( Originally Published Early 1900's )
As advertising is being used more extensively in the retail meat industry, it has become a subject of general interest to the average meat retailers. Like salesmanship, it is a subject on which a great many volumes have been written. Advertising in itself is also a highly specialized profession, requiring a thorough knowledge of the technical details as they may relate to the printer's art. But in addition, advertising requires a thorough understanding of merchandising and the marketing business.
What Is Advertising?
Advertising as defined in the dictionary is: "The act of making known by public notice, by extension ; the art of conveying, of offer or sale, in such manner as to induce purchase." .
Analyzing advertising from the meat retailer's standpoint, there is one very important fact to consider. It should be analyzed very carefully before deciding upon advertising expenditures. The important fact is that meat is a strictly staple commodity, a necessity purchased daily by the general public, irrespective of advertising.
From the retailer's standpoint, the function of creating a demand for meats is not necessary because fundamentally the demand already exists. For that reason, advertising loses its importance when it is applied to the retail meat industry. Further analyzing advertising in the retail meat industry, it narrows down to what the retailer can advertise. The public knows that he has meat for sale, therefore, the retailer's field for advertising is narrowed down to prices, quality or service which may include sanitation, or exceptionally good attention at the store.
Does It Pay to Advertise?
There is an old saying in business, that it pays to advertise. This statement is not true at all times, for advertising can be come a great economic waste, and its success or failure depends upon a great many conditions. It would be folly, for instance, for a neighborhood market to advertise in the large city news-paper as perhaps 98% of the readers would be too far away from his market to be able to patronize it.
It is different, however, with the downtown cash and carry store which may draw trade from all sections of the city. Many retailers are deceiving themselves by not ''knowing the actual results which they receive from their advertising. Very frequently the author has found that when discussing advertising with the retailers, that the results were judged by sales and not by profits.
An illustration is given by the following example :
Retailer A was practically forced to advertise because his competitor was advertising. A was enjoying a very good business of about $1,500 per week. He had a good steady trade. He operated at a margin of 5% net profit which gave him, besides his salary, $75.00 per week profit.
He started to compete in advertising. He reduced some prices considerably, and advertised in order to bring the public into his store. At the end of the week, he found that through his advertising, his business had increased to approximately $2,000 per week. Retailer A was very much elated over the results which advertising had evidently brought about. But after checking up the profits for that week, he found that the additional volume had required considerably more expense for wages, and for the advertising.
After analyzing his profits, he found out that on account of the lower prices, instead of operating at a 5% margin of profit, he had only been able to realize 3% net profit ; or, in other words, the week's business showed him a total net profit of $60.00 on $2,000 worth of business, against $75.00 net profit on $1,500, which was secured without any advertising.
While the advertising may have increased the volume of sales, it decreased the profits. From a strictly economical viewpoint, the amount of money spent for advertising in the average retail meat market may be considered a waste of money, because the public will buy meats irrespective of whether they see them advertised or not.
Meat retailers advertise, of course, to gain benefit individually. But looking at it from the standpoint of groups of retailers in a given locality advertising from distant points, can again be considered an economic waste. This is best illustrated by an-other example :
Assuming a city of 5,000 people with 6 meat markets. Each one of these markets is advertising, on a competitive price basis. Together they spend perhaps $200 weekly for advertising. The fact remains, however, that the public would buy the meats at all of these 6 markets even if there had been no advertising.
Fundamentally the public is buying the meat because it needs it, and for that reason, the retailers could have saved the money they spent for advertising.
Meat Advertising Often Misleading
Actual investigations have proved that misleading advertising in the retail meat industry is one of the most serious drawbacks to the typical honest meat retailer. When a customer sees an advertisement in a department store of silk hosiery, she can usually judge for herself whether it is silk or not. A customer can judge wool and cotton fabrics, they can judge style, fit and select practically all other products along a certain standard, but when it comes to the buying of meat, the great majority of the people are entirely ignorant as to what they are buying in the quality and the grade of meat.
For that reason, the public has been preyed upon by unscrupulous retailers who use misleading advertising and names for meats sold at very low prices. This deceives the public, and causes a great deal of unfair competition for the honest meat merchant.
Lack of knowledge of the different grades of meats by the public is a serious drawback to the industry. But there is an-other very important subject, namely, that of advertising meats trimmed or untrimmed. Every retailer knows that there is a great difference in the price, if meats are sold trimmed or un-trimmed. On many cuts it amounts to several cents per lb. While a neighborhood store owner may trim his meats care-fully, the public seldom takes this into consideration and is usually influenced by the price advertising and get inferior meats untrimmed. If the piece of meat bought this way is fairly analyzed, it is usually found that it has cost the customer more than if bought at a good meat market where it was carefully trimmed.
The serious effect of misleading practices in the retail meat industry has been set forth in United States Department of Agri-culture Bulletin No. 1441. Some of the facts as they are dis-cussed by experts of the United States government are worthy of attention :
Misleading Practices and Deception
Misleading practices in the retail meat trade form such an important retarding factor in the proper development of the industry that special attention was given to the subject in this study and special attention must be given to it in this bulletin, although it should be emphasized that the study seemed to show that such practices involve only a small percentage of retail meat distributors in any city. But some were found in every city, and in all cases these deal-ers are very active and are persistent advertisers. From a competitive standpoint, they influence to some extent the activities of certain other dealers who under normal trading conditions would prefer to deal honestly with the trade.
Such dealers are known locally as "clean-up" men. In all their contacts with the public, especially in advertising, they stress exceptionally high-quality meats handled, yet limit their purchases to meats of the most inferior quality. The fact that customers generally are uninformed regarding meats and meat cuts makes this deception possible. Because of the dissatisfaction which results this practice may tend gradually to decrease the demand for meats.
Local associations comprising both retail grocery men and meat dealers of exceptionally high character and ability are active in most of the cities studied. In every case they stand for honest methods and are doing effective work along education lines, and are raising the standard of merchandising, but so far have found no effective means of combating this undesirable element in the retail meat trade which is now known to be one of the undermining factors in the advancement of a large and necessary industry. The deceptive methods generally used comprise false advertising, misleading displays, substitution and short weighing.
Terms used to represent meats of highest quality occupy prominent places in all their advertisements. Some of those commonly used are "Finest Meats Market Affords," "Meats of Highest Quality," "Prime Native Steer Beef," "Genuine Spring Lamb," "Milk Fed Veal," "Young Pig Pork," etc. Coupled with these terms are very low prices. In many cases investigated, prices quoted for preferred cuts were lower than the cost of live animals of grades comparable with the terms used. For instance, during the progress of this study stores in different cities advertised "lamb legs" from 12 1/2 to 17 1/2 cents per lb. Live lambs at the time were worth from 13 to 15 cents and their dressed carcasses were offered wholesale around 26 cents. During the period when live hogs were costing around 14 cents, "pork sausage" was offered freely at 2 lbs. for 25 cents, and in at least two cities, at 3 lbs. for 25 cents. This sausage was made from beef suet, beef fat, tripe and cereal. In such stores in every case the meat actually being offered for sale was very inferior to that advertised. Common and medium grades of steer beef, cow beef, or bull beef were offered as prime beef; mutton of low quality or goat was offered for lamb ; heavy carcasses from grass calves were offered as milk-fed veal, and cuts from stags and old sows were sold as young pig pork.
To the uninitiated, misleading displays are the same as false advertising except that the product or article is used in connection with a product which has similar characteristics but is of lower value. The most common display of meats designed to mislead the public are center cuts of pork loins and end cuts displayed on same platter. The price cards "center cuts," but end cuts are supplied. The same applies to loin lamb, or lamb rib chops and shoulder chops. In some instances picnic shoulders were found displayed and placarded as "picnic hams" and surrounded by genuine hams. Relatively low prices are used in all such displays. Window displays of retail cuts of beef of good quality were found marked at unusually low prices, quality considered, but in the store beef of very low grade was offered in most instances not worth the asking price.
Short weighing and over charging frequently are practiced by such dealers. Price cards which include fractions of cents are displayed prominently. After the customer selects a piece of meat the clerk places it on the scales and quickly announces a total amount but not the weight. Some dealers of this type admitted they used fractions on their price cards because they are confusing to the average person. In case of doubt as to the correctness of the transaction the customer hesitates to question it. (U. S. Department of Agriculture Bulletin 1441.)
The above examples show the effect of advertising on the entire industry and not from the viewpoint of the individual retailer. Advertising, however, can become a great benefit to the meat retailer, increase the volume of business, pay its additional cost, and the retailer may get more than his regular profit. But advertising expenditures must be carefully watched because profits on sales in the retail meat industry are small.
The retailer doing a business of $1,000 weekly and spending $20.00 for advertising has an expense of 2% on sales for advertising. Inasmuch as the average percentage of profit in the retail meat industry varies from 2% to 5%, an expense item of 2% may have an important bearing upon his profit. The amount of money which can be spent profitably on advertising must be based upon a knowledge of the amount of profit the retailer is able to secure. If advertising expenses are distributed over a great number of stores, like chain stores, the expenses, of course, are greatly reduced.
Advertising is beneficial when it increases sales to such an extent that it decreases overhead expenses, and increases profits. But if it does not accomplish these results, it is usually wasteful. Since business is governed by the law of the survival of the fitttest, good advertising has often helped the retailer to eliminate competition, and increase his profits by lowering his expenses A decision as to advertising and what to advertise must he carefully weighed; if it is not, advertising may become a waste.