The mingling of business with economics in some economics departments went on well into the middle of the 20th century (the contrary movement of “economics departments” being added to business schools/colleges and schools of public policy is another, later story). Moving on through the undergraduate course offerings in the Johns Hopkins department of political economy 1937-1938, we encounter the course in marketing taught by Roy J. Bullock. The course description and semester examination questions have been dutifully transcribed and are found below.
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Life and Career of Roy Johnson Bullock
1903. Born October 5 in Crete, Nebraska.
1925. A.M. Doane College (Nebraska). Phi Beta Kappa.
1927. M.B.A. Harvard Business School.
1927-28. Associate Professor of Business Administration, University of Oregon.
1933. Ph.D. in Political Economy, Johns Hopkins.
1934-1940. Faculty member of the department of political economy.
1941. Director of Johns Hopkins School of Business.
1942. Joined the Office of Price Administration in Washington, D.C.
1945-48. Served with the U.S. military government in Germany.
1948. Begins Congressional career as a member of the staff of the Joint Committee on Foreign Economic Cooperation.
1951. Served as economic expert for the House Foreign Affairs Committee, later promoted to senior staff consultant.
1957. Served on staff of the congressional delegation to the United States.
1970-1972. Staff administrator of the House of Representatives Committee on Foreign Affairs
1972. Retired from congressional service.
1980. Died February 14 at his winter home in Marco Island, Florida.
Source: Obituary for Roy Johnson Bullock in The Washington Post, February 18, 1980.
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Fun Poster: The Johns Hopkins Department of Economics’ timeline 1875-2016. (Archived copy at the Wayback Machine).
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Course Description
Marketing
1937-1938
20 B. Marketing. Dr. Bullock. Three hours weekly, through the year. Th., F., S., 9.30. Gilman Hall 312.
A comprehensive study of the machinery encountered in present-day business that is utilized in the distribution of merchandise from the producer to the consumer, together with the policies governing its use. Attention is given to such subjects as retailing, wholesale trade, advertising, buying, cooperative marketing and the various types of functional middlemen, with particular regard to the place occupied by each in the general marketing structure. Detailed examination is made of the distribution of the more important commodities. A considerable amount of time is spent in the discussion of problems taken from business practice that pertain to the topics under consideration.
Source: The Johns Hopkins University Circular (1937).
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Final Examinations
Marketing
1937-1938
THE JOHNS HOPKINS UNIVERSITY
MID-YEAR EXAMINATION
POLITICAL ECONOMY 20 B
Dr. Bullock
January 31, 1938
I
Define or identify:
- Merchandising
- Economical Emulation
- Intensive distribution
- Trade-mark piracy
- % of selling price = % of cost
100 – % of selling price - Price-lines
- Stockturn
- Functional middleman
- Selling agent
- Hedging
II
National Hardware Stores, Inc.
In 1917, it was announced that the National Hardware Stores, Inc. had been organized under the law of the State of New York, to operate a chain of retail hardware stores. As a nucleus it planned to purchase selected unit stores in the eastern states and later to open new stores as well as to purchase other established stores throughout the country. The plan contemplated the operation of a perpetual inventory control of merchandise stocks in all the retail branches by means of an electrical tabulating machine in the central office; for each sale ticket a specially designed card was to be punched to show salesman’s number, code number of the merchandise, quantity, and selling price. Operating statements and balance sheets were to be prepared monthly for each store.
It was the policy of the company to deal in standard brands of merchandise, purchased centrally so far as practicable, but with permission to store managers to buy goods peculiar to their local requirements. Goods were to be sold at standard resale prices, without price cutting.
A sales promotion department was to be organized at the control office to furnish a regular service of direct advertising to select lists of customers of each store, to prepare newspaper and street car advertising and window displays, and to train store salesmen. As regards the owners of the stores, it was stated: “It is the policy of the corporation to buy men into its organization rather than to buy out their businesses.”
The corporation made a prolonged study of communities and stores within a 12-hour railroad radius of Now York City preliminary to the commencement of operations. Then several stores were purchased. In July, 1922, however, it was announced that receivers in bankruptcy had been appointed for the company. Its assets then were stated as $75,000 and its liabilities $100,000.
What were the inherent weaknesses in the company’s plan?
III
Waldemar Machine Company.
The chief products of the Waldemar Machine Company were automatic screw and chucking machines. The company also manufactured a line of shop equipment, including such items as steel benching, stock racks, and tool racks.
The company’s total annual sales were in excess of a million dollars; of that amount about 10% was represented by sales of shop equipment. In 1925, both the automatic machinery and the shop equipment were being sold by the same salesman. At that time it was proposed that the company should relieve the machinery salesmen of the responsibility for selling shop equipment and provide some other method of distribution for that line.
Waldemar machines were made in about 15 sizes and three types. They ranged in price from $5,000 each to $15,000 each. Firms producing large quantities of similar parts constituted the market for these machines. It was important that salesmen for the machines have engineering experience. They were expected to visit all large prospective customers several times a year but to devote, the major part of their time to firms actually in the market for machinery. The salesman obtained detailed information from such firms as to the particular jobs for which automatic machinery was required and submitted this information to the home office for production estimates and proposals. The salesman customarily negotiated with production officials and had to be able to advise them as to applications of the machines, small tools to be used with them, and other technical matters. The salesmen were paid salaries and expenses and, as an incentive, small commissions on sales in excess of specified amounts.
After a sale had been consummated and the machinery installed, the company provided a demonstrator to instruct the customer in use of the machinery. No separate charge was made to cover the cost of demonstration. The demonstration period varied from a few hours to several weeks.
The problems of selling shop equipment were totally dissimilar to those of selling automatic machines. Items of shop equipment were comparatively inexpensive and the potential market for them was much wider than that for the machines, although machinery users also were prospective customers for shop equipment. Even when the same firm bought both lines, however, different individuals usually were responsible for their purchase. The technically trained salesmen for the machines, moreover, tended to be disinterested in the equipment line.
In view of those facts the company in 1925 decided that thereafter it would not have its machinery salesmen sell the shop equipment. Its shop equipment sales, however, did not seem to be large enough to justify the employment of salesmen for that line alone. The company decided, therefore, to sell this line by means of manufacturers’ representatives specializing in a few lines of industrial equipment. Some of these representatives sold on consignment and some bought the goods outright; the company deemed it important to have local stocks. In general it was the company’s experience that sale on consignment gave the best results, since under that method of sale the company had a larger measure of control over its goods.
Criticize the decision of the company.
IV
Landon Company.
The merchandise manager of the Landon Company early in 1934 had the following operating statistics of the neckwear department presented to him by the controller’s office. For the use of the merchandise manager, the controller included with the company’s statistics the common and the goal figures of the National Retail Dry Goods Association for neckwear departments.
|
Item |
1932 |
1933 |
1934 |
||||
| Store |
NRDGA |
Store |
NRDGA |
Store | |||
| Common | Goal | Common | Goal | ||||
|
Mark-up, % |
38.06 | 39.1 | 41.2 | 38.67 | 41.1 | 42.1 | 39.48 |
| Mark-down, % | 9.04 | 7.3 | 5.4 | 11.71 | 8.4 | 4.5 |
12.25 |
|
No. of stock-turns |
8.8 | 7.5 | 10.1 | 7.6 | 8.8 | 11.3 | 6.4 |
| Expense, % | 37.45 | 39.8 | 33.8 | 44.21 | 39.9 | 37.5 |
|
|
Sales, % of previous year |
85 | 86 | 97 | 75 | 100 | 113 |
59 |
What use could the merchandise manager make of this information?
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THE JOHNS HOPKINS UNIVERSITY
FINAL EXAMINATION
IN
POLITICAL ECONOMY 20 B
(Marketing)
1 p.m.
May 30, 1938
I.
Explain briefly the meaning or significance of:
- Process materials
- Push selling
- Pittsburgh Basing Point System
- Robinson-Patman Act
- 2%, 10 days, net 30, 60 extra
- Old Dearborn Distributing Co. v. Seagram-Distillers Corp.
- Activity standards for salesmen
- Hedging
- Period discount
- Centralized control
II.
Evaluate the recent legislation legalizing resale price maintenance in most of the United States from the point of view of the independent retailer, the chain store, and the manufacturer of a nationally advertised article.
III.
The following statement appeared in Sales Management September 1929, p. 425 in an article signed “A Chicago Sales Manager”:
“I may say that my company has been a leader in our industry for more than thirty years. Our goods have been nationally advertised for about half this time, and practically all of our distribution has been through wholesalers. In 1921 we experimented with direct selling to large retailers, but discontinued the practice the next year. We still sell [to] the retailer through the wholesaler, and, principally in the larger cities, this method has been satisfactory.
“During my employment by the company we have sold all of our wholesale accounts on the same price basis. We have tried to confine our goods to the best class of wholesalers, and our merchandising has suffered little from price-cutting. We have maintained our position in the industry, and have a profitable and slowly growing business.
“A representative of a large mass distributor called on our president about a week ago. For about two days he talked with the four of us collectively and individually. He proposed that we sell his chain store organization a volume of goods that represents about 12 per cent of our present output, at prices which average at least 9 per cent below our net prices to our wholesalers. There is assurance, but no guarantee, that this volume will be maintained or increased. The buyer also submitted some interesting figures to support his allegation that we would not lose any money on the additional volume.
“He justified the special discount in several ways. When we objected to it on the ground that we are making less than 3 per cent net on our output, he argued that the greater part of our overhead is already taken care of by our present volume, and that we could not justly charge this expense against the additional business. If this claim is correct, a large part of the special discount may be justified.”
Discuss.
IV.
What economic justification is there for a wholesale price differential such as was provided in the N.R.A. code for the Wholesale or Distributing Trade?
What questions of social policy are involved?
V.
What methods of sales promotion should the following companies undertake? Give consideration to the characteristics of the product and the buying habits and buying motives of consumers in reaching your conclusion.
Katches
In 1928 a Boston inventor perfected an improved device called “Katches” for attaching license plates to automobiles. Katches simplified the task of attaching license plates to automobiles, because the device was in one piece, and thus did away with the necessity for bolts and nuts and lock washers. Furthermore, Katches would not rust and could always be attached or removed by one turn of a screw driver. This new invention cost 3 cents a pair to manufacture. The inventor expected to sell them to the retail trade for 6 cents a pair, and suggested that the latter resell them for 10 cents a pair. Since most license plates were changed at the beginning of the year, he expected that the sales of this produce would be very seasonal.
Owl-Fiber Rug Company
The Owl-Fiber Rug Company manufactured rugs made of spun paper yarn, and wool and cotton yarn, for sale to department stores and wholesalers. These rugs were made in a number of attractive patterns, and gave very satisfactory service in actual use. They were mainly sold to small-home owners for inside all-year-round use. Rugs manufactured by this company competed not only with all-wool rugs and oiled-surface floor coverings such as Congoleum, which were more expensive than fiber rugs, but also with other wants of users, such as furniture and electrical appliances. The manufacturers of oiled-surface coverings had advertised their products very extensively, one company having spent more than $1,000,000 in a five-year period. The Owl-Fiber Rug Company, on the other hand, had done little advertising.
Claybon Company
The Claybon Company was one of four large manufacturers of cheesecloth. Cheesecloth was mainly used for polishing, dusting, and straining cloths, as well as for surgical work and for making curtains and nettings. There were 13 principal grades of cheesecloth, the retail prices of which varied, when sold as piece goods, from 7 cents a yard for the coarser grades to 20 cents a yard for the finer grades. In addition to what was sold as piece goods a considerable amount of cheesecloth was sold in packages. Packaged cheesecloth was sold in five standard grades in 5 and 10 yard lengths. Companies charged 1 cent a yard more for packaged cheesecloth than for roll cheesecloth to cover the extra charges of packaging.
Source: Johns Hopkins University, Eisenhower Library. Ferdinand Hamburger, Jr. Archives. Department of Political Economy. Curricular Materials. Series 6. Box 2. Folder “Department of Political Economy — Exams, 1936-1940”.
Image Source: Johns Hopkins University graphic and pictorial collection. Portrait of Roy Johnson Bullock, 1940. Colorized by Economics in the Rear-view Mirror.