Method of Charting Prices The chart shows the relative frequency with which the different prices 89 .95 1.96 1.98 1.99 2.00 2.29 2.49 2.50 2.69 2.79 2.00 2.09 2.98 2.99 $3.00 3.49 3.00 3.95 3.98 3.9 4.9 Pricing Trends Prices ending in 9 are strongly favored up to 79. At higher levels, prices ending in 8 show up very conspicuously. This represents a new trend since our 1953 study. At that time 88 was noted only about one-sixth as often as 89%. Today 88e is slightly more popular than 89%. At around the dollar level, our 1953 studies showed an even $1.00 most favored, falllowed by 984, and with 99 reported infrequently. Today, 98 occupie first position, $1.00 second, and 99% third but growing in relative favor.” Whereas $1.98 was favored over $2,00 by a ratio of two to one in 1953, today it is favored about four to one, and $1.99 shows increasing popularity. The same is true in principle in regard to $2.98, 53.00 and $2.99. At the $5.00 level, the price most favored in 1953 was an even $5.00. Current pricing practices appear to favor $4.95 and $4.99, $5.00 did not appear with sufficient frequency to be charted. 2 Mr. CowAN. I do want to emphasize that the National Flexible Packaging Association in opposing S. 985 does not endorse false or deceptive packaging or labeling. We believe in truth in packaging as strongly as do supporters of the present bill. We believe that present laws are adequate to cope with any deception that exists. The company that attempts to rely on deception in selling its products will not long survive. The package is the poor man's friend. If the product represents a good value in public demand, the small manufacturer can launch it and achieve success if he has established proper marketing practices and has an effective, self-selling package. You will understand the validity of this when I point out that even giant corporations, before launching a new product in great volume all over the country, first try it out in test markets, possibly only in a single city, possibly in many forms or alternatives in many cities. But their aim is to find out if this meets the test of public approval. Secondly, the retailer is constantly searching for new profitable goods to add to his selling displays. The small firm cannot out-advertise his giant opponent, but there is nothing to prevent him from outpackaging him. In the present almost universally self-selling era, the small unknown package can achieve the same impact in the aisle traffic in the store because it is openly displayed next to competing products. S. 985, however, would require a high degree of standardization and uniformity in packaging and labeling. It would, therefore, severely limit the ability of small manufacturers to call attention to their products or by use of distinctive and unique packages and labels. Up to now this has been one of the principal means by which small companies' products have been recognized and accepted in the marketplace. Take this away, and you destroy the ability of such companies to compete effectively, to the ultimate detriment of consumers. Another provision in S. 985 which I believe would be unwise is that which would prohibit "cents off" advertising. There is a degree of consumer loyalty to products which have served one well in the past, and the marketeer tries to wean you away by offering you a temporary incentive of a "cents off" deal or a free sample to tempt you to try some other product. Some persons scream at this as though it were immoral practice. If it is banned, it will indeed slow down the introduction of new and improved products, would deprive the public of legitimate bargains and will especially handicap the small manufacturer who cannot gamble millions of dollars in overwhelming advertising. The package is increasingly recognized as the finest advertising medium. It is completely timely. It delivers its message at a time when people are planning to buy. It acts only in those stores where the product is available. It says, "Buy me now," and does not require a fading memory to remind the prospect days and weeks after the advertising message was last seen and heard. If we start banning legitimate adjectives from the package copy while permitting advertising for the same type of products to go uncensored on radio and television and the other communications media, we are once again handicapping the little man whose advertising is restricted to his package. Mr. CowAN. I do want to emphasize that the National Flexible Packaging Association in opposing S. 985 does not endorse false or deceptive packaging or labeling. We believe in truth in packaging as strongly as do supporters of the present bill. We believe that present laws are adequate to cope with any deception that exists. The company that attempts to rely on deception in selling its products will not long survive. The package is the poor man's friend. If the product represents a good value in public demand, the small manufacturer can launch it and achieve success if he has established proper marketing practices and has an effective, self-selling package. You will understand the validity of this when I point out that even giant corporations, before launching a new product in great volume all over the country, first try it out in test markets, possibly only in a single city, possibly in many forms or alternatives in many cities. But their aim is to find out if this meets the test of public approval. Secondly, the retailer is constantly searching for new profitable goods to add to his selling displays. The small firm cannot out-advertise his giant opponent, but there is nothing to prevent him from outpackaging him. In the present almost universally self-selling era, the small unknown package can achieve the same impact in the aisle traffic in the store because it is openly displayed next to competing products. S. 985, however, would require a high degree of standardization and uniformity in packaging and labeling. It would, therefore, severely limit the ability of small manufacturers to call attention to their products or by use of distinctive and unique packages and labels. Up to now this has been one of the principal means by which small companies' products have been recognized and accepted in the marketplace. Take this away, and you destroy the ability of such companies to compete effectively, to the ultimate detriment of consumers. Another provision in S. 985 which I believe would be unwise is that which would prohibit "cents off" advertising. There is a degree of consumer loyalty to products which have served one well in the past, and the marketeer tries to wean you away by offering you a temporary incentive of a "cents off" deal or a free sample to tempt you to try some other product. Some persons scream at this as though it were immoral practice. If it is banned, it will indeed slow down the introduction of new and improved products, would deprive the public of legitimate bargains and will especially handicap the small manufacturer who cannot gamble millions of dollars in overwhelming advertising. The package is increasingly recognized as the finest advertising medium. It is completely timely. It delivers its message at a time when people are planning to buy. It acts only in those stores where the product is available. It says, "Buy me now," and does not require a fading memory to remind the prospect days and weeks after the advertising message was last seen and heard." If we start banning legitimate adjectives from the package copy while permitting advertising for the same type of products to go uncensored on radio and television and the other communications media, we are once again handicapping the little man whose advertising is restricted to his package. I defend the right of any manufacturer, of liquor, for instance, to put on his bottle the words, "A full quart," if much of his competition is sold in fifths of a gallon. There are many similar situations. I see nothing sly or deceptive in the words "family size" or "economy size" attached to a measure of quantity. I do not believe this great country of America should censor or prohibit the use of any qualifying phrase on quantity which this miracle of fluid marketing practices has evolved because, ridiculous though some of these seem, they do not in my opinion deceive the public in any way. I repeat, the package is the poor man's friend-as a consumer and as a producer of goods and merchandise. I would not deny that confusion exists regarding the marketing of the outpourings of America's factories and shops, but the confusion is mostly in the minds of those who want to tamper with the machinery without realizing what effect this may have on our economy and the services and conveniences we take for granted. There is no body of evidence that America's housewives are disturbed or unhappy in spite of an amazing flood of provocative articles and news releases of tight control advocates. My personal pile of clippings and proceedings now weighs 8 pounds. I weighed it last week. The only constant in the packaging industry is change. Changes can occur virtually overnight. When something more appealing is offered to consumers and they respond favorably by buying the product in the new package rather than the old, every other manufacturer is forced to consider some type of improvement or innovation. This may not be a copy of the previous packaging change, but a complete change of direction. To merely match a competitor may not be enough to retrieve lost consumer preference. The package with more protective properties which extend flavor and palatability, the package with a more attractive appearance, the package with greater convenience to the consumer or the provision of greater value through a change in quantity or package size can all combine to affect the consumer's buying decision. S. 985 would unduly interfere with these dynamics of the packaging industry which I have just described. It would limit the manufacturer's ability to innovate in response to changing market conditions and consumer demands. It would foster a philosophy of regimentation and uniformity which would stifle ingenuity and incentive to experiment with new designs and concepts in packaging. Another great complaint has to do with pricing practices. Some persons assume there is a diabolical plot afoot to confuse the housewife by placing in odd cents and two or three combination sale units In reality, consumer psychology determines many pricing practices. Many a product fails to be marketed in particular outlets because the addition of the normal retail markup would throw it into an unpopular price category. I have here the results and an exhaustive study by a New York advertising agency, Charles W. Hoyt Co., Inc.. which illustrates this fact. The study consists of an analysis of retail advertising in 50 cities. Twenty thousand advertisements were checked, involving about 100,000 products on which prices were quoted by this retail organization. |