Advertising; selling the consumer

Front matter

SELLING THE CONSUMER

Class X Book_

_

CHAPTER II How Markets Benefit Both Consumer

and Producer 12

The markets based on the group — Professional services enhanced by the group — vi CONTENTS— Continued

Marketing a young man's time — The buyer not an expert judge of intrinsic values — Sentiment is the basis of satisfaction — Disaster follows price competition — The salesman's judgment must be respected — Market control a money-making occupation — Publicity will correct all evils of market control — Consumers should prefer goods bearing the producer's trademark — The dangerous position of some manufacturers.

CHAPTER in

Men succeed as they are able to induce others to accept their views — Advertising is organized salesmanship — The most successful salesman is he who gives his customer the most service — The intelligent salesman appreciates that his responsibility does not end with the sale — The service that merchants give more attractive than the goods — Merchandise plus advice and ideas more valuable than merchandise alone — Advertising is service salesmanship directed at a group — Advertising should create desires that benefit the consumer — Publishers fast realizing their responsibility to readers — The days of advertis-

CONTESTS— Continued vii

PAGE

ing "mystery" and fake advertising fast passing — Censorship of advertising a necessary service.

CHAPTER IV How the Salesman Becomes a Producer 33

Personal salesmanship enhanced by advertising — The salesman produces satisfactions — The essence of real values — Satisfactory shoes are produced by salesman as well as by shoemakers — Identical automobiles have radically different reputations — How a paper salesman made his goods more valuable — A dealer in ranges, with twenty-nine years' experience, learns something new — What a range will do, and not what it cost to produce, determines its value.

Chapter V

Salesmanship converts storekeepers into merchants — Getting the confidence of a group is the department store idea — The group is composed of those who think alike — Groups as viewed by philosophers — Groups are really cooperative organizations — Cities, fast trains, publications, good examples of the group — Convenviii CONTENTS— Continued

PACK

iences, luxuries, and education made available for all because of groups— Membership in any group largely a matter of volition — The tremendous proportions of certain groups — In reaching groups advertising multiplies salesmanship — Outdoor, street-car, and publication advertising — an appeal to a group — Sensing the keynote of group harmony brings success to the salesman and writer of advertisements.

CHAPTER VI What the Manufacturer Owes the Consumer 51

Every one is a consumer and should be a producer — A successful newspaper publisher is an exemplary manufacturer — A complete plan of production and distribution essential — What the consumer thinks is a merchandising factor — Consumer groups can be organized — The manufacturer cannot escape merchandising responsibility — Unproven superiority of no value to either manufacturer or consumer — A merchandising audit should be made by every manufacturer — Never trust professional work to untrained men — How to decide whether or not an article may be profitably advertised.

CONTENTS— Continued ix

CHAPTER VH

7A6E

What the Consumer Owes the Manufacturer 60

Preference of a group creates and maintains every big business — How the newspaper has increased the purchasing power of the penny — Modern merchandising has reduced prices — When a manufacturer gains by reducing prices — The consumer should not be too sure of reduced prices — Consumers should appreciate that the advertiser is an educator — Advertisers usually reliable — Well-advertised articles usually the most valuable — The merchants who can usurp the manufacturer's functions are few.

Chapter VIII

Successful illustrations must tell the story in less space than words — Ideas that appeal to the buying group must usually be given to the artist — Mechanical limitations must never be overlooked — Using words to convey ideas — Keep the words simple — The successful use of type — Let the master compositor work out details of layout — Building an advertisement likened to

CONTENTS— Continued

PAGE

building a house — How type is used in printing a newspaper — How type is used in printing a magazine — The making of engravings — Cheap engravings are poor economy — Making the most of advertising space — Space buying a job for a man of long experience — How to get good printing — "Look before you leap" in ordering printed matter — The postage-saving expert a coming profession- — Paper stock and printing inks — Judge paper stock and inks by this test — Does it emphasize itself in the story — Greatest of all advertising tools are brains and common sense.

Chapter IX

Choosing the medium of greatest prestige — A case in point — Buying space requires careful analysis — The intrinsic value of mediums and aggressive salesmanship — Service by the representative of a medium is an important factor — One large group vs. several small groups — The different mediums used in advertising — Groups of advertisers who find newspapers the best medium — The daily news-

CONTENTS— Continued xi

PAGE

paper ideal for advertising the local store — The newspaper best medium for satisfying immediate needs — Fiction magazines as advertising mediums — The national weekly as a combination newspaper and magazine medium — Technical, trade, and class publications — Farm papers, the trade publication of a great class— How to judge a class publication.

Chapter X

Advertising Mediums (Continued) ... 87 Street-car advertising analyzed — The use, checking, and cost of street-car advertising — The fore-runners of modern posting — The evolution of the twenty-four sheet poster — Billposting service as standardized in United States — Painted bulletins — Bulletins and walls compared — The comparative cost of "paper" and "paint" — Electric signs — Window displays — Store demonstrations — Sampling — House-tohouse canvassing — Form letters, mailing cards, folders — Cards and other printed matter used to assist salesmen — Calendars and novelties — Selling ideas used by novelty salesmen — Adding value to novelties — Moving-picture slides.

xii CONTENTS— Continued

Chapter XI Page

Building and Testing an Advertisement 99

What the copy writer should know — The copy writer an interpreter between advertiser and buying group — Writing and illustrating advertisements with a strong group appeal — a natural gift — Diagramming the advertisement — Brevity not necessarily good — Advertisements must attract and create desire to buy.

Chapter XII

Application of the Five Tests . . . . 113 Institutionalism as embodied in newspaper advertisements — Cities have institutional characteristics — The distinctive Chicago character — A big store is a big group — Every detail carefully studied — Sentiment is always the basis of action — A store without a sign — The five tests applied to magazine advertising — The secret of success in Eastman Kodak advertising — Keeping the demand active for Old Dutch Cleanser — Advertising to enhance confidence — Focussing demand on Swift's Premium Ham — The subtle handling of Hydraulic Press Brick advertising — Ap-

CONTENTS— Continued xiii

PAGE

peal to the sentiment by the National Lead Company — Quaker Oats advertising is well rounded — The mail-order idea in general publicity advertising — Comments on mail-order advertisements — The five tests can be applied to any kind of advertising.

Chapter XIII

Advertising and Selling Through the Ordinary Channels of Trade . . 130 The retailer — the biggest link in the merchandising chain — The functions of a wholesaler — The wholesaler as an aid to the retailer — The exclusive jobber plan — The advertiser must create his market, the jobber is a distributor — Selling the retailer direct — Reasons for selling direct — The third middleman: agent, broker, importer, or exporter — Broker and agent practically the same — The broker sells the wholesaler — Selling the consumer direct — Introducing goods to consumers by solicitors — The manufacturer who operates retail stores — The mail-order house — The middleman essential in almost all selling systems — The middleman's functions should be clearly defined — The consumer xiv CONTENTS— Continued

is the final test — Advertising confers a double benefit.

Chapter XIV

How the Middleman Serves the Consumer 144 The middleman is not a consumer — The jobber and advertised goods — When private jobbers' brands are justified — Each distributing factor should educate the consumer — Better understanding will eliminate waste — Retailer and consumer have identical interests — Advertising should never coerce — Advertising should be merchandised.

Chapter XV

Retail Advertising — Preparation . . . 151 A stable labor market necessary to successful retailing — The location within the locality — Buy from competent salesmen representing reliable houses — Comparative value of advertised and unadvertised products — Exclusive agencies should be carefully considered — National prestige aids local standing — Well-advertised lines cost less to handle.

CONTENTS— Continued xv

Chapter XVI Page

Retail Advertising — Methods and Mediums 158 Groups make retailing possible — Show windows are silent salesmen — The local newspaper is the retailer's best medium — Treat your advertising appropriation as a trust fund — Plan your work and work your plan — How suburban dealers can cash in on local newspaper advertising — Dealers should and can discriminate — The plan more important than the medium.

Chapter XVII

Retail Advertising — Making Good . . 168 Retail dealers are expected to be square- Maintaining confidence increases the dealer's assets — Inviting the return of merchandise increased profits — " Taking Back" goods the dealer did not sell — The power of service — Price cutting benefits nobody — A square deal for every one is the dealer's best asset — The difference between intrinsic, real, and commercial value — Will service become too costly? — The desire for luxury stimulates industry — Service competition invites cooperation — Advertising will bring needed reforms — Stable conditions insure prosperity.

xvi CONTENTS— Continued

Chapter XVIII Page

The field of tremendous accomplishment — The Supreme Court and the fixed price — Two ways of maintaining price — both effective — Selecting the salesman able to stop price-cutting — Cut price to one may destroy confidence of many — Plus service vs. cut prices — Persuasion vs. coercion — Confidence vs. price-cutting — Advertising the strongest ally of price maintenance.

Chapter XIX

Cooperation Between Salesmen and Advertisings — Salesman, the Closer — Advertising, the Missionary . . 190 Creating the buying impulse — Team work — Increased income for the salesman — Service to the consumer — The stability test of both advertising and salesmanship — The salesman with a medieval mind — Reducing the selling cost — Utilizing the modern machinery of selling — Advertising and selling cost no more than salesmanship alone — The salesman works on a bigger scale — Advertising as insurance against the future — Let the wholesale salesman cooperate with the advertising of branded

CONTENTS— Continued xvii

PAGE

staples to set higher standards for the retailer — It is the salesman's job to educate his trade to cooperate — Responsibility — Cooperation — You are bound to get more than you give no matter how much you give.

CHAPTER XX Advertising Opportunities 199

Three distinct types of men needed — Thought must be expressed to be valuable — The publisher — The advertising solicitor — The advertising writer — The buyer of advertising space — Printers, plate makers, and typesetters — Big advertising opportunity with the publishers — Advertising courses in universities.

Chapter XXI

The Advertising Manager . . . . . 207 The advertising manager should direct sales — The advertising manager can create new policies — The four epochs in a business career — Second epoch, working without supervision — Delegating to subordinates is epoch number three — Commanding cooperation of big men is fourth epoch — Good judgment more important than handling details — The business should be an open book to the advertising manager — xviii CONTENTS— Continued

FACE

The strong advertising manager must be mature in development — Knowing where to get the best the secret of success — Advice to advertising manager in a concern new to advertising — Getting saturated with information essential — Get a good printer — The advertising manager must command good- will in his organization- How to get all that callers can give,

Chapter XXII

A first attempt at soliciting — Advertising can harm as well as help — A solicitor should know what he is selling — Writing the advertisement once the dealer's prerogative — A solicitor must give service — The new order of soliciting — Turning down business a royal road to future business — Soliciting is a serious job — A solicitor should be sociably serious, never clownish — The solicitor must know, bluffing doesn't go — Criticism of your house is fatal to your success — The hunt for good men — The solicitor's fate lies largely in his own hands.

CHAPTER XXIH

Plenty of room for both mail-order and dealer business — Mail-order business natural and

CONTENTS— Continued xix

PAGE

legitimate — The live, wide-awake merchant has no fear of mail-order competition — The field that mail-order advertisers serve better than any one else — Many nationally advertised lines started in a mail-order way — Follow-up systems necessary in every mail-order business — Choosing the mediums for mail-order advertising — Sales-producing matter of high quality used by mail-order houses — Creating confidence, the constant aim of the mail-order house — Mail-order copy must more than offset the prestige, displays, and personal salesmanship of the store — Every word must be carefully weighed in writing a mail-order advertisement — The change of one word made a wonderful advertisement out of a mediocre one — Good mail-order copy should be repeated — Getting the names of possible buyers — Mail-order advertising to focus the attention on the catalogue — Writing mail-order copy a true training.

CHAPTER XXIV National Advertising and Exclusive Dealers 241

An arrangement between manufacturer and retailer for the benefit of both — The manufacturers must contribute all possible sellxx CONTENTS— Continued

PAGE

ing help, the retailers actively push the sale — Manufacturers that fail to give proper selling assistance to retailers — Local advertising by dealers to connect up with national advertising — Drawing inquiries through national advertising to refer to local dealers — Selling to one dealer appeals particularly to manufacturers of high-grade merchandise — How the magazines are protecting the dealer by censoring the advertising of the manufacturer — The advertising manufacturer gets the preference with live dealers — Failure to handle advertised goods a reflection on the dealer — Advertising in restricted territories — Advertising service furnished dealers includes a variety of different kinds.

Chapter XXV

What is our amateur judgment worth? — Cooperation between manufacturer and dealer a benefit to consumer — Greater profit to producer, lower cost to consumer — The trademark means stability — Do not hide your trademark under a bushel — Backing up the trademark with advertising — The stronger the competition the greater

CONTENTS— Continued xxi

PAGE

the benefit to the trademarked product — The legal aspect.

Chapter XXVI

Prestige-building Advertising .... 257 The salesman's part in establishing prestige — Prestige, the impression of quality without question — Constant reiteration gains prestige — Prestige depends as much on the manner as on the matter of your story — The price of silence — A pointed instance— Old masters made new by the master hand of publicity — The prestige-building story and the telling of it — Publicity without prestige — Masters of prestige building — The penalty, "Make Good" — Advertising makes the goods live up to the prestige gained — Where a rise in price built prestige — Advertising brings the deciding vote — Building prestige on prestige — Prestige is substantial, not built upon snobbishness — The price of confidence — A house of cards — As Omar says: "A hair perhaps divides the false and true."

CHAPTER XXVn

Can the Commercial Value of Good-will Be

Accurately Appraised? 268

Constant appraisal necessary to value goodxxii CONTENTS— Continued

PAGE

will properly— The new factory did not possess the good-will of the old lumber yard—Customers do not care where things are made — Good-will is attached to that which identifies the service — Two clearly defined objects for all advertisers— A merchandising audit will reveal marketing possibilities — The engineer or accountant preferable to salesman or copy writer for making merchandising audits — How a merchandising audit should be made — Representative groups of people must be canvassed — Chart your competitors' advertising but don't advertise them — The wonderful effect of minor points in advertising — Accounting that provides a ready basis for advertising deductions — Proper distribution of overhead expense — Checking up results should be made easy— The executive should be able to know anything he wants to know at a moment's notice— Successful advertising defined.

Chapter XXVIII

The early days of the agency — The era of split commissions and agents' net rates— The lowest bidder secured the business — Of

CONTENTS— Continued ndii

»ACS

present-day agencies there are four types — The agency that sells copy — The agency which places business at publishers' rates — Agents of types two and three cannot fully represent the advertiser — The evils of the agency system which does not represent the advertiser — The highest type of agency sells service to its customers — The best system of compensation — The four definite functions of the advertising agency of the fourth type — The advertising agent a trustee of the customers' money — The agency of the highest type will advise against advertising if advertiser is not ready for it.

CHAPTER XXIX How Much More Can Be Given the Consumer? ... 293

Advertising makes the dollar larger — The Iowa hen is a paradox — Our wasteful distributive system — Through advertising the consumer gets luxuries at the price of necessities— Scientific merchandising benefits greatly both producer and consumer — When big business men compete intelligently in advertising the consumer will be best served — Misapplied energy is the greatest economic waste.

Introduction

In the spring of 1910, Dr. Willard It. Hotchkiss asked me to take an evening class in Advertising at the School of Commerce, which the Northwestern University had just established in Chicago.

Grouping the subject matter under ten heads, I devoted one evening to the discussion of each and the class was encouraged to ask questions freely.

The chapters which follow were based upon notes made at these classroom talks and from lectures delivered before the Universities of Chicago, Wisconsin, Michigan, Illinois, Minnesota, and Washington.

The second edition of "Advertising — Selling the Consumer" is practically identical in purpose and scope with the first. Some of the chapters in the first edition have been replaced by editorials on merchandising which I wrote for James Keely, editor of the Chicago Herald. As he published them in January, 1916, under his own copyright, his permission to use them here is duly acknowledged.

It is gratifying to note the growing demand for this kind of a book which is an attempt to introduce to earnest, thoughtful men a work which is xxvi INTRODUCTION

constructive and fascinating and is rapidly becoming a profession worthy of the best minds.

To give due acknowledgment to all who have helped me in this work would require a volume larger than the book itself. Nearly thirty years of business experience and close contact with successful men in every part of the United States have developed the ideas which justify presentation and preservation in this form.

John Lee Mahin.

New York City, April 15, 1916.

Chapter I Advertising Can Appeal Only To Free Dollars

THE dollar that buys the absolute essentials — food, clothing, and shelter — is a mortgaged dollar. It must be spent, because the possession of these things is absolutely necessary to existence.

But even these necessities must be merchandised to free dollars if design, style, location, or the form and manner of delivery are determining factors in making specific purchases of them.

Clothing is commonly regarded as a need. Yet a considerable percentage of the clothing business is created by a merchandising instinct which develops the want which it wishes to supply.

Nothing is more artificial than that something which we call style. Style entirely upsets the economist's theory that wealth is the product of raw material and labor. A smart hat to-day contains the same amount of raw material and labor that it did two years ago, or will two years hence. But it was commercially impossible two years ago, and will be impossible two years from now.

Why? The value of the hat depends entirely upon whether or not it is "in style." It is "in style" if a large enough number of women can of r styie is be induced to think it is. Changes in Salesman^ s tyle are controlled by the merchandising ability of men and women who profit financially by these frequent changes. Styles are created by those in position to benefit by their acceptance. The ability to create style and get it accepted is a subtle form of salesmanship worthy of careful study.

The freest dollars in the world are those constantly being paid to the individual worker. They No One Is are the dollars that are spent only when the Compelled workers choose. They are not needed to

a Free provide f ood, shelter, or raiment. They may

Dollar k e deposited in the bank or used to gratify whims. Most of the "necessities" for which they are spent are fancied rather than actual.

When we say "big business" we think of oil, tobacco, beer, moving pictures, newspapers, automobiles. But who can say that any of these kinds of business have been built up by dollars which the consumer had to spend?

It may seem paradoxical, but it is certain that

the most strongly entrenched businesses are those

The Free which give the consumer's dollars back

Dollar to him if he is not thoroughly satisfied

Builds . . . . -

Big with his purchase.

Business K t k e merchandising of the savings habit were directed as intelligently and prosecuted

ADVERTISING APPEALS TO FREE DOLLARS 5

as vigorously as is the merchandising of chewing gum, 554i out of every 1,000 (the percentage for Switzerland) citizens of the United States would have savings accounts, instead of our present poor showing, which is only 99 out of every 1,000.

The choice of the possessor of the "free dollar" is the determining factor.

In disposing of the mortgaged dollar the consumer merely hands over to the producer and distributor money for the necessaries of life — having sumer En- no great amount of satisfaction in their ^Culf'Td P ossess * on — because he has to have them. But the producer or distributor who wants to get the attention of and sell to the free dollar has to make the consumer positively and actively want what he has to sell.

The consumer has to be "sold" the things he spends his free dollars for. The capture of the free dollar calls for more in the way of inventive genius, organizing ability and persistently skillful catering to the whims, fancies, and sentiments of human beings than anything else in the world.

I cannot see how we can escape two conclusions: (1), that the American people do not need to put a curb on any big business which appeals directly to free dollars; and (2), that any attempt to build a business on the mortgaged dollar alone has within itself elements which will finally destroy it.

For some time Chicagoans have been watching the career of a politician who could go back to his constituents every two years, appealing to a free ballot, and secure power, prestige, and preeminence — because he was willing to stand that test continually. This same man made a dismal failure of banking, because he tried to apply to it an entirely different set of principles. The best bank depends upon no political pull for its deposits and considers only genuine merit in making loans.

There is business that can become a parasite,

clinging to large, successful enterprises, because

somebody thinks that a mortgaged dollar

Parasites . i i i i i i p

Live on is as valuable and as serviceable as a tree M Doia 9 s d one * Many firms do all their own printing, because they are erroneously supposed to save money in that way. An unbiased audit and a correct division of overhead expenses generally show that these excrescences are unprofitable.

The practice of business reciprocity, i. e., trading back and forth, has such a hold on some communities that practically all the consumer's dollars are mortgaged.

The retailer who believes that his store ought to be "supported" because he pays taxes and spends his money at home is in a wrong mental attitude for successfully combating mail-order competition, or even for establishing his own business upon a serviceto-the-consumer basis. Cities which give free sites or bonuses to manufacturing institutions are doing an injury to the consumer, who must finally pay the cost of all economic waste. A business which can-

ADVERTISING APPEALS TO FREE DOLLARS 7

not exist without such an artificial stimulus is not profitable to any community.

The publisher who asks for "patronage" instead

of merchandising his service on its merits and re-

little fusing any income which is not made up

Businesses f f ree dollars, is well started on his own

Die on

Mortgaged toooggan. lne merchant who encourages

Dollars j ong crec jit s , believing that he can thus force his customers to buy things they would not buy otherwise, is making them less valuable to themselves and is, therefore, curtailing the ultimate expansion of his business.

Twenty-three years ago it was supposed that the

wholesale clothing business had to give credits of

. from four to nine months. The best

ness Thrives known clothing house in the world (located

%Jl™ s m Chicago) started out by giving cash discounts of 7 per cent. This firm soon secured the best dealers, those who discounted their bills, and has built up a tremendous volume of business, having practically no accounts to carry now.

As soon as the executives of this firm were sure that advertising was the most economical form of salesmanship they began to advertise. Within fifteen years advertising multiplied their volume by ten. Their selling expense is lower than that of their competitors, because their salesmen (the best paid in the trade) put all their time on selling and let the advertising do the missionary and follow-up work.

Business has been bad in the farm implement

line where long credits to the farmer and to the

The Auto- dealer have been carried by the manufac-

dustry turer. Yet one man in every fifteen in Thn p r s J n Iowa owns an automobile — and from the

Dollars beginning the manufacturer of automobiles has insisted on having cash before surrendering title to his car.

When the consumers' dollars are free and he and she have in the bank money with which to make purchases, the reflex is best not only on the consumer's mind but also on the service furnished by the retailer and manufacturer.

The manufacturer who advertises can appeal only to the free dollar. The consumer who will take any butter that the dealer chooses to send her, when she orders butter, is buying with a mortgaged dollar; but if she asks for and insists upon having a particular brand of butter, wrapped in a dainty, sanitary carton, an advertised make whose quality she knows and can depend upon, she is spending a free dollar. In the first case she is merely supplying herself with a necessity; in the second instance she is making a choice; her purchase is the result of a want created in her mind by the advertising effort of the maker of that particular brand of butter. She can at all times decide whether or not she will buy, in response to the advertiser's suggestion. The man who advertises knows this.

ADVERTISING APPEALS TO FREE DOLLARS 9

Big business is possible only so long as it appeals to the free dollar. Big business has been criticised.

The Free Sometimes the muckrakers and agitators Is ^he^Con- were r ig nt — sometimes the dominant spirits

sumer's of big business have forgotten that the

Greatest , j» n i • i • • .•

Protection basis oi all big business is continuous apand the Ad- p ea j j. Q free dollars, and never the arbi-

vertiser s x . , .

RealOppor- trary, autocratic use of the power which my the free dollar has placed in their hands. The consumer is best served by the man who will study his needs, the man who will expect to attain and hold supremacy and preeminence only by appealing always to the consumer's free dollars, by the man who will use in the upbuilding, development, and maintenance of his position all that modern merchandising has proved to be efficient.

Advertising gives a manufacturer power to produce trade for the thing he is best equipped to make. It eliminates competition. It creates, forces, persuades, builds. It makes things happen. It is so many-sided that it deserves the attention of each de- . . partment of every business organization. Makes Advertising produces desire; gratified desire F Smdl P r °duces habit ; and habit produces business. Capital It does more. It makes sales. The duced brainy salesman gets a larger field for use- Sdling f u l ness anc [ m0 re pay when he cooperates with advertising, and while making more money for himself reduces the cost of selling which includes both personal salesmanship and advertising.

The man who advertises gets along on less capital and saves on interest charges. That is because a business which advertises is produced more by creating business conditions than by adapting its affairs entirely to them.

Advertising is not material substance. It is service. The true advertiser and the advertising man never forget that space is less important

Not^ 19 than service. Ideas are paramount. The Material p Ur p se of an advertisement should be clear