Music Trade Review -- © mbsi.org, arcade-museum.com -- digitized with support from namm.org
DECEMBER 10,
1921
THE MUSIC TRADE
REVIEW
Hit!
SHARING THE MANUFACTURER'S GOOD
WILL WITH THE RETAIL DEALER
Waldon Fawcett, Special Correspondent of The Review, Shows How the Sharing of
Good Will Has Been a Valuable Factor in the Music Industry
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A spokesman for the music trade recently told
a commission of Congress what is the most
distinctive attribute of American practice. It
isn't Yankee "hustle," famed afar. Nor is it the
quantity merchandising that so impresses the
average foreign visitor. Instead there was cited
as a unique factor in business building the co-
operative system whereby the manufacturer
shares his carefully cultivated good will, with
his distributors. This is a form of team play
particularly well exemplified in the various
branches of the music industries.
The Value of Co-operation
Recent first-hand comparison of American
methods with business technique in Great
Britain and on the Continent qualified William
H. Ingersoll to pick the dominant American
trait. Therefore, this well-known marketing
manager, appearing at Washington not merely
for his own industry, but for the music trades
and several others from which he has creden-
tials, spoke with authority when he addressed
the special body of Senators and Representa-
tives that is investigating the marketing systems
of the United States.
Glorification at the United States capital of
mutuality of business good will grew out of a
discussion of co-operative distributing agencies
abroad—co-operative associations, co-operative
stores, etc., etc. "Here in the United States,"
commented Mr. Ingersoll, "we have worked up
what I regard as a more co-operative system
than the co-operatives." Thereupon he proceeded
to talk to his Congressional auditors on the text
of interdependent and interlocking good will as
an impetus to the movement in commerce of
musical instruments and other wares that find
their most valuable asset in brand or name value.
Only in the United States, this student of mar-
keting methods pointed out, does the manufac-
turer account the actual production of an article
to be one-third of his responsibility. Secondary
to that, he goes to the distributors and retailers
and explains to these associates his manufactur-
ing policies and the promotional means that he
will employ to attain his objectives. And, third-
ly, the American manufacturer advertises his
goods nationally and thereby helps directly to
make the market where the retailer gathers the
harvest.
European Merchants Are Independent
Your average European merchant is, accord-
ing to the evidence laid before the Congressional
commission, in a sense, somewhat more inde-
pendent than his American counterpart. But the
champion of American transfusion of good will
as a trade stimulant told the Congressional jury
that is sitting in judgment upon marketing meth-
ods that he thought this particular form of
European independence represents a loss, not a
gain. By his estimate, the ideal of economic
distribution, the minimum of friction and waste,
is attained when merchants and distributors pro-
vide the goods to supply the "suction demand"
that producers have created and thereby obtain,
as a background for store prestige, the good
will of a nationally known manufacturer.
A tradesman may not quite- realize how val-
uable is the good will that the producers of musi-
cal instruments and merchandise voluntarily
share with distributors unless he pauses to con-
sider that some of the most valuable trade-
marks in the world—trade-marks being merely
symbols of good will—are the property of the pro-
ducing forces of the industry. Single names in
the trade show, by the dividends that they re-
turn, a valuation up in the millions and it is this
earning power that the creator of good will
shares with his regional and local representa-
tives throughout the country. It is very much
as though a manufacturer gave each trusted asso-
ciate shares of stock in his company, but with
the advantage that this is an equivalent of capi-
tal stock upon which the holder need pay no
taxes.
The Factor of the Exclusive Agency
It was said, formerly, that the notable success
of the system whereby manufacturers' good will
is shared with music merchants was due to the
prevalence of exclusive agencies. There is no
gainsaying the fact that sole representation of a
house of established reputation in the music in-
dustries tends to concentrate locally the influ-
ence of national good will. But the exclusive
agency plan is not a prerequisite of good will en-
dowment, as has latterly been proven in music-
dom. Leaders in certain branches of the music
trade have eschewed the idea of the exclusive
agency and yet the translation of the good will
that these forms have created has been the most
powerful single element in gathering trade mo-
mentum for countless non-exclusive distributors
and dealers. Logically, though, a manufacturer
must have a more massive good will to share it
with all applicants in the trade than would suf-
fice if he gave it but one point of contact in each
community.
At first glance it appears a somewhat one-
sided arrangement whereby the manufacturer of
a musical utility shares with a merchant, per-
haps newly recruited, the good will that repre-
sents the fruits of years of conscientious effort
and cumulative advertising investment.
In
reality, however, there is not the inequality of
service and responsibility that one might sup-
pose. For the merchant who, in proper spirit,
partakes of a manufacturer's good will becomes
inevitably the custodian of that good will in his
immediate environment. It rests with him to
preserve and perpetuate whatever measure of
good will is placed at his disposal. And it
usually works out that the progressive, ener-
getic piano merchant actually adds to the manu-
facturer's fund of good will, while nurturing
good will for his own establishment.
Another Field for Service
There is yet another reciprocal service on the
part of the music merchant that recompenses
the manufacturer for sharing his good will—
that would, indeed, impel him to resort to just this
formula, even if it were more practicable than
it is to attempt musical instrument distribution
by the mail-order channel or some other direct
route. This added equation is the thoroughly
practical assistance that the music merchant or
distributor can render as a good-will guardian
or vigilante. Here we come face to face with
one of the prime incentives of good-will co-
ordination, to use that overworked word.
In many a line of business the perils that
beset the good will of the average manufacturer
are obvious, or may be anticipated, because con-
ventional in form. Menace arises, we will say,
from imitation of a trusted trade-mark or trade
name, the counterfeiting of a label or the simu-
lation of a package or container. In the musical
trades, unfortunately, the law of probabilities
has no such narrow range. All the risks of in-
fringement above enumerated are present, as
in any other line, but on top of them come
countless chances of substitution, deception and
misrepresentation due to the trade-in system and
the opportunities it opens in the sale of used
instruments. To the holder of precious good will
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facing such contingencies the co-operation of
local agents, distributors and dealers is worth
all it costs in shared benefits. No manufacturer
could at all times scan so closely the entire
music trade horizon as to detect each and every
trespass upon his good will. But with a sentry
in every community to give warning of each
good-will invasion, if he cannot personally repel
it, there is effected a satisfactory give-and-take
arrangement for the musical instrument manu-
facturer who shares his good will.
Sharing Good Will
No less in a practical sense than in a senti-
mental sense does the manufacturer of musi-
cal instruments share his good will with the dis-
tributor when he shoulders the guaranty for the
ohysical perfection, the performance and the
service of each instrument. Recently, as our
readers doubtless know, several retail firms in
the music field have attached a "dealer guar-
antee" to each instrument sold. Admittedly it is
a clever talking point, but for all practical pur-
poses it is superfluous under the conditions that
prevail in the major part of the music industry.
In the case of an instrument manufacturer with
a good will to respect and conserve the manu-
facturer's guaranty is ample and adequate and
it operates as a good-will insurance policy that
the producer transfers to the distributor with
the premium fully paid.
Occasionally an overexacting critic is en-
countered who grumbles that the musical instru-
ment manufacturer does not allow his distribu-
tor or retailer to share in his good will to the
nth degree because the privilege of dealer im-
print on the instrument is denied. Such a com-
plaint ignores, of course, the very fundamentals
of branding in the musical industries. The manu-
facturer himself is content to give his product
comparatively inconspicuous identification in
recognition of the artistic stature of the object
identified and the conspicuous place it is to
occupy in the home, club or other social setting.
It is unthinkable that the traditional, single com-
mercial autograph should be flanked by several
others. For if the privilege of imprint were ex-
tended to either wholesale or retail distributors it
might rightfully be claimed by all intermediaries.
If, however, the multiple trade-mark practice
that prevails in more commonplace lines is im-
practicable in the case of musical instruments
that does not signify any desire on the part of
manufacturers to prevent distributors or mer-
chants from tying to the producer's good will.
On the contrary, dealers are encouraged to let
the public know of the existing relationship. It
is to that end that the manufacturers furnish
advertising literature bearing dealer imprint, give
listings of local agencies in "foreign" advertise-
ments in newspapers and, under certain circum-
stances, share in the expense of local newspaper
advertising.
The Value of Good Will
The good will or "ancient partiality" on which
the established musical instrument manufacturer
encourages the distributor to lean is unusual in
that it is pre-eminently a form of consumer pref-
erence that serves at its best in "the long pull,"
commercially speaking. Music merchants have,
of course, known this subconsciously, but not
always have they sensed its effect in every-day
business. In the case of a thousand and one
familiar articles of personal or household use
the good will that makes the business world go
round is manifested in the form of frequent re-
peat orders by ultimate consumers, the very con-
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