ADVERTISING MAKES IT PAY

'Lord Leverhulme was a grocer's son, He learned to sell when he was young And all the tune that he could play Was 'Advertising Pay' Over the hill and skies By God it pays to advertise?

Everyone knows that BO is to be avoided. Millions are spent removing the natural smell of the body and replacing it with a chemical odour.

But 40 years ago people would have looked blank if you had whispered BO in their ear. Because that was before Francis A. Countway, the head of Unilever America, discovered it after playing golf.

Another one of Unilever's ideological wars was unleashed on the population of the world. Soon people from Hong Kong to New York were all worried about BO and wanted to buy Lifebuoy toilet soap -introduced in England in 1898—to get rid of it. Unilever, naturally, made millions.

The BO story is by way of an introduction to the staggering expenditure on advertising in the food industry. packaging and promoUnilever alone spends £200m a year on 'promotion' and further £100m on packaging -the budget of a small country.

Almost all this is parasitic, represents an enormous waste of human resources, adds greatly price of groceries and in many cases leads to inferior goods. The advantage is entirely the manufacturers. The aim of advertising is to promote the 'exclusiveness' of a product, which in all important respects is identical to other products in the same field.

This development is a direct result of the capitalistic structure of the food industry.

Before the war several large firms dominated particular sectors of the industry.

But the development of convenience foods, in cans and in frozen and dehydrated packets, led to a rapid diversification of interests. Combine followed combine into new fields. To stand still would have been to risk annihilation.

Eventually two, three or four combines faced each other in all sectors of the food market. Some, like Unilever, Imperial Tobacco, Associated British Foods and Cadbury Schweppes, have substantial interests in many fields. In the language of the economists the structure of the food industry is oligarchic.

Price competition in these circumstances is too much of a risk for the big companies. For example Proctor and Gamble (Thomas Hedley) and THREE Unilever between hem control the entire Brit sh market for detergents. They both have massive resources. A pricewar would be so damaging to both companies that it is entirely ruled out.

Instead both firms tend to shift competition into other fields-especially advertising and promotion. The same is true of the whole food industry. Company after company spend millions of pounds to persuade the customer to buy their products.

Advertising is a vicious circle. Once a giant promotes brand through blanket coverage on commercial television, the Press and on hoardings, its rivals are forced to follow or lose millions in sales. This accounts for the saturation advertising of food products and the endless search for gimmicks and innovations to show the product is 'new'.

It all leads to the paradox that while sales promotion makes products appear different, they are becoming more and more the same. Bread is a typical example.

The great variety in the loaf is being destroyed as the big three private bakers get a greater grip on the market. But their packaging is designed to suggest there is an outstanding example between their products and the bread products within each of their own ranges.

For example Associated perate for a new innovation. British Foods (Sunblest), desintroduced 'Happy Bread'. It was more or less the same product dressed up in a different coloured wrapper for each day.

Deterioration discovered 1871 n 1970 the results of a five-year check on 100 common consumer goods by Warwickshire weights and measures inspectors was published. The conclusion was that while goods may have appeared to be improving, the opposite was the case.

They discovered widespread deterioration-l o a ve s had been made to look bigger by increasing the moisture content and bottles of dish washing liquid were enlarged by adding water. The inspectors concluded that the manufacturers 'know they will lose sales by putting price up .. whereas they can. profit safely by reducing quality. • The Vim campaign gives some indication of the sums of money involved.

Vim was launched by Unilever (or Lever Brothers as it was then) in 1904 as a simple cleaner. Later the emphasis was changed. Vim became a cleaner that could tackle anything from roof to cellar.

Everything went splendidly and Vim captured 55 per cent the £9m heavy-household cleaner market. But in 1955 Proctor and Gamble brought out Ajax with the 'greater cleaning power'. Vim's share 2003E of sales slumped to 30 per cent. So Unilevers invented 'new' Vim. The perfume was changed from 'garden pine' to *fragrant floral' and the powder from white to green.

The whole idea was to make Vim noticeably different from other powders in what was described by the adwizards as a low-interests field'.

Apart from the smell, the campaign hung on a 'chemical miracle' which was supposed to happen right in the housewife's sink. What happened was that the green powder turned white on contact with water. One contemporary commentator had this to say about the promotion:

'Obviously housewives are not sufficiently interested in science to prefer a product merely because it enables them to enact a minor chemical miracle in their sinks, but it may at least help them to believe that "New Vim" is really improved product. an But for a product such as durin sume: to be Th paign no n lever motir gical eighti tire t Th ding 1971 'Ariel £1,32 lever) bix; Cor chocc ary; c2.9n on W £3,60 on N (Nest bine), On

ILMENT sver ra TiT.

Tora D per rented = was ne' to green. as to ferent : aderests emical posed lousepened owder porary o say s are ed in roduct nables chemis, but em to n" is duct. t such 35622 as Vim, which has already undergone several revampings during its long history, a consumer might well have reason to be cynical'.

The cost of this one campaign alone was £500,000 (by no means a record for Unilever which spent f8m promoting 'Radiant' the biological washing powder) one eighteenth in value of the entire household cleaner market.

This kind of fabulous spending is repeated throughout the entire groceries field—in 1971 £1.42m was spent on 'Ariel' (Proctor and Gamble); £1,329,000 on Persil (Unilever); £1,195,000 on Weetabix: £1.177.000 on Kellogs Corn Flakes; chocolate and ary; £5m on bread £2.9m on biscuits; on Wall's sausages £3,607,000 on tea; on Nescafé and ( (Nestlés group, a bine), and so on.

One recen SUX.

356710 £9.6m on confectionand flour; £1,317,000 (Unilever); £1,207,000 iold Blend swiss comargument brought in by the defenders of monopoly in the food trade is that pressure from the retail trade has curbed the power of the giant manufacturers and forced them to compete.

It is true that the growth of the chains has had an important effect on the industry. One of the most noticeable developments has been the rise of 'own label brands' Sainsbury's for example, does a line in beans, manufactured by Crosse and Blackwell (Nestlés), which it sells a lot cheaper than the main brands.

Something approaching

per cent of all retail sales in the multiples are captured by 'own labels'.

But the result has been to strengthen rather than weaken the power of the big combines, and the necessity on their part to advertise.

'Own-label' brands sell on the strength of their cheapness. They do particularly well, therefore, in fields where housewives put little store on 'quality' or status. In these cases an 'own-label' brand can retail 20 per cent cheaper against an almost identical product, sometimes both made by the same producer, and do well.

In a . 'status' market where the housewife is persuaded quality is important, the 'ownlabel' brands stand less chance since they tend to be considered inferior.

The power of the retail trade The result, therefore, of supermarkets forcing manufacturers to produce brands for them is more advertising of the manufacturers' own lines.

Heinz must fight off the threat of cheaper Sainsbury beans by saturation advertising and promotion which suggests that although Heinz beans are dearer there is really no subPress, stitute for them. You may that a baked bean is a baked bean, but the manufacturers would have it otherwise.

The power: of the retail trade, thereforę, tends to work ultimately favour the giants and against the smaller manufacturer who cannot carry massive advertising costs. This was recognized at a sales conference held recently in Blackpool. John Harvey, the marketing direc tor of Cadbury Scheweppes, said:

*Despite the many pressures of the past two or three years, big brands remain dominant in the grocery market.

It is the minor bands that are really feeling the competition from "own-label". Big brands have their own distinct personality, the development of which represents an investment in ertising, promotion and sel ag effort [note the prioritie -noT cheapness, or quality]. A big brand must sustain its uniqueness and there is a need for constant innovation if it s to stay that way. Its physi cal characteristics and elements of its communication-pack, style, advertising and promotion-must be blended into a single-brand image.' This is really a fancy way of saying the public must pay far more for any product surrounded by a 'halo' of advertising.

Promotion is often carried to such fantastic lengths that the product itself becomes a secondary factor.

Recently Unilever found that grocers were buying as many giant sized packets of Persil as they could, not to sell the powder, but solely to acquire a 30p voucher on each pack. The powder was being thrown away given favourite customers because the special offer was worth more than the retailer paid for the pack at the cash and warehouse.

The combines, of course display a wounded innocence advertising expenditure. rheavy towards criticism over passage from 1966 Uniever annual report delivered by Lord Cole fairly states their case.

'Our market is of infinite variety of partly to accept it in all its variety to accept that some people preter to stay at home, sweet stay-at-home, weel well-content some like pretty packages and others are concerned only with what is inside them. Some Wall the reassurance of an old tried brand name-others like endlessly to try something new, that some like shopping .. and some find it a chore.

'We accept this immense variety of our public not the because if we did public would discipline us in he simplest ways. They would uy from somebody This argument is a total evasion.

Choice, as we have shown, IS severely curtailed in groceries. In margarine, for example, Unilever and Kraft, a Us firm, have a total monoPolitever far and away the poly of this product-with leading manufacturer. The 'choice presented the housewife is a choice between similar terms quality and price different only in their brand images which are the result of mass advertising Cole added: 'Whether an package deceives lies entirely advertisement misleads or in the eye of the beholder.

This too is completely false. And advertising campaign after advertising campaign proves it.

Even.. the authorities on occasion have been forced to recognize this. The 1964 ort on detergents (again Uni- Monopolies Commission relever dominates the field) found that all competition February 21, 1973 PAGE was in the field of advertising and promotion:

"The main criticism of the advertising and sales promotion policies of these two firms, Proctor and Gamble firms, Unilever, are that their advertising matter concerned merely with emphasizunprovable qualities and building up brand images than with informing the public ob the throat and ate bees attribute use can be made of it. Lise hey Ithe Commissions ay this encourages a consumer buy a particular powder for the benefit the gifts prizes and that the elect is uneconomic because it leads a manufacturer to market two very similar products under two different brand names and to launch 'new' products or hange the formula of exist ing products for the sake of "improvements" which oute of little intrinsic value to the consumer.' The Commission suggested that a reduction in advertising expenditure would reduce the price of detergents by as much as 23 per Cell. The giants carried out.

One might ask Lord Cole, if the housewife is sovereign, if the companies are at her mercy, if she cannot company to broadcast the 'qualities' its products are alleged to possess?

The answer is that the monopolistic structure of the food industry forces Unilever to do so. If it did not, the compan would lose sales and millions in profit In private moments food bosses are much more candid.

Do the profits rise? Yes Bill Bowman, the INTer national division head of United Biscuits (McVities, Crawfords, Carrs etc.), described to the 'Financial Times' how his company's fortune was revived.

"There was no advertising, no product support at all, no image, they were cut-price products. So we made a start on revamping McVitie. We put up massively, we improvedPrices packaging and got away from English-style packs.' Did the consumer gain? No. Were the biscuits cheaper? No. Was there more variety? No. Was there any particular improvement in quality? No. Did the United rice 80 up? Yes.

Did Biscuits' profits rise? Yes.

The thing to grasp about advertising is that the bulk of it is entirely the product of the monopolistic structure of the industry and aids only the big nrms to make more and more profits. Apart of increasing prices, it results in enormous human waste.

there would soly be need for the most minimum advertising- -enough to inform the public that there were certain commodities available and that they had certain properties and qualities.

The emphasis would be strict!y on transferring the benefits of technology and efficiency to the consumer in the form of lower prices, better quality etc.

The Tory government has the opportunity to slash prices at stroke-b ordering halt in the mad race suade the punch-drunk housewife that this powder is whiter than that one, that this margarine spreads better than the other But it will not.

Talks of a 'decent standard of living' and 'prices freeze' is a sham. Because the Tories represent the food 1OIUpolies, the supermarket bosses and the advertising kings, not the working class.

The Taff Vale judgement of 1901 was a powerful blow against the trade union movement which drastically changed its When the five Law Lords sitting on July 22 in an action taken by the Taff Vale Railway Co. against two officials of the Amalgamated Society of Railway Servants (ASRS) declared that a trade union was liable to be sued in its registered name' employers all over the country were jubilant.

With these few words, the judiciary, on behalf of the employers, had struck a crippling blow against trade unionism, the only defence of the working class against exploitation. The decision made it virtually impossible to carry out picketing during a strike and enabled employers to sue a union for damages inflicted during a A trade union would think twice about calling strike which might result in it being saddled with heavy damages • and legal COSTS sufficient ruin it financially. The judgeby the judiciary on the rights trade which were believed to exist under the Acts of 1867 and 1875.

Not only effective picketing made virtually impossible, BOUT the gueston of whether the workers had any rights of combination at all— whether the trade unions were legal bodies-was now raised. In addition, trade unions could be restrained by court injunction trom activities regarded as tortious; in other words, the full NOWAT NT THA W coin mobilized to hamstring the In this case the Taff Vale Co. was able to sue the ASRS and was awarded £23,000 damages. The total cost to the was £42,000 which, 1nl 1901, was a very large sum.

The case went through three stages in the courts. In the first court the judgement went in favour of the Taff Vale Railway Co. which brought the action. In the Court of Appeal this decision was reversed, but the company took it to the House of Lords where the first judgement was upheld.

The Taff Vale case arose out of a struggle by the ASRS for wage increases against a number of railways in South Wales which were largely concerned with transporting coal. legal position.