Since this is about TV advertising I’ll put it here to start.
The other day I was watching some TV shows from the late 50’s, for example ‘The Frank Sinatra Timex Show’ from 1959, and while I enjoyed watching Frank, Dino and Bing blast out tunes for an hour I especially liked watching the live Timex commercials.
During the show Timex was pushing a new line of watches. One line was a waterproof model for both men and women, and the other was for a self winding men’s watch. What was interesting was that during the commercials they would talk about the watch and then tell you the price, either $14.95 or $15.00, which seems so strange compared to how products are sold today. I can’t imagine a watch company today listing prices for their products since the price would vary based on where you lived and which retailer was selling it. I listened carefully and these weren’t ‘suggested’ prices, just regular prices. Since this was a national broadcast (on the ABC television network) it was presumably going out around the country.
So how was Timex able to control the price that all of their merchants were selling their products for? Was it done contractually, or was Timex just talking about a suggested price and merchants could discount the price as much as they wanted?
1959 was in the era of the ‘Fair Trade Statutes’ - state laws that allowed manufacturers to set prices for their products and those prices had the force of law behind them. I guess the (stupid) idea was that small retailers needed to be ‘protected’ from the rise of department stores that could undercut them on quantity and supply efficiency.
This was before the days of the big box retailers, the internet, large discount stores, etc. As those forces grew, there was pressure to repeal the laws, and they were pretty much gone by 1975, to the benefit of everyone. Price fixing is never a good idea.
But there is still MSRP, the Manufacturer’s Suggested Retail Price, and manufacturers do still contract with distributors and resellers in ways that force them to advertise MSRP, even if they might sell for less. And some products still have pretty strong price control. Apple’s products, for example. It has more to do with how much market power a brand has and how much control over the supply chain the manufacturer can manage.
The thing with cheap watches is that the lower-priced ones are a commodity now, and no one much cares about brand. Timex, Citizen, Casio and others offer products very similar in quality and very low in price. But back in the day, Timex was considered to be a good watch and they didn’t yet have a lot of competition in the low-to-mid price watch market. That more than anything may have allowed them to set national prices.
$15 back then would be $115 today with inflation, so that was fairly expensive given that overall living standards were lower. My grandfather was quite proud of his 50’s era Timex watch, and wore it throughout his life.
Great answer. Thanks Sam.