8. Advertising and other marketing order to show the effect of competitive marketing methods on prices, we have confined our attention to advertising, because advertising is the activity that is most attacked and because advertising readily serves to illustrate the principles. It should be re membered, however, that personal salesmanship does exactly the same thing as advertising except in a dif ferent way and frequently on a smaller scale. If a manufacturer sends out traveling salesmen it is be cause he believes that thereby he can make the maxi mum sales at the least selling cost. Often, if Ile did not use salesmen, Ile could not sell or make his goods at all. If the owner of a retail store hires salespeople to help him behind the counter, or to take his place there, it is because by doing so he can make more sales without proportionate increase in selling expense. Increased sales, whether they come thru advertising or personal salesmanship, usually result in keeping down consumer prices on any article to which effec tive advertising or personal salesmanship is applied.
9. General criticism of competitive selling.—In the preceding paragraphs arguments have been pre sented to prove that neither advertising, nor any other kind of intensive selling activity, necessarily or usually makes the price of any individual article higher than it would be, if the article were not subjected to the strenuous sales measures that competitive business de mands. There is, however, another kind of charge against competitive selling, and like the one already considered, it is usually leveled at advertising rather than at personal salesmanship, probably because ad vertising is spectacular in its methods and touches more people than personal salesmanship.
This second charge has three phases: First, it is charged that advertising, as well as all other forms of competitive selling, is an economic waste—it is a tax on society. It is contended that when an advertis ing manufacturer greatly increases his sales in a com petitive market, one of two things happens: either tbe total purchases of the kind of product he makes are increased (which may or may not be a good thing for society), or be is taking business from a competi tor, who, with declining and perhaps disappearing sales, finds himself ultimately with a factory and equipment on his hands that represent social waste. Second, it is charged that, altho an individual article does not have its price increased just because it is ad vertised, when two or ten or a hundred competing ar ticles are in the field and when they are all pushed by strongly competitive advertising and salesmanship, then the cost of selling each one is necessarily more than it would be if only one article were on the mar ket ; accordingly the prices of all must be raised. Finally, it is charged that competitive selling, and ad vertising in particular, is bad for society as a whole be cause it multiplies the selling appeals in such an allur ing way that people buy more things than tbey need or can afford ; extravagant living, therefore, is en couraged, and the already high costs of living are boosted still higher.
10. Limitation of the charges.—It has been said that these charges are brought against all kinds of competitive selling. Sometimes this is the case; more often, however, they are brought against advertising alone, for reasons already presented. Those who bring them, in other words, are usually unconscious of the fact that their criticism is an indictment of the competitive system of industry; they think that they are condemning only one of its methods.
It is necessary for the defenders of the present business system to insist, over and over again, that neither advertising nor personal salesmanship can properly be singled out for attack; all honest methods of competition must stand or fall together. If the national advertising of a manufacturer is an economic waste, then the local advertising of a store is a similar waste. No one can condemn national advertising on principle unless Ile also condemns such things as put ting goods in the window of a store to attract trade; making a store attractive so that customers will feel like staying and buying; the neat dress of the sales women that is supposed to add to the pleasure of purchasing; the practiced courtesy of the salesman that makes the customer want to trade at one store in stead of at another; and the hundreds of other seem ingly innocuous things that are done to build up com petitive business. If it is ethically and economically wrong for a manufacturer to tell his story in print to a thousand readers, it is equally wrong for a retail salesman who has sold a collar to a customer, to re mark: "These new cravats that tic into a tight bow are being worn generally with that shape of collar." The only difference between the thousand things that the retailer legitimately does to attract trade, and the advertising that the manufacturer causes to be sent all over the country, is one of degree. One does on a small scale what the other does on a huge scale. If it is right for the retailer to get you to trade with him instead of with a rival dealer, it is right for the manufacturer, by telling his story where you can see it, to try to get you to purchase his goods instead of those of another manufacturer. There is no difference in principle. If competition as a prin ciple is right, then any method of competition that is honest and in good taste is right, regardless of whether it operates on a large scale or on a small scale; and one such method cannot logically be criti cized without criticizing every other competitive method of selling.