs Pl1n to Cub Coupox 31s2e1. Lu Supe1w1ket News, Vol. 9, Ho. 13 (IQPCH 23, l9LO),p.l. H _ 7. A. .1 0..-' _ 0 :~ , - . ‘ .. _ . CompuLePs Point Cefitilieu Auf“m Cl n." impen- maPket News, Vol. 7, No. 52 (LctobeP 20, 19:55, 9, 30, t H H .1 J__ ,1 _ _o _o ,_ _ o ., , :1 . _, ~ _ _ , L . . FOJU CHPJ u Au Chief'}t1:s Point 0. LxfiuaTultePiuls." SuperaPketI Hers, Vol. e, lo. 39 (SeptembeP 3a. 1 if), I I p. 4. , "Trrn1fafidn1Pe1P3 P-Jl-P Lk1teli_ V1311e3's C’iticl‘”,1 Jupele (:39111 C99, 1931' ,' 9 p° 11' H "7* , , ,_ ‘l _,_O _a’.‘ 1'7" 0 z o UNA Psym~nts Cone Bfllngs 1+e1 e. 1 , .., Vol. Cu 1k).'fi iFebvunry 13. l~7f), p. L. o - H 1, _O .7 __,‘ _ Vi'. 4‘- Gottfried, Ls:t1n.Cnu1n terse? 31 e Shipez1n111x3t TKrns, *Jol. iIO, 110. l p. E11. C1 oce°y ExpePt Rips Cash Dis ecu-:11: Coup 1:1, Edi .;-«,;*‘r‘ Publisher, V01. 89, No. 20 (‘W 2Q, 1950), p, 20. _ * - .H , ‘ , _‘ _ - 1. ‘ ‘0 ,_ HEHQN, H:1:1<. Does tne Deal Prucuce tne E15 Fond Business, Vol, 8, No. 18 (gay, 1 . Handler, Julian. ”The Editov’s Cornen,”: HpeWWIWTet News, Vol. 5, No. 51 (Decembec 1T, 195C), p. c. 5‘- 1 o ' no -1 _—< ' v 'Heavy Cons1mer Dealing Con11ned to new P:°oiuc t3 , v .. v v . . ’71:) _'i_—“ market JGWS, Vol. 1, No. 1 (June 30, 9;;), p. A. " O ‘ ~ ’V ‘ _ ... if r! '1 _\ (V ‘ (W ‘ 7 Ins1de Success, What Special Secret ¢1ue Sc;tt cules Gram (’3' (‘1’ '1 I _ _ ~ ‘ ‘ _ ‘v ‘ -9 ...-_"r- u “ ... . (MC); 111 l;;'Yefn‘s?. P1311te13's IR1L, wo1.. Zr {, :1u. l (Apjil 311959): Do :5- L « —- v" C‘ . j " ‘ 4. P ~v ‘\ , . ' ‘,’ . ‘\ “ r * 11“. t ‘1‘ f “ ’. 1'“ 5 ‘ " Jflflnszn. .JLLMay J. 1L12 Lu U.emwx1m3‘?1.t,fl1nu3>r hut ;,m:1sm, *A—‘ m!“ - “ T» “d VT CQ roam Bu iness, Vgl. j, Lu. 1; (Dece1z1be1, 19,;), p. a“. H - ' . _-fl .._. - -- r‘~ a 1 . Lsre Camp ementvry :e:¥e'>, veaer : lermen Pue.‘ F031 Business, Vol. 5, N_. 1 (IulV, lag/1, p. la. I __ V H - v _o _ 1‘ _ f“ a (' __‘ 1 __ _ . . -! , ftxulley. HQ:.I?31ML ,17. ale 1V1V‘1igwse vxfi3_ age 0 ‘ ,‘i ' ‘ fl l.‘ “-“r 'Y *1 ’-\ rj “w-i 7". -. ‘ fective aruz1n31suseble, :KLTJ Bu w.1mtm3. r31. 5, Jo. 3 (naych, 195x), p. 1:, Kenny, Thomas. Nodeyn Iniu U) C) ’1 r ’ \f‘ {"1 '0' " ’_ L“ T'\ -7_. . r r‘ M ,1 1 Time ans the salesmen, Dun's he: ew gnu F1". C? ' n u :2' .11 .1 t:— 1y ’ \701 0 «—-":,~ 3 L113 0 _/ -'3'\;L.L Gill, 1.9/17, p. "T-';. _. -_ - .H ‘. a A - 1 -, .1 . 1 - 7'. . .. .- Kelley, Etna M. Cnoose Yuur Psrtneys, sales management, Vol- 80, No. 9 (May 2, 1953,, p. 38. H Kovsc, Jo11n Coupon nedempt‘on Br.3, mar1:et News, Val. 12, No. 4 (L1; .117}; r 0 w, 1*.- f‘ '1 H ("V - ilr _ ‘,. .L. as 1-1a:°1r:et1ng-, Ideas neeues, ;;.1,1pe31111.,:°1<,:3t Lesmsn a1d Tab . . 9, No. 41 (October 31, last), p. 16. i DIE 5’10 I.) , TVTO 1 Levitt Theodore. "Marketing M o is ” Harvscd Business 3 E-) J Review, Vol. 38, No. 4 (July-August, 1960), p. 50. Lieberman, Ge POWE - "Suppliers Threat Seen in Chain Competi— t10n,"supecm1cnet News, V01, 7, No. 10 (A 311 :l, 1958), p. 10. - - ~~~ H ‘ . . . - (9., . m . .r‘ " LC’eb} (3r. .‘1 c (- 111C el‘ltJI-_ ' LkJ1|J (J... rLa. Lek-)LT (L‘l' D LA(' .1 ELLC’) 3 o o a '7 W \ The Cum ecC1 1 ani F1umnc1al Cnponical, Val. 1{b, Jo. ,""' {S . ’- ff . , , 1‘") :- A, a: :- :/C{; (:J:) YJelllbe-i’ 1L1, 1.9/34 3 p. l-V’JJ- o Lynch, .chn. "Coupon M13“ : ~ 1c.. Food Business, Vol. 9, N3. ; (lav, 19'0), p. 30. w- 1 x " " filkeP Betwefl1n~ D1: splu3 ,' .H“€””7T :et Jews, Vol. c, A @3 No. (Ta1u1wv e, 1953), p. :4. HaPtin, Glen "Whit Price B-lhi IOValty? " Printe?‘s Ink d V ‘ : V01- 2 (, IO. 13 (Decefibef 3, 193m , p. 81. \n- 1 Hchaic, Vulcame and Eleanor Fay. ”A Revolutionary Appraach ' _, O O _ 'Y _ O '3 O - tc>Ek3U111 ACCCHHTtln%, 111“vcrfil%1s1nees rxyruafl, V01. 59, No. 3 (L;y-June,1l T, p. 105. ‘Y -| y"_ _s_‘_ _O H _ " - .-‘ ‘~.-.:r mooney, Weyr1e."A3e Deals kuftuuhlle?, P91mter'e jun, October, 1953, p. 33. Nuelle: . H. W. "HON G101 Ts It?,”pP1J.1€SSiV€ GTscer, V01. 37, N3. 10 (Octvbe1,l lQEQL . ( ,t‘ h .. < 1 7-3 0 0 ‘ . ”1990 Annual nepcc on Fooe neta1l1ng,' Prcgressive Grocer, V31. 40, NO. 4 ($9311, 1951):p- 3 "NAFC Clinic Urges Co—Op Flexibility,” Supermarket News, Vol. 7, No. 12 (March 2M, 1958), p. l. "NAFC Annvel Meeting Report," Cupe°murket News, Vol. 9, N3. Mt1)W :ee t3 fell"£”t€f . H ‘ ‘. - “T ._. A A a lllegzl, ~upe3m¢:het News, Vol. 10, n3. , (JWL1" 3 19:1), p. l. r-- J J Babb, Norman 3 "What Step emf S1ep Elxpects of 311 3 T ' (Feb1u113 LOZL), p. o. |- O 0 Li: G \_4 L) H- :3 (0 C" C? \o A ‘N (J H 3- 7: ( ) "\ H. ' o - H -0 _. A - ‘-'- .7 -. ,’ Retajjiams ESPERk?1H3 . 4"- T.’ 1 1 - v‘q "I M x - ' -. ~- 2" fig *7- . Significgnt 3331 News, 3:11 BUH1AGJQ, :1. \t \ r. - . A 1.. 1‘1 Ag. 11 (Jovembey, 19;;), p. 5,. H m . H w . . , _ ... f A. , -. 11 x 3 ‘ _. .1 -7 1. . uighiflc1nt read Lens, F0.u Business, 2,1. F '- ‘m - ~_ ’ iii: ‘ f 110. _j ( 113011, 1§11,), g). 13,. H ,‘1 O , . U I 4" ‘ .‘1 r‘ {a 7‘ 1 ~ "V 1’ fl "‘ ' m ". ‘ ' d ' ~' " - . ,ignific1nt hu3u Je.s, 3101 Buniifiob, $31. - 1 ., 1 . :7 f - K: .I;. 1. (J11u11-3, ‘19,»-1, 11. 11. V " ' . "‘ A ‘ v, ‘1 ~ ’N r V— -- - ,g" «‘4» .‘ Weinstein, Steve. Coupon Pug 3e01pt12'3; K1M5115Mt 33¢ :‘ H _ _, ____ ,. ‘\ _, . I, f - V,‘ . r 7 t nlgxs, Supermmufluet revs, KAXL. p, £3. 14 fijqqu/j L"? 71 19,"! > 1 p 0 ”' Clearins 11) V31. UiuJe se.H Sim) :13 - ,3 p. Prrmrre ._ 0, $51179 'KIoijit 131”UL)“;?'T111{3 11316 s, V31. T N3. 10 (March I "1' . _ ‘I ' , * _ 7‘ _. Ne1nstein, . te7e Coupon Lle111ng House ro's JU ' 1't. Set by GiA " Supermufiket NeWS, VJ . 8, N3. 3M .1 l' r“ (Jfilv 1%, 19:6). p. l. . "Urge HOPe Re1listic Co-Op A11331uce,” Supe;mw‘ket News, Vol. 8, N3. “9 (November 1c, 1959), p. 3?. '1 , ‘ 0 ~ _0 ~ y_ ’ v. o ‘_ m H “1 r . - , , Western Ch1ins A13 Vie s 01 Promnt1ous, Supe:‘m Pket News, Vol. 0, No. 17 (April 28, 1958), p. 29. Y 7 , _ _ r H ‘ ' \ J 4‘. ‘r- ,‘_ ‘ '1 f. ..-. __ ____ V Weiss, Edn1rd. Tue Bu‘e° Jeeus tne S11esme1, qupe911ruet Ie*chqn1 1oz, Vol. 2A N3. ’ (F eb°u4”7, 1959), p. 99. v . o .H , r) o o . , n . W1111s, Paul. The Food Iluugt y--A t b111 1mg Inllueuce, - 1 \ . r: :7.“ 2‘: }?Q-m1 ngvt Ilevxs, Ap1fil 21;. 1?},0, p. 1, 1,). '1 r—V 7' , ___ _ , _ . 1‘ ‘ . 1“ J- ~ . <""Lkn.i is tfiwa Fe3 't; Cgkuuth, (31 “n ts'e e, v— :~ : : . :pg- -n; \V ‘31 0 -) l/ _, AID 0 '~-‘ (3111.8 9 .Lj» l ) 9 p O . LI- 0 ‘ — ‘,. " — r A; k. . ‘ , cw '! - v. ~- ‘- ~~ m. .... ,— Wulp, ann. Outlooh for P-O—P S1100, F31;te"s 11L, T A r— x - f - r ". I" f: :‘ r-I;-- "31¢: 101. L>3, A9. 13 .RCM L9, 19);), p. (a. 713mm.“ n. Fi'h211 G. "Inside Blyir Cokmittees." 3nuep- *Lufiret x3uc‘huyiisiir‘, Vt1_. SE, 215. E? (Teb111 3y, JJEE’), p. o. I TTe SI) I‘e ‘” "Ge”e: 1.231113 Ms E .se ” Tina V211 f1t‘eet Jfiwu'i 1. K11, ,— 1931) /'.‘ - in . ,.~ 1 ”1'. —p H2 1 1 ‘1 1 u- _v 111- . Abe , Goluoevg, 110 hestf1e11. Jotes on tge ngcexy _3ace.” I. W1lter Tmsmpisu Comp1.x Bulletin f—Ll. 3 "Ch ;1, 1901, p. 3. . 'Tfotes CH1 the (kfioeeFQ/Tjugie,” (T. Malte- ”T1 mpg 11 Company Bulletin ll-ul, Juwe 13, lQul. p. l. Boyle, Charles R. Misso u“i V1Lle y F331 D'stributo: ssgni- a ”an, Bulletin No. 12, TUIle o, 19:1, p. f. '1—v—a u ,_ (“1‘ 7—~ o 7‘ _____ j ‘ , _ - _ _ _ g1“ F3<1n1neg 0113 :0 3d C;2;3w11Jem1uueu 111eV11 Payments “11m . _ H ,_‘ , __ 1 7-- .. Its Suppliers, Att1chment to the Gr: oejy 11nu‘ ctu ezs o o \ ‘.r~. . [I . of A e3101n Bulletin r3. 9«;, Appil w, 1950. p. 1. Grocery F'oufacturer“ o. Ameyica. Bull eti:1 Ho. 8*”, fou- p r] _) 1959: .' I: u1ny y, p. R) Q LL) Special Publications t cs for Sale n: Committee 0 111 Grocers, Cn'c1g e . Prep1ped by the Neicn1n- tne Natione l Associ1tion 3f 0, Illinois, 1957. Dunning, H1rrison F. An Address to the mid- -;e1r meeting of the Grocefiy F11u111T11¥LJDss 0ve1 in Must E&PH Dollar Must Grossed Required Stock Per Week Earn ($1.00 x .08) is 2 11 6:1! = 121/ 8 - 3112/ When the item was "turned" in tz1e firs 1.1-Jedi, it earned 33— —l 3% more than required-~but failes to pay its W1y if held in stock for two weeks or more. Conversely, sozne grocers are perfectly satisfied in carryi11q an item in inventor which has a markup well above their ”Cost of Doing Business," but which could very well be losing money. E?o‘“ irrztcn1cea, JABt‘ £3 CfiBS Lune r1 2T3§=1tagdiu53 ert C; tLUPnche1° ‘ ce in every seven Jeeks: During: Period G',‘:.i :1 ”>1” Weeks This Inventory Actually Loss Over in Euut Earn Dollar Must Greased Reguired Stock Per Week Earn L§1,00 x .08) Q N. _1._. g¢ X E 25. /fl 6 x (3;! z 3 6? 2 f? 1 fl 5 x 6¢ = 30¢ 25¢ - E¢ 1L x (.35 = 2.1g! 25;! + 1g“ 3 x (33¢ = 1 8,2/ 2:- : g + M The item, per the example, should notete once each four weeks in order to be . . . PAYING ITS wAYI Held in inventory for a greuter perior, it is actually ILJSing.nummey e\mni tnotufli its urnflrup ix; xell :flxsve tfiVB "Cost; of Doing Business.'H APPELUIX B THE ROBINSON-PAP AN ACT (Act Of Julie 19, 193:, Chilp. 592, $9 Stat. 1526:15 U. 8' COde’ 8808' 139 133) l:b, :11.) AN ACT to amend section 2 of the Act entitled "An Act to supplement existing laws against unlawful ?€SCM‘ iz‘ Hts and monopolies, and for other purposes," approved October 15, 1914, as amended (U.S.C., title 15, se 1?, and for other 0 purposes). (Amending Section 2 of Clayton .ati-Lrust Act) (Fe ction l. ) That section 2 of the act e21titled "An Act to SUpplGIWEflt existins laws against unl1wful restraints and monop171cs, and for other purposes," 1pp11veo October 13. “e ended to read as follows: (Price Discrimination and Quantity Discounts) L1) That it shall be unlawful for any person enWWKeo in corre1ce. in the course of such commerce, either directly or indirectly, to discriminate in price between purchases of commodities ‘f like grade and duality, where either or any of the purchases involved in suc}1 dis11m1n1- tion are in commerce, where such commoditi s are sold fo: use, consumption, or resale within the United States or any Territory thereof or the District of Columbio or any insular possession or other place under the juristiction of the United St'ltes, and where the effect of such dis rimination may be substint1illy to 1e?) sen competition or tend to create a monopoly in clny line of c rmerce or to injure, destro or prevent competition sith any person who either grants or knowingly receives the benefit of such discrimination, or with customers of either of them: Provided, That nothing herein contained shall prevent differentials which make only due allowance for differences in the cost of manufacture, sale, or delivery resulting from the differing methods or quantities in which such commodities re to such purchasers sold or delivered: Provided, however, That the Federal Trade Commission may, after due investig21t tion and hearing to all interested parties, fix and est 1bli sh quantity limits and revise the sL commodities or cl 1V‘1l ble purcho s s it finds necessary, as to par es of comm111t1eo. where it inds that in greater quantities are render differenti on account thereof unjustl tory or promotive o monopoly in any line of coamerce; L2:‘1d the foregoing shall then no t be const1Mue to permit dif ferentials based on diffeiences in qua1titios g:wexte1 than those so fixed and establishe(L And pcoV1dc1 fu‘1ther, That nothing herein contained shLll prevent pecswns en9gz1ged in selling goods, wares, or mercf-noise in c neoce from selecting their own customers in bono fide toaa::ct1o and not in restraint of trade: And provide d fu~t1e3, Tha nothing herein contained shall prevent p1 ice coon es from time to time where if11sagiw1ve to c111.11g CUHuLtchu af- fectflrn; the nuijket f‘n ‘19 the TMereluJJlllty7CIf t11e gaaods concerned, such as but not limited to actual or JWHJlelt deterioration of perishable Hoods, obsolescence of season goods, distress sales under court process, o1 sales in go faith in discontinuance of busi1eas :1n the so ds co1ce°ue I :._-J 1 n 11 (i L): U 0 (Burden of Pebutta1--heet1nx Competition) (b) Upon proof being made, at any hearing on a c plaint under this section, that there has been discrim 3 tion in price or services or facilities furnished, 'he bur- den of rebutting the prima- -facie case thus made ‘y show ‘ justific a ion shall be upon the person charvei with a violation of this section, and unless justification shCLll be affirmatively shown, the Commission is authorised to issue an order terminating the disc1m1nat1oh Provided, however, That nothing herein contained s1ill prerent a seller rebutting the prima-facie case thus rgade by show' that his lower price or the furnishing of services or facilities to any purchaser or purchasers was made in good faith to meet an eoually low price of a competitor, or services or facilities furnished by a cowpetito . (Brom ace Commissions) (C) rfliza t it EH1 all be Lnfihr ful fVué'riy pe‘m511 e1rrsrri in conme'ce in the course of such commerce, to pay, grant, or to receive or accept, anything of value as a C1nni35ion, brokerage, or other compensation, or any allo :ance o" d1?— count in lieu thereof, ex cept for services rendered in connection 1.‘ith the sale or pu: chase of goods, wares, or merchandise, either to the other arty to such 1a1saction or to an agent, representative or other intermediary there- in where such intermediary is acting in fact for or in be— half, or is subject to the direct or indirect control, of any party to such trans action other thLLn the person by whom such compensation is so granted or paid. {\1,‘ }_1 V (Payments for 5e11vices 1nd Facilities Furnistel by Customer-Adve11tising llo11nces.) (d) That it sh:1ll be unl11ful for any pers Cn engaged in commetce to pay or contract for the p: yment of 1nything of value to or for the benefit of 1 customer of s11ch person in the course of such commo ities 1s co111pens1tion or in con— sider1tion for any services0 3? facilities furnished by or through such customer in C1: nnection 11it11 the pnoces sing hsndling. s1le, or offering for s11 11 any p11:ducts or commodities m31nufsctu11ered, s offe11eg for s1le by such pepsin unless such payment 1 1e11i1tio is evoilnble on p:oporti:m1€lly equal terms other t1H1 11m- peting in the GlotplbULlCH of :o’iuctsC o? cmm: L" 183. Cf’ C »di ' 1 {Q ) (e) That it sE1ll be unle Wiul fo111ny person to dis— criminate in f1vor of one puench1sep against another pur— Ch1ser or p1n1ch1sers of 1 commodity bought foC Ces1le. with or without p11ocessing, by contno1cting tlo furnish or fu11ni3E ing, or by contributin1_3 to the 1u1110*1n1 of, 1ny services or facilities cor nnected ‘ith the pioces sing, hxndlin1 s1le, or offering for s1le of such CuTnJQltJ so purcho's ed upon terms not accorded to all pu1c11se1s on p11oportionnlly equ1l tem_.s. iishing Additional Services o? Facilitie A ’IJ C Q l- 1"sz v (Unl1wful to Induce or Receive Di1C:1 1in1tion (f)1h1t it sho1ll be unl11ful for 1ny person engsged in C: >mme11ce in t11e cou1se of such commerce, :11 in ly to 1 1 ¥ induce or 11eceive 1 dis criminotio in price which is pro- hibited by this section. APPENDIX C R1e fo llo11ng is the full text of the Federal Trade Commis:ion's guides for advertising and other pronm;tional payments and s-ryices; compliance with sections 2(d) and 2(e) of the Robinson-Patman Act. What The Guides Are Me ant T1 Do These guides c1n be of g; we t value to businessmen who want to avoid violating the 11:3 1111nst giving or receiving improper promotional allovowces. including advertis iLg or special services, for pro 1ot1n products. The 'u1des11ill make possible a better understanding of the 1bll ations of the sellers and their customers in joint promotional activi— ties. The Commission’s job is to obtain compliance with these l:ws. It has a duty to m1ve against violators. How— ever, as an adm111strative agency, the Commission believes the more LGo .‘led ge business smen have with respect to the aws enforced by the Comm 1.sion the 1H0 e likelihood that the lans will be complied ltith. For the Commission to do its job properly and for business to ste y out of legal trouble requires that every effort be made to give individual businessmen better understanding of these lam. This, of course, 1es not mea1 that a business man must become a legal export, but it will help hin and the Commission' s law enforcement efforts-—if he has a good general knowledge of what he can and cannot do in the field of promotional allowances. If a businessman kno1ms that the leg 11 pitfalls 1‘1 e, he can steer his business policies to avoid them. Furth her— more, such knowledge is most useful in determining when competitors are trying to use leg :11 methods. In other words, it pays fol a businessman to know what his rights are as well as his obligations. These guides are es1aoeo to be both practical and understandable. They contain cazeiully consic lered sug gestions, or general rules of thumb, which business mill find very useful in preventing unintentional violations. They h111l1 ht the requirements of law and offer means for complying nit11 it without any attempt to suggest ways for skirting along the border line between what is legal and illeg al. 81. do What They Are Not Meant To Do It should be made cl e; too that the guides are not meant to do several thi1ngs : _471 R3 1_1 (1 (1) They are not meant to cover every sit1ation . Decided cases dealing ait11 unusual situations are not covered. or are situations which have not been considered by the Commission or the Courts. (2) They are not meant to tell how to shirt illegality. Clever people can undoubtedly devise practices not mentioned in the guides, but they may still violate the law. 51% They are not a substitute for sound legal advice. A They do not offer either new inte11p11et1tions of the law or change or amend the laws as determined by the Commission or the Courts. They should be read as 1 non— technical explanation of what the lam means; not as a legal restatement. What The Law Covers Gener1lly The Robinson- Patm1n Act is an amendment to the Clayton Act. It is directed at preve nting; C>1pet1t11e ine1uc1lities t -1at con.e from certain types of li)c11:ination by selle;s in ijmxarstate cunmnerce. {hections 23(1) and 2(e) cxf‘the zlct deal with discriminations in the field of promotional services made available to purchase11s who buy for w1e :.le. Where the seller pays the buyer to pe‘11for m the service, Section 2(d) applies. Where the seller furnishes the service itself to the buyer, Section 2(e) applies. Both Sections require a seller to treat his competing customers on propor— tionally eque 1 terms. Other Law Covered In two places, the guides go beyond Sections 2(d) and (e): (l) A seller “ho uses a promo 1tional scheme to cover a price discrimination by pa ying fo11serv ces that are not rendered may thereby violate Section 2(1) of the Clayton Act, as amended by the Robinson-Patman ct. (See page; ”po 11) (2) A customer who improperly receives p1v1e1to, services or facilities may thereby violate Section 2(f) of the Clayton Act, as a1 nen nded by the R binson-Patman Act, or Section 5 of the Federal T; 1ade Commission Act. (See paragraphs ll and lrf; 77). THE GUIDES 1. When Does the Law Apply? Sections 9(57and (ej apply to a seller of products in interstate commerce, if he either (a) pays for services or facilities furnished by his cu1tome in connection with the distribution of his products (Section E(d)) or (b) furzishes such services or facilities to his customers (Iection 2(e)). 2. Who ls A SelleU? “SelleU" includes snygne 1itn CU without fUUtneU pUscess a candy nanulicture s an exsmp oncessing. Is A Custome‘o '1: 11 Eng sells p: o1ucts er Ueswle. ing. Se 1 g sUn syUup ts le Uesale with A TrCustomeU" is some ne xns buys diUectly f31w the selleU cU his agent a: bUJkeU. sometines, semesne who bU” stm the customeU may have such a “elaticnskig with the seller°111 t t1e Jinn slsc11mékes Er'1 a c1ua‘gner’11f the sellerh :Hl f1ese gnyfiies, tfiv, onf 'Rnistsue‘“ 1fi1icn ix31ised in Sec tion 2(u) of t11e 14' includes ’pusc“ 'EU" w‘icn i" used in Section 2(e). 4. Whit Is lnteUstnte CJUWeUce? Cl1is :is inn eifi1i1U; tl:;t :n11l_e lru: b xfl:s EU?Ue lyeen1 UUitten about cu cannot de*1ine it in a few ”N‘ss. e.¢l inte °p: ‘et the l teUm quite b-1idlv. a tneUe is any part of a business which is not wholly Ni 1n cne state, (for example, sales 3U deliveUies cf p;U1duccts, tneiU subsellent QlDCWibUtl“D OP pu cngses JP deliUeUies of supplies WU Usr m?te 11s) the busi11ess may be su.bj& st to the Esbinson- Pstmen Act. Sales in the TistUict cf Columbis aUe coveUed by the 11w. Serices 0U Facili ties? 1H '13 (.53 i e: 0U in dec s ans The following else cove “ c n U serices and oring ns es coveUe’ t1e buyeU 11 if by not been exactly ‘p \‘17 D t le 1 celine1 by meUely sgm . r . l 1 -‘ k3 _— Z'l l" e "0‘ facilities. ve been held t: be seUV1ces 0U tne 1911wneUe the selleU ftufiliS‘ Mii1giifl1enn sing, 1CLIldb 113 Tflindow and il;x1U displays, Special sales 01 onmotic nsl eficUts faU 1Thicn "push money' is paid to cle1k11sslesnen, inn ctneU emplsye ees if the buyezs, Tf‘er‘rto .s ‘1"‘CLtQPS and cewwnstUii isns, (illectin: of :UdeUs onm uiiVidLL stnUes. :UUnisning csmplete distUibutisn cf selle°‘" line. HeUe :1Ue SG:'V1.CG selleU fUUnish 1 1 Any kind 1dve Catalogs, 'Denunis';%itsifis, Display and ssoUsre Displ:y m1teUiils. Tpec'il packaging, fisUensuse f cilitia s that hive been leld t: be sveUed ta; t e L i1en the 1‘1 3 }_1 L1) or credit, Accepting returns f i for conducting promotional Prizes or merchon‘ sts. ides t11e term “ es" and ”f4 .. . a v L.) is often used In these gu ces " -ties." J as short for ~ervic C 6. Need For A Plan If a s ller makes payment) or furnishes se1vzices th 3.t come under these sections he must do it under a plan hiC1 meets several requirements. Altr‘u1h this plan need not be written or formal, this may be a1v111b_c. particularly there ar many competing customers to be considered or 11 the plan is at all complex. Briefly, the requirements 11 a. The payments or services under the plan must be available on a proportionally equal basis to all coxnpetins customers. (See pa_ag'1oh 7.) b. The seller should tak some action to inform all of his customers who compete with any participating cus- tomer that the promotion is available. (See paragraph 8.) c. The pla1 must either alloJ all types of c mpetinl customers to participate or p1ovide some other means of participation for those who cannot use the basic plan. (See paragra h 9.) d. The seller and customer should have a clear under- standing about the exact terms of the offer and the condi- tions upon 1:hich payments 1ill be made for services and fa cilities furnished. (;e e p119ar1pn 10.) e. The seller must take reasonable precautions to see tm1 t the services are a t11ally furnished and also that he is not overpaying for th “ (See paragraph ll.) C) (D !" I {. Proportionally Equal Terms The payment or services under the plan must be made available to competing customers on proportionally eoual terms. This means that payments or services must be pr po°tionali ed on some bas's tha' is fair to all customers who compete. 11o single may to proportionalize is presc cribed by law. PHS’ met11od t11at tre1ts competing customers on proportionally equal te1m13 shay be used Generally, this can best be done by ba u1g the p1JMcn made or the serv furnished on the d-o lla: volume or on the quantity of go purchased during a specified time. BS 1'. C0 C S 1 0d 8. Seller's Duty To Perform The seller should take some action to inform all his customers competing with any participating customer t the plan is available. He can do this by any means he chooses, including letter, telegram, notice on invoice salesmen, brokers, etc. However, if a seller wants to be able to show ater that he did make an offer to a certain customer, he is in a better position to do so if he maxe it in writing. 219 9. Covering All Competing Customers The plan must allow all types of competing c11stomers to participate. It must not be tailored to satisfy tl1e needs of a favored customer or class, but must be .suitable and usable under reasonable terms by all competing customers. This may require offering all customers more than one wa to participate in the plan. The seller cannot either ex- pressly, or by the way the plan “per tes, eliminate some competing customers. Where the seller has alternative romotional plans, his customers must be given the opportun- ity to choose among planS. 10. The Need To Urdersta11d There should be a cl seller and each participat of the offer and the cond made for services and fac1 derstanding between the ustomer as to the exact terms upon which payments hill be ll. Checking Customers Use Of Payments The seller must take reasonable precautions to see that the services he is paying for are furnished and also tha he is not overpaying for them. moreover, the cxstoner must efcperid the value received in full solely for he purpose fo1 which the allowances were given. If the seller knows or should kno1J that what he pays or fu‘n1>ne: is not being properly used, the payments or services must be discontinued. It should be noted that pa y~e ents b, the seller there the customer pe: forms no se1vice.o may result in legal action against the seller under section 2(a) of the Robinson—Patman Act and against the customer und r section 2(f) of that law. Likewise, a seller may not properly pay, nor may a customer properly receive and retain, any amount in excess of that actually used by the custom-r o perform the service. ..4 12. Competing Customers The seller is required to provide i for those customers who compete in the distr promoted .roduct with the customer who is pa in the promotion. Therefore, the seller of his promotion to that in which partic sell. l3. Indirect Payments Payments by the seller, through an agent or broker or to a third person, for the benefit of the customer may violate the law 14. Meeting Competition In Good Faith A seller charged with discrimination in vic lELtion of section 2(e) may defend his actions by showing that the services ”ere furnished in good faith to meet an qui ivalent se1 vice furnished by a competitor. However, this is a very technical defe se subject to important limitations. The F0 [D 0 Commission k“; s held that the defense of meeting competitiin in good faith is not available to a seller charge: with discrimination in violation of Section 2(a). 15. Cost Justification It is no defense to a charge of unlawful discrimination in the payment of an allowance or the furnishing of a service for a seller to show that such payment, se vice, or facility, could be justified through savings in the 033‘ of manu- facture, sale or delivery; lo. Customer's Li ability Sections 2(a) and (e) apply only to sellers and not to customer HoJever a customer who knows hat reason 0 fl .9 ~ c_. to know that he is receiving ,ay‘ent :3 sejvices ,iwnted or furnishex when the seller violates Sectiots 3 j) and (d) may also he proceeded against by the Com31,s1 h under Section E of the Federal irade C»rW1313n Act, which pro— hibits unfair methods of ccxpetitian Complete Text_of F10 Guide," oupe°micket Hens, Vol. 9, No. 23 (June 6, lgto), p. it.