The model stock plan

Bibliographic data

Monograph

Identifikator:: 1820833348

URN:: urn:nbn:de:zbw-retromon-210730

Document type:: Monograph

Author:: Filene, Edward A. http://d-nb.info/gnd/123562244

Title:: The model stock plan

Place of publication:: New York

Publisher:: McGraw-Hill Book Company

Year of publication:: 1930

Scope:: xiv, 253 Seiten

Digitisation:: 2022

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Chapter II. Choosing price levels to increase sales

Collection:: Economics Books

CHOOSING PRICE LEVELS TO INCREASE SALES 31 The highest full-line price is probably best set by a process of reasoning altogether outside store statistics: 1. It cannot be a price at which a Rolls-Royce is sold.* 2. It depends on the average income level of our type of customers? By the very definition of the highest-priced full line it is clear they cannot buy the bulk of their needs at this level. Especially in a store catering to the higher- income trade, care is needed to avoid “trading up” beyond the greatest total-profit limit, the point where the greatest number of sales and the greatest dollar volume should be attained. 3. Experience enters importantly. More mistakes are made by deductions from undigested experience than from any other single source, for experience may be based on results that are mot at all indicative of the truth. But, in general, there has been built up in the experience of any store a broad knowledge of what are the highest prices that 1 Especially in the larger cities there is, of course, room for the profitable Operation of stores confining their business to luxury goods. In his natural desire to gratify his personal preference for running a high-quality store, however, a merchant must be careful not to overrate the volume of this business that can be done in his particular community or with his particular clientele, The greatest inherent virtue in merchandising is not in selling highest-grade, high-priced articles but rather in performing the maximum service for customers, which is to sell them the right goods at the prices they can pay and still keep their budgets in balance. We must always keep in mind these diametrically opposed considerations: (1) pseudosocial recognition associated with dealing in the very top-quality merchandise; (2) real social service in serving the masses. Fortunately, the latter brings by far the greatest total profits. . . % Government statistics show that the average wage earner’s income in the United States and the income set as a minimum subsistence level for a wage earner’s family of five persons are very close indeed. The average income 18 not high enough to allow these people, the mass-buying power of our com- munity, to buy all goods at the highest-priced full line. But a great many of these customers from time to time buy an article from the highest-priced full line, Unless, then, our store draws its custom almost exclusively from the higher-income group of people, we know perfectly well that our customers cannot buy on a mass-purchasing basis at prices too high to be compatible with their incomes. It is worth remembering in this connection that the greatest of American businesses and fortunes have been built from catering to mass demand at prices the masses can pay. Such total profits as Ford's and Woolworth’s could not have been made on products above most people's ability to pay. General Motors has consistently made far larger total profits from Chevrolets than irom Cadillacs. Fortunately, the Model Stock Plan will make it far easier and far more profitable to sell very high-priced goods in the de luxe departments {see p. 69).

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