Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-07-02
PROGRAM URGED
FOR RESTORATION OF TRADE
Nations Business Calls Upon Individual
Firms to Do Their Part in Bringing
Back Prosperous Times.

manufacturing that would lower pres
ent costs.
g would turn my attention TO dis
tribution and first Of all isolate my
profitable market.
Example: In the automotive industry
far-fung dealer organizations have
proved a charge on that industry and
loss to the dealers There are three
principal f1elds-the low-priced. the
medium and the high. Seven hundred
and seventy counties. with approx
mately one thousand dealers. fill every
economic demand in distribution in
that medium-priced field for better
than 80 per cent of sales. Yet manu-
facturers vie with one another for
1000, 5000 and 5000 dealers.
Less than 200 counties out of 3,072
in the Nation cover every essential de-
mand in the distribution of high-priced
cars, with perhaps 300 to $50 dealers
an economic maximum. Yet the or
CARNATIONS spread themselves to the
extent of 500, TOO and evn 800 outlets.
This is economic waste, with less of
control, with diffusion of effort, with
costly direction, costly advertising in
communities, where neither dealer nor
consumer should be considered.
3. would study and define potential
buyers first from the standpoint of who
buys the product normally. How many
are there normally? Precisely where
do they live? Then I'd discount the
figures in the light of todaysA depressed
markets.
Example: If there are $1,000, 900
native white families in America and
$4,000, 900 registered motor cars-and If
a normal production was 100000 cars
each year-and If 100000 car owners
we're unemployed, I'd say that a rough
total of 3,o00.000 to 100000 cars would
be the limit of this years domestic
sales. If, in normal year, sold three
per cent of that market, or 10000 cars,
I'd see to it that this year I'd get
these 100000 sales or nearly per
cent of the total market. would &C
complish this by doing what no man
ufacturer has done in years-study the
market, isolate 100000 who could most
logically buy and sell 10000 of them.
4. In this study I would qualify my
buyers. Not l industry in 100 ever
qualities its purchasers. One hundred
and f1fty-three executives we're inter-
viewed personally and only nine re-
ported that they remembered ever being
solicited to purchas a motor car-yet
they returned year after year to the
market. Any manufacturer can set up
the machinery to capitalize on such a
situation.
S. In the entire study of distribu-
ton I would have an eve eternolly
on the economic. There's many
jobber given franchise-many a deal
er set up in America for the mere de-
sire to place pins on maps without
economic justification whatsoever.
The only tenable theory in dis
tributing organizations is that jobber,
distributor or dealer can render a
service at the factory at cost less
than the factory can enter the market
direct:
Tradition here imposes a terrific tax
on industry. The fact that a COM
petitor has a good dealer in OSkalooSa
is certainly no justification for es-
tablishing poor dealer there to COM
pete with him.
In this sense the fixed idea of trading
centers may impose Journalism in dis
tribution structures which profit the
factory nothing.
An example: One great American
city appears to be so pre-eminently
qualified as one of the 10 leading mar
kets of the Nation that one motor car
manufacturer after another has sunk
annually far more than his profit per
car in newspaper advertising alone, to
say nothing of other forms of local
advertising, dealer cooperation, travel,
zone supervision. all on the hypothesis
| that there is a rich market to cultivate.
AS a matter of fact. there Is not.
Of seem to draw my examples from
| the automobile industry 1T is because