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BILL FISHMAN

Bill Fishman & Affiliates

11650 lberia Place

San Diego, Ca.92128

IHAVE always suspected, and now I lam more than ever convinced that many building material retailers have never accurately classified their customer base.

Usually the retailer speaks in terms of percentages of d-i-y (retail) customer to contractor (professional). The frgures most often heard are 5090/5090 or fio/o/40t/o etc. These percentages are usually educated guesses or a percentage based upon cash sales to charge sales. I believe they're misleading.

So what's the big deal? What difference does it make to the dealer whether it's 50/50 or 90/10 or 10/90? It may not have meant much before 1985 but it's going to make a big difference now that warehouse and chain operations are seek- ing new geography. It's going to make a great deal of difference to the independent retailer who is going to plan aggressively to maintain his market share.

If a major portion of the customer base is truly the dedicated and occasional doit-yourselfer then the dealer must secure his market by directing his efforts and discretionary expenses, promoting to attract the d-i-yer. It means budgeting for a continuity of advertising in the mass media (newspaper, radio, television, etc.).

It also means a merchandise mix that avoids sending customers to competitors for materials to finish the project. It means visual merchandising programs, evening and weekend store hours, the availability of delivery, competitive pricing, lowest price guarantees, lit parking lots, lumber stored on the showroom floor to avoid a double (or triple) tallyman payroll during extended hours, extra checkouts, creative signing, reticketing of sale merchandise, merchandising economy grade studs, and more.

On the other hand, ifa dealer has been running a successful and profitable business for years with no or little advertising, and has been closing at 5:00 p.m. daily, noon on Saturday, while the chains remain open-if he has been working on 4090 margins on everything except the commodity items and operating out of a small showroom featuring only the basic hardware, tools, and maybe some plumbing and electrical fittings-while for years the open-late-and-weekend chains near him have been out-advertising, outmerchandising, and even out-servicing him on the d-i-y level-then just maybe the dealer's true customer base is the professional, commercial, and industrial customer-sometimes paying cash. And, if that's true, then maybe his operating, merchandising, promotion and service level strategies should be different to maintain or extend his market.

Next month we'll explore these different strategies.

When senrling in a change of address please include zip code on both okl and new addresses and either the old label or the in/brmation .from il. Thanks !