ADVERTISING AN AID AT BAD TIMES.

Star (Christchurch), Issue 19242, 2 December 1930, Page 7

ADVERTISING AN AID AT BAD TIMES.

gramophone company MAKES BIG PROFITS. “ If you cease to advertise regularly you lose ground which you can never niake up again,” said Mr Alfred Clarke, managing director of the Gramophone Co., Ltd., when explaining why his firm always pursued a S3*stem of regular advertising. “ The late Lord Northcliffe,” he said. “ was a close friend of mine, and I remember him* saying that in times of depression one should always increase one’s advertising. I believed that at the time, and forty years’ business experience with the gramophone business has convinced me that he was right. _ “ This country is now passing through a time of great depression, but we should not dream of cutting down our advertising in any way. Rather the contrary, for we do not look for immediate results from an advertisement. We consider it more as a system of building up goodwill with our customers and prospective customers. Invaluable Goodwill. “ They may not be inclined to buy anything at the time that the advertisement appears, and the advertisement may not make any immediate change in their attitude, but, by regularly and constantly advertising, we are making an impression, and when the time comes for them to buy anything that we sell they will remember our advertisement. That is the only way that real profits are reaped from advertising. “ A very good illustration of this was afforded when the war broke out. In the first year everyone was so depressed that you could hardly sell a gramophone. We did not, however, cease to advertise, or even cut down buying gramophones. We simply plodded ahead, and in the next few years more and more people began advertising. Had we ceased our programme of advertising we could never have caught the tide again when it turned. “ So that is my advice to other traders. Keep on advertising, and do not look at it so much from the point of view of quick sales as of establishing an invaluable goodwill.” Twenty Per Cent Dividend. The accounts issued last month by the Gramophone Company are the first for six years to show a reduction in earnings. They cover the twelve months ended June 30, for which period a net profit of £841,931 was earned, after providing for debenture service and directors’ fees. This figure compares with a total for the previous year of £1,168,217, which was a record. The directors state that profits have been adversely affected by the trade depression prevailing in most countries of the world. The dividend for the year is 20 per cent, and the balance carried forward is raised from £1,210,440 to £1,399,371, an increase which would have sufficed to pay a further 52 per cent on the ordinary shares. For the preceding year the dividend was 60 per cent, but the ordinary capital has since been doubled. The report states that the total assets of the company, as shown by the balance-sheet (irrespective of patents, trademarks and goodwill), and of the foreign branches and factories at June 30 amounted to £6,722,057. Deducting liabilities and debenture stock amounting to £968,178, there remain net tangible assets of £5,753,879, in respect of a capital of £3,340.000, of which £IOO,OOO is in preference shares.