STANDARDIZING THE SIZES OF MAIL

THURSDAY, MARCH 28, 1968

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON POSTAL RATES OF THE COMMITTEE ON POST OFFICE AND CIVIL SERVICE, Washington, D.C.

The subcommittee met, pursuant to recess, at 10:18 a.m., in room 210, Cannon Building, Hon. Arnold Olsen (chairman of the subcommittee) presiding.

Mr. OLSEN. The subcommittee will come to order.

We are continuing our study of the standardization of mail sizes and our bill addresses itself to a surcharge for nonstandard first class and airmail. However, we know of the interest in third-class bulk and samples. The bulk and sample mailers have some warning from the Post Office Department to the effect that there may be a surcharge imposed by regulation by the Postmaster General. We welcome these witnesses to come to us with the problems of samples and of third-class bulk.

I might say that the hearings have demonstrated that there is a great deal of cooperation on the part of the mailers.

Our first witness this morning is Mr. Arthur Messinger, manager, promotion and display materials services of the purchasing department of the General Foods Corp. I understand that you are accompanied by our very old and dear friend, Robert Oliver. We are very happy to have you gentlemen here this morning, and in whatever manner you wish to proceed, please do so.

TESTIMONY OF ARTHUR MESSINGER, MANAGER, PROMOTION AND DISPLAY MATERIALS SERVICES, PURCHASING DEPARTMENT, GENERAL FOODS CORP., ACCOMPANIED BY ROBERT OLIVER, PRESIDENT, ROBERT OLIVER ASSOCIATES

Mr. MESSINGER. Thank you, Mr. Chairman. I would like to read my statement and be available to answer any questions that may arise and perhaps interpolate or elaborate on some points in the statement as I go along.

Mr. Chairman and members of the subcommittee, my name is Arthur Messinger. I am manager of promotion and display material services for General Foods Corp. at its headquarters in White Plains,

N.Y.

My purpose in appearing here today is to emphasize the important role that sampling of products and use of premiums play in our economic system and in the service of consumers. I also hope to point out how certain of the problems of the Post Office Department in

handling this type of mail can be solved with resultant benefits in both economy and efficiency.

At the outset let me say that General Foods is engaged in the manufacture and distribution of a variety of convenience foods that are used in virtually every home in the Nation. On an average shopping day some 20 million packages of our products are purchased by American housewives.

Marketing to the American consumer requires the use of many different advertising and promotion media to inform the prospective purchasers about the inherent advantages of a product and the satisfactions that can be achieved by using it. This activity is especially important when new products are introduced to the publicnew products that have features and consumer attractions quite different from any others on the market. Last year we introduced 29 new products.

General Foods believes that product sampling by mail is a most effective technique of inducing consumers to try new products and thus, to increase the distribution of these products. The economic importance of this promotional technique is underscored by the fact. that almost all progressive and growing consumer goods industries attribute their growth and expansion largely to their success in introducing and selling new products with consumer appeal. Naturally, new products mean new plants and equipment and new job opportunities all the way from relatively unskilled labor to skilled, management, and executive levels.

Product promotion through mailed samples has the following advantages to the consumer and to business:

1. It is a proved business-building promotion technique which can be expected to result in increased sales, provided that the consumers like the product.

2. It is an excellent way to assure that a broad cross section of consumers will try the product.

3. The consumer is given the opportunity to make a buying decision in the home which is where the product will be used. Thus, a more intelligent purchase decision can be made for future purchases, of

course.

4. The flow of goods is encouraged because the retail trade recognizes the effectiveness of product sampling and is willing to increase its purchases of goods in anticipation of a rise in consumer demand.

5. Consumers receive a "no risk" sample of the product without the necessity of returning coupons, or paying for such things as mailing and handling costs.

The development and introduction of new products to the American consumer is an important part of our economy and it is involved with our total economic growth as a nation. The distribution and stimulation of sales of new products contributes important elements to a healthy economy. The continued use of mail sampling as a means to effect this distribution is evidence of the success of this method. The business of preparing these samples for the mail is also an important part of American industry. The average sample mailing represents the combined final products of at least a dozen major manufacturing processes. This runs from the paper, can, and mailing box to raw materials and so forth. This represents an impressive number of wage and commodity dollars put to work in this field of endeavor.

How about the consumer's attitude to sampling? Market surveys conducted by the A. C. Nielsen Co. reveal that three out of four people receiving samples actually use them and that the great majority love to receive them. The housewife's attitude toward this kind of mail is definitely receptive.

Granted, there are other methods of achieving distribution of new products, and there is no doubt that large marketers, such as ourselves, could adjust to a disproportionate increase in sample postage rates. But it is doubtful if the smaller company that relies more heavily on this technique to test its products and to break into existing markets could adapt to other methods, or could be flexible enough financially to absorb this increased postal cost. The disadvantage to the smaller company is obvious.

Now, let's examine the Post Office's problems in handling third-class bulk mail of "irregular" size. By law, all third-class bulk mail is packed and shipped in lots directly to the delivering branch post office by ZIP code. This task is accomplished by the mailer at considerable expense. The Post Office states that the difficulty in handling this material develops at the point of delivery. Present postal facilities are inadequate for sorting of samples by carrier and further arrangement by walking route. Banding or strapping samples in proper order and retaining this order becomes difficult.

It has been brought to our attention, Mr. Chairman, that a postal carrier on his route may have his samples strapped very adequately at the beginning, but as he walks and dispenses a few of them, the bundle then becomes irregular in shape and the whole bundle will break apart and he has to start resorting over again. This is a recognized problem.

These parcels can't be strapped with other mail, necessitating the carrying of two separate loads by each man. Often the sheer bulk or weight of the material requires the carrier to make several trips to relay boxes. These are the problems as the Post Office states them. Every problem, however, has its solution and General Foods feels that the responsibility for achieving the solutions here rests jointly with mailers, such as ourselves, and the Post Office.

Mr. Chairman, I'd like to provide your committee with a brief résumé of the work and cooperative efforts of the Grocery Manufacturers' of America Committee on Sampling with the Post Office Department. During the past few weeks I've attended several meetings. of this group, representing General Foods. Other firms represented were Procter & Gamble, Lever Bros., Colgate-Palmolive, Kellog, Bristol-Myers, Corn Products, and two mail-handling firms, Reuben H. Donnelly and Metromedia, Inc.

This group, working with the most helpful cooperation of the Post Office Department, has evolved some very fresh ideas, which are to be tested in the field. An innovation is the affixing of the names and addresses of sample recipients to small 3 by 5 cards rather than to the actual sample package. This is known as the detached label system.

This procedure allows the postal employees a simplification in their sorting and arranging operations. I think it is obvious that it is easier to arrange and sort 3 by 5 cards in your hands than it is to sort out a hundred or so samples on the table. This is the real economy

in the operation. The carrier then has only to drop any sample into a mailbox along with the name and address card.

The Post Office Department thinks that the approach has merit and has agreed to test it in principle at the Silver Spring, Md., branch this week with a mailing of approximately 30,000 samples of a new Lever Bros. product. Post Office cost ascertainment people will be on hand to do time and motion studies. A second and more elaborate test of this proposed method is to be held next month, I believe it is between the 1st and 15th of April, at several branches; specifically Colorado Springs, Manitou, and Pueblo branches. They will be using a somewhat different piece of sample merchandise. Additional test ideas are being explored.

I would like to digress and discuss the sampling in the Silver Spring and Colorado Springs Post Offices. They are basically designed to test the broad idea of the detached label in principle. Neither the grocery manufacturers group, who is sponsoring this test, nor the tester who is structuring it, feels that any very definite monetary or numerical figure of a valid nature will be forthcoming. We are testing the principle on a go-or-no-go basis for a future more detailed testing operation which we may propose.

Now, the Post Office would be interested, according to their spokesman at our meeting on March 15, in a device which would eliminate the need for carriers to strap samples at all. This simple dispenser that General Foods has designed for such a task, I hold in my hand, Mr. Chairman. It's a prototype and I must admit a fairly rough prototype of a unit, which when combined with the card system of distribution, would eliminate most of the previously stated delivery problems for third-class bulk mail.

The dispenser is a simple cardboard tube in which a quantity of the samples to be dispensed will be prepacked by the mailer in increments of 10, 20, or whatever is convenient in size and weight. The arrangement is a gravity feed arrangement. These packages are packed right up the tube, so as the mail carrier walks his route with this dispenser either tucked under his arm or sitting in his regular pouch, he need only remove one package at a time and the following package will fall down into place ready for the next stop.

While this particular prototype does not contain a full load of packages we had to prepare this in a hurry-I think you can see the basic functionality of the piece and how it can organize the carrier's load, and simplify the door-to-door distribution problems that he is currently experiencing.

We at General Foods, and we collectively the Grocery Manufacturers of America, intend to explore the possibilities of this type of dispenser further and to hopefully test it in some future mail test which we will arrange with the Post Office Department.

As you can see, Mr. Chairman, the most fruitful ideas in this situation are a result of our people cooperating sincerely with postal authorities in an all-out attempt to solve problems. General Foods believes that adequate solutions will be reached and that it will not be necessary for the Post Office to adjust rate structures or regulate this class of mail in any further manner.

In conclusion, Mr. Chairman, General Foods believes that any precipitate action by the Postmaster General regarding third-class bulk mail or, more specifically, mail sampling, would be premature,