Skptkmbkk, 1922 



G L K A N I N (i S IN [5 K K (J II L T LT It \<) 



573 



THE MARKETING PROBLEM 



Importance of Uniform Packages, 



Proper Publicity and IVell-seleded 



Channels of distribution 



By E. G. Le Stourgeon 



Manager Texas Honey Producers' Association 



CEET A I N 

 consid e r a- 

 tions that 

 always outer in- 

 to all marketiug 

 plans are diffi- 

 cult to apply to 

 the marketiug of 

 lioney. Yet they 

 must be well un- 

 derstood before we can liopc to solve our 

 problems. 



One of these is the proper package in 

 which lioney is to be packed, especially if 

 it is contemplated to have the co-operation 

 of the retailer in its distribution. This in- 

 volves standardization of package and limit- 

 ing the number of sizes and kinds. For re- 

 tail distribution a standardization of retail 

 price is also essential. With many men of 

 many minds producing honey and not agree 

 ing among themselves as to the cost of pro- 

 duction, and many not even knowing what 

 it costs to produce a pound of honey, this 

 is an extremely difficult problem. 



The unit quantity of comb honey has been 

 pretty well determined by the universal use 

 of the one-pound section, but the unit price 

 at which it should be sold to the consumer 

 has never been sufficiently standardized. In 

 extracted honey both considerations are 

 still unsettled, and, therefore, the j)roblem 

 is much farther from solution. 



Another consideration to be taken into ac- 

 count is the proper appearance of the prod- 

 uct when offered for sale. Too much honey 

 is offered in unattractive, often repulsive 

 and at least poorly labeled condition. This 

 tends to lower the chances of any honey be- 

 ing looked upon with favor by the consum- 

 ing public. Each beekeeper is a law unto 

 himself in the size and style of package 

 and often pays no regard to the vital mat- 

 ter of appearance. 



Next comes the need for proper publicity 

 back of the package, and this includes a 

 policy of co-operation with the dealer. We 

 see many commodities sold under attractive 

 brands and standards because of such pub- 

 licity. The sale of honey has miserably 

 failed in this consideration, and such fail- 

 ure has been the most serious drawback to 

 our success as merchants of our product. Al- 

 most every district in every state produces 

 some honey, and usually no more individ- 

 uality of price, size and appearance has en- 

 tered into its sale than in the sale of such 

 products as eggs or garden produce. Here 

 and there some nationally or locally adver- 

 tised and properly packed and standardized 

 brand is offered, but the earnest efforts of 

 the packer are soon set at naught by the 

 senseless and foolish competition of tlie 

 local producer, who floods the market with 

 a nondescript offering at ruinous prices 

 which are arrived at without regard to cost 

 of production or expense incident to pack- 

 ing and marketing. 



What Is the Best Method of Distribution? 



Tlie fiii;tl mriin consideration is the ])ro])or 



method of dis- 

 tribution to the 

 retailer. A cor- 

 rect solution of 

 this will depend 

 upon a greater 

 measure of co- 

 operation than 

 has been hereto- 

 fore shown by 

 beekeepers, since concerted action and the 

 collecting and dissemination of informa- 

 tion concerning trade conditions and ten- 

 dencies are necessary. 



In my opinion the laborer is worthy of 

 his hire, and the jobber or retailer, who 

 takes the risk of sale of the products he 

 carries in stock, is entitled to his reason- 

 able profit. It is manifestly unfair to the 

 retailer of honey for the producer to con- 

 tinue, as so many beekeepers do, to sell to 

 the consumer in his neighborhood at the 

 same price at which he sells to the grocer. 

 In the same way it is unfair for the pro- 

 ducer to sell to the retailer at the same 

 price at which he sells by wliolesale to the 

 jobber. The retailer is the customer of the 

 jobber, whose reasonable profit should be 

 protected. The consumer is the customer of 

 the retailer, and the profit of the retailer 

 should be protected. In other words, a bee- 

 keeper should recognize and quote . three 

 different prices, if he sells to these three 

 groups or links in the chain of distribution. 

 If he does not sell to the wholesaler or re- 

 tailer, but confines his sale to the consumers 

 only, he should remember that he is himself 

 doing the work of these important factors, 

 and should add to his price enough to re- 

 pay liini for his effort in packing, labeling 

 and selling. This should be enough to cover 

 a reasonable profit and the cost of doing the 

 business of those who are handling honey in 

 fliis territory. 



The ''Spread" Between Producer Price and 

 Consumer Price. 



I will not attempt to say what the 

 "spread" shall be between the cost of pro- 

 ducing a ten-pound pail of honey and the 

 sale price to a consumer. Many factors 

 that are determined by local conditions and 

 trade customs enter in. The problem c;ui 

 be approached only in a general way, and 

 the suggestions made here are general. 



Let us say that it costs 10 cents per 

 pound to produce our extracted honey. This 

 is a bulk price at whicli we could sell our 

 honey, without containers, in carload lots 

 to a bottler, ;ind just come out even on our 

 year's operation of the apiary. The labor, 

 label and container will cost us, say 21/. 

 cents. Our price to the jobber or Avhole- 

 saler in resale quantities should therefore 

 be 12V^ cents per pound or $1.25 for each 

 ten-pound can. The jobber's profit usually 

 ranges from 10 to 121^ per cent of the sell- 

 ing, or list price, to the retailer. This would 

 make the normal price to the retailer of 

 such honey about $1.40 per can or $8.40 per 

 case of six cans. The profit of the retailer 



