Classic Mode

Music Trade Review

Issue: 1952 Vol. 111 N. 4

Music Trade Review -- © mbsi.org, arcade-museum.com -- digitized with support from namm.org
Manufacturers Should Aid in Eliminating
Trade Practice Abuses Says Emert Rice
TN his address at the Southeastern Re-
•*- gional meeting of the NAMM which
took place recently in Atlanta, Ga.,
Emert S. Rice, chairman of the NAMM
Trade Practice Committee, after point-
ing out how little dealer, salesman,
tuner or customer knew about piano
construction said:
"It is perhaps in the selling of pianos
that some of the most flagrant trade
practice abuses have been promoted.
"Recently I had the pleasure of talk-
ing with a gentleman who was prob-
ably among the country's most able
piano salesmen about 35 or 40 years
ago. In discussing many of the interest-
ing, as well as humorous salesmen's
tactics, he mentioned one used in a
prominent retail sales room of that
time. The technique was as follows:
"As the store's star salesman watched
the other salesman serve prospective
customers, he would slip into a show-
room where he noted a man having
some difficulty closing a sale. Aro-und
his neck would be dangling a typical
medical stethoscope which he would ad-
just and carefully begin to listen at
various parts of one of the pianos in
that room. Of course the story was that
he was checking the vibrations of the
piano to see, as he might explain to
the prospect, that the piano was prop-
erly seasoned. The prospect would be
all eyes. At this point he would un-
obtrusively take charge of the buyer
and it would become known that there
was a certain piano just checked that
was perfect and ready for sale. There
is no need to finish the story!
Bell Metal Plate Stunt
"Then there was the "bell metal
plate" stunt. The salesman would prove
the qualities of the bell metal plate by
taking a 50c piece out of his pocket,
raise the lid of a piano, and tap on the
cast iron plate. By comparison he
could go to the particular piano with
the special "bell metal plate", raise the
lid and at the same time slip his foot
over on the sustaining pedal and then
strike the plate with the 50c piece. Of
course the "bell metal plate" very evi-
dently made it a better piano due to the
sustained sound when he struck the
plate.
"All kinds of stories have been told
about pianos—pianos that have self-
tuning devices, pianos that never need
tuning and all manner of ridiculous
misinformation has been used by sales-
THE MUSIC TRADE REVIEW, APRIL, 1952
men to sell. And we may also add that
every conceivable scheme has been de-
vised to find a piano buyer.
Use of Fake Ads
"For many years probably one of the
most used unethical schemes to locate
a piano prospect is the fake ad claim-
ing that a repossessed piano is avail-
able in a community. This has been
and is now being used either by small
dealers in towns nearby them or by
larger organizations who have spread
the plan into several states. As we know,
the blind ad is usually placed in a
small town paper. When the customer
replies, a truck bringing one or more
usually new pianos will arrive at the
door one day and a clever talking sales-
man may even admit that he docs not
have the repossessed piano but happens
to have a "fine bargain". I was recently
told that one large operator was even
showing fake contracts to prove that
the instrument offered had been repos-
sessed. Usually a very substantial sav-
ing is offered. The customer often winds
up buying a piano "valued" at $800.00
for $600.00, which if he had taken the
precaution to check, could probably
have been purchased at the nearest le-
gitimate dealer's store for $550.00.
"Today with a more widespread
knowledge, together with a broader in-
terest in stamping out fake advertising,
most local newspapers will not accept
blind ads and welcome information
about dishonest layouts. They are in-
terested in protecting the local dealers
as well as the people of their commun-
ities.
Price Cutting
"Of all of the various complaints
that are heard today with regard to
trade practices, most of them can be
traced to what is commonly termed
price cutting. Just what does a price
cutter do? He may give a direct dis-
count. He may call it a cash discount.
He may offer an overvalued trade-in
allowance. Perhaps it comes under the
term of a loss leader. Then there is the
"anonymous friend" who will make a
gift and occasionally it is a "personal
gift" used to cover the discount offered
in a competitive sale. I am not referring
to the disposal of bonafide shopworn
merchandise.
The question is, what can be done
about this problem called price cutting.
The Federal Trade Commission plainly
states that nothing directly can be done
legally. Any merchant can legally sell
his wares at any price he pleases al-
though the fair trade practices rules do
state that it is unethical to sell below
cost with the intent of injuring a com-
petitor.
Literally, then, nothing legally can be
done about any particular dealer who
advertises or tags merchandise at one
price and then under the pressure of a
competitive sale, or for any reason, will
change the price.
We might approach the subject of
price from the angle of value. Just what
is the value of an instrument? Is it the
value of the materials plus the cost of
the labor to make it? In my opinion, it
is rare that the equal cost of two pro-
ducts can make the products equal in
value. I agree with the government that
an individual, whether it be the manu-
facturer, a dealer, or the person making
the final purchase, may value a product
as lie chooses. When one manufacturer
produces a useful article which the pub-
lic finds to be more efficient or useful
than another manufacturer's article,
then we can logically say that it will be
worth more and public competition in
the sale of the two articles will level the
price of one in proportion to it's value
to the other, regardless of production
costs or the cost to the dealer.
"An illustration of public reaction to
a variable nonstandard price is a recent
instance in which one of our service
departments was given a contract to
service an institution's pianos. We
found that one of the reasons that we
were approached was the fact that the
preceding year another firm's service
department had made a certain price to
do the work and then had gone to a
neighboring institution where they had
offered to do their work at a lower
price.
"In* describing the price cutter then,
I would say that he not only causes
some confusion when his neighboring
competitor is a one price operator, but
he is unfair to the public whom he
charges all manner of prices for the
same product. The dealer who deter-
mines by means of the manufacturer's
cost, together with his own needs, a
certain standard price for merchandise,
does not dare to inflate this price be-
cause he would then defeat his objec-
tive to sell competitively.
"In contrast, the price cutter must in-
flate his prices to make allowance for
the discounts, overvalued trade-ins, or
25
Music Trade Review -- © mbsi.org, arcade-museum.com -- digitized with support from namm.org
what not; to maintain a profit and stay
in business.
Fictitious Trade-in Allowance
"An interesting example would be
our experience at the time we opened
one of our stores several years ago. One
manufacturer that we represented al-
ready had a dealer in the town who sold
their pianos under a certain stencil or
brand name. We agreed also to repre-
sent them and sold the same identical
piano under a different brand name.
We priced the piano, including our
standard mark up, at $295.00. A com-
petitor priced the same identical piano
with only the difference of the name at
$495.00. This caused considerable con-
fusion from time to time when the com-
petitor would and could offer as much
as $200.00 trade-in allowance on an
old piano valued possibly at $25.00.
Actually a customer would receive $25.
more as an allowance on our piano
than the $200. on the competitor's
piano. That firm is now out of business.
"Another illustration might be the
experience of a customer who ten years
ago purchased a used piano for $85.00
from one of our stores. When he de-
cided to purchase a new piano, a com-
petitor offered an allowance of $125.00
whereas our salesman could offer only
$50.00. We lost the sale. However, with-
in the next few weeks the customer
found a record of the same style piano
having been sold to one customer at the
full price of $725.00, to another cus-
tomer at a cash discount of $125.00 or
$600.00, and he himself had been al-
lowed a trade-in allowance of $125.00
with # balance due of $600.00. Actually
the customer got nothing for his piano.
I do not believe he appreciates the deal
he was given.
Teacher Commissions
"Another of the most common com-
plaints in the merchandising of musical
instruments, and one which is appar-
ently destined soon for some official ac-
tion, is the old evil of paying commis-
sions to teachers, that is, without the
customers knowledge that the teacher is
acting as a salesman. This practice
seems to be as old as the musical in-
strument business.
"Recently an old friend, who was at
one time a concert artist, told a story
about a friend of his who was also a
well known concert artist about 25 or
30 years ago. He had a studio in a large
city. In the same building and on the
floor above a prominent piano sales
room. The sales room had a hidden
buzzer system to the concert artist's
studio. When one of the salesmen had
a good prospect for a piano and was
having some trouble in closing, he
26
would arrange to buzz the studio and
the artist would come down and uncon-
cernedly saunter into the sales room
whereupon the salesman would remark
"Oh, here is Mr. So and So, the concert
artist. I wonder if you would please tell
this customer what you think about this
piano." There is no need to finish the
story.
"This may have been considered
smart business 25 to 30 years ago, but
I do believe that today's better business
attitudes would hardly condone such
tactics. In that age many of the old
time teachers went up and down "piano
row" in the large cities to find out who
would pay the largest commission for
a sale that the teacher could influence.
"Of course, there is no reason why a
teacher should not sell pianos as long
as the customer knows the teacher is
acting as a salesman. The problem we
are discussing is the practice of the
teacher who is interested only in the
customer buying a piano where the
teacher will receive a commission.
"Many teachers seem to acquire a
possessive feeling towards their pupils.
This is a natural reaction to their in-
terest in seeing that the pupil does ac-
quire what the teacher believes to be a
proper instrument. It is the natural and
courteous thing for the parents to con-
sider the teacher at least partly in mak-
ing a selection. But I wonder how these
same parents would feel if they knew
that the teacher was interested in their
buying a piano only from a dealer who
paid them a commission, rather than
honestly helping them to select the best
instrument.
An Expose
"One of the sadest stories I recall
was an instance where a family pur-
chased a piano from a prominent music
store. When the teacher heard about the
purchase he went to the home and
examined the piano which he explained
was not to his satisfaction. The teacher
then went to the dealer demanding an
arrangement for a commission. The
dealer (with a certain plan in mind)
agreed and the piano was returned to
the store. It was placed in a prominent
position on the sales floor. Then the
parents and teacher were invited in.
The teacher unknowingly was shown the
same piano and found it to be exactly
what the pupil should have. The story
now goes that the dealer who had been
very much incensed at the whole situa-
tion proceeded to tell the parents exact-
ly what had happened.
"From one of our large cities come
many stories about the method of one
dealer who has approached a large
number of teachers showing them the
factory cost of pianos and making an
agreement with them to divide the
profits on a 50-50 basis on all sales
they can make. I understand the dealer
has sold so many pianos that the manu-
facturer represented has offered him
some sort of prize in recognition of his
success.
"From all over the country come
letters of condemnation of the teach-
er commission practice not only in
the piano business but especially the
band instrument business. Many believe
that it is almost impossible to operate
any sizeable business without tying in
in some way with the school band di-
rectors or instrument teachers.
"Certainly there is no individual
more important to the continued success
of the music business than the music
teacher. It is our duty to help and en-
courage them in every way possible. In
fact, with the present surge of interest
in music, it is imperative that we urge
more young people to enter this profes-
sion to fill the present and ever more
noticeable shortage of good teachers.
The natural questions to be asked with
reference to our trade practice problems
are, "What has been done, what is be-
ing done, and what can be done about
them?"
Remedies
"First, I will mention the meeting of
the trade practice committee of the Mus-
ical Instruments and Accessories Indus-
try held February 2, 1944, under the
auspices of the Federal Trade Commis-
sion. At this meeting trade practice
rules were discussed and passed upon.
The committee that met at that time in-
eluded representatives from the N.A.
M.M., the National Association of
Band Instrument Manufacturers, the Na-
tional Association of Musical Merchan-
dise Wholesalers, the National Associa-
tion of the Musical Merchandise Man-
ufacturers, the Musical Accessory Man-
ufacturers Asso. and the Music Mer-
chants Association of Ohio. The meeting
was held in Cincinnati.
"Seventeen rules were drawn up cov-
ering (1) misrepresentation and mis-
branding, (2) deceptive testimonials,
(3) misrepresentation as to the design-
ing, use, or endorsement of musical in-
struments, (4) misrepresentation as to
price reduction, '(5) use of "bait" ad-
vertising, (6) desception as to rebuilt,
used, converted, reconstruqted, restyled,
repossessed or second-hand products,
(7) misrepresentation as to being man-
ufacturer, importer, wholesaler, jobber,
distributor, or retailer and prices re-
lated thereto, (8) deception as to origin
(9) misrepresentation as to installment
sales contracts, their terms or condi-
THE MUSIC TRADE REVIEW, APRIL, 1952
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