Dealers Can Make Profitable Use of Mass Merchandisers' Proven Sales Techniques

Lumber and building supply dealers can make profitable use oI mass merchandisers' aisle techniques, according to K. F. Browning product and marketing manager for Du Pont's consumer product division.

In a recent talk, Browning outlined four basic principles involved in this new, for traditional dealers at least, concept of marketing:

(I) Use price promotions at regularly planned intervals to build traffic for your big-ticket items.

(2) Base your price not just on margin but turnover as well, so that your promotion will "pay its way."

(3) Reduce prices on only a few nationally advertised "leaders"-not across the board.

(a) And return to regular profit levels promptly at the end of the promotion.

tITTtE WAIK-IN IRADE

Browning pointed out that the average lumber and building supply dealer's location doesn't enjoy much 'odrop int' walking trafre, and that his locale is more of a "terminal facility"-a place where customers head when they have a definite need in the particular line.

"If their need is lumber," he pointed out, "chances are one of you will get a shot at tlrem-for your only competition is your fellow lumber and building supply dealer.

"But if it happens to be in the allied obuilding supply' line, you may see them and then again you may not, depending on the general item or items desired. For this is where you run up against other retail outlets, hardwares, mass merchandiserg etc. -many of whom are actively promoting such wares.

"Like the operator of the vacation resort," Mr. Browning emphasized, "yoo must get your customers out of their homes, into the family car, and to your place of business.

"Few suggestions equal the pull of a low, low price on a well-known, nationally advertised product."

Advertising Important

Browning also pinpointed tlle importance of advertising as a motivator, and explained that underlying the success of the 1964 tax cut as a stimulant to the economy was the high rate of advertising, which created a pressure of consumer demand sufrcient to utilize the additional personal income.

He described the task of DuPont's consumer products advertising as twofold: (I) to attract attention and favorable consumer reaction on a national basis; and (2) perhaps of most importance to the retailerto build traffic and subsequent sales when used cooperatively by dealers at the local level.

Another key to higher sales and profits for retailers is in recognizing the necessity of standardized channels of distrilution, according to association executive S. M. Van Kirk. In the following discussion he sets forth his views on standardizing distribution channels.

"Business at the retail building material dealer level is becoming so tough that the dealer feels he can improve his position by merely changing his tide to 'discount housg' ocash and cartyr'or 'warehouse discount center.'" accurding to Van Kirk. He added that a retail"builfing material dealer is a 'oretailer" and a change of name isn't the solution to the chaotic distribution problems of today.

Van Kirk is general manager of the Na' tional Building Material Distributors Asso' ciation (NBMDA).

"If there is one basic fact that I may reiteratert' Van Kirk emphasized, "it would be tlat the wholesale distributor is an econ' omic necessity in the distribution of building materials. And, regardless of eftorts now being initiated by a dealer group'to research centialized pnrchasing,' Jto research volunteer chaingt 'to perform wholesaling functions,' som@ne has to warehouse sell . . break bulk . provide credit and deliver regardless of who performs these functions, they must be performedand at a cost.

,VIANY SEEK CHANGE

Van Kirk went on to say tlat too many dealers think a narne change is the answer, and manufacturers, with over capacitn are inrigued by such dealer thinking.

o'When it comes to distribution, we can say, tno, Mr. Dealer, tJrere is no Santa Claus.' Before any of us &rn find the magic solution that might be waved like a wand which will increase our net profits, we had best face up to some of the realities of today's competition."

The dealer and the distributor must ride the same tandem bicycle in srder to survive the many changes in the marketplace, Van Kirk pointed out.

o'This bike stops when one rider stops. If it goes left, you both go left, if you go fast, you both go fastero and if you slow down, you both slow down together. About the only improvement would be a threeseated bicycle with the manufacturer in the third seat. This would be an ideal manuturer/distributor/dealer relationship. However, I don't know who we would put in the middle."

,VIISGUIDED CONCEPT

The NBMDA general manager concluded that the ,basic misunderstanding today is the misguided poncept by both the distributor and dealer that he can make his profit on the purchasing function rather than on the selling function.

o'We can't help but be somewhat cynical about this approach, as it is commonplace that neither the wholesale distributor nor the retail dealern in general, are willing, or ablen to keep whatever additional discount they may receive, but immediately pass it on to the custom€r," he said.

"Because of the growing trend by the purchaser to get shaded prices, I want ot emphasize this comment about buying right, 'he said. oolt is our opinion that such purchasing efforts are only stop.gap grmmicks which have not penetrated to tle core of the problem, and are not lasting solutions. Let's get that tandem 'hicycle operating."