Reavis Cox

Towards a Theory of Marketing

Editors Note: The authors explain the need for the development of marketing theory and indicate some of the sources from which such a body of knowledge will come as well as some of the directions ...

An Outline of Distribution Costs

T HE Distribution Cost Committee is preparing an outline of the field of distribution costs, of which the first part is presented below. The Committee has the following principal objectives in mind in preparing this outline: It is hoped that the outline will help to clear up several widespread misconceptions concerning distribution costs. This outline could serve as the framework for a comprehensive and integrated treatment of the subject of distribution costs; and provide the basis for suggesting and defining specific feasible research projects.

A Note on Relationship between Sales and Advertising of Department Stores

In mathematical terms, the hypothesis upon which this study is based is that the relationship between sales and selling expense for any business enterprises may be described by a function homogeneous in the first degree. In more popular terms, this means that if, for example, you double the advertising, double the sales force, double the customer traffic, and double all other factors of effort, you will double the sales volume.

LEVY, HERMANN. Retail Trade Associa tions : A New Form of Monopolist Or ganization in Britain. Pp. x, 265. New York: Oxford University Press, 1944.

needed by the government. It is only a different distribution of national income. &dquo;We need no general sales tax for fiscal policy purposes,&dquo; Mr. Ruml writes, &dquo;now that the individual income tax is on a current basis.&dquo; Unfortunately, the withholding system of the income tax and the lowering of exemptions to the

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500 level, as per Federal legislation of 1943-44 (greatly inspired and supported by Mr. Ruml), have created the greatest tax mess in the history of taxation in the whole world, as is now known to everybody. The withholding procedure, applied to wages, is advisable only as a separate and final tax at generally lower rates (this being &dquo;earned&dquo; incomes) and with sufliciently high exemptions (so recommended in various of my previous publications); otherwise, in the framework of a general income tax there is the absurdity of tens of millions of returns and tens of millions of refunds. Therefore, it is difficult to understand why an income tax on the lower brackets is preferable to a general sales tax. I have shown in a memorandum reprinted in the

Toward a Concept of Workable Competition

The paper of which this is an enlarged and revised version was read at a joint Round Table of the American Economic Association and the Econometric Society, during the meetings at Philadelphia, December, 1939. Where one of the conditions of perfect competition is absent, the presence of others may lead to greater rather than less imperfection. Long-run curves of individual demand and cost are flatter than commonly represented, and the imperfections of competition correspondingly less. Industry subject to fluctuating demand requires prices in excess of short-run marginal cost. Favorable conditions appear to include a sloping individual demand curve, and some uncertainty whether a reduction of price will be promptly met. With standardized products, a chaotic market tends toward ruinous competition. Pure oligopoly is seldom found; the important case being that of openly-quoted prices with varying amounts of deviations on actual sales. Standard products with sloping individual demand curves are also possible. While extreme quality differentials approach monopoly, more moderate ones may be workably competitive, especially with further growth of closer substitutes and better knowledge of qualities on the part of buyers.

FERNSTROM, KARL D., et al. Organization and Management of a Business Enter prise. Pp. xi, 703. New York: Harper and Bros., 1935.

posed for overcoming world chaos, for it destroys individual initiative and the incentive to efficiency, in production. Under communism, moreover, the author believes state power is the only reality. All such generalizations indicate either a lack of knowledge or a deliberate misrepresentation of so-called radical doctrines. The single-tax proposal, however, is not viewed as radical, for it is held to be compatible with existing economic institutions, and is a bulwark against encroaching socialism.