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Palco said it accepted the lower offer because it seemed more likely to be

Wally Lynch

Builders Express, Inc.

11550 Plano Rd.

Daf f as, Tx' 75243

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"advertising." It is widely adjudged to be one of the more perplexing and expensive adventures experienced by the merchant. One is damned if he doesn't and damned if he does.

The question most asked is: "how do they do it?" Cenerally, follow-up shows that the questions really is "how do they pay for it?" This addresses the symptom rather than the cause.

The high visibility of sophisticated retail advertising within our industry in the last l5 years has done more to remove participants from competition than almost any other factor. Oil embargoes, inflation, administration changes, investments, lack of housing starts, etc., have not devastated the independent with one iota of the force brought to bear by ,,advertising."

From the devastation the question, "Why do they do it?" should havecome. There have been tomes written on the why ofadvertising, but in the retail business it's done /o change the buying habits of the consumer.

We're all creatures of habit, the familiar and the comfortable. We like what we know, not the other way around. Many studies have shown that the number one cause of business failures is not money, but lack of decision making information. How's the communication in your business-both with employees and customers?

Think about this as an example of how advertising can communicate and cause people to react. In the face of a reduced price, how many AI&T customers stayed loyal while those who were not under government control leased their lines and then sold services at lower prices to former AI&T customers. How many of these,,discounters" could have made it without advertising? llhen sending in o chonge ofaddress please include zip code on both old and new addrlsses and either the old labet or rhe inlbrmation from it. Thanks!

It's a constant source of amazement to these old eyes just what Americans will pay for. The $8000 wrist watch, the $100 theater ticket, the $50 jeans, the $4O,000 and $50,000 cars that now cost more than many fine homes did a couple of decades back. They all continue because the seller has told the buyer about them.

Advertising, its impact and generation aren't as simplistic as these few words would indicate. What is simple is that if you don't advertise and your competitor does, he will change the buying habits of your customers. That means fewer customers in your store and a momentum shift of undesirable consequences.

The days of foot traffic and ,,all the customers know us" won't hack it. The days of talking to your trading area about solving their problems, providing a benefit or just a bargain, come and get me, are with us.

The experts call it an age of power retailing and the powers will prevail. Will you? Collision course or profitable growth, it,s up to you.