Detroit Free Press from Detroit, Michigan on September 30, 1973 · Page 19
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September 30, 1973

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Detroit Free Press from Detroit, Michigan · Page 19

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Detroit, Michigan
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Sunday, September 30, 1973
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""ler i i-1 ..'' t i v. . - v s' k' ' k' i.-' . '. ' V '. ' . f 1 (. '.' t" ' 3JetroU4ftee;Pre$s SECTION New Yor& Exchange 3B American Exchange 6B Over the Counter 5B Mutual Funds 8B Business Report SUNDAY, SEPTEMBER 30, 1973 1-B Vlasics Duke of the Cukes the ticker Packing a Peck of Pickles It's a Relishing Business Right Time For Bonds? Not So Fast Many of the ads feature the pregnant - lady-as-pickle-eater motif, such as the one where a husband wakes up his wife and tells her: "Sweetie, it's time for your 4 o'clock pickle." In addition to the laughs, the company goes in very heavily for marketing, and stresses colorful and attractive labels, customer taste tests and other devices that are found more often in the cosmetic and soap businesses than in food. Even the Vlasic logo is artsy a stylized cross-section of a cucumber. ACCORDING TO VLASIC, pickled products are one of the true growth product of our; time per capita consumption in the U.S. is now eight pounds a year, twice what it was 20 years ago, the company says. Vlasic did not get into the pickle business because It made market projections or had a great old pickle recipe it got in more or less by accident. Bob Vlasic said his father, Please turn to Page 4B, Col. 1 BY ALLAN SLOAN Free Prtss Business Writer Seriously, now, consider the pickle. Pickles are cucumbers that have led a spicy life. They are green and seedy. They have the reputation of being the favorite food of pregnant women who get hungry in the middle of the night. And if that's not enough, anyone who gets in trouble says he's in a pickle. So how can you take the pickle seriously? VLASIC FOODS INC. decided six years ago that it couldn't, and that pickles are really pretty laughable. Vlasic Is still laughing all the way to the bank. In fact, in the wonderful but esoteric world of sauerkraut, relish, and Kosher dills, Vlasic is far and away the top pickle. The company expects to do $50 million in sales this year, and has a 14 percent slice of the national pickle market, compared with 11.1 percent for second place H. J. Heinz. That's a lot of cucumbers 180 million pounds worth, grown on 20,000 acres, or more than 30 square miles of cukes. ' Vlasic, based in the Detroit suburb of Lathrup Village, has gotten where it Is by being playful about pickles. "We decided that pickles are a fun food," says Robert Vlasic, chairman of the board. "We decided we didn't want to take ourselves or our business too seriously." So Vlasic's advertising, a bit more than $1 million a year, goes in heavily for laughs. Job-Shift Worries Misguided? BY DOUGLAS WILLIAMS Free Press Business Writer Headlines that scream "Apex leaving Detroit 1,000 jobs lost" irritate" more than a few people among them some of the economists working for the City of Detroit Ernest Zachary and his boss; Robert Kropf, two economists with the Community Development Commission (CDC), argue that no such statement is valid or meaningful until it's compared to trends in other U.S. metropolitan areas. . THE CDC ECONOMISTS are just finishing the first part of an evaluation of employment changes in the Detroit area (Wayne, Oakland and Macomb counties) between 1960 and 1970. Some of the results they're producing are very interesting, particularly for businessmen and politicians. The point is this: If all the major metropolitan areas saw the percentage of people working in manufacturing reduced by 1970, Free Press lllustretlon by NOLAN ROSS Vlasic Foods Chairman Robert Vlasic says pickles are ourselves or our business too seriously." BY JOHN WOOLLEY FrM Press Business Editor Despite a 70-point rally in the stock market, there is still lingering interest by former stock buyers in the bond market. The reasons the word is out that short-term Interest rates are near their peak and so this must be the time to grab up some high-yielddng bonds. And right now, after eight months of down markets, "yield" has a substantially better image than it did when stocks were soaring. For the amateur, getting a high yield and some capital growth out of a bond looks simple. Because they pay a fixed interest rate, bonds fluctuate in price according to changes in prevailing interest rates. A bond is bought for 5100 and it pays $7.50 percent interest annually. Now if the prevailing interest rate goes down to 6.5 percent, so new $100 bonds pay only $6.50 a year in interest. Obviously that bond paying $7.50 is going to be worth more than $100 on the open market. The professionals aren't so quick to encourage extensive bond buying by the average investor. First, they say, big bond profits aren't all that simple. "Managing a bond portfolio is as tough and time-consuming as a stock portfolio," says one investment advisor. Second, it remains a question of investor objectives. Bonds give safety of principal and a fixed return when held to maturity. The chance of capital appreciation if the bond is sold before maturity is a guessing game depending primarily on interest rates. . Bob Kemp, an investment adviser with Wilson, Kemp Swaney and Associates, emphasizes that not all interest rates are going down at the moment. Rates on borrowings for a year or less are dropping some, he says, so he is moving his bond-buying clients out of these short-term debts and into longer-term bonds where the rates are stable. "We're making some temporary sacrifices," he says, "down from 10.5 (percent interest) on the short-terms to eighty)lus on the longer-terms." Kemp figures that over the next few years the total yield on the longer-term bonds will be better than continuing to reinvest in shorMerm instruments. For the little guy "with an Income orientation," Kemp says intermediate-term (six to nine years) bonds listed on bond exchanges are not a bad buy. There are two other considerations In this bond buying plan, according to Detroit-area brokers: The fact that short-term Interest rates appear to be topping out does not mean that all interest rates have reached thedr limit. The majority view is that long-term rates are still going to go higher. While some interest rates are falling, the stock market appears to be rising. For the investor interested in capital appreciation, that could mean the "bargain" prices of stocks he is interested in will rise substantially, leaving him behind. Darwinian Theory Applied to Cars BY DOUGLAS WILLIAMS Free prtss Busimss Writer Here's a small bit of cheer for those who make their living from the auto industry: The top policy-maker at the Environmental Pollution Agency doesn't think automobiles should go on the list of "endangered species." Robert L. Sansom, EPA assistant administrator for air and water programs, is a youthful grey eminence in Detroit. But in the Washington environmental councils he swings a lot of weight. "The auto has demonstrated its adaptability as a species to the changing environment of customer demand," Sansom Fighting the Packaging In . the Supermarket Jungles War Free Press Photo by STEVE THOMPSON fun, "so we don't take the "merchandise" in his nothing's for sale except $1 million last year, and the agency turned out more than 400 package designs, compared to an industry average of 30 per year. ROBINSON STRUCK OUT on his own because he got tired of the big-agency rat race, in which "the right hand often doesn't know what the left is doing." And, with his knowledge of graphics and design, he set out to fill what ha felt was a gap between advertising and sale of a product "Nobody was paying enough attention to point of purchase," Robinson said. "So much selling is done at the point of purchase by the package itself that we believe packaging and advertising should be two integral parts of the same promotional plan. Offering a client; one without the other is offering only half a job." Robinson said most manufacturers have to deal with at as they did, it s not unusual. (Dallas was the only exception.) In 1940, 48.25 percent of those working in the Detroit area were in manufacturing; in 1970, the figure was 37.4 percent. In the 20 largest cities It was 30.7 percent in 1940 and 27.3 percent in 1970, and nationally it was 23.5 percent in 1940 and 25.9 percent in 1970. So while manufacturing fell in the metropolitan areas, It grew just slightly In the nation as a whole, reflecting a trend away from the cities and toward rural areas. The percentage of printing employment fell in the metropolitan areas "contrary to expectations," Zachary said. But employment in banking, medical care and educational work as a percentage of those working rose. "That was true for most metropolitan areas," he said. When a plant closes "it's not a death, but a transition," Zachary said. "You've got to be realistic" and try "to find out where the potential is," he said. ITS FRUITLESS to train people for a dying trade or an industry that is moving to the rural areas, Zachary said. "You can delay the inevitable, but yod can't do a lot about it," he said. .. . A computer expert working for CDC under contract, Alex Kennedy, said the need is to Identify which problems are not unique to the Detroit area. "Maybe Detroit cannot develop a policy that would change anything," he said. Zachary and Kennedy pointed to the employment in motor vehicle manufacturing in the three Detroit-area counties between 1960 and 1970, a period when employment nationally rose 18 percent. ' Total employment in the auto industry rose eight percent; white collar employment rose 18 percent. Professional and technical employment 1 in the auto industry rose 35 percent; but clerical employment perhaps as a result of the computer revolution rose Just one percent COMPARED TO an 18 percent growth in those working nationally, that's a major reduction in jobs as is. the' number of blue collar jobs, which were up only eight percent in the same period. Zachary said that the Detroit area auto employment figures parallel the trends" in national employment, and Kennedy said the point is "what actually do we cara where they build cars as long as they handle, the money and do the engineering here . . ." said recently. "Every other year, over the years, we have seen it grow fins and fish tails, sprout wings, and take flight in soaring sales. Once the idea got going, it came a long way from the Model A," he said, flipping into the language of biology. Samom was sptakingto the American .Automobile Association (AAA), a fairly progres3've insurance com- nanv that often adnnts thp BY DAVID KLEMENT Free Press Business Writer From the outside, the storefront at 2850 Rochester Rd. in Troy looks like any other little Mom and Pop operation. Funny though, there's no sign identifying it as a party store or corner grocery or variety store. , Inside, the shelves are filled with a hodge-podge of goods there's steak sauce next to pickles, art paints and antiquing kits vying for space with toy train sets and model cars, camper supplies next to hardware, cosmetics beside cook-ware. Funny, but there's no cashier, nor even a cash register. And Mom and Pop are nowhere to be seen. How do they expect to sell anything with such a lackadaisical attitude? They don't, because nothing Is for sale. Most of the packages are empty. The entire "store" is nothing more than a mockup display lor the clients of E. A. Robinson Inc. advertising agency. WHILE ROBINSON Is a full-service ad agency, it specializes in package design, The "store," part of the firm's new office complex in Troy, serves several purposes, said agency founder and president Ed Robinson. His designers can sharpen their package designs before the clients see them, the clients can see how their packages stack up to the competition, and survey "shoppers" can be brought in to pretest the market reaction before a major packaging investment is made. Packaging, said Robinson, is as important to the sale of a product as any other phase of advertising and marketing. "Let's face it, the brown corrugated box in the Mom and Pop store is long gone," he s a i d. "The supermarket shelf is a jungle of color. You've got to stop the consumer and get him to look at your product." There was a time when the package was merely something to contain the product. Now the package "has become the container, the display and the salesman." So how come some of them are so hard to open? Simply a lack of research on the part of the designer, Robinson said. "Maybe they could save a fourth of a cent per unit with a lousy design, so they took the expedient way." advice in his clients' battle to win the packaging war. fcimimiii Ed Robinson stands amid ad agency "store," where Robinson opened his agency In 1968 after two years of experience in design and creative work in Detroit ad agencies, including stints as art , director at MacManus, John and Adams and Ross Roy. In less than a year he had his first big bomb. Remember Denny McLain paint? Not too many people do. But Ed Robinson does. He'd sunk $52,000 in creating the packaging concept for McLain's paint venture at the height of the ex-Ti-ger pitcher's on-and-off-the-f ield success. Then McLain's star plummeted and with it his commercial ventures, including Robinson's paint packaging plans. "We were sick," admits Robinson, who can laugh about it now. "But we've recovered nicely from it." Indeed. With leading toy, hobby, and hardware manufacturers among his major clients, billings pushed up over Robert L. Sansom hue of a public utility or charitable organization. "In most areas, there's no question the auto can continue to survive by adaptation. If an animal can change fast enough by adding a fin, or a catalyst, it may even be able to survive the detrimental impact of an increase in numbers," Sansom said. . But now the automotive animal faces a new threat its appetite must be curbed, he said. Sansom explained the EPA gasoline mileage labeling program, and defended the EPA numbers as meaningful and representative. General Motors, Ford and Chrysler which agreed to put the labels on '74 cars and American Motors which refused all criticized the EPA mileage figures as not very valid. Sansom dropped a bit of a bombshell on the AAA: He aid the EPA's Ann Arbor lab found Detroit cars "for their size get better mileage than foreign-made autos. 'That's particularly true when the 2,000 and 2,500 pound classes are excluded. There aren't any U.S. cars in those categories. "The problem is with all that extra weight, and every car, including foreign cars, has grown in the last decade (so) 'the best fuel economy is not that good," Sansom said. The EPA official said he expects smaller, trimmer cars In coming years, and attacked the 'small-cars-are-dangerous' position often put forward by auto safety enthusiasts. Please turn to Page 2B, Col. 7 least three separate agencies to get a new product properly packaged and promoted: A packaging engineer, a design house and an ad agency. He claims his is the only agency in the nation offering the entire ball of wax under one roof. An example of a total packaging "package" Is the campaign Robinson designed for Leigh Products Inc. of Coo-persville, Mich., to introduce Leigh's new plastic garden sprayer. Robinson created anew symbol for the sprayer, the box in which to package it, a publicity campaign to introduce it, point-of-purchase displays for selling it, catalogs for retailers to re-order it, sample ads and direct-mailing materials to advertise it. All of this material was packaged into a kit for use by retailers, making it easy for them to sell Leigh sprayers. WHAT SELLS BEST in packages? That's almost impossible to answer, said Robinson. There are thousands of packaging boards available, so it depends on the product, the situation and the market. But there are some ground rules. Most important is convenience. "Whatever we can do to help the wholesaler, the retailer and the consumer will help sales of the product," he said. Campbell Soup has a good example of a clean, practical package arrangement, Robinson said. The master cartons are clearly labeled as to their contents, and the cartons themselves become rhe display racks in the supermarket. An example of convenience packaging created by Robinson is the cartons for Palmer Paint Products of Troy, which makes Creative Touch paints Please turn to Page 4B, Col. 4 ' -3- ' s ' i .A d -- ' ' V -c -n ' ' '- - -- -M- .'- -- -a J. 1