1. Desire to keep close to market.—Advertising 1)3' the manufacturer has brought consequences which tend to upset the old manufacturer-jobber relation. The manufacturer who spends huge sums in adver tising his goods desires to keep in closer touch with his market than is possible when he deals only thru the jobber. He wants to be sure that the advertising is being backed to the limit by personal salesman ship all the way down the line until the goods are de livered to the final consumer. This does not mean necessarily the elimination of the jobber but the manufacturer wants to exercise an increasing amount of control over all steps in his distribution. Further-. morc, he is not satisfied with the passive order-taking attitude of many jobbers' salesmen.
12. Neces.sity of checking up advertising.—The advertising mamlfacturer wants to know definitely zuhere his goods arc consumed. Suppose a manu facturer of a food specialty deals only thru jobbers.
Ile advertises in national magazines, but it is his pol icy also to use local advertising—newspapers, street cars, billboards, etc.—in those towns where special advertising effort is needed. There are seventy-five wholesale grocers, say, in Chicago, and he sells to all of them. He has an idea that his sales to consumers in Chicago are falling off, but he wants to make sure of this before he spends money for local advertising.
How can he make sure? It will do him no good to compare his sales to Chicago jobbers for this year with those of last year, since Chicago jobbers ship his goods all over the western territory, and total sales all over the district covered by them may have in creased while actual deliveries to Chicago retailers may have decreased. The jobbers can guess at the situation for him, but advertising appropriations should not be made on a guessing basis. He may send representatives to the retailers themselves and attempt to get exact figures—not guesses—from them; but if he can afford to do this as often as will be necessary, he can afford to eliminate the jobber, and have his rep resentatives do all his selling. As a matter of fact. the manufacturer who sells only thru jobbers does not know where his goods are consumed. Unless the jobbers are willing to keep definite records of the shipments of all his goods to supply him with this information, he is handicapped in his advertising activities.
13. Some jobbers antagonistic to advertising.— Some jobbers resent national advertising by manu facturers. They say that the profits on advertised goods are too small; they complain that the manu facturer is making of the jobber a mere machine; they resent their lessening influence with retailers oc casioned by the growing consumer demand for ad vertised goods. This attitude is not logical unless
the profit on an advertised line is really too low, but it is not infrequent, and as a consequence, manufac turers often prefer to find their own markets rather than to spend the time and money necessary to enlist the jobber's support.
14. Price cutting by jobbers.—One of the most important results of advertising has been to aid in the development of the principle of price mainten ance. Many manufacturers wish to name the price ktt which jobbers shall sell their goods to retailers. Jobbers in large numbers have refused to give this principle their support. Price cutting • by jobbers is one of the oldest and most common of the practices of which manufacturers complain. When price cutting becomes general among jobbers, the manufacturer who wishes prices maintained is tempted to withdraw entirely from his jobbing rela tions. The failure of some jobbers to support price maintained goods has been perhaps the chief stimulus in developing manufacturer-direct-to-retailer selling systems.
15. Price cutting by retailers.—The application of the principle of price maintenance usually includes an attempt by the manufacturer to establish the price at which retailers shall sell to consumers as well as the price at which jobbers shall sell to retailers. Many retailers, as well as jobbers, refuse to comply with the manufacturer's price restrictions. This has sug gested to many manufacturers the advisability of es tablishing strict agencies—of putting goods in retail stores on consignment, keeping the title to them until they are sold, and thereby retaining the legal right to dictate the price to consumers. This practice at present is followed to a small extent only, but wher ever it is practised it involves dealing direct with the retailers.
16. Exclusive agencies and direct selling.—It has been found that certain kinds of goods are best sold by the exclusive agency system; they are handled by one dealer only in a town. The large sales of this dealer make direct selling by the manufacturer often more economical than selling thru the jobber. The manufacturer wishes to keep in the closest possible touch with dealers to whom he has intrusted the exclusive sale of his goods, and this is not always pos sible if the jobber must act as an intermediary.