Another important question involves the present good-will of each competitor. What has been the rate of increase in his business? Has he stood still, or does a healthy growth indicate growing good-will and good selling ability? How is he thought of in the trade? Is it going to be easy to compete with him, or is be likely to match any trade-drawing activities that are launched by a competitor? 12. Competitive marketing methods.—Finally, what are the marketing methods of each competitor? -What is the policy of each one with respect to sales channels, advertising, credits, dealer cooperation, and all the other things that go to make up the details of a sales campaign? The purpose in ascertaining these facts is not to enable the investigator to copy the methods of his competitors. Good business is not imitative. The purpose is to permit the investigator to take advantage of the mistakes of others, and to guide him in following custom where customary methods—the line of least resistance—seem to be the best for the given conditions. Novelty in sales methods is often valuable, but novelty at the cost of the good-will of dealers or consumers is foolish. Often the old ways are the best.
One phase of competitors' marketing methods that must be closely studied is that which has to do with prices and profits. It is essential that every factor in the field should know the prices charged by all his competitors to jobbers, to retailers and to consumers, and the profit that each factor in distribution makes on each line of competing goods. Prices are finally fixed by competition, and the facts of competition are presumably registered in the prices of the goods already in the field. The manufacturer who offers a profit so low that the dealers cannot pay their selling expenses out of it will not get their cooperation. A price to consumers that exceeds competing prices and does not give in return greatly increased value will kill a campaign. A price that is much below the market will needlessly disrupt trade relations and is likely to result in reprisals and ultimate disaster.
Competitors cannot and do not get together to fix prices, under a market system of real competition, but the organization of the market is such that there is a perfectly natural trend toward relatively uniform prices for uniform goods.
13. Transportation problems.—The last phase of study of the market is concerned with transportation problems. The factory in the first place must be lo cated logically with reference to the raw materials and the market. It seems inconceivable that a man would put up a canning factory in New Jersey with out adequate analysis of the situation, and find, too late, that he was 500 miles away from his raw ma terial; and yet this was an actual incident. For tunately such incidents are not common, but they indicate the need for common-sense study of the sit uation before any money is spent to make or market a product.
The extent of the market is definitely limited by the ability of the manufacturer to ship his goods quickly and cheaply. Unless a product is a novelty which cannot be duplicated by competitors, or unless the manufacturer has given the name of his brand such wide publicity that it takes on the nature of a spec ialty, he cannot hope to extend his market much beyond the area in which shipping charges from his plant are less than from a competitor's establishment. Branch warehouses help to widen his area of opera tions, and a great national sales organization can often lessen the handicap of high shipping charges. But regardless of these things, the problem of transporta tion is always a vital one, forcibly affecting the size of the market, the prices for the goods and the profits of the manufacturer.
It is interesting to note that jobbers have the same shipping problems as manufacturers. The Claflin failure in 1914 is said to have sounded the knell of long-distance jobbing from the East. The jobbing center of the country has inevitably shifted to Chicago and St. Louis as the westward trend of population has made national jobbing operations centering in 'New York more and more of an impossibility.