Closing the deal: GM's marketing dilemma and its franchised dealers, 1921-41

The Emergence of Modern Marketing

Volumn , Issue , 2003, Pages 60-79

  Clarke, Sally ^a  

^a UNIVERSITY OF TEXAS AT AUSTIN   (United States)

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EID: 84905551791     PISSN: None     EISSN: None     Source Type: Book    
DOI: 10.4324/9780203484005     Document Type: Chapter

References (69)

1. As Alfred Sloan observed, the dealer 'makes and closes the deal that sells the car'. A.P. Sloan, Jr., My Years with General Motors (New York, 1964), p.280.
2. GM is singled out in specific studies of advertising, styling and public relations. Consider R. Marchand, Advertising the American Dream (Berkeley, CA, 1985);
3. C.E. Armi, The Art of American Car Design (University Park, PA, 1988);
4. D. Gartmann, Auto Opium (London, 1994);
5. R. Marchand, Creating the Corporate Soul (Berkeley, CA, 1998);
6. L. Calder, Financing the American Dream (Princeton, 1999);
7. S. Clarke, 'Managing Design: The Art and Colour Section at General Motors, 1927-1941', Journal of Design History, Vol.12 (1999), pp.65-79.
8. Overviews of GM's competitive use of marketing are found in S. Tedlow, New and Improved: The Story of Mass Marketing in America (New York, 1990), pp. 112-81;
9. Sloan, My Years with General Motors, pp. 149-68, 219-37.
10. For GM's history, consult A.D. Chandler, Jr., Strategy and Structure: Chapters in the History of the American Industrial Enterprise (Cambridge, MA, 1962), pp. 114-62;
11. A.D. Chandler, Jr. and S. Salsbury, Pierre S. du Pont and the Making of the Modern Corporation (New York, 1971), pp.433-604;
12. A.D. Chandler, Jr., Giant Enterprise: Ford, General Motors, and the Automobile Industry: Sources and Readings (New York, 1964).
13. On GM's system of mass production, see D. Hounshell, From the American System to Mass Production (Baltimore, MD, 1984);
14. D. Raff, 'Making Cars and Making Money in the Interwar Period', Business History Review, Vol.65 (1991), pp.721-53.
15. For GM's early promotion of industrial research, see S.W. Leslie, Boss Kettering (New York, 1983).
16. And, for GM's competitive prowess, consult AJ. Kuhn, GM Passes Ford, 1918-1938 (University Park, PA, 1986);
17. R.F. Freeland, The Struggle to Control the Modern Corporation: Organizational Change at General Motors, 1924-1970 (New York, 2001).
18. US Federal Trade Commission, 'Report of the Motor Vehicle Industry', 76th Congress, 1st Session, House Document No.468 (Washington, DC, 1939), pp.22, 27.
19. Sloan, My Years with General Motors, pp. 136-9, 279-312, quotation on p.279.
20. E. Hawley, The New Deal and the Problem of Monopoly (1966), p.433.
21. US Federal Trade Commission, 'Report of the Motor Vehicle Industry', pp.4-5.
22. McDonald quoted an article from Fortune (16 Jan. 1995) in which Bill Gates rated Sloan's autobiography as 'probably the best book to read if you want to read only one book about business'. J. McDonald, A Ghosts Memoir: The Making of Alfred P. Sloan's My Years with General Motors (Cambridge, MA, 2002), pp.ix-x, 188-9, quotation on p. 189.
23. Various scholars have studied how firms have come to grips with questions about consumers. See R. Blaszcyzk, Imagining Consumers: Design and Innovation from Wedgwood to Corning (Baltimore, MD, 2000);
24. A. Forty, Objects of Desire (London, 1986);
25. J.L. Meikle, American Plastic: A Cultural History (New Brunswick, NJ, 1995);
26. R. Weems, Jr., 'The Revolution Will be Marketed: American Corporations and Black Consumers During the 1960s', Radical History Review, Vol.59 (1994), pp.94-107;
27. CM. Goldstein, 'Mediating Consumption: Home Economics and American Consumers, 1900-1940' (unpublished Ph.D. dissertation, University of Delaware, 1994);
28. S. Clarke, 'Consumer Negotiations', Business and Economic History, Vol.26 (Fall 1997), pp. 101-22.
29. The FTC investigation was submitted as US Federal Trade Commission, 'Report of the Motor Vehicle Industry'. For a summary of the antitrust charges, see CM. Hewitt, Jr., Automobile Franchise Agreements (Homewood, IL, 1956), pp. 103-6.
30. The two auction houses faced antitrust charges for conspiring to fix 'commission fees charged to more than 130,000 customers over six years'. C Vogel, 'Indictment Names Two Ex-Chairmen of Auction Houses', New York Times (3 May 2001), p.Al;
31. C Vogel, 'Sotheby's Guilty Plea Brings Collusion Case Closer to End', New York Times (4 Feb. 2001), p.C5.
32. Economists have studied agency or control problems that shape relations between the franchisor and its franchisees. Examples include P. Rubin, 'The Theory of the Firm and the Structure of the Franchise Contract', Journal of Law and Economics, Vol.21 (1978), pp.223-33;
33. A.W. Dnes, 'The Economic Analysis of Franchise Contracts', Journal of Institutional and Theoretical Economics, Vol.152 (1996), pp.297-324;
34. F. Lafontaine and M.E. Slade, 'Retail Contracting and Costly Monitoring: Theory and Evidence', European Economic Review, Vol.40 (1996), pp.923-32;
35. RJ. Kaufman and F. Lafontaine, 'Costs of Control: The Source of Economic Rents for McDonald's Franchises', Journal of Law and Economics, Vol.37 (1994), pp.417-53;
36. G.F. Mathewson and R.A. Winter, 'The Economics of Franchise Contracts', Journal of Law and Economics, Vol.28 (1985), pp.503-26.
37. Sloan, My Years with General Motors, pp. 129-39, 279-312.
38. Hewitt, Automobile Franchise Agreements, p.88.
39. Other manufacturers began to monitor their dealers more closely, beginning in the early 1920s. US Federal Trade Commission, 'Report of the Motor Vehicle Industry', p.288.
40. Sloan, My Years with General Motors, p.293;
41. Dicke, Franchising in America, p.72;
42. Hewitt, Automobile Franchise Agreements', and for the industry in general, the US Federal Trade Commission, 'Report of the Motor Vehicle Industry', pp.110-21, 123-5, 140-45, 254-8, 289-94.
43. Sloan, My Years with General Motors, pp. 136, 287.
44. For General Motors and the industry in general, see the US Federal Trade Commission, 'Report of the Motor Vehicle Industry', pp. 110-14,118-21, 123-5, 140-45, 254-8, 289-94.
45. For inventories, see Chandler, Strategy and Structure, pp. 145-53;
46. A.J. Kuhn, GM Passes Ford, pp.203-9.
47. US Federal Trade Commission, 'Report on Motor Vehicle Industry', pp.222, 242 and in general, pp.173-6, 215-22, 240-45, 288-91.
48. M. Olney, Buy Now, Pay Later (Chapel Hill, NC, 1991), pp. 119-28.
49. Sloan, My Years with General Motors, p.280.
50. J.J. Baney, 'Field Report for CM. Woodward', 26 and 28 June 1938, p.5, Box 3108, RG 122, NA.
51. US Federal Trade Commission, 'Report on Motor Vehicle Industry', pp. 179-80, 222, 241-4;
52. Sloan, My Years with General Motors, p. 136.
53. Hewitt, Automobile Franchise Agreements, pp.86-7.
54. U.S. Federal Trade Commission, 'Report on Motor Vehicle Industry', pp.92-4, 219.
55. US Federal Trade Commission, 'Report on Motor Vehicle Industry', p.96.
56. US Federal Trade Commission, 'Report on Motor Vehicle Industry', p . 111, quote p.1077.
57. Sloan, My Years with General Motors, p.300;
58. Macaulay, Law and the Balance of Power, p.71.
59. US Federal Trade Commission, 'Report on Motor Vehicle Industry', p.920.
60. US Federal Trade Commission, 'Report on Motor Vehicle Industry', pp.934, 941, 972.
61. N. Borden, Advertising: Text and Cases (Chicago, 1950), pp.525-8.
62. J.J. Baney, 'Field Report of CM. Woodward', 26 and 28 July 1938, p.5, Box 3108;
63. J. Baney, 'Field Report of J.E. Harris', pp.5, 8,19 Sept. 1938.
64. Dealers and management acknowledged the problem of gauging consumer demand in a market. See, e.g., J.J. Baney, 'Field Report for J.E. Harris', 19 Sept. 1938, p.5, Box 3107, RG 122, NA.
65. 'William E. Holler Testimony', Transcript of Record for US Circuit Court of Appeals for the Seventh Circuit No.7146, Box 1003, RG 276, pp.1639-41, 26 April 1940, NA, Chicago.
66. I thank Philip Scranton for calling McDonald's memoir to my attention. McDonald, A Ghosts Memoir, pp. 178-82, quotation on p. 181.
67. N.R. Lamoreaux, 'Reframing the Past: Thoughts about Business Leadership and Decision Making under Uncertainty', Enterprise & Society, Vol.2 (Dec. 2001), pp.632-59.
68. Sloan, My Years with General Motors, p.287.
69. See, e.g., note 76; Macaulay, Law and the Balance of Power.