Evening star., 1947-08-17

"A" 4AioSSA AsAo GAAAOO6A Vic 4CtdLl
sale of finished products to con-
sumers are getting attention.
Because of confusion as to Just
what constitutes distribution, the
United States Chamber of Com
merce adopted this definition:
Distribution is the term used in
American business to embrace all
the activities employed in finding
customers for goods and services
and in moving goods, both geo.
graphically and through the chan
nels Of trade"
/ Distribution Too Costly
i The Goth Century Fund, private
nonprof1t research organization
found that in the last prewar year
1899, the consumer was paying So
cents out of every dollar spent on
goods for these activities. This, II
decided, was too much.
!. Taking the field of distribution
as a whole, the process undoubtedly
costs too much, but how much too
much it is impossible to say" the
funds report said. 1--WE can say
with confidence that there is waste
in distribution, but we cannot re-
duce it to percentage figure"
Business and industry are out to
discover where that waste is and
to eliminate it, particularly since
distribution costs have headed up
ward again since the war.
Some students of the subject see
distribution as the key to a number
of knotty problems.
For several years We heard on
every hand the cry production is
the answer = Now we are
beginning to feel the weight of the
load that has been laid on our
marketing machinery. Today dis
tribution is the answer said Don
Francisco, vice president of j. WAL
ter Thompson Advertising Agency.
Writing in the National Retail
Dry Goods Association Publication,
Stores, Mr.. Francisco said:
For the long run, prices can be
reduced in the face of a high level
of costs only if the efficiency of
both production and distribution is
increased"
Stating that "the important figure
is not the ratio between production
and distribution costs, but the total
which the consumer must pay" the
advertising executive said innumer-
able articles which carry a SEEM
ingly heavy sales and advertising
expense show a gradual reduction In
the purchase price of the finished
article.
The AID Mans Views
Advertising, he added. must con-
tinue to be an important factor in
reaching the millions OF families
that have moved into higher in
come groups, offering an enormous
new potential market for all kinds
of goods.
Mr.. Francisco warned, however,
that "the elimination of waste calls
for continuous advertising to q
carefully selected audience-not ex-
travagant, stop-and-start effort, or
campaigns that are spread too thin
to be effective"
Fenton B. Turck, president of
Turck, Hill g. Co., engineers, and
chairman of the American Society
of Mechanical Engineers Distribu-
ton Committee, estimates that con-
sumner prices could be reduced an
average Of % per cent through ap-
plication to distribution of engineer
ing principles used in production.
With efficiency in distribution
added to efficiency in production,
our national economy should be on
sounder basis than ever before in
history" Mr.. Turck said.
Production and distribution are
so closely related, economists say,
that mass output could not exist
without the means of mass distribu-
ton. BY the same token our vast
distribution system would bog down
If goods were not produced in
volume.
The relationship between the two
factors is explained this way:
AS Economists See 1t
When cobbler made q pair of
shoes from materials produced To-
cally and sold them to a customer
who came into his shop and ordered
them, distribution costs we're negli-
gible. Later machinery enabled him
to make more shoes at a lower cost
per pair, but he had to have the
means of selling the additional shoes
in order to enjoy the benefits of
increased production. As his mar
ket expanded he could increase his
volume of output. To reduce pro-
duction costs it was necessary for
him to increase his distribution
costs.
Under the present system, where
production of goods Is centralized,
both raw materials and finished
products must be moved, stored, ad-
vertised and sold pot only once but
often many times before they reach
the ultimate consumer.
For this reason some economists
say more efficient distribution is the
logical way to reduce prices. They
see lowered prices as a means Of
increasing sales, which in turn
would support high level of pro-
duction. And only through high
production. they explain. can unit
manufacturing costs be kept down
In the face of high wages.
! distributed by the Associated Press.H