Document JvEeNnD31knkq9p2aDXdXpkKO

I am submitting herewith, the 1957 budget covering all "Dutch Boy" paint advertising. It is in two parts; one, amounting to $1, 194, 000, applies to the Eastern operation; the other, amounting to $421, 000, to the Pacific Coast branch. The total is $1,615,000. fat 1**^^ EASTERN BUDGET The 1957 budget shows a decrease of about $200,000 or 14% less than the estimated amount that will be spent in 1956. It will also reduce our advertising expenditure to 6% of estimated 1957 sales compared with 7.4% of actual sales in 1956 and 8. 8% in 1955. I j Media Advertising We propose to invest $476, 000 of the Eastern budget in national media in 1957. This is less than we spent in 1954 and 1955, despite the fact that space costs increased about 10% in that period. However, it does represent a better proportion of our total budget (about 40%). In 1956 the percentage slipped to 27% due to increased expenditures for cooperative advertising and fox color cards, both of which we expect to reduce in 1957. Our most successful experience this year with the introductory advertising for Nalplex, consisting of six successive pages in Look plus the color card insert, has proved to all of us that dramatic advertising pays off. For 1957 we will use a Spring push-off for both House Paint and Nalplex of a three-page, full-color advertisement, the former in the Post, the latter in Look. Not only will we get domination through the use of three successive pages but also from the type of treatment being used which is distinctly different from anything previously seen in the paint industry. These would be followed throughout the year by three full- color pages on both products in both magazines plus six 4-color pages in Better Homes and Gardens. I t IASI NL 000039778 2_ - We have cut down our paint advertising in dealer trade magazines to bring it in line with what our competitors are doing. We have added two fields, however. One is motels. This is an attractive and rapidly growing paint market and in Nalplex we have an ideal product. Advertising should help us get our share of this business. The second is railroads. We now have a line of paints suitable for this market and advertising is needed for promotion. Cooperative Advertising For nearly four months early in 1956 we allowed dealers to advertise Nalplex without regard to their normal allowance, 2% of annual purchases. In other words, we matched dollar for dollar. This naturally increased normal expenditures. Also with a new product there was more incentive on the part of more dealers to advertise it causing a further increase. In 1957, we will not offer unlimited advertising. We will not operate a direct mail plan which was charged to cooperative. We will not have a new product to promote. This, we estimate, will effect a saving of $150, 000. ^ Color Cards The 1956 figure includes the cost of 5, 000, 000 color card inserts in Look magazine which will not be a repeated item in 1957, of course. Also some special cards are not being reprinted and there are no new products requiring color cards. We expect to effect a saving of $145, 000. Color Gallery In 1957 we expect to gradually replace existing Galleries, most of which have been in use several years and have become worn and unsightly, with a new and attractive but less expensive model. PACIFIC COAST BRANCH BUDGET Their request totals $421, 000 (compared with $341, 000 for 1956) and includes "Dutch Boy" advertising in the 13 western states, Schorn advertising and advertising in Hawaii. Although this is $80, 000 more than requested in 1956, most of this ($65, 000) is just an accounting transfer. It represents the cost of color cards NL 000039779 -3- which were not included in the advertising budget prior to this. Previously this expenditure was charged directly to sales expense. This revision brings their practice in conformity with the Eastern operation. The $110,000 for General Advertising, includes a charge of $83, 000, representing their share of the national media advertis ing costs. This is about $20, 000 more than they were charged in 1956. The balance of the General Advertising fund is to be used for local promotion of Nalcrete in the Central and Southern Divisions where it has such excellent sales potentials. T. Howard Sarine Advertising Manager Submitted November 27, 1956 .t i NL 000039780 f, ^ ^ < *. , - w , - t -4- Paint Advertising - 1957 Eastern Budget Media Advertising (national & local) Magazines Business Papers Space Placed Direct Cooperative Classified Phone Promotional Booklets & Folders Color Cards Dutch Boy Dealer Trade Shows Point of Sale Window & Store Displays Store Signs Special Factory Signs Color Gallery Painters Caps Administrative Assn. Memberships Personal and Travel Expense Office Expense Rent, Light & Heat Salaries Misc. Production Costs Contingency Fund * Last two months estimated 440,000 36,000 3, 000 175,000 50,000 60,000 175,000 20,000 15,000 45,000 45, 000 4, 000 25,000 -- 2,000 5, 000 4, 000 10,000 52, 000 3, 000 25, 000 $1, 194, 000 1956 Expenditures* $ 335,000 50,000 6, 500 325, 000 45, 000 95,000 320,000 19,000 17, 000 . 70, 00?) 40,000 4, 500 ---5, 000 1, 200 4, 500 4, 000 10,000 50,000 3,000 .... "$1, 404, 700 NL 000039781 - 5- al Magazines - 1957 Publication Saturday Evening Post Look Better Homes & Gardens Space 3-page 4-color spectacular 3 single 4-color pages 3-page 4-color spectacular 3 single 4-color pages 6 single 4-color pages Cost $ 98,688 85, 815 ' $184,503 82,186 74,715 _ |156>^01 $123, 675 Total Space Cost Less Cash Discount Estimated Art, Cuts, Type $465,079 8,079 $457, 000 60,000 $517, 000 NL 000039782 6- - Trade Magazines - 1957 Mixed Paint Line Publication American Paint & Wlp. Dealer Paint & Wallpaper Logic American Painter & Decorator American Motel Space 10 double pages 6 double pages 8 single pages 12 single pages American Paint Journal Oil, Paint & Drug Reporter Paint Industry Paint, Oil & Chemical Review Official Digest Paint & Varnish Production Convention Daily Dry Pigments 9 double pages 9 30" units 6 single pages 9 single pages 12 single pages 12 single pages 5 7" x 10" units Industrial Paints 6 double pages Total Space Cost Less Cash Discount Estimated Art, Cuts, Type $31, 201 401 $30,800 11,200 $42,000 Cost $ 7,400 2, 340 2, 880 3, 900 1157520 . $ 1, 900 1, 359 690 1, 152 1, 020 1, 560 700 $ 8,381 NL 000039783 -7- Consumer Magazines Trade Magazine s Recap Showing Costs Division between Eastern Branches and Pacific Coast Branch Total Space and Preparation Costs $517,000 42,000 $559,000 Eastern Share . $440,000 36,000 $476, 000 Pacific Coast Share $77, 000 6,000 $83,000 i ? NL 000039784 8- - Pacific Coast Branch - 1957 Dealer Presentation Painter Advertising Architect Promotion General Advertising Export Advertising Cooperative Advertising Cooperative Advertising Production Color Gallery Distribution Direct Mail Program Dealer Signs Dealer Electric Signs Telephone Book Listings Window Displays Cooperative Color Booklets Stuffers and Mailers Company Store Advertising Company Store Displays Company Store Signs Color Cards General Office Contingency Fund $ 10,500 6, 500 ---- 110,000 5, 500 55, 000 5, 000 13,500 -- 13, 500 7, 500 12,000 15,000 2, 500 4,000 2, 000 8,000 4, 500 60,000 37, 500 $372,500 1956 $ 8,500 3, 500 5, 500 100,000 5, 000 44,000 5, 000 18,000 10,000 10,000 5, 000 12,000 13, 500 2, 500 5, 500 3, 000 9, 500 3, 000 .. - - . 36,000 3,000 $302,500 NL 000039785 -9- Schorn Division - 1957 Dealer Presentation Dealer Aids General Advertising Cooperative Advertising Cooperative Advertising Production Direct Mail Dealer Signs Telephone Book Listings Window Displays Color Books Company Store Advertising Company Store Signs Color Cards Contingency Fund $ 1,000 1, 000 15,000 2, 500 1,000 -- 1, 500 2, 000 1, 500 2, 000 2, 000 200 4, 000 300 $34,000 1956 $ 500 100 16,500 2, 500 600 1, 500 1, 500 1, 800 1,000 1,000 2,000 500 500 $30,000 Hawaiian Islands - 1957 General Advertising Cooperative Advertising Direct Mail Dealer Signs Dealer Electric Signs Telephone Book Advertising Company Store Advertising Company Store Signs Color Cards Contingency Fund $ 4,750 2, 500 400 250 600 2, 000 3, 000 1, 000 ...... $14,500 1956 $ 5,400 1, 500 200 400 100 600 100 100 . . ,, 100 $ 8,500 Pacific Coast Branch Budgets Grand Total $421, 000 NL 000039786