Evening star. [volume] (Washington, D.C.) 1854-1972, 1917-02-23
TO INVESTIGATE INFLUENCE
OF ADVERTISING ON PRICES

Among the several Investigations In
progress or contemplated, of commodity
prices. none is of more interest to the
average business man than the one
which has just been suggested at
Washington to cover the basic facts OF
production and distribution. The scope
of the inquiry has not yet been fully
revealed, but thus far 1t is apparent
that the influence of advertising as
distributing force on both the price and
quality of goods will have a leading
place.
In this connection 1t is of interest not
only to producers and distributors, but
likewise to the consuming public, to
note that considerable preliminary
work has already been done in deter
mining the influence of advertising
during an era of high prices.
Advertising Not an Extravaganza.
The Association OF National Adver-
tisers has recently been gathering
some remarkable facts and figures on
this subject. They show how one after
another of the big advertisers or the
country have been able to reduce the
price OF their product Ut else "
prove the quality at no increase In
price It is a significant fact that ma
tionally advertised goods are the only
products which. as a class. have not
tended to rise in price during the past
few years.
to force prices up. Against all these
forces one force only is working 70
keep prices down-and it's name is
advertising. according to the data de-
partment Of the association;
facturer advances the claim that he
can sell his goods cheaper because he
doesn't advertise, says @: +. McClel-
land. who has been compiling figures
on this subject for the association
Every one who knows the A 3 G of
business knows that this claim Is i'm
possible on its face. Yet 1T sounds
plausible and ouch talk decetves mil
lions OF people.
"Two prominent business men were
talking things over not long ago: One
of them asked the other: What is the
most common delusion in the business
world today Instantly came the re-
to the price of goods
"In the production and marketing of
goods there are two inevitable costs
one Is the manufacturing cost. the
has ever yet been found by which
either Of these costs can be eliminated.
Cutting Selling Cost.
whether you buy farm products at
a grocery store, or mill products at q
dry goods store. or laboratory prod
ucts at q drug store; whatever you buy
at any store, be sure of one thing-the
price includes the selling cost. 1t must.
else the manufacturer. the wholesaler,
the retailer and the salesman could not
/ live.
And just as surely as there are al
ways two items of cost, the manufac-
| turing and the selling, just so surely
are there only two ways in which the
price of goods can ever be reduced
One is by economies In manufacturing
cost The other is by economies In
selling cost.
| "Of course, It isn't easy to cut manu-
featuring cost without cutting quality.
But in modern times a way has been
found to cut selling cost-and it's name
is advertising.
Advertising is like a straight line;
the shortest distance between two
points-the producer and the consumer.
It cuts out the grades. curves and the
angles 1t makes drop of ink do the
work Of a salesman. Bear in mind that
goods can never be sold unless there Is
a demand, and advertising creates this
demand in the simplest, most direct and
least expensive way. No other sales
|. method can equal Il in magnitude Of
return for a minimum Of cost
And the big returns from advertls-
ing also cut down the manufacturing
cost-that:s another saving. Increased
volume Of production always means
decrease in the unit cost of production
through better and more efficient man
ufacturing methods"