Presto

November 20, 1920.
STO
PRICE MAINTENANCE HIS THEME MERITS
In Sending Regrets at Inability to Attend Meeting of Trade Association
T. M. Pletcher Communicates Strong Views on
Vital Subject.
In accordance with a resolution passed at the last
meeting of Talking Machine Men, Inc., an organiza-
tion comprising the trade of New York, New Jersey,
and Connecticut, E. G. Brown, secretary, was in-
structed to have the enclosed letter from T. M.
Pletcher, president of the Q. R. S. Co., Chicago, re-
produced and distributed to members and the trade
press:
ARE CLEVERLY STATED
Three-fold Character of Instrument from De Kalb,
111., Industry Made Clear to Readers.
"A marvelous achievement" is what the Apollo-
phone is called in a handsome display in the Chi-
cago newspapers by Rudolph Wurlitzer Co., Chi-
cago representatives for the Apollo Piano Co., De
Kalb, 111. The music public is directed to consider
a pleasant circumstance:
"Think of having in your home an instrument that
not only summons great artists like McCormack,
Galli-Curci and Caruso to sing for you, but also
great pianists to play these artists' accompaniments on
your own piano should you not care to do the play-
ing yourself" was printed in the Sunday issues of
all newspapers. "The Apollophone, combining the
phonograph and • the Apollo player, gives you this
privilege. It plays as a phonograph, as a player-
piano, or as an ordinary piano. Besides, it synchro-
nizes phonograph music with that of the player-
piano or piano. Come in and hear John McCormack
sing "Somewhere a Voice Is Calling" to a player-
piano accompaniment. Demonstrations given daily
on this marvelous instrument. You are welcome.
knowledge? Such as wearing apparel, etc.? By the
price of course. And that's the way the customer
judges merchandise you sell. He is not an, expert
his only recourse is judgment by price, and conse-
quently he regards the higher priced goods as better
than the lower priced.
Rule Always Holds.
You may say that if two merchants side by side
I am sorry that stress of business here has pre- are selling the same trade mark article, one at full
vented the synchronizing of my visit east, with the price, the other cut, that this statement will not main-
meeting of your association. However, I am doing tain. But it does. When a consumer sees two ar-
the next best thing and communicating my views on ticles in two windows bearing the same trade mark,
the subject of price maintenance by letter. When a at two different prices, his reaction is that the cut
man mentions the two words, "price maintenance," price goods must be seconds or inferior in quality;
the majority of his listeners begin to think about in other words, there must be a hidden reason for
something else. They have heard the two words so the cut. And he is always safe in dealing with the
full price merchant, because that man's price main-
often that the phrase has almost lost its meaning.
tenance policy enables him to stand back of his
But I never will stop talking upon the subject of
profit protection. A dealer can justly say, "What goods and gladly render the kind of service that
business can it be of any outsider if I choose to cut your cut-price merchant cannot afford to give.
Price cutting used to be a terrible evil in the
my prices and sacrifice my profits, the money comes
out of my own pocket; if there is any suffering to ready mixed paint business; retailers everywhere
cut their profits into nothing, using paint presumably
be done,,I am the one who pays the piper."
True enough, but you've only told half of the as a leader depending on price attractions to at-
Elda McNamara's Topic Was the Packard Plant
story and the weakest half at that. Every merchant tract other trade to their stores.
An acquaintance of mine who is interested in the
and Its Harmonious Characteristics.
is a part of the economic business structure of the
country. To exist and contribute his part to the industry, made an exhaustive investigation of the
Elda McNamara, an employe of the stringing de-
welfare of the retail structure, his business must entire situation. And his records showed that in
towns where there were three merchants cutting, and partment of the factory of the Packard Piano Co.,
progress and prosper.
Most certainly the bankrupt and the barely exist- one merchant protecting his profits by price main- Fort Wayne, Ind., was one of the prize winners in
ing ones, the never really prosperous merchants, are tenance, that the full price man was doing more a contest by Forbes Magazine, just closed. It was
for an essay on the topic, "The Best Kept Plant in
not doing anything to help either themselves or the business than any of his competitors. This situa- America." The writers of the most convincing arti-
trade in which they are engaged. So, the first step tion existed not in one town, but practically in every cles were adjudged the winners.
to being a real sound merchant is profit protection city investigated.
Mr. McNamara's twenty years of service in the
—price maintenance—or whatever you choose to call
A Fervent Wish.
Packard Piano Co.'s factory had put him in touch
it. The asking of excessive profits is a menace, but
I am so radical on this subject that I do not hesi- with all phases of the organization and provided
it is so rare that we need hardly even discuss it.
tate to state frankly that I hope the time will come him with an abundance of personal experiences to
The Accepted Margin.
when Congress will see its way clear to pass a law cover his subject thoroughly. In his own words he
In every branch of retail trade there is an accepted compelling a manufacturer to set a fair retail price told a simple story of the surroundings and working
margin of gross profit necessary for the payment of
on his merchandise, printed right on the goods and conditions which had particularly appealed to him.
overhead and earning of a net at the end of the enforce adherence thereto on the part of everyone
Considering the fact that there was very keen com-
year. In some lines, such as groceries, it is small; concerned. The ultimate purchaser is absolutely
petition
among the many large and wonderful plants
in others, such as music lines, it is by comparison protected by a price suggested by the manufacturer.
larger, but in each and every trade the accepted mar- Why? Simply because the manufacturer knows he scattered over the country, it makes the' officials and
employes of the Packard Piano Company proud to
gin is the result of years of evolution. Finding of
must fix a fair price to insure his sales in competi-
cost of doing business, credit risks, investments, lo- tive markets. He realizes that he must have vol- find the busy plant right up in sixth place on a list
of forty receiving prizes or honorable mention. In
cations, rents, etc., necessary to do business.
ume, if his price is too high it will restrict his sales; the big list Mr. McNamara was seventh.
And the fairness of these margins is conclusively therefore, the buying public are as fully protected
proven by the fact that capital invested in relation as the retailer who sells the goods.
to sales, comes within a few per cent of yielding the
Illustrative Incident.
same earnings in various retail lines no matter how
When
I
was
about
twelve years old my father took
widely divergent their character. All of which leads
me
to
a
clothing*
store.
We waited while another
right to the subject of price maintenance, or profit
customer
purchased
a
suit
of clothes and a Selz-
protection, by selling at the established retail figure;
the figure which pays your overhead and really nets Schwab pair of shoes for his boy. He paid the One to Be Opened in Populous Part of New Orleans
merchant $15.50. After he left the store my father
an earning after the sale is made.
the Beginning of Big Plan.
purchased the same outfit for me and by dint of
shrewd dickering not only got the price down to
A Common Question.
L. Grunewald, Inc., New Orleans, La., will open a
A good many retailers ask why the manufacturer $13.50, but persuaded the merchant to throw in a new branch store at Lafayette and South Rampart
should be interested in the resale price of the article. pair of suspenders, two bandanna handkerchiefs and streets about December 1 under the management of
They say as long as the manufacturer gets his whole- three pairs of cotton socks. Somebody in the tri- L. A. Gueynard. The branch will be known as The
sale figure and his bills are paid, what does he care angle was treated badly, and it is not hard to guess Music Shop and will be the first of a chain of
that it was the man who was not protected by a branches which eventually will cover the states of
about the resale price. Our attitude on this subject
fixed price.
Louisiana and Mississippi.
is that our interest in retail prices is based upon our
Of course, they don't do business that way to-
The success of the L. Grunewald Co., Inc., with
absolute knowledge that our prosperity is so closely
interwoven with that of our dealers, that the two are day. Fortunately we are getting nearer to the point the branch in Jackson, Miss., has made the manage-
where merchants realize that one price and a fair ment enthusiastic about extending the activities of
inseparable.
profit is the only really sound foundation for a
We set a resale price on our goods that is fair, big business, but the more we talk and believe in the firm. Of course the range of the sales depart-
fair to the consumer, yielding a fair and satisfactory • it and act on it, the nearer we are going to come ment of the progressive New Orleans house extends
far beyond the parish lines but a more personal con-
margin to the man who sells them. It is a safe to that ideal situation where prices take care of
margin. The retailer who cuts below the resale price themselves and our entire efforts and time can be nection with the music-loving public at other points
we suggest is first of all doing himself an injury. He employed in developing markets and swelling sales. is sought.
is doing business on a margin which is unsafe. He
I believe the above about covers the subject. I
does his competitor an injury if that competitor is have always made it a practice not to meddle in
OPEN CHICKERING WAREROOMS.
weak enough to meet his too-low price and he does things that do not concern me, but the profit pro-
The Chickering Warerooms were formally opened
the industry an injustice by disturbing the economic tection, price maintenance, is so vital to the wel- in Baltimore, Md., on Monday of this week by E.
safety factor of proper profit margin. This holds
fare of our retailers that while directly it does not Paul Hamilton. The entire building has been re-
true of every detail line in the world from food stuffs mean an added penny in the treasury of our com- modeled to suit the requirements of a modern music
to farm machinery, and everything in between.
pany, indirectly the entire prosperity of the industry, house. Everything is arranged for the pleasure of
Point to Fallacy.
our competitors including that most important the customer and the convenience of the salesmen.
thing, the satisfaction of the customer, hinges The extent of the roll department in the basement
The man who cuts prices usually consoles himself
is an evidence of the degree of importance ascribed
with the thought that while he may not make any largely on this vital factor.
With very best wishes to you personally and to to this phase of the music business.
money on the reduced articles, his profits on other
lines will make it up. This has been proven a fal- the Talking Machine Men, Inc., and for the suc-
cess of both.
lacy, for in order to bring up his average general
OLD HOUSE ENDS CAREER.
T. M. P L E T C H E R ,
profits, he would be obliged to charge more than a
The
piano
stock of Smith Bros., New London,
President.
fair price for the other articles. The weak salesman
Conn., has been purchased by Maxson's Piano Store.
invariably resorts to price-cutting as a medium of
The Grosvenor & Lapham Company, Chicago, has The closing of the store at 108 Main street ends the
securing business.
just
sold a beautiful and artistic A. B. Chase grand active business career of one of the oldest piano
And yet, price cutting as a business bringer is an
firms in that section. The business was founded in
absolute failure. I make that statement unqualifiedly. piano to the Flossmoor Country Club, Floosmoor, 111., 1851 by N. D. Smith. The first store was on Bank
of which George B. Grosvenor has been a member
Why? Well, how do you personally judge the value
street.
for several years.
of things you buy, of which you possess no technical
PACKARD PIANO CO'S MAN
WINS PRIZE IN CONTEST
CHAIN OF STORES FOR
L. GRUNEWALD CO., INC.
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