Radio age research, manufacturing, communications, broadcasting, television (1941)

TODAY THE ALBUM SHOWN BELOW SELLS FOR LESS THAN THE SINGLE RECORD COST 40 YEARS AGO. MODERN DISTRIBUTION Ncu) Methods of Mooing Goods From Factory to User are Complicated and Expensive but Because of Them the Public Gets More for Less Money transportation of goods from one place to another. It includes every- thing that happens to a product between the time it is produced and the time it is owned by the ultimate consumer. It includes advertising and sales promotion and display and shipping and packaging and warehousing and wholesaling and retailing. And it costs money. Many of us have been wondering if it costs too much money. Since 1870 the trend of distribu- tion costs has been upward. In 1939 the 20th Century Fund made a study and found that 59 cents out of every consumer dollar went for distribution. And it's still going up. That sounds high. It sounds like waste. It sounds wrong to pay more to distribute a product than to make it in the first place. At first glance it looks as though we ought to change the system so as to elim- inate some of these costs. Should we eliminate the whole- saler, or the retailer, or both? By Frank M. Folsom, Executive Vice President in Charge of RCA Victor Division, Camden, N. J. OF late years, many of us have been putting more and more thought into a phase of business activity which appears to need re- form. This phase is a highly com- plicated process, involving a large number of loosely associated activi- ties, and it goes under the name of "distribution." It represents a great deal more than the mere physical Should we strike out advertising and promotion? Before we take any rash steps, let us remember the danger. Let us be sure what the effects will be, and whether they are what we want. The business of RCA Victor con- sists of a variety of product lines. They are all basically electronic, yet their uses, and the types of customers to whom they appeal, differ widely. Separate distribution systems are therefore necessary. These distribution systems vary from a relatively small list of 35 distributors for aviation radio products, to 600 distributors for radio tubes — who in turn service between 30,000 and 35,000 retail outlets. In between come the spe- cialized distributors and dealers for Home Instruments, Records, Re- placement Parts, Sound Equipment, 16mm. Sound Film Projectors, and many others. Let's examine that largest group -—the tube distributors and dealers. Where are these thousands of out- lets, and what part do they play in distribution? Suppose a tube burns out in your radio or Victrola radio- phonograph. If you want to take the time, you can run down to the local store, buy a new tube, and re- place it yourself. But the average person's knowledge of radio doesn't go much beyond changing tubes, so if that burnt-out tube is not the sole difficulty, but merely an indica- tion that the set needs a general checking over then you're in trou- ble. You have to rely, as millions do on a radio service man. Serviceman's Role Important The service man tests all the tubes and other parts that may be the source of trouble. If he's a good service man he uses modern testing and analyzing equipment, and we know that's good because we make it. Then he advises you of the diffi- culty, and makes the necessary re- pairs. In this role he performs the same function as your automobile service shop. While he sells parts and tubes, this is only part of his job. The real value to you is the service he renders. Now suppose we were to elimi- nate this multitude of small outlets and sell all radio tubes direct—say through factory controlled outlets. [14 RADIO AGE]