Some aspects of advertising and of the advertisability of fruits and vegetables

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NORTHWESTERN UNIVERSITY

SOME ASPECTS OF ADVERTISING AND OF TEE ADVERTISABILITY OF FRUITS AND VEGETABLES

A DISSERTATION SUIMITTED TO THE GRADUATE SCHOOL IN PARTIAL FULFILLMENT OF THE REQUIREMENTS for the degree DOCTOR OF PHILOSOPHY

DEPARTMENT OF MARKETING AND MANAGEMENT

Joseph L. Apodaca

Evanston, Illinois Are

ProQuest Number: 10060831

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j d f **

PREFACE Nation-vd.de consumer advertising of farm products in their natural state, sponsored on behalf of entire producing industries, has up to the present time been associated almost entirely with the marketing ventures of such associations as the American Cranberry Exchange, the California Fruit Growers Exchange, the Sun Maid Raisin Growers Exchange, and the Walnut Growers Association.

These are the grower-owned marketing

agencies for cranberries, California oranges, raisins, and walnuts; and they market practically all of the nation1s out­ put of these respective farm crops. During recent years there has come about a widespread application of consumer advertising to other agricultural commodities.

Some States have passed legislation calling for

taxation of growers in order to provide funds for the adver­ tising of their products.

Advertising* is also playing an in­

creasingly greater role in the sales made Dy producers 1 co­ operatives in various parts of the country.

As yet, however,

most of these campaigns are limited in a number of respects. In some cases the advertising is confined to only a part of the United States.

When a product is advertised nationally, it

often happens that the advertising covers the output of only a limited number of. the nation’s growers of that commodity. In the case of some commodities, particularly in the field of fruits and vegetables, movements are under way to organize all of the nation's growers in an effort to carry on advertis­ ing for entire industries similar to that sponsored for the nationally advertised products mentioned above.

£-

i

Consequently, farm leaders are beginning to raise ques­ tions with respect to the feasibility of undertaking advertis­ ing programs of this nature.

They wonder whether the economic

position of such industries as have undertaken nation-wide advertising programs for all their growers has improved since advertising got under way and to what extent such an improve­ ment may be due to the advertising programs maintained.

They

also wonder whether these nationally advertised products and the industries that produce them have been favored by circum­ stances that may not exist with respect to other products or growing industries and whether these circumstances would have any influence on the maintenance of nationwide advertising pro­ grams.

Agricultural research workers have apparently never

had occasion to undertake investigations with respect to these matters. The present study endeavors to present information that may help to answer these questions.

The information was de­

veloped as a result of a research project on the subject under­ taken by the writer in 1 9 3 S for the Bureau of Agricultural Economics of the United States Department of Agriculture.

It

is believed that, with the necessary reservations, limitations, and qualifications, most of the data presented are useful in throwing light on the issues mentioned above, particularly as they apply to fruits and vegetables.

At any rate, the study

may fulfill a useful purpose if it serves to open up a field of study which seems to have

teen completely neglected and

which may become increasingly important in the future. The writer is indebted to a great many people who have -had a part in one way or another in shaping* this work.

Without

iii the excellent research facilities provided by the Bureau of Agricultural Economics at Washington, it would have been almost impossible to obtain a great portion of the statistical data used in this study.

In assembling the data considerable assistance was

rendered by the Fruits and Vegetables Section of the Division of Statistical and Historical Research of the Bureau of Agricul­ tural Economics, and by the Program Planning* Division of the Agricultural Adjustment Administration.

Through conferences

and interviews the writer received encouragement and valuable advice from a number of people in the Bureau of Agricultural Economics, particularly Mr. Gustave Burmeieter,

specialist

in fruits and vegetables; Dr. Oscar C. Stine, Chief of the Division of Statistical and Historical Research; Dr. F. L. Thomsen; Dr. Frederick V. Waugh; Dr. Eric Englund;

and Mr.

C. W. Kitchen, Assistant-Chief of the Bureau of Agricultural Economics. Information of particular value with respect to advertis­ ing ventures was obtained through the courtesy of the Cali­ fornia Fruit Growers Exchange, the American Cranberry Ex­ change, the Sun-Maid Raisin Growers Association, the 'Walnut Growers Association, and the American Fruit and Vegetable Association. For permission to use the research undertaken for the Department of Agriculture as a basib for the present dis­ sertation, the writer is indebted to the Graduate School of Northwestern University.

This obligation extends in par-

iv

ticular to Professor Fred E. Clark, whose encouragement at all times and whose scholarly and timely suggestions aided con­ siderably in trie completion of the work. grateful, too, to Professor Lyndon 0.

The writer is deeply

B?own, who gave so freely

of his time and services and under whose direction this thesis was prepared.

Credit is also due to Professor Horace 3ecrist

for his many apt and helpful suggestions.

August 1 2 , 19^1.

J• L. A*

Y

TABLE OB CONTENTS Pages Preface . . . . . .

i

Table of Contents .

v

List of Charts*

. .

vii

List of Tables.

* .

ix

I* INTRODUCTION . . . ............................. Rise of the Problem— Statement of the Problem— Purposes of Consumer Advertising— Conditions Necessary for Successful Advertising— Method of Approaching the Problem— Underlying Assump­ tions— Definitions— Sources of Data— Limita­ tions of the Study— Contribution. II.

TEE ADVERTISING OF CRANBERRIES ............ 2 2 - 4 3 Background--Advertising Expenditures--Behavior of Farm Prices— Behavior of Crop Values— Be­ havior of Consumption— Consumption Expenditures — Expenditures as Percentage of Income— Cran­ berries Versus Other Fresh Fruits--Other Con­ siderations .

III. THE ADVERTISING OF' CALIFORNIA ORANGES........... .. Background— Advertising Expenditures--Beha­ vior of Farm Prices— Behavior of Crop Values— Behavior of Consumption— Consumption Expendi­ tures— Expenditures as Percentage of Income— Other Considerations. IV.

THE ADVERTISING OF R A I S I N S ................. Background — Advertising Expenditures— £ ahavior of^Farm Prices— Behavior of Crop Values — Behavior of Consumption— Consumption Ex­ penditures-—Expenditures as Percentage of Income— Other Considerations . . . . .

VI

TAELS OF CONTENTS' (Continued)

Pages V, SHIFTS IN CONSUMERS* PREFERENCES WITHIN TEE FRUIT AND VEGETABLE FIELD ............... 84-92 Introductory Note——Cranberries, Oranges and Raisins— Comparisons Within Group— Change in Base Period— Significance of Situation. VI. FORCES INFLUENCING SHIFTS IN CONSUMERS* PREFERENCES . . . . . . .................... . . 93-112 Introductory Note'— War and Immediate Post-War Demand— Improved Transportation Facilities— Relative Changes in Incomes--Literature on Nutrition— Recent Changes in Consuming Habits— The 18th Amendment— Recapitulation. VII. CONDITIONS OF PRODUCTION -AND MARKETING......... 113-139 Introductory N ot e— Standards of Marketing— Standards in Relation to Advertising— Selection of Commodities for Study— The Production of Potatoes— Standardization and Grading'--Paeking— Transportation— Methods of Sale at Growing Markets— Terminal Market Facilities— Significance of*Factors Considered— Comparative Situation. VIII. SUMMARY AND C O N C L U S I O N . .........................140-156 Subject-matter Covered— Relevancy of the Subject-matter— Findings and Conclusions— Cranberries, Oranges and Raisins— Favorable Circumstances— Conditions Governing Produc­ tion— Conditions Governing Consumption— Final Conclusions. APPENDIXES, BIBLIOGRAPHY

............................. 157-19?

198-202

vii

LIST OF CHARTS Page 1 . Cranberries: weighted average and adjusted farm price per barrel, United States, 1901 to 1 9 3 5 ................ ^5

2 . Cranberries: actual and adjusted value of crop, United States, 1901 to 1935 ................... £9 3 . Cranberries: total and per capita consumption United States, 1901 to 1 9 3 5 .................................... 31 k. Cranberries: apparent total and per capita consumption expenditures (adjusted), United States, 1 9 OI to 1935* 34

5 . Cranberries: per capita expenditures for cranberries as a percentage of per capita income. United States. 1901 to 1935............................................

3?

6 . Per capita consumption of cranberries and per capita consumption of other fresh fruits, United States, 1919-20 to 1935-36 ...................................

40

7 . California Oranges: weighted average and adjusted price per box United States, 1900-01 to 1 9 3 5 - 3 6 . .

50

S.

California oranges: actual and adjusted value of crop United States, 1900-01 to 1935”36 . . . . . . .

9 . California Oranges: total and per capita consumption ........... . United States, 1900-01 to 1935-36 .

54 56

1 0 .California Oranges: Apparent total and per capita expenditures for California Oranges, United States, 1900-01 to 1935“3 6 ............................. 59 1 1 .Per capita consumption expe rditur es for California oranges as a percantage of per capita income, United States, 1900-01 to 193^~35 * • • .........

61

1 2 .Raisins: average weighted farm price and adjusted farm price United States,1909-10 to 1936-37 . . . .

69

1 3 .Raisins: estimated average value and adjusted value of crop United States, 1900-10 to 1936-37 . . . .

?z

1^4-.Raisins: apparent total and per capita consumption United States, 1 9 0 9 -IO to 1 9 3 6 - 3 7 .................

74

1 5 .Raisins: apparent total and per capita consumption expenditures (adjusted), United States,1909-10 to 1936-37 ..............................................

77

1 6 .Raisins: apparent per capita consumption expenditures paid to growers (unadjusted) as a percent of per capita income United States, I 9 0 3 -IO to 1935~36 . .

SO

viii

LIST OF CHARTS (Cont'd) Page

1 7 . Specified Fruits and Vegetables: Domestic consump­ tion expenditures as a ratio of national income. 1913-19 to 1 9 3 6 - 3 7 .................................

66

IS. Specified Fruits and Vegetables: Domestic consump­ tion expenditures as a ratio of national income, 1913-19 to 1936-37.................................

89

1 9 . Specified Fruits and Vegetables: Domestic consumption expenditures as a ratio of national income, 1913-19 to 1936-37 ................................ 91 20. Estimated changes in national income and i n income of industrial workers expressed as a percentage of 1921, United States, 1921to 19 36

ICo

21. Potato Producing Areas - Counties producing 50^000 or more b u s h e l s ...................................

11 7

22. Leading Potato Shipping

119

Counties

.................

1. Cranberries: Weighted average and adjusted farm price per barrel, United States, 1901 to 1935 ............... 2. Cranberries: actual and adjusted value of crop, United States, 1901 to 1 9 3 5 .................................... 3* Cranberries: total and per capita consumption United States, 1901 to 1 9 3 5 ' ............... j

4 - .

I

Cranberries: apparent total and per capita consumption expenditures (adjusted), United States, 1901 to 1935*

1 5* Cranberries: per capita expenditures for cranberries as a percentage of per carita income, United States, j 1901 to 1935 ............................................. j

!6 . Per capita consumption of cranberries and per capita consumption of other fresh fruits, United States, 1919-20 to 1935-36 ..................................... i j7* California Oranges: weighted average and adjusted 1 price per box United States, 1900-01 to 1935“ 36 . . . . Is. California oranges: actual and adjusted values of crop i United States, 1900-01 to 1935“ 36 ...................... :|

|9 . California Oranges: total and per capita consumption United States, 1900-01 to 1 9 3 5 - 3 6 ...................... i

110. California Oranges: Apparent total and per capita conI sumption of California oranges, United States, 1900j 01 to 1935-36........................................... 111. Per capita consumption expenditures for California ! oranges as a percentage of per capita income, United j States, 1900-01 to 1934-35 ' ........................ Ijl2 . Rea sins: average weighted farm price and adjusted ■ j farm price United States, 1909-10 to 1936-37 . . . . •1 3 • Raisins: estimated average value and adjusted value of crop United States, 1900-10 to 1936-37 .......... ;,l4. Raisins: apparent total and per capita consumption i | United States, 1909-10 to 1936-37 ................. i!15- Raisins: apparent total and per capita consumption ! expenditures (adjusted), United States, 1909-10 to I! 1 9 3 6 - 3 7 ..................................................... |16. Raisins: apparent per capita consumption expenditures i paid to growers (unadjusted) as a percent of per j capita income United States, I 9 0 9 -IO to 1935-36 . . 120. Estimated changes in national income and in income of |l industrial ’workers, United States, 1§21 to 1936. .

X

APPENDIXES I.

Tables: 1. Cranberries: Production, prices, estimated con­ sumption and expenditures for consumption, United States, 1902-03 to 1935-36 ......................

157

2. Oranges: Production, supplies, prices, estimated consumption and expenditures for consumption, United States, 1 9 0 0 - 9 1 to 1935“3 6 ...............

158

3 . Raisins: Production, prices, estimated consumption and expenditures for consumption, United States, 1909-10 to 1936-37.........' .................. 159 4. Tree Nuts: Estimated total and per capita con­ sumption, United States, 1919-20 to 1936-37 ♦

•

160

4-b.Tree Nuts: Estimated production, farm price, consumption and expenditures for consumption, United States, 1919-20 "to 1936-37 .............

5 . Chart of prices received and paid by United States farmers, index numbers, 1910 to 1937*

*

161 *

6. Four consistently advertised commodities: domestic consumption expenditures as a percent­ age of national income, United States, 1900-01 to 1 9 3 5 - 3 6 ....................................

7 . Specified fruits and vegetables: Domestic con­ sumption expenditures as a percentage of national income, United States,191^-19 "to 1936-37 . . . .

162

163

164

7 -a.Specified fruits and vegetables (continued): Domestic consumption expenditures as a percentage of national income,United States,1918-19 to 1 9 3 6 - 3 7 .

165

7-b. Specif ied fruits and vegetables (continued): Domestic consumption expenditures as a percentage of national income,United States,1 9 1 8 - 1 9 to 1 9 3 6 - 3 7 .

166

7 -c. Specif ied fruits and vegetables (continued): Domestic consumption expenditures as a percentage of national income,United States,1918-19 to 1 5 3 6 - 3 7 .

15?

7 -d.Specified fruits and vegetables (contirued): Domestic consumption expenditures as a percentage of national income,United States,1 9 1 8 - 1 9 1 9 to 1 9 3 6 - 3 7 .i 6 Q 7 -e.Specified fruits and vegetables (continued): Domestic consumption expenditures as a percentage of national income,United States,1918-1919 1936-37 159 7~f. Specif ied fruits and vegetables (continued): Domestic consumption expenditures as a percentage of national income,Unite '• States ,1 9 1 8 - 1 9 to 1 9 3 6 - 3 7 .

170

APPENDIXES (continued) 7-g.Specified fruits and vegetaties (continued): Domestic consumption expenditures as a percentage of national income ,United states ,191£>"19 to 19 '3 k” 37 II. C or re spo n d e n c e : 1. Letter from M r .R. Z.Eller,Assistant Advertising Manager, California Fruit Growers Exchange, Los Angeles, California,March 3, 193d, with en­ closures relating to advertising expenditures, orange shipments , and returns to shippers......... 2. Letters from M r .W. N, Keeler,General Manager,SunMaid Raisin Growers Association, Fresno, Cali­ fornia, dated March 9 and March 17,1933, with enclosure relating to advertising expenditures . . 3. Letter from Mr.William H.Allen,Secretary,Depart­ ment of Agriculture, Trenton,Mew Jersey, 'dated February B, 1933, relating to fund.raising program for advertising p u r p o s e s ................. 4-. Letter from Mr. William L. Wagner,Secretary,United Fruit and Vegetable Association, Chicago,Illinois, dated February S, 193^, stating some thoughtswith respect to the progress of advertising fruits and vegetables.

5 . Letter from Mr.Sturgis Dorrence,President BrookeSmith-French-Dorrence,Inc.,New York City, dated February 23,193^, with enclosure containing a copy of law passed by State of Maine imposing a' tax on growers of potatoes for the purpose of raising an advertising fund ............... 6 . Letter from Mr. Frank T.Swett,Secretary,Califor­ nia Pear Growers Association, dated February 1 7 , 1 9 3 b, outlining the success of efforts to organize pear growers for advertising purposes . . . . . . 7 . Letter from M r .H.B.Tabb,Executive Seeretary,The National Potato Association,Chicago,Illinois, dated February 5*1933, with enclosures contain­ ing a copy cf the Annual Report of the Secretary and outlining the attempts to organize the nation's potato industry for purpose of advertising . . .

BIBLIOGRAPHY

Chapter I INTRODUCTION While the essential task of advertising is to secure sales, there are many roles that nationwide consumer adver­ tising may he called upon to fill.

One purpose for which it

has

been used in this country is to strengthen the position ij of entire industries. This particular use of advertising is based on the recognition that up on making their purchases consumers consider several alternative uses to which they may

put their money.

Even

before a person decides to buy a given

product and before he faces the question of where to buy it and what brand to select, he must decide which one of two or more alternative products or services he prefers.

A summer

cruise, for instance,may compete in his mind with an auto­ mobile, an electric Refrigerator with an oil heater, ham, orange juice with tomato juice, and so on.

beef with

Recognizing

this situation, entire industries have sought, through nation­ wide advertising, to make consumers conscious of products or services in a general sense, like flowers, candy,

steel, elec­

tric refrigerators, insurance, airplane transportation, and the like. In agriculture, too, one finds the use of nation-wide con­ sumer advertising sponsored on behalf of entire producing in­ dustries.

The advertising of cranberries, by the American

Cranberry Exchange; of oranges, by the California Fruit Growers' Exchange; of raisins,

T7

by the Sun Maid Raisin Growers' Exchange;

Klennner . Otto. Advertising Procedure. Prent ice-Hail Tnc~. 1936, Ch. II, p. '

and of walnuts, by the California Walnut Growers 1 Exchange, are conspicuous examples.

Writers of textbooks and marketing

treatises often refer to these advertising ventures as out­ standing examples of successful consumer advertising of farm products in their natural state. ventures has come to

But the importance of these

be appreciated

ty other people as well.

Farm leaders, farm organizations, and legislators in some State have come to regard these advertising campaigns as samples of what can be done for farm commodities and they have urged that nation-wide consumer advertising be applied to potatoes, apples and a variety of other fruits and vegetables, in an effort to ■ improve the position of the growers of these

commodities.

The

Federal Surplus Commodities Corporation, which has in recent years been called upon to remove surplus quantities of fruits and vegetables from the market and has faced the problem of disposing of these supplies, has also given some serious thought to the matter of encouraging producers to advertise. This Federal Agency looks at the problem from the standpoint of the nation's growers of a given commodity. This interest in the problem on the part of farmers, legislators, and the F ed eral.government was one of the factors that gave impetus to the present study. that no research had

Another factor was

been undertaken with respect to certain

phases of the problem and a great need was felt for factual information.

It has apparently been assumed that under nation­

wide consumer advertising the economic position of the

ration's

growers of cranberries, California oranges, raisins, and walnuts has been improved and that the improvement can be

attributed to these nation-wide advertising programs.

Moreover,

there seems to be a general tendency to think that nation-wide advertising programs sponsored for entire growing industries can just as readily be initiated and maintained for other fruits and vegetables as for the commodities mentioned above. particulars have apparently

never

been subjected to careful

study by agricultural research 'workers. vestigation an attempt

These

In the present in­

is made to throw light on these parti­

cular aspects of the subject of advertising. Statement of the problem.

In general, the problem

Iunder investigation may be said to consist of three interi

|dependent parts.

The first part has to do with an examination

of the advertising experiences relating to crancerrids, Cali­

i

fornia oranges, and raisins, from the standpoint of the welfare of the growers of these products, to see how the economic posi­ t i o n of the growers during the period since advertising was !initiated compares with that of the pre-auvertised period and ;j

jjto note whether the changes that are evident have any particular ||relationship to the growers' expenditures for advertising. i || The second part of the study considers some of the |j |major forces current in the advertised period which are believed jto have aided or arrested the influence of advertising. This I consideration covers not only the nationally advertised pr o­ ducts mentioned above but also a group of 2 & selected commodities i jfrom the fruit and vegeta bLe field which may in the future be |

subject to nation-wide consumer advertising programs sponsored by their growers.

It is intended in this part of the study

-to throw light on forces beyond the control of the industries

4 which are tending to bring about shift 8 in consumers' prefer­ ences within the fruit and vegetable field and which thus tend to favor the maintenance of nationwide advertising programs for some commodities and discourage it with respect to others. The third part of the problem is concerned with an examination of the current

conditions governing the production and market­

ing of specified products and their relationship to the establish­ ment and maintenance of nation-wide advertising programs.

The

products considered in this part of the study include three nationally advertised goods (cranberries, California oranges,

1

and raisins) and some representative commodities selected from a group of 2 $ fruits and vegetables.

i j Before mention is made of the ways in which the proi | blem has been approached, it might be advisable to summarize | | at this point some of the better-known purposes of advertisi j!ing. Attention might also be called to a number of require­ ments that, according to marketing and advertising authorities, it is highly desirable for farm products to meet if they are to lend themselves adequately to such nation-wide consumer I advertising ventures as may be sponsored on behalf of entire I ] growing industries. i Purposes of co nsumer advertising. While in "a broad ji I sense and in varving degrees, all advertisements endeavor to ! 2/ do pioneering work, competitive work, or retentive work/' There are in general a number of purposes which consumer adver­ tising has

been called upon to serve in modern life.

Among

these are (l) to increase the use of a product by telling ■people how to use it; 2/

Ibid. , p. 25.

(2 ) to increase the variety of a product's

5

uses;

(3 ) to promote recognition of a product as a leader in

the field; is used;

(^) to increase the frequency with which a product

(5 ) to dispel

regarding a product;

"mal-impressions" held hy consumers

(6 ) to increase the units of purchase;

(7 ) to increase the length of the

buying season;

(S) to

support sales of a product in the faoe of price cutting and substitution; and, 1/ industry.

(9 ) to increase the strength of an entire

To begin with, however, the product must embody characteristics that may serve as

basis for the advertising

copy, or advertising can serve no useful purpose.

Hew

uses for a product must exist independent of the advertising, which can only be used to inform the public with respect to what the new uses are and how to apply them.

Advertising

cannot appropriately be employed to suggest that a product be purchased more frequently unless some definite advantages accrue to consumers through its more frequent purchase.

Try

as it may, advertising cannot correct "mal-impressions" when these are justified in the light of the quality of the product or in view of the condition in which it reaches the ultimate consumer.

In other words, advertising must be supported,

its appeal

by conditions which make the product what the adver-.

tising says it is.

in

As one advertising consultant has aptly put it,

y

A d v e r t i s i n g can never sell a product that will not sell it self.“

3]

Ibid. , Chapter II. See alsp Hotchkiss,G.B., Out 1 ine of Adver­ tising . Macmillan Company, 1 9 2 3 , Ch. IV. See also Clark and Weld, Marketing; Articultural Products , Macmillan Company, 1932, Ch. XXIII, pp. 5 1 7 -I 9 . Brown,L.O., personal interview with writer, July /,19 ^ 1 .

y

The purpose or purposes which advertising should seek to accomplish depend not only on the characteristics of the product itself tut also on at least two additional considerations of major importance.

The first relates to external forces often

beyond the control of the industry, which are found to be af­ fecting the consumers' preference for the product.

The second

consideration has to do with the conditions under which the product is produced and marketed. advertisability of a commodity.

Both of these affect the "Skill lies is recognizing

the exact nature of the circumstances affecting the sale of the product," states Otto ICleppner, "in deciding how the sale can be helped in view of the situation, and finally, in de5/ firing clearly what the purpose of the advertising shall be." I |

With respect to the first of these considerations, it

|

sometimes happens that a product is adversely affected by con­ ditions beyond the control of the producing industry.

Because

of changes in living and social customs and their attendent !

-

j i effects on consumption,

,

.

forces come into play that are adverse

| to the consumption of some products, -which advertising finds i j it difficult or even impossible to counteract. Advertising | may be able to do a great deal to support the sales of a || nroduct that is losing ground in public preference, but it | can seldom

be expected to turn a bad situation into a favor­

able one. i The continuous maintenance of advertising 'becomes extremely difficult under these circumstances,

since those

who contribute to the advertising fund get discouraged and

5y TCI eppner , Qt to . o p .c i t . , pT 55 7 See also Brown,L. 0. Market Analysis and Re search, Harper Bros., 1537 > p. p.

7 are inclined to curtail their financial support.

In agriculture

it would seem that a situation of this character would be wor­ sened by the fact that there are many producers involved, pro­ ducers are scattered over wide regions, and their complete co­ operation is, even under favorable conditions, rather difficult to attain.

In attempting to use advertising to increase the

strength of an industry, therefore,

it 'would seem to be extreme­

ly important to consider the circumstances that may be affect­ ing the consumption of the commodity, the developments that are favorably or unfavorably affecting its sale in relation to other commodities of its class, and the combined effect which these factors have on the maintenance of nation-wide consumer adver!tising. | j A consideration of the situation which governs the pro| duction and marketing of a product is also

believed to be

extremely important to the determination of advertising policy. i i "No amount of advertising," state Clark and Weld, "will create i !a permanent market for an inferior product, or for one that

6/

ijvaries in quality from time to time."

Uniformity of quality is,

'particularly in tlae case of agricultural products, largely !i i! conditioned by circumstances governing the uroduction and i! |marketing of a good. r l| It is difficult to state with precision what standards |i i!of advertisability from the standpoint of nroiuction axnd II |jmarketing a product should meet. Tnere seems to be general j|agreement among marketing authorities, however, with respect to certain conditions that are necessary or particularly 57

Clark and Weld, op.

cit .. Ch. XXIII, p. 523 .

8

favorable to successful advertising- of fan;; products.

One of

these conditions calls for associative action, on the part of grower8, so that their output moves through one or more central marketing agencies.

Another is tnat the commodity 'be 'a consumers1

good as distinguished from a raw material. requires that production

A further condition

be more or less centralized. Further­

more, the product should he of uniform qualify and it should have a grade or trade-mark that will reliably identify it. There should

oe a steady supply of the prodiet during the

normal consuming; season, and its flow from the farm to the consuming markets should not 'be undulv disturbing to the aia int enanc e of its qua lit y , un if or m ity , and accessibility.

2/

Having stated the problem, summarized the purposes of advertising, and reviewed some of the major considerations essential to the determination of the advertisability of farm commodities, we might now turn to a consideration of methods used in approaching the problem under study.

Attention might

be called again to the fact that the problem is here viewed from the standpoint of the growers of entire producing in­ dustries.

Because of this basic consideration in the terms

of reference, it seemed quite natural to the writer to start the study with an examination of some outstanding examples of nation-wide consumer advertising programs for far^ com­ modities sponsored on behalf of ent ire grouting industries. These include the advertising programs relating to cranberries, California oranges, raisins and walnuts. jj McKay, 5f. A ™ "Management Problems of Cooperat'd ve As sociations Marketing Fruits and Vegeta ties," U.S. Dept, of Agri­ culture Bui. 141^, p. 4*3. Also, Francisco, Bon, "Aovertising Farm Products," California Fruit Grovers' Exchange, 1933 • TU. Also, Clark and Weld, o p . cit. , Ch. Xllll, p. pUq.

9 Method of approach. The first step in approaching the problem is designed to find out if the economic position of the growers of

cranberries was improved as nation-wide consumer

advertising got under way, and if improvement followed there­ after in line with the

continuous expenditures by growers for

advertising purposes.

In this connection, the situation in

the advertised period is compared with that of the period immediately preceding the rise of nation-wide advertising. The pre-advertised period for cranberries covers the crop years from 1900-01 to 1 9 1 5 - 1 6 , the advertised period from 1 9 1 6 - 1 7 to

1535- 36 . The economic position of the cranberry-growing industry prior to the rise of advertising and during the whole of the advertised period examined is measured in terms of average farm prices for cranberries, adjusted for changes in the general level of prices; adjusted crop values; domestic consumption of cranberries; domestic consumption expenditures paid to growers, that is 'cased on prices received by growers; and domestic per capita expenditures for cranberries as a per cent per capita income.

In tracing the

behavior of these variables through

the advertised years, particular attention is given to the changes in growers'

expenditures for advertising.

This analy­

sis is supplemented further by a statistical comparison between the domestic per capita consumption of

cranberries and the

domestic per capita consumotion of other fresh fruits not subject to continuous nation-wide consumer advertising. Essentially the same type of statistical analysis is made for California oranges and for raisins except for the

10 omission of one step.

The step omitted i n these two cases con­

sists of the comparison between the per capita consumption of the nationally advertised article and the per capita consumption of competing products not subject to nation-wide advertising. California oranges could not

be subjected to this last step

in the analysis because of the absence of fruits with which oran­ ges might

be compared.

It was felt that deciduous fruits 'would

not do for the comparison.

On the other hand, citrus fruits,

like lemons and grapefruit, have advertising during recent years.

been subject to considerable The same situation exists

j with respect to raisins; the only other important dried fruits with which they might

be compared - prunes and figs - have

been advertised extensively i n recent years. Walnuts presented a peculiar difficulty at the outset, | which ultimately led to their omission from the study. Reliable i | data could not be obtained for years prior to the rise of nationi | wide advertising. Finding it impossible to make a comparison of the advertised with the pre-advertised period, as was done in the case of the other nationally advertised products con-

5jsidered, attempts were made to use a different type of approach. ji ! Considerable data were collected and series were computed in Ian effort to compare the per capita consumption of walnuts i

|with that of other tree nuts. Price series for walnuts and i for other tree nuts, such as almonds and pecans, were also compared.

The results were not

however, not only

believed to

oe significant,

because other tree nuts have

been suoject

to sporadic advertising campaigns in recent years,

but also

because there is considerable difference of opinion as to

11 whether

such tree nuts as p e c a n s , filberts, cashews, Brazil

nuts, and w&lnuts are really competitive in the light of their present-day uses . Following the examination of the advertising experi­ ences relating to cranberries, California oranges, and raisins, the second general approach to the problem

consists of a

statistical examination of domestic consuinption expenditures as a ratio of national income for each of the three nationally advertised products and 2S commodities from the fruit and vegetable field.

This is undertaken with a view to pointing out

for the period since about 1 _9 1 S the changes in consumers' P^eferences for products within the fruit and vegetable diet, and to finding out how cranberries, California oranges, raisins, and each of the other commodities examined show up in the general picture. A consideration then follows of the major forces operating since about 1 9 1 $ which are

believed to have given

rise to the relative changes pointed out in consumers' pre­ ferences for fruits and vegetables. In interpreting the forces I in question particular attention is given to their possible influence in aiding or arresting actual or prospective advertis­ ing ventures for the commodities considered. The final step deals with a survey of the conditions governing the production and marketing of the nationally ad­ vertised products and their relationship to the maintenance of advertising ventures for these products.

With respect to

other products from the field of fruits and vegetables de­ railed

consideration is given to the production and marketing

of potatoes, and minor consideration to the situation with re­ spect to the production and marketing of apples.

These two

commodities are selected to illustrate the situation governing production and marketing of fruits and vegetables in general not only because of their great importance within the fruit and vegetable industry, but also

because efforts are

being made

to organize all their growers for nation-wide consumer alver8/ tising. It is assumed that if these two products fail to measure up to cranberries and California oranges from the stand point of

conditions governing' their production and marketing,

they are to that extent less advertisatie.

The same should be

true of other fruits and vegetables whose situation is In im~ portant respects similar to that of potatoes and apples. Assumptions.

In the first part of the study where

! the three experiences of nation-wide consumer advertising of j

farm products are examined, it is assumed that the variables

jjanalyzed reflect rather well the economic position of the i growers both in the pre-advertised and in the ad vertised period These variables include farm prices, adjusted for changes in I

j the general level of farm prices; crop values, based on quan­ tities produced times adjusted average farm price per unit; estimated domestic consumption of the good; domestic consump­ tion expenditures paid to growers, that is,

based o n quantities

domestically consumed multiplied by average farm price; domestic per capita consumption expenditures as a per per capita income.

and

cent of

It is further assumed in each case that the

influence of advertising would extend itself to the entire 17

See Appendix II, p .

13 growl ig industry.

This assumption is based on the fact that the

bulls: of the n ation’s output of each of the commodities treated is marketed, through the central growers 1 agencies mentioned. The marketing agencies sponsor the advertising program so as to apply to all of the marketed supplies. In the part of the study dealing with a comparison of yi fruits and vegetables in the light of domestic consumption ex­ penditures as a ratio of national income, it is assumed that the variable employed gives a fairly good index of consumers 1 preference, since it combines the three elements of consumption, expenditures for consumption, and expenditures for consumption related to income.

It is also assumed that the group of com­

modities considered constitutes a good sample of the marketed fruits and vegetables that enter into the American fruit and vegetable diet. In the final part of the study a number of assumptions are involved.

It is assumed that the conditions governing the

production and marketing of cranberries,

California oranges,

and raisins are favorable to nation-wide advertising.

This

assumption is based on several important details brought out in the course of the discussion, most of which come from com­ prehensive studies dealing of these commodities.

with the production and marketing

It is also assumed that the situation

regarding the production and marketing of potatoes and apples reflects to a considerable extent the production and marketing problems of other fruits and vegetables

considered.

It is as­

sumed that if the situation in this respect for potatoes and apples is not so conducive to nation-wide consumer advertising

as that of the nationally advertised commodities mentioned above, the same would, in general,

be true of most of the other fruits

and vegetables mentioned, which are also troubled with serious difficulties arising in general from the same source. |

Defi nit ions.

Because of the point of view of this

study and the particular aspects of the general problem of ad­ vertising which are treated here, attention should be called to the definitions of a number of terms used.

By "nation-wide

consumer advertising," is meant advertising which (a) is ad­ dressed through one channel or more to the ultimate consumers j

|of the good in the nation,

(b) is sponsored essentially on

behalf of an entire producing* industry, (c) is financed at 1i ijleast for the most part by the growers themselves either directjly or through their association.

The idea, too, of an adver­

tising venture that is continuous through a period of several i

lyears also seems to

be a part of the general concept in the

'treatment of the subject in this study. i

!

By the term "farm goods in their natural state" is

i

jbeant those consumption goods from the farm consisting primarily ibf foodstuffs consumed in approximately the form in which they jkre produced on the farm.

Consumer advertising of farm pro­

ducts can be thought of only in terms of these goods.

Such

taw materials from the farm which require processing are ad­ vertised to consumers primarily as semi-manufactured goods in which case the growers are usually not directly involved. The statistical analysis in each of the advertising experiences examined begins with an examination of farm prices.

The "adjusted farm price" is the average season farm price for the commodity divided

oy the index of farm prices of the Bureau

of Agricultural Economics.

This is the customary method used

by commodity specialists in the Department

of Agriculture

to adjust the price of a commodity for changes in the general level of farm prices. The statistical analysis also considers the behavior of "crop values," by which is meant the quantities of money that the crops in the various years are estimated to be worth.

For any given year this estimate is derived by multi­

plying total production oy the average price for the year. If the average price has

'been "adjusted" as indicated above

before the multiplication tabes place, an estimate of the '"adjusted cron value" results.

The discussion in the statis-

i

jtical j

analysis of this study includes the use of both terms, The "domestic consumption" of each of the commodities

'considered has

'teen estimated by subtracting from the total

'[production of a given year the quant it ie s representing carryjover and exports, if any.

Allowance is made, for imports in

the

[event that any are involved. This is in general the method l ijof determining domestic, consumption followed bv the Bureau of ji

((Agricultural Economics of the United States Department of Agri■j jculture. The "domestic 'consumption expenditures for a given year i

represent the product of domestic consumption and average farm price.

If the farm price has oeen adjusted, the resulting pro­

duct, of course, is "adjusted consumption expenditures."

In

the examination of domestic consumption expenditures for the products as a ratic

of national income, it is the nnadjusted

series of domestic consumption expenditures that is used.

15

Reference to the "pre-advertised period" and to the 'advertised period" is made repeatedly in the discussion, par­ ticularly in the opening chapters of the study.

By the first

is meant the period of years shown in the charts when no nation­ wide consumer advertising was applied to the commodity under discussion.

The"Advertised period" begins in each instance with

the year when consumer advertising is known to have been under­ taken on a nation-wide scale and closes with the last year con­ sidered in the specific

chart.

This method of dividing the two

periods may not necessarily be the best for the particular analysis.

It has the merit of

But as a point of

being historically accurate.

beginning in tracing the benefits of adver­

tising it happens that the year in which advertising was initi­ ated

sometimes leaves much to

he desired.

More will be said

a tout this presently, when the limitations of the study are under consideration. Sources of data. Since the greater part of the present study consists of a statistical analysis, the general series on prices, production, income, and domestic consumption that are employed were taken from p u d i s h e d records of the Bureau of Agricultural ’ E conomics, the Agricultural Adjustment Administration, the Bureau of Home Economics, the Bureau of Labor

Statistics, the Bureau of Foreign and Domestic Com­

merce, and the State Departments of Agriculture.

Some of

the specific data on which certain computations are 'eased came from reports of the California Fruit Growers Association, the Sun-Maid Raisin Growers, the American Cranberry Exchange,

17 and the California Walnut Growers Association.

For the parts

of the present study that are substantially non-quant itative in character, extensive use has from various sources.

been made of published material

These include standard textbooks on

economics, marketing, and advertising as-well as specialized studies of such Federal agencies as the Bureau of Agri cultural Economics, the Bureau of Home Economics, the Farm Credit Administration and the Bureau of Labor Statistics. use has

In addition

been made of published material issued by the Agricul­

tural Economics Departments of a few of the State colleges and s i

universities.

The Federal Trade Commission1s report on MAgri-

| cultural Income Inquiry,” 1937 and articles in scientific

i and trade journals dealing with varied aspects of the subject ti

have served as sources for some of the points presented in | the general discussion. |

Limit at ions of the study. One major gap in the first

|| part of the study where the advertising experiences are exj amined from the standpoint of the growers results from the omission of data covering the nature of the advertising applied

j

| to the farm products considered.

Such an omission is felt

j

particularly with respect to raisins where it is found that ! in some years of the advertised period no improvement

is

apparent in the position of the growers, despite increased expenditures for advertising.

Part of the reason might well

lie in the advertising appeals made and in the media employed to reach consumers.

Since the present study is not intended

to serve as a test of advertising per se

nor primarily as

a test of the effectiveness of the advertising applied to Ithe

commodities considered, it is felt that the failure to

consider this aspect of the problem does not seriously affect the conclusions reached in the study.

It is felt, moreover,

that the inclusion of data on advertising media and the nature of advertising and the appraisal of these in the course of the discussion would have called for a specialized knowledge of advertising technique which the author does not possess. A shortcoming that has

been physically impossible to

overcome has to do with the inequality in the length of the pre-advertised periods and the advertised periods covered in the first part of the analysis.

Again it is more serious for

! some of the advertised commodities investigated than for others.

In the case of cranberries, for example, the pre­

advertised period is Ip years.

For California oranges it

was possible to examine a pre-advertised period of just 7 years.

But in the case of raisins, the pre-advertised period

covers only 5 years.

On the other hand, the advertised period

! in all' cases covers a considerable number of years, ranging ! from 19 .years for cranberries to 28 years for California orange | It was simply impossi oLe to find comparable data for preadvertised periods consisting of a larger number of years. This shortcoming, incidentally, resulting from the relatively short pre-advertised periods.led to the advisv

ability of plotting the curves on the time-series charts used on the basis of annual values rather than on the basis of trends.

This, of course, makes it easier for the reader

to observe the actual situation in any given year and compare it with any other year.

In the discussion, attention is

19

called not only to turning' points in particular years but also to general movements covering groups of years.

It might be

added that while the data for the early years shown in each case come from reliable sources and are believed to be fairly comparable with that of later years, they can hardly be said to

he as accurate as that of later years when a great deal

more has been ddme by the Federal and State agencies to improve their reporting and their economic statistics in general. In tracing the economic position of the growers of the advertised products, the method used, which consists of a I

comparison of the situation

before and after the rise of ad­

vertising, is subject to the great difficulty of making proper [ allowance for factors other than advertising affecting the variables analyzed, including new factors that appear and the disappearance or diminution of old factors.

In part this

matter is taken into account in subsequent chapters, which indicate the changes in dietary habits of American consumers | since about 1 9 1 8 , the relationship of these ohan'es to the |consumption of the three nationally advertised products and I 1 of 2 & other fruits and vegetables, and some of the major de­ v e l o p m e n t s which are

believed to have

brought about the

!situation. This phase of the study suffers in the sense that 1 it probably does not explain exhaustively all the forces in operation since 19 1 8 that might have influenced the consump­ tion of fruits and vegetables. |

With respect to the closing part of the study, it is

Iappreciated that generalizations applied to a group of commodi­ ties based on a minute examination of one or two commodities

call for further verification.

That a number of products in

the fruit and vegetable field are, like apples and potatoes, fari short of measuring up to cranberries and California oranges from the standpoint of conditions governing production and marketing is probably true.

What the position of each

one of the fruits and vegetables listed is in relation to potatoes or apples can be ascertained only by a more detailed examination of this phase of the problem than is given in this study. Contri bution.

Notwithstanding the limitations pointed

out above, it is hoped that this study will throw some light on the general problem of advertising farm commodities in their natural state.

More specifically, it is intended to be

a contri bution to the field in the sense that it presents a general picture of how the growers of the three industries \

whose products have

been advertised to consumers on a sustained

na-tion-wide scale, have fared from an economic standpoint and what the course of uomestic consumption of their products has been.

By pointing out current

shifts in dietary habits of

American consumers, as revealed by what people are paying for specified fruits and vegetables in relation to their in­ come, the study may serve to guide the grovers of these products on matters of advertising policy, particularly in deciding whether their advertising programs would be aided or arrested by these dietary developments.

Perhaps too, it

21

will serve to emphasize what many marketing and advertising authorities already know; namely, that favorable conditions of producing and marketing farm products are a pre-requisite of successful nation-wide consumer advertising and that

such

conditions are somewhat rare in the fruit and vegetabLe industries.

At any rate, it is hoped that the present

study

will serve to open up a field of investigation that apparent­ ly has been completely neglected by agricultural research worker s .

Chapter II ..THE ADVERTISING OF CRANBERRIES Nearly the entire commercial crop of cranberries con­ sumed in the United States is produced in five states. chusetts, New Jersey, and Wisconsin are the

Massa­

big three, while

Washington and Oregon, which started to supply the market only in recent years, are of relatively minor importance from the U standpoint of their portion of the total commercial supply. Control over marketing and price has er than might

been much great­

be indicated by the widely scattered growing

regions that the aforementioned states represent.

This is

largely because of effective organization on the part of growers. We find that several large growers1 cooperatives were in ex­ istence in the chief producing areas as early as 1S95-

They

secured substantial centralized power with the formation of The National Cranberry Growers1 Cooperative Association, in 1907This led finally to the formal organization of the American Cranberry Exchange in 1911*

As early as 1921, the Exchange con­

trolled the marketing of over 75 P er cent of the crop in Wis­ consin and 6 5 per cent in New Jersey and Massachusetts, the 2/ chief cranberry producing states. Advertising

ty the Exchange was initiated in 1 9 1 6 , with

a test campaign in Chicago to determine whether advertising would increase the consumption of cranberries and growers'

incomes.

Over

so raise

$22,000 was spent for advertising

17 See Appendix I, Table I. 2/ Hobson, Asher, "Sales Methods and Policies of a Growers' National Marketing Agency," United States Department of Agriculture, Bui. 1109* 192B, p. 5 .

2b

limited to the Chicago market in that year.

Id

A check-up follow­

ing the advertising campaign is reported as showing that there was an increase in the volume of cranberries consumed in Chicago in comparison with other markets.

Since then appropriations for

nation-wide consumer advertising have been made continuously,

dp

to 1935 these amounted to a n aggregate of $2,254,418 or an average of $125,245 P er year. Of course the annual appropriations have not been uni­ form.

The degree of variation from year to year is indicated by

the followi ig data obtained through the courtesy of the American t/ Cranberry Exchange. Year

Advertising Expenditures

1916 1917

5 22,941 14,911

1918

54,199

1919

1 2 2 ,6 9 s 77,936 73,564 179,774 194,539 77,734 153,639

1920 1921 1922 1923 1924 1925

Year

1926 1927 192S 1929 1930 1931 1932 1933 1934 1935

Advertising Expenditures $ 222,510 127,523 150 ,S70 141,995 164,367 131,663 (not reported) 123,437 100,372 37,135

If the statistical analysis contained in the pages which follow were intended to measure the effectiveness of advertising, it would

be necessary to include here, in addition

to the advertising expenditures given ahove, a detailed dis­ cussion of the nature of consumer advertising employed in each of the years considered.

It would also be necessary to evaluate

"Annual Report of The American Cranberry Exchange - Adver­ tising Campaign and Finances," Crop Season of 1934, pp. 5 - 9 . See Appendix I , Table I.

b4:

!

the advertising media in relation to results and to examine the forms of cooperation on the part of salesmen and merchants en­ gaged in getting the product from growers to consumers.

These

matters, however, are outside the scope of the present study. Not only is the author not in a position to obtain comprehensive data with respect to them,

but it is felt that such particulars

as the evaluation of the advertising media employed call for a knowledge of the field of advertising which the author does not possess. In the statistical analysis that follows, therefore, attention is confined to an examination of such variables as are believed to reflect, on the one hand, the economic condi­ tion of the growers of cranberries and, on the other hand, the behavior of consumers with respect to their consumption of the commodity. Behavior of Farm Prices.. The general trend of prices for periods covering advertised and pre-advertised years is shown in Figure 1.

The average farm prices of cranberries for

the years 1 9 0 1 - 2 to 1 9 3 5 ~ 3 6 , together with the series adjusted for changes in the level of farm prices in general, are pre­ sented. The pre-advertised period includes from the crop year 1901 through the crop year 1 9 1 5 .

Through this period as a

whole, there was a downward movement in the adjusted price, as may be disclosed by the three-year averages shown in Figure 1. The adjusted price fell from an average of #7-37 in 1901-03 to an average of $5*57 P er barrel in 1 9 1 3 -1 5 and, with the ex-

»

Cranberries: weighted tiverepe end adjusted farm price per barrel, United States, 1901 to 1935* f

3 yeast averges j«»TS

ActuaL

pirice

A4ji/«te3

7

f

4J7

/a. 4,I\T /$■ £4* IT/*' /f rst

iiic-

if If - Al

//•X7

f.*7 /ft4? /far- JOJ /J-*4 /fj» -J3» 4.J3 /?JV -jir" //.fa

4?«* 4 4J* 7-W fM

f 4ft

l/.ev pywe

\ A

' ' V : '> V

pro—advertised period

v

^

/

\

\ ! a V/

•; 1

\V

.

i Ajtuitcd

j average p r i c e

advertised oeriod

r n table * below Table

•

Cranberries: weighted average and adjusted farm price per barrel ____ United .States . 1901 to 1955*____________________ weighted average price per barrel iDollan}

5.50 6.20 6.00

Adjusted average price per barrel (Pollan)

Tear beginning Sept. 1

weighted average price per barrel (Pollarj^

7

Adjusted average price per barrel

JLqklftCt)

3

6 0

ception of the period 1904— 0 $, this decline was progressive. On the basis of the adjusted price per pear that the cranberry industry was

barrel, it would ap­

becoming progressively

more depressed through the pre-advertised period. well have

This might

been one reason that prompted the American Cranberry

Exchange to undertake consumer advertising in an effort to al­ leviate the situation. But though advertising started in 1916 , the general decline in unit price was not halted.

The average adjusted

price for the 1916 cranberry crop was $4-.15 per barrel, about $1.70 below that of the previous year. to I 5 -1 S in 1917“ 1&,

Although the price rose

following year it fell to $4-.OB.

How­

ever, reference to the table on advertising expenditures present­ ed above will show that the advertising in this period was insig­ nificant compared with that of subsequent years. It was not until 1919 that the advertising expenditures attained a significant level.

And yet the years 1919” 20 to

1923-24- were characterized by such a n abnormal rise and subi

sequent fall in prices, relative to the other years shown, that the advisability of including this period in our analysis might well be questioned.

From an average of $3«5! P 0r barrel in

1919, the price rose sharply to $ 6 . 6 3 in 1920 and to $ 10 .6 l in 1921, bat thereafter declined almost as sharply to a price of $ 5 . 7 5 in 1923.

While this behavior was more or less character­

istic of most farm commodities in this period, as shown by the index of farm prices of the United States Bureau of Agricul­ tural Economics (see Appendix I, Table 5 ), cranberries manifested

27 a peculiarity.

Farm prices in general were rising progressively

from 1915 through 1919* increasing as much as 112 per cent.

In

contrast, the price of cranberries was falling through most of this period and did not

begin its phenomenal rise until 1 9 1 9 *

When a relatively more normal period is selected for comparison with pre-advertised years, some interesting and per­ haps significant developments are noted in favor of the adver­ tised period.

The average adjusted price of cranberries for

the period 192^-25

to 1923-29 was $ 7 *6 2 , while the average

for 1 9 1 1 - 1 2 to 1 9 1 5 - 1 6 - the last five years of the pre-adver­ tised period - was |6.13 per barrel.

This means a difference

of tl.^9 per barrel in favor of the advertised years. Reference to the table on advertising expenditures will show that in the five-year period 1 9 2 ^ to 1 9 2 8 , expenditures for advertising reached a very high level. If the years 1923-29 "t0 1932-33* which represent about the highest price level of the advertised period, be compared with the years 1 9 0 5 -0 6

to 19 0 9 -IO, years of highest price level

for the non-advertised period, it will be found that the average for the former was $10.03 per barrel, and the average for the latter was $7.51 per

barrel.

This means a difference of $ 2 . 5 7

in favor of the advertised period.

Again it should be noted that

the record-high prices for the advertised period occurred in the years when the highest level of expenditures for advertising was made. The average price for the entire pre-advertised period of fifteen years was $6.33 per barrel, while that of the first

fifteen year

advertised period was $ 7.06 per

barrel.

This

leaves a substantial margin in favor of the advertised period. Behavior of Cro-p Values.

The higher adjusted unit

prices prevailing through the advertised period, as noted in the preceding section, were accompanied by substantially high­ er adjusted values for the farmers’ output of cranberries through the advertised years, as may ence to Figure 2.

be readily seen by refer­

Advertising was extended nationally in 1917

.Interestingly enough, a sharp cushioning of the downward move­ ment occurred just as nationwide advertising got under way, that is,

between 1917 and 1918.

value of the farmers' tion until 1922.

Thereafter, the adjusted

output rose steadily without interrup­

Of course this latter characteristic was

true of many farm commodities, as is indicated by reference to Appendix I, Table 5*

But peculiar to cranberries is the

fact that the downward movement after 1922 was relatively slight and of short duration, ending in 1923*

Thereafter, a

general rising trend got under way which reached its highest point in 1932 with an adjusted value for the cranberry crop of $7,20^,000.

And, for the most part, this rising trend was

on a level substantially higher than that of any preceding period.

Further comparisons here would seem to be unnecessary

since it is evident

(see Figure 2), that, except for the years

1916-17 to 1920- 21 , any period of time selected from the ad­ vertised years would yield an average value considerably high­ er than any comparable period selected from the pre-advertised years.

And, it should be noted, the low-level period, 1916-17

Firure

. Cranberries: actual and adjusted value of crop, United States, 1901 to 1935*

2

I,nrv dollars Veiv A e tua.L l9o I-/?03 4 34

IfOif'/'foL

4

verges Adjusted 49 >S

4, It*t

19o7-lfo9 A. S 7> iito- fit 3.3 7 0 1913- I S 3, o i o l?i£- ft 3. 3 S t I f i9 - 4 1

I944 -4if

6 ooo

I9 4 S 4 7 I 9 4 Z - 1901-02 to 1916- 17 , averaged $ 0 .0328 . Two movements are in evidence.

From 1901-02 to 1911- 12 , per

capita expenditures were relatively stable, the average being $0.03*4-, and there was no rising or falling trend.

A decline

started in 1911, which caused the average for the years 1911~12 to 1915“

to be approximately $0,032.

Hence, per capita con­

sumption expenditures were on the decline when consumer adver­ tising started. The trial advertising campaign undertaken in 1916 did not halt the downward movement in per capita expenditures.

But

as consumer advertising was undertaken on a national scale in

1917> it is of interest to note that the decline in per capita expenditures came to a halt (see Figure ^).

With the develop­

ment of advertising on a significant national scale in 1919 , a sharp upward trend in per capita expenditures got under way which in 1922 reached the high point of $0.0*4-1.

This high

level was maintained without much change except for yearly fluctuations until 1928.

From 1928-29 to 1932-33, the high­

est level on record was attained, accompanied by a moderately rising trend which came to a halt in 1932. The average per capita expenditures for the advertised period

as a whole was $0 .0366.

This is 11.6 per cent greater

than that of the pre-advertised period.

For selected intervals

within the advertised period the difference is much greater; for example, the average of per ca.pita expenditures between the advertised years of 1922-23 to 1927-28 was $0,037*

The

average for the highest six-year pre-advertised period, 1907" 0£> to 1912- 13 , was $0 ,035 .

This means a difference of $0,002, or

six per cent in favor of the advertised years.

Again, the

average for the years 192&-29 to 1933" 3^, which represents the six advertised years of highest per capita expenditures, was $ 0 .0 ^ 7 *

highest pre-advertised six year average was $ 0 ,0 3 5 *

The difference here is $0,012, or 3^ P er cent in favor of the advertised interval. The foregoing analysis has shown that the adjusted per capita expenditures for cranberries were somewhat greater during the advertised years, however considered, than they were durdng the non-advertised years.

By way of supplementing this

analysis, and perhaps further testing the findings, the per capita expenditures for cranberries might be examired in the light of per capita income.

This is presented in Figure 5*

both for the pre-advertised and for the advertised period, with a trend line for each interval plotted by inspection. Expenditures as Percentage of Income.

It should be

noted that the per capita expenditures series referred to in Figure 5 is based on actual dollar expenditures not adjusted for changes in the general level of prices.

The reason for

not adjusting this series is that national income, which is the

basis for computing per capita income, is itself expressed

in dollars.

Thus to conform with the per capita income series

employed in Figure 5* ^he per capita expenditures for cran­ berries are left unadjusted.

- i

j l**ure

.Cranberries: per—capita expenditures Tor cr? nberries ' of per-capita income, United Otates, 1901 to 1935J

non- advertised neriod W \

\7

*Data from table Table *5" .Cranberries

tfiJl

advertised period

j?*JL

s

s

:Dita fron

Jib

tfZ.7

below, Per-cepita expenditures for cranberries as e percentage per-capita income, United States, 1901 to 1935* Year beginning Sept* 1

s

percentcrre

Unadjusted per capita expendi­ tures

Per capita income

oh

ercent ccl. 1 is of c^l. 2

^

Pol.

ercent

T03l .044 .046 .048 .056 .049 .053 .060 .047 .056 .067 .063 .051 .034 .036 .035 •041

.006 .008 .007 .009 .011 .008 .009 .009 .007 .009 .010 .010

.009 .007 .009 .010

From 1901--02 to 1917- 18 , there was a general tendency for people to employ a smaller and smaller portion of their in­ come for the purchase of cranberries.

If the period as a whole

be viewed, there was a rather pronounced downward trend in the !

percentage of per capita expenditures to per capita income. The downward movement was not halted in 1916 when the 1 trial advertising test was made, taut continued more sharply than ever.

It was halted, however, in 191&~19* coincident with the

expenditure for the first time of substantial amounts of money Ifor nationwide consumer advertising.

Thereafter an upward

movement got under way which, but for slight fluctuations, i jcontinued through 1935 * last year shown. j!

There is a striking relationship in time here between

ij

Ithe development of nationwide consumer advertising on a sig­ nificant

scale and the upward trend in per capita consumption

i

jexpenditures for the advertised article; between the continu­ ous expenditures for advertising on a significant scale therei after and the subsequent rise in per capita expenditures for consumption as a percentage of per capita income.

This re-

i

jlationship is the more striking

because it coincides with the

findings of the other variables studied, such as farm price, the adjusted values of the cranberry crop, per capita consump­ tion

i

*

and the adjusted per capita expenditures for cranberries,

The evidence strongly suggests the conclusion that advertising was influential in attaining higher crop values, greater con­ sumer expenditures for cranberries, and in causing people to spend a larger portion of their income for the product.

Cranberries Versus Other Fresh Fruits.

By way of

i

concluding the analysis let us see how cranberries have fared as compared with other fresh fruits throughout the period when most of the advertising has been applied.

In this connect ion,

the per capita consumption of cranberries is compared with jthe per capita consumption of other fresh fruits which,'it is jassumed, have been subject to somewhat similar forces since i

I!1919 except for nationwide advertising applied continuously. ! ! Figure 6 on the following page presents the curves of per capita consumption of cranberries and per capita con!| | sumption of all other fresh fruits combined, citrus fruits [ excluded. Two additional curves are shown to indicate the !i ■percentage of change of per capita consumption of cranberries | and per capita consumption of other fruits, with percentages Ibased on the 1919-21 average for each series. |

It is clear that through the period 1919“ 20 to 1933“

!

34. the per capita consumption of cranberries increased somej what more than that of other competing fresh fruits, as shown in the lower part of Figure 6.

In other words, with the

average per capita consumption of 1919“20 expressed as 100 per cent, five year averages of the cranberry series are as follows:

110.7, 115.4-, and 115.4 per cent.

five-year averages of other fresh fruits are: and 98.4-8 per cent.

Corresponding

107 .0 , 113 *16 ,

Cranberries, therefore, reflect not only

a greater amount of increase in per capita consumption bat also a higher rate of increase and a more stable consumption. The latter indication is brought out more strikingly by

— ——■ _

Q S E bH

b

HIM

Is ^99QXN|Kffl|

■

Per capp i t a. c ontcf mpf,rt»n

'

Po*r\As

Per e. e n+

I3.0

* rO + h c r

^Yt-

-fresh

_____

^ro': t - i l l o £ bolov,___________________________________ L P s:* -o r ” i tr cor.r-r^ t oth^r

Tear beginning :

S^nt. 1 :

f r e r ' :

i j ~

o'*

Cranberries Per capita Percent of consumption 1919-21 avera^ Pounds Percent

.U .U

:i •5 :i .U .5 .5 .5 .5

nr. :. ' ^ r - c

o r ; , n l e r r i o s

’ ’n i t ' P .

92.3 92.3 115.& 138.5 115.^ 115^ 13«e5

,

1 0 1 . • - ■ " * ' . >

t >

'.• -»-• 1

_______Other fresh fruits "U Per capita t consumption 1 Pounds

97.9 118.1 76.1 U 9.5 109.5 10M IOU.9 13^.6 92.7 H 3.9 96.7 96.3 115.1 83.7 87.6 91.1 111.1

Percent of

1919-21 average

Eirqeqt 100.5 121.3

78.2 122.7 112.5 107.7 107.7 138.2 95.2

117.0

99.3 98.9

118.2 86.0 90.0

93.6 11U.1

* Compiled by Program Planning Division. Agricultural Adjustment Administration. 2J Citrus fruits sad cranberries excluded.

visual inspection of the curves in the lower section of Figure 6. This test yields indications that agree with, and ap­ pear to supplement, those of the foregoing tests.

Coincident

with the rise and the successive employment of advertising, we find higher prices, higher values received for the cran­ berry crop, greater expenditures made for cranberries con­ sumed in the United States, a larger portion of per capita income devoted to cranberry consumption, and per capita coni

j sumption of cranberries increasing more than per capita con!

| sumption of other fresh fruits and attaining greater stability of consumption in recent years. Ji

As a whole, therefore, the indications brought out in the preceding analysis augur well for the nationwide consumer advertising of cranberries.

| fleeted in the

The favorable experience, as re-

behavior of the variables studied may be due

in large measure to the character of the advertising employed and also to other considerations which have to do with circum­ stances that have made the product advertisable.

There is no

attempt made here to examine the character of the advertising 5/ employed, for reasons which have already been indicated. Other Considerations. "Living and social conditions change,” says Otto Kleppner, and "the stream of social public taste flows on like a river, and, like a river, is likely to

6/

change its course.” R/

Forces in operation over long periods

See p. IS. Kleppner, Otto, Advertising: Procedure. Prentice-Hall Incorporated, 1 9 3 & > Chapter II, p . ^9*

may well cause the public to increase its purchases of some commodities and decrease relatively its purchases of others. These are external forces over which a given producing industry has little or no control.

When advertising rides on the crest

of forces that favor the purchases for consumption of a com­ modity, it is much easier to attribute specific effects to it in stimulating sales, and, moreover, it is much easier to main­ tain support on the part of growers. On the other hand, when the tide runs against the advertised product, it is often impossible for advertising to head-off the unfavorable forces, and ultimately the interest in maintaining continuous support on the part of producers has i a tendency to wane. What has been the situation in this con­ nection with respect to cranberries? This matter is investigated in Chapters V and VI of the present study, where it is found that within the fruit and vegetable diet of American consumers, cranberries along with certain other fresh fruits and vegetables, show a rising level of domestic consumption expenditures as a ratio of national income through the period from 191S to 193&*

This is attri­

buted to the combined influence of a number of forces, discussed in Chapter VI, which have tended to stimulate the relative con­ sumption of certain commodities within the fruit and vegetable diet. Another matter relating to the advertisability of cranberries in contrast to that of other fruits and vegetables is examined in Chapter VII.

This pertains to the conditions

4:0

governing the production and marketing of the article3 which axe found to he excellent in relation to those of other modities from the field of fruits and vegetables.

com­

In view of

such favorable factors it should not be surprising that this farm product represents one of the outstanding examples of successful nationwide advertising sponsored in the interest of an entire industry.

Chapt er III

THF ADVERTISING OF CALIFORNIA ORANGES The orange industry of the United States today involves seven States, of which California and Florida are by far the most

important.

In 1919~20, the latter States supplied 99 P®** cent

of the total commercial orange crop, while the remaining 1 per

cent consisted of the combined output of Texas, Arizona, Alabama Louisiana,

and Mississippi.

Although the portion supplied by

these latter States ha s increased in recent years, it is still comparatively small, as may he indicated by the fact that

1936-37 it constituted hut about 5 per in contrast to

in

cent of the total supply,

95 P er cent of the total for California and

1/ Florida. F lorida is of considerable importance as a producer of oranges,

but California has held and still holds first place.

Up to 192S-29 almost 70 per cent of the total United States pro ­ duction of oranges came from California.

But California's

share of the total has declined in recent years, coming down to about 53 P er cent

in 1936“37*

Not only is the supply considerably concentrated, noted above,

but a very considerable portion of the California

orange crop has to the present time marketing purposes. at random,

as

been highly centralized for

The data for the following years, selected

seem to point rather forcefully to the degree of con­

trol over marketing exercised by the California Fruit Growers l7 Computed from data in "Agricultural Outlook Charts - Fruits and Nuts," United States Department of Agriculture, Bureau of Agricultural Economics, October 1937, p. 13*

2]

Ibid.

Exchange.

It is estimated that in 1904-05 about 10,225,000

boxes of oranges were produced in California, of which 4,513,783 were marketed through the Exchange.

In 1 9 1 0 -II, the Exchange

marketed 9*272,499 ^oxes

the total California supply of

approximately 15,645,000.

In 1913-19, the total supply of

California oranges was about 15,614,000 boxes, of which 10,925*408 were marketed by the Exchange.

Since 1 9 1 8 , an in­

creasing portion of the California supply has by the Exchange.

been marketed

In 1 9 2 8 - 2 9 , for instance, the Exchange

marketed approximately 8 0 per cent of the crop, while in 1 9 3 5 -

36 it marketed about 68 per cenb.

Conservatively estimated

the California Fruit Growers Exchange marketed on the average about 50 per cent of the California crop prior to 1918, and on the average about 70 P er cent through the years 1918 to

y

1937.

It should be observed that a considerable degree of control over the marketing of the California supply existed before the

beginning of nationwide consumer advertising in 1 9 0 7 *

This was achieved through the establishment of the California Fruit Growers Exchange in 1905, a non-profit cooperative association of persons engaged in the production and/or mar­ keting of citrus fruits.

The aims of this organization were

to improve the facilities for marketing citrus fruits, to lessen marketing costs, and to enlarge the markets by bring­ ing about a greater consumption of citrus fruits. -aims have in large measure

been realized may

That these

be indicated by

w Computations based on estimate of California production and reports on shipments of the California Fruit Growers Exchanget See Appendix I, Table II.

40

the fact that a great number of marketing authorities point to the California Fruit Growers Exchange as one of the outstanding American examples of successful cooperation. Advertising was apparently envisioned by the founders of the California Fruit Growers Exchange from the very start. Among the aims listed in the early Articles of Incorporation is this:

"to maintain an advertising department for the purpose

of increasing the consumption of citrus fruits and their by­ products; to institute and conduct any department to assist in i£/ carrying out its purposes." Pursuant to the foregoing, a trial advertising campaign was conducted in Iowa in 1 9 0 7 .

So much success was attributed

to this venture that the following year the Exchange began mak­ ing appropriations for consumer advertising on a nation-wide scale

and yearly appropriations for this purpose have been

made since that time.

Advertising expenditures, however, were

negligible during 19 07 and I 9 0 S; they were more than tripled in 19 09 and then declined again during the two subsequent years. It was not until 1 9 1 3 - 1 6 that they really attained a level that may be said to be significant in the light of that of subsequent years.

The annual expenditures for advertising from 1907 to

19 35 inclusive were as follows:

"Articles of Incorporation and Bylaws of California Fruit Growers Exchange," 1 9 1 6 , Eos Angeles, California. 5/ Erdman H . E . , "The California Fruit Growers Exchange," 1933, P. 24. 6/ See Appendix I, Table II.

s

r

4?

Year

Advertising Expenditures

1907

I

Year

6,9X 2

Advertising Expenditures

$

5 8 5 ,2 2 4

1908

2 5 ,8 9 1

19 2 2 1923

1909

5 0 ,0 0 0

1924

515^20

1910 1911

1 6 6 ,2 1 3 1 2 2 ,8 6 1

1925

6 3 8 ,0 0 0

1912 1913 1914

7 ^ ,7 2 3

1926 1927

7 4 2 ,9 6 8 7 8 9 ,0 2 1

1928 1929 1930

1 , 2 0 9 ,7 6 0 7 2 6 ,0 6 3

2 3 3 ,1 0 2 2 6 7 ,5 5 8

1915

1931

6 7 7 ,0 7 6

1 ,5 4 7 ,8 2 6 961,77^

1917

1 3 5 ,^ 5 8

1932

8 1 2 ,1 4 2

1919

3 0 9 ,0 7 5

1934

1 ,4 5 1 ,9 6 0

1920 1921

564,703 273,195

1935

365,937

1918

2 7 2 ,9 1 8

1,004,991

Three primary objectives have constituted the goal of the advertising employed by the California Fruit Growers Exchange:

"(1) through educational advertising to cause non­

users to consume oranges and lemons for their healthful and refreshing qualities;

(2 ) to cause limited users to consume

more, and (3 ) to encourage habitual users to continue citrus fruit as a part of the daily diet in preference to other prov ducts for which are claimed the same health properties." However desirable it might

he for the sake of the

analysis which follows to undertake a detailed discussion of the nature of the advertising employed and the media used from time to time, this is not a part of the present study for reasons noted on page 18

.

It may be appropriate, never­

theless, to restate briefly a general sketch of the advertising technique as reported in "The 193^ Annual Report of the Cali­ fornia Fruit Growers Exchange."

To attain the advertising

objectives enumerated above, the four main types of advertis­ ing that have 27

Armnoi

been employed include magazine, newspapers, out. California Fruit Growers Exchange, 1933,p . 24.

door posters, and street car cards.

In addition,to supplement

the foregoing, millions of pieces of educational and health literature have "been distributed gratis to teachers and students in grade schools, high schools, and colleges, as well as to professional groups like physicians, dieticians, and public health workers.

Educational films have been shown and scien­

tific research subsidized on behalf of citrus fruits. permanent

staff of dealer service men has

A

been maintained to

call on independent retail outlets of all sorts as well as g/ soda fountains, hotels, hospitals, and dining halls. These constitute

the army of "citrus fruit missionaries."

Not only does the advertising campaign appear to be thorough and extensive, but it is planned on what would appear to be well thought out and scientific principles.

The strategy

and appeal are made to vary in accordance with climatic con­ ditions, the physical disposition of potential consumers, and the resistance offered by competing products.

Although national

in scope, the advertising is planned on the basis of localized campaigns of coverage, keeping in mind the potential importance 2J and the peculiar characteristics of individual markets. The nation-wide consumer advertising of California oranges, therefore, has

been maintained consistently for a con­

siderable period of years by the California Fruit Growers Ex­ change.

This organization has marketed the great bulk of the

California orange crops.

Thus it would seem that the advertis­

ing would bo of direct concern to practically all the growers _in the industry and its benefits would be mirrored upon the §/ "Annual Report," California Fruit Growers Exchange, Oct. ,193^-, pp. 2J-2k. 2/ Ibid. p. 2 5 .

growers as a whole.

For this reason the advertising of Cali­

fornia oranges is of particular significance in attempting to study the advertising of farm products from the standpoint of the growers. The statistical analysis which follows does not, of course, presume to he a test of the effectiveness of advertising. As noted on page 18 , this would involve the use of additional data not available to the author and the employment of a type of appraisal with which the author is not familiar.

A contrast

is made below of the advertised period and the pre-advertised period in the light of certain variables that are believed to reflect, on the one hand, changes in the economic condition of the growers and,-on the other hand, changes in consumption of oranges and in expenditures for consumption. Behavior of Farm Prices.

The estimated average farm

prices of oranges and the adjusted prices for the years 1 9 0 0 01 to 1 9 3 5 - 3 6 are plotted on Figure 7* The pre-advertised period shown includes the years 1900-01 to 1 9 0 6 - 0 7 .

Wide fluctuations in both actual and ad­

justed prices characterized this period (see Figure 7)> pro­ bably due to yearly changes in production.

Reference to the

three-year averages of adjusted prices shown on Figure 7 re­ reveals a general downward movement through the pre-advertised period as a whole.

The seven-year average of adjusted prices

covering the entire pre-advertised period is # 2 .2 ^- per box. The downward movement continued through the first year of advertising, but as the pressure of nation-wide advertising

United States, 1900-01 to 1935-36*

Hcol? 0 3 i9oa ,9*9 i91J. I 9 IS

I 9 IS 9 /? 3 o

I933

Untn fro~t table 7 bol T a b le 7

. Califo rnia 0 ornia Orp.ncos: weighted svorare and adjusted price per box

United 3tates, 1900-01 to 1935-36* Year beginning ?Tov.

Actual weighted av. price per box T?ol j

Adjus Ad jus 1 ted price prlc« per pel box boa Pol.

1°00

1.97

:°oi

2.25 2.20 1.26 1.25 1.97

2.69 2.6S 2.7S 2.75

1302 190 3 IQOU

1^05 lor*6 r>07 l^PE

1009

1^10 1Q11 191?

1.81 1.61 1.52 1.7U 1.72

22.55 . 55 1.5S 1.55

1.*6 l.|?fi

2.^1 2.^7 2.CS 2.C9 2.09 2.0s l.Sg 1.52

1I..65 6J 1.6*

1* ^

loiU

1.63 2.13 1.U6 ,1.69

2.1] l . k] 1.7C

1^1^ 191 6

2.03 i . Qo

i.e i 1.11

1^13

* ' 'arce ?f T>..tn; / -innrd i 7.,'"able

,ta fron

Year beginning

Actual weighted

Adjusted price

got under way in 1 9 0 $, the downward movement was halted and henceforth prices were characterized by relatively greater stability until 1915~l6.

But though prices were considerably

more stabLe through the advertised years 1 9 0 7 - 0 $ to 1 9 1 5 - 1 6 than they had been before, the general level of adjusted prices was lower than through the non-advertised years.

For

example, the average adjusted price for the pre-advertised years 1 9 0 0 - 0 1 to 1 9 0 6 - 0 7 was $ 2 .2 ^- per box, while the average adjusted price for the first seven-year advertised period was $1.77 P er box.

On the other hand, since advertising ex­

penditures for the period 19 07 to 1 9 1 2 averaged only $ 7 ^ , 3 6 7 per year as compared with an average of $2^5,2^4 for the next six-year period, it can hardly be expected that they would constitute much of a price-raising influence during these early years.

A stability in price is evident, however, even if at a

lower level. Beginning with the crop year 1915~T6 and ending with the year 1 9 1 $“ 1 9 > some violent fluctuations in the adjusted price are evident.

The average adjusted price of oranges for

these years was $ 1 . 6 7 per box, which is no greater than that of any previous advertised three-year period, and considerably less than that of any of the pre-advertised three-year periods. Advertising expenditures, incidentally, fluctuated consider­ ably during this period, though they were already well on the

12/

way toward assuming a significant level. From 191$“ 22 the price of oranges rose sharply, as did the prices of most farm commodities, ~1 0 /

but this was followed

See record of advertising expenditures, page 47.

by a decline apparently as sharp as was the rise, which by 1 9 2 3 Sk had

brought the price down to near the 1918 level.

Since a

somewhat similar price behavior characterized farm commodities ! 11/ in general, perhaps this period should be omitted from con­ sideration here. The period 1923-2*4- to 1927~2$, which might

be regarded

as more normal and probably more comparable to periods prior to 1 1916, reveals both a generally rising trend and a higher level of prices than that of the periods discussed above.

It is of

interest to note that in this five-year period advertising ex­ penditures averaged $ 6 7 2 , 0 0 0

per year, which is considerably

higher than in any previous period.

However, the risipg price

trend was not a sustained one but was

broken by a sharp decline

in 1 9 2 7 - 2 8 , a sharp rise a year later, then an almost pro­ gressive decline from I 9 2 9 - 3 O to 1 9 3 ^“ 3 5 *

The average adjusted

price for the years 1923-2*4- to 1 9 2 7 - 2 $ is $ 2 . 6 3 per box; that for the years 1923-2*4- to 193^"35 is $ 2 . 5 6 per box.

Both of

these are somewhat higher than the average price of the pr e­ advertised years shown. Behavior of cron Values.

The foregoing test, while

probably interesting from the standpoint of price behavior be­ fore and after advertising, fails to indicate whether the income of the farmers in the advertised years was larger than it was in the non-advertised years. price and production must

For a better view of this,

be considered, or,

both

better stated,

average price times annual output might be a more satisfactory criterion in the sense that it indicates the annual amounts w

See Appendix I, Table p.

of money received by' farmers for their product.

The series of

annual values for the years 1 9 0 0 - 0 1 to 1 9 3 5 - 3 6 , actual and adjusted, are plotted on Figure 8 . i

For the pre-ad vertised period, 1900-01 to 1 9 0 6 - 0 7 , the average annual value of California oranges was $ 1 9 ,5 *4-0 ,0 0 0 . In contrast, the average value of the first seven-year adver­ tised period, 1 9 0 7 -OS to 1913-1*4-, was $21,836,000.

This means

an increase of $ 2 ,2 9 6 , 0 0 0 or a difference of 1 1 . 7 per cent in favor of the advertised period.

i

If this is troken up into

smaller time intervals, say three-year periods, it will be found that the average of the last 3 pre-advertised years, jwhich represented the highest level of the non-ad vertised period, |was about $ 1 9 ,9 ^ 3 ,0 0 0 -

The average for the first 3 advertised

years was about $ 2 0 ,7 1 7 ,0 0 0 , the average for the second threeyear advertised period was $21 ,*44*4-,0 0 0 , and for the third three-year advertised period, $26, 76 *+,000.

In other words,

not only was the average of the first seven-year advertised period higher than that of the seven-year pre-advertised period, |hit any smaller time interval consisting of 3 years during which advertising prevailed reveals a higher average value than the highest three-year non-advertised period.

For the

years immediately following the rise of advertising, then, California orange growers received larger gross incomes from the sale of their crops than they did during the pre-advertised years.

And this is all the more true for the years 1918-19 to

1935 - 3 6 , as may be readily seen by reference to Figure 8 .

Figure

. C a l i f o r n i a oranges: U n i t e d States,

actucl

1900-01

and adjusted value o f c r o p

to 1935-36*

Actv>a-L k-iUt

, -fd\ 7 dil/A t