TIDE-NEWSMAGAZINE FOR ADVERTISING EXECUTIVES - November 3, 1950
Continued from the Magazine Page.......
Obviously trucking is an important factor in the U.S. economy, both production-wise and as a major distribution arm. But how significant are trailers in the motor transport picture? In terms of dollar sales and operating units, trailer industry figures are picayune compared with the fantastic totals of the truck and automotive industry. The trucking industry buys over 1,000,000 new trucks a year, but only 50,000 new trailers. The truck fleet currently numbers over 7,500,000, while the trailer fleet is less than half a million.
Nevertheless, trailers or, rather, the tractor-trailer combination, are far more important in the industry picture than a simple census would indicate. Their share of the ton miles in over-the-road haulage is disproportionately high, considering their numbers, and in view of current and pending developments both in the long and short haul fields, that share may well become higher.
The Fruehauf Giant
How important is Fruehauf in the trailer industry? To say it is the General Motors of the business understates the case. Not only is Fruehauf the biggest firm in the field, it sells more than all the others put together.
The company’s growth has been fantastic. Fruehauf sales nearly quadrupled between 1936 and Pearl Harbor and have more than quadrupled since then. The way wheels are now turning almost insures that the company’s growth will continue, because the industry in which it is the biggest and most successful operator seems bound to continue expanding.
Fruehauf, though an old firm, is actually engaged in a relatively new business. A one-time wagon builder, the company pioneered the tractor-trailer idea, and built the first motor-hauled trailer for a lumber firm in 1914. The guiding philosophy motivating the founder and president of the firm, August C. Fruehauf, was incontrovertibly simple; a horse can pull more than it can carry, therefore the horse-and-wagon principle applied to motor trucks should equally give greater payload capacity.
But the full development of the trailer industry had to wait on physical and mechanical factors, like the development of road networks and inventions like the differential dual wheel. But though Fruehauf owes its sensational growth partly to general trends and developments, the company has always made its own breaks. It has relentlessly and ceaselessly worked at improving its methods and machinery, operations, training, selling and advertising.
The company has constantly gone after new and bigger markets. It not only makes a full line of trailers, but parts and accessories like auxiliary gasoline tanks as well. Working the other side of the street, it has even built up a booming business in truck bodies. But the company’s most exciting project, still in development, is the small trailer.
The Small Trailer
Practically all trailers now in use are 30 feet and longer. Though economically more feasible than straight trucks of comparable carrying capacity, they obviously cannot operate where crowding or congestion would not justify such large equipment. Carrying the original Fruehauf thinking one step further, the company high command reasoned that if a big tractor-trailer combination works better than a big straight truck, then a small tractor-trailer combination should work better than a small straight truck.
This idea was kicking around the company for a long time and some experiments were made. Also, the company had encouraging reports from users of custom built small equipment. Two years ago, Fruehauf finally got rolling. The company built ten 16-foot trailers, using various body styles, and sent the fleet on a 3,000 demonstration tour of the country. The reception was most encouraging, and Fruehauf feels certain there is a demand right now for such equipment to be used in intra-city traffic by department stores, milkmen, gasoline people and others. Fruehauf estimates it could deliver such a trailer for $1,500 or less which, with the cost of the motor tractor, would make the combination competitive in price with the straight truck of comparative size and—according to the company—considerably more efficient. Fruehauf was ready to go into production on the small models this year, but the material situation held up the schedule. When the situation eases, the company will go ahead as planned.
The result of these aggressive and progressive strategies, ably executed, has been to rocket Fruehauf sales and earnings. Sales this year will hit $140 million, double last year’s take and $56,000,000 above the company’s previous peak in 1948. Earnings should reach about $9,000,000 or $7 a common share, as against $2,800,000 ($1.91 a share) in 1949 and $5,500,000 ($4.16 a share) the year before. Further, the company this year has paid off $800,000 in debentures, put $1,000,000 into a bad debt reserve. At present, it has no inventories except in raw materials and a $30,000,000 backlog of orders.
At the wheel of this economic juggernaut is 42-year-old Roy August Fruehauf (older brother Harvey C. is chairman of the board and another brother Harry R. is first vice-president). Fruehauf, a big, black-haired, barrel-chested man, has been in the trailer business practically all his life. As a boy he maneuvered the rigs around his father’s yard. After two years of college, he went to work in Detroit in 1928 for the company’s service department, and for the next 12 years shuttled through a succession of jobs embracing the entire field of production and sales.
In 1930, he transferred to the Chicago branch as a salesman. Three years later he became regional sales manager in the west and in 1935 took over as vice-president in charge of the western division. In 1938, he was named vice-president and director of sales. By 1940, he was vice-president in charge of operations. Four years later he became executive vice-president and early last year he took over as president.
Four Pedestals
The Fruehauf success story rests squarely on four pedestals—production, distribution, service and advertising. Originally the firm was essentially an assembler but it has continually manufactured more and more of its own parts. Currently, it makes about half the parts it uses, an increase of 10-15% since the war. Besides increasing its actual production activity, the company has improved its over-all efficiency, abandoning old plants and concentrating production in major centers. Now in addition to the main headquarters in Detroit, the firm maintains large factories in Ohio, Indiana, California, Iowa, Nebraska, Tennessee and Canada.
Fruehauf’s commanding size in the industry affords a number of considerable competitive advantages. Because of its greater plant facilities, it is able to develop and build various lines and models of trailers to serve more efficiently the differing haulage needs of various industries, and a major point in Fruehauf promotion is that the company offers a full line. Also, the company’s size gives it a potent advantage in clinching sales. Prices in the trailer industry are often subject to dickering and a prospect will frequently place his business where he gets the best deal. Thus, selling is extremely competitive and Fruehauf because of its size and manufacturing advantages is generally able to bid successfully wherever price factors are dominant.
The company’s distribution and service setup is closely integrated. Fruehauf distributes chiefly through directly owned factory outlets. The company does 95% of its business through 96 such installations scattered throughout major market areas. The remaining five percent is handled by 22 distributors. This balance—or imbalance—has led to the charge that Fruehauf does not like to use distributors. Actually, there is no such prejudice. Rather, the company expects certain performance standards from its sales outlets. For that reason it has built and maintains its own outlets but it also uses distributors. Roy Fruehauf’s yardstick for measurement is simple: “We will take on a distributor anywhere we can use one if he can prove he has the money and the ability to do what we do.”
What Fruehauf does is to sell service facilities along with its equipment. Every sales outlet is also a completely equipped garage and machine shop in which a trailer can be rebuilt from the ground up. The company maintains a force of 2,000 mechanics throughout these installations and in each one carries a full line of parts for every type unit it has ever built. Such an operation, though large, Fruehauf considers necessary. Trailers defy obsolescence and except for brakes and tires, practically never wear out (one trailer will survive several generations of the power units used for hauling). Thus it is extremely important for the operator to have sources for maintenance and repair. As Roy Fruehauf puts it: “A trailer traveling across country is never more than a few hours from Fruehauf service.”
Fruehauf installations are generally located on the outskirts of cities because of the acreage required to store and service the large equipment. In large metropolitan areas, the company offers pick-up and delivery service, thus saving operators from tying up their own tractor units hauling the equipment to and from the garage.
All Fruehauf equipment is sold with a warranty covering materials and workmanship for a specified period. The service policy is liberal. The company goes to extremes to satisfy the customers. All incoming complaints, when they occur, are routed directly to the president’s office. Mr. Fruehauf then routs the complaint to the general service manager, with a request for a full report on the matter when it is settled. The company takes absolutely no chances on losing future sales by skimping on service.
Training School Pays Off
Last year, the company embarked on the first stage of an elaborate training program, under executive vice-president L.C. Allman. Initial project was a 12-week correspondence course for the sales force. Local branch managers got material and props from the central office, retailed the material to their staffs at weekly meetings.
However, the company felt better results could be obtained by running a sales training program at headquarters in Detroit. Same time, it decided the same facilities could be used to train other personnel. Accordingly, this year the company started setting up the Fruehauf Technical Institute.
The Institute opened in September, occupies a good sized portion of available plant area in Detroit. A permanent display shows every basic trailer type Fruehauf has ever made; there is also a model parts exhibit and a service department to demonstrate repair techniques. Additionally, the Institute provides classroom space, a series of rooms divided by movable partitions. Wide open, the classroom becomes an auditorium that can house several hundred people. The cost of the installation is considerable, but Roy Fruehauf dismisses it: “It’s a lot cheaper than the high cost of ignorance.”
To supervise the actual training, Fruehauf hired a faculty member of the Engineering College of the University of Michigan. Administration and instruction come from key people in the various divisions of the firm. Currently, Fruehauf is importing its salesmen into the home office 20 at a time for a two-week course. At the Institute, in addition to studying sales techniques and problems, they get a look at the company’s products, parts, paper work—an over-all view that will help them better understand the entire Fruehauf operation. In addition to the actual displays, the Institute uses movies, slide films, easels and other teaching aids. Later the company plans to give a comparable course to office and branch managers, mechanics and others.
The Advertising Concept
Fruehauf’s advertising budget this year, the largest in its history, will total about $1,000,000, for a ratio of 0.71% on net sales—the lowest in the firm’s history (in 1948, the previous peak year, Fruehauf spent almost $900,000 for a ratio of 1.05% on net sales). Fruehauf’s advertising director is Norman Rowe, who works closely with the advertising agency (Zimmer-Keller, Inc., Detroit). However, Mr. Rowe reports to vice-president Allman who also oversees activities of the public relations department headed by John Denler.
Not only the size, but the aim and purpose of Fruehauf advertising has changed considerably. Ten years ago the company was still selling the trailer idea. A 1940 insertion in Collier’s and the Satevepost (the company uses no general magazines now) explained “What is a truck-trailer—and how does it save on advertising costs?” The ad showed a truck chassis (“it can be used either to carry or pull loads”) alongside a “modern Fruehauf Trailer.” The clincher was the old horse and wagon versus pack-horse theme: “Couple the truck to the Fruehauf Trailer and you have a Truck-Trailer with which you can haul three or four times as much because the truck can pull far more than it can carry.”
Nowadays Fruehauf advertising is apparently based on the assumption that the trailer idea has been accepted. A more or less parallel ad, appearing recently in trade publications, completely skipped this elementary concept to drive home a number of more sophisticated selling points. The ad asked: “Looking for ways to cut operating costs?...” Copy said: “Ship via trailer. Fruehauf users find trailers best for faster, better transportation at lower cost!” A series of small cuts and captions explained that trailer transport saves money by allowing less handling and faster deliveries, by eliminating crates and cutting warehousing and by offering greater operating economy. The ad also made the point that a “nation-wide service network ‘comes with the package’ when you buy a Fruehauf Trailer.”
Till this year, the company used newspapers only spasmodically. But currently about half its space budget is going to this medium and the rest is chiefly in trade and business magazines. As a matter of policy, wherever possible all space advertising, direct mail and promotional literature carries the imprint of the local branch office.
The newspaper advertising breaks into two more or less separate campaigns—on service and on truck bodies. Occasionally, however, a “product” ad plugs service and vice versa.
The service campaign started last spring in some 30 branch cities, ran 400 lines once a week for three months. The product campaign, on truck bodies was scheduled to run three months through the summer, using 200 lines once a week in 32 markets, but had to be called off because the advertising oversold plant capacity. Currently Fruehauf is running another newspaper service campaign. Most insertions offer specific jobs at stated prices like brakes, painting, lubrication and so on. A few, however, plug the “Fruehauf Fall Service Specials.” By the middle of next month, Fruehauf will start the newspaper truck body campaign again.
The trailer advertising runs in a long list of specialized trade publications, as well as in such general business publications as Business Week, Chicago Journal of Commerce and Wall Street Journal. Fruehauf’s policy on trailer advertising is to watch sales closely and concentrate the copy on a few selected items from the company’s wide line. Currently, the company is pushing its stainless steel model, claims it is “lighter, stronger and costs less to operate than any other trailer with comparable basic specifications.”
Trade Publications
Fruehauf advertising runs consistently in the trucking trade publications, to reach the truckers, who account for about 65% of the company’s trailer business. But the firm also runs extensive copy in trade books reaching the private carrier, firms in the food, chemical, construction, petroleum and other fields, who use trucks in the conduct of their business. For the most part, copy beamed to both groups is basically similar, except where highly specialized equipment, like an acid hauling trailer, is concerned. Essentially, whatever the target, Fruehauf advertising tends to drive home the same major points regarding the speed and economy of trailer operation, plus the claim that Fruehauf trailers are best of all. The essential difference between contract and private carrier copy is in the art. It is tabu [sic] to run a picture of a trailer emblazoned with a private carrier’s name in a contract carrier publication. Likewise, the company would not show a picture of a contract carrier trailer in an advertisement aimed at a private carrier audience.
Fruehauf advertises regularly in Transport Topics, the official medium of the American Trucking Assns. and in all local trucking association magazines.
Public Relations Advertising
The company takes an active interest in the public relations problems of the trucking industry and runs institutional advertising on its various phases. In its copy, however, Fruehauf steers clear of direct involvement in the railroad-truck controversy, prefers to tell a constructive story with no invidious comparisons.
A recent ad shows the back end of a trailer whisking along the road (by cutting off the trailer body the ad cleverly sidesteps the intra-industry feud between the private and the contract carriers). The headline: “If these wheels stop turning what would happen to 25,000 U.S. cities?”
Copy spells it out, indirectly implying that trucks serve the U.S. vitally in ways that the railroads cannot: “Can you image your community without milk for the children—without bread—without medicines? That’s probably what would happen if the trucks stop coming to your town! Life would slip back to what it was 50 years ago. There are more than 25,000 communities in the U.S. whose citizens depend solely on trucks and truck-trailers for everything they eat, wear and use.
“No system of transportation can perform the service that trucks render the American people. Small towns, villages and farms once were considered outposts in America. But trucks today assure all areas . . . the same high standard of living.”
In a box, the ad additionally details a number of specific ways in which trucks are “vital to our way of life.” Among the evidence cited: farmers own 2.5 million trucks and another 500,000 trucks haul only farm products, 85% of the nation’s urban population receive their fluid milk by truck; 89% of farm products now reach their markets by highway; the field of highway transportation provides one out of every seven American jobs and is the country’s second largest industry.
“Case History” Selling
The economy of trailer operation has always been a major Fruehauf selling point. Till a year ago, the company featured this approach in a series of case study advertisements, citing the experience of a Fruehauf user. The last ad in the series told “How National Biscuit Co. solved a bulk-cargo problem.” Copy stated that Nabisco had to step up deliveries of its crackers and other Nabisco goods, switched from trucks to trailers and achieved “substantially higher” hauling capacity. The ad quoted a testimonial statement by Warren S. Warner, Nabisco’s vice-president in charge of sales: “Each trailer in our fleet of 25 Fruehaufs average 40,000 miles per year. We get more efficient distribution through the use of this . . . equipment . . . and that is important in our sales operations.”
Fruehauf still regards its economy story as a major selling point, but now uses it only in direct mail. Primarily for private operators, the company cooperates in preparing detailed cost analyses on transportation problems, generally at the request of a prospect who needs equipment. The results help sell the initial prospect, then are used as sales ammunition on companies facing similar problems.
One recent cost analysis was undertaken for an automotive parts manufacturer. The company was opening a new plant in Ohio, 135 miles from Detroit, and had to move 250 tons of material and parts a month. The automotive manufacturer undertook a comprehensive study of transportation charges. The issue finally resolved itself to a comparison between rail and motor transport. Fruehauf engineers supplied basic data to the prospect.
Based on the study, the company bought five Fruehauf trailers and three tractor trucks. Compared with rail rates, the savings to the company for the first four months of operation averaged over $1,650 a month, for an anticipated annual saving of over $20,000.
Fruehauf maintains a mailing list of 135,000 U.S. trailer owners and 26,000 truck dealers (these dealers carry certain Fruehauf accessories). So for this year, the company has sent four mailings to the owner list, with one or two more scheduled. All direct mail is localized to the branch. In addition to the national mailings, the company runs local drives when and where needed. A special mail campaign announced the opening of a branch in Evansville (Ind.) and special campaigns are instituted when local branches need help. On such occasions, samples are sent to other branch managers who can get the material for their own use on request.
A typical mailing, on the fall service campaign, went out recently to the owner list. Copy theme was that “Fruehauf Service Pays Off”: the cover picture showed a hand putting a coin into a piggy bank over the caption “Just like money in your bank.” One full page was devoted to plugging four features of Fruehauf service: “finest facilities,” “skilled workmanship,” “quality materials,” and “faster service.”
The rest of the space was given to a hard selling pitch: “Trailers, any make—any model! Bring ‘em in today! Fruehauf branches coast-to-coast offer you big service savings . . . Don’t take chances on crippled equipment cutting into your hauling profits during the winter months ahead . . . “ The mailing then listed a number of the same offers plugged in the newspaper campaign.
Fruehauf is in an excellent position. Orders have been pouring in at a constantly increasing pace. And even if civilian production must be curtailed because of increasing demands for military equipment, the company will undoubtedly get lots of government business. During the last war Fruehauf produced many trailers of different types for the armed forces.
Barring upset in the economy, Fruehauf’s prospects are even brighter.
The motor hauling industry, on the whole, is still on the way up and Fruehauf occupies a commanding position in one segment of the industry. Also, the market for trailers seems promising—even discounting potential growth in the trucking industry—because of the great disparity between the number of straight trucks and truck-trailers in use, a disparity which Roy Fruehauf is confident will begin to level off when his small size trailers go into production. Ask him about future potential of the trailer business. He will tell you: “It’s straight up.”
********************
Obviously trucking is an important factor in the U.S. economy, both production-wise and as a major distribution arm. But how significant are trailers in the motor transport picture? In terms of dollar sales and operating units, trailer industry figures are picayune compared with the fantastic totals of the truck and automotive industry. The trucking industry buys over 1,000,000 new trucks a year, but only 50,000 new trailers. The truck fleet currently numbers over 7,500,000, while the trailer fleet is less than half a million.
Nevertheless, trailers or, rather, the tractor-trailer combination, are far more important in the industry picture than a simple census would indicate. Their share of the ton miles in over-the-road haulage is disproportionately high, considering their numbers, and in view of current and pending developments both in the long and short haul fields, that share may well become higher.
The Fruehauf Giant
How important is Fruehauf in the trailer industry? To say it is the General Motors of the business understates the case. Not only is Fruehauf the biggest firm in the field, it sells more than all the others put together.
The company’s growth has been fantastic. Fruehauf sales nearly quadrupled between 1936 and Pearl Harbor and have more than quadrupled since then. The way wheels are now turning almost insures that the company’s growth will continue, because the industry in which it is the biggest and most successful operator seems bound to continue expanding.
Fruehauf, though an old firm, is actually engaged in a relatively new business. A one-time wagon builder, the company pioneered the tractor-trailer idea, and built the first motor-hauled trailer for a lumber firm in 1914. The guiding philosophy motivating the founder and president of the firm, August C. Fruehauf, was incontrovertibly simple; a horse can pull more than it can carry, therefore the horse-and-wagon principle applied to motor trucks should equally give greater payload capacity.
But the full development of the trailer industry had to wait on physical and mechanical factors, like the development of road networks and inventions like the differential dual wheel. But though Fruehauf owes its sensational growth partly to general trends and developments, the company has always made its own breaks. It has relentlessly and ceaselessly worked at improving its methods and machinery, operations, training, selling and advertising.
The company has constantly gone after new and bigger markets. It not only makes a full line of trailers, but parts and accessories like auxiliary gasoline tanks as well. Working the other side of the street, it has even built up a booming business in truck bodies. But the company’s most exciting project, still in development, is the small trailer.
The Small Trailer
Practically all trailers now in use are 30 feet and longer. Though economically more feasible than straight trucks of comparable carrying capacity, they obviously cannot operate where crowding or congestion would not justify such large equipment. Carrying the original Fruehauf thinking one step further, the company high command reasoned that if a big tractor-trailer combination works better than a big straight truck, then a small tractor-trailer combination should work better than a small straight truck.
This idea was kicking around the company for a long time and some experiments were made. Also, the company had encouraging reports from users of custom built small equipment. Two years ago, Fruehauf finally got rolling. The company built ten 16-foot trailers, using various body styles, and sent the fleet on a 3,000 demonstration tour of the country. The reception was most encouraging, and Fruehauf feels certain there is a demand right now for such equipment to be used in intra-city traffic by department stores, milkmen, gasoline people and others. Fruehauf estimates it could deliver such a trailer for $1,500 or less which, with the cost of the motor tractor, would make the combination competitive in price with the straight truck of comparative size and—according to the company—considerably more efficient. Fruehauf was ready to go into production on the small models this year, but the material situation held up the schedule. When the situation eases, the company will go ahead as planned.
The result of these aggressive and progressive strategies, ably executed, has been to rocket Fruehauf sales and earnings. Sales this year will hit $140 million, double last year’s take and $56,000,000 above the company’s previous peak in 1948. Earnings should reach about $9,000,000 or $7 a common share, as against $2,800,000 ($1.91 a share) in 1949 and $5,500,000 ($4.16 a share) the year before. Further, the company this year has paid off $800,000 in debentures, put $1,000,000 into a bad debt reserve. At present, it has no inventories except in raw materials and a $30,000,000 backlog of orders.
At the wheel of this economic juggernaut is 42-year-old Roy August Fruehauf (older brother Harvey C. is chairman of the board and another brother Harry R. is first vice-president). Fruehauf, a big, black-haired, barrel-chested man, has been in the trailer business practically all his life. As a boy he maneuvered the rigs around his father’s yard. After two years of college, he went to work in Detroit in 1928 for the company’s service department, and for the next 12 years shuttled through a succession of jobs embracing the entire field of production and sales.
In 1930, he transferred to the Chicago branch as a salesman. Three years later he became regional sales manager in the west and in 1935 took over as vice-president in charge of the western division. In 1938, he was named vice-president and director of sales. By 1940, he was vice-president in charge of operations. Four years later he became executive vice-president and early last year he took over as president.
Four Pedestals
The Fruehauf success story rests squarely on four pedestals—production, distribution, service and advertising. Originally the firm was essentially an assembler but it has continually manufactured more and more of its own parts. Currently, it makes about half the parts it uses, an increase of 10-15% since the war. Besides increasing its actual production activity, the company has improved its over-all efficiency, abandoning old plants and concentrating production in major centers. Now in addition to the main headquarters in Detroit, the firm maintains large factories in Ohio, Indiana, California, Iowa, Nebraska, Tennessee and Canada.
Fruehauf’s commanding size in the industry affords a number of considerable competitive advantages. Because of its greater plant facilities, it is able to develop and build various lines and models of trailers to serve more efficiently the differing haulage needs of various industries, and a major point in Fruehauf promotion is that the company offers a full line. Also, the company’s size gives it a potent advantage in clinching sales. Prices in the trailer industry are often subject to dickering and a prospect will frequently place his business where he gets the best deal. Thus, selling is extremely competitive and Fruehauf because of its size and manufacturing advantages is generally able to bid successfully wherever price factors are dominant.
The company’s distribution and service setup is closely integrated. Fruehauf distributes chiefly through directly owned factory outlets. The company does 95% of its business through 96 such installations scattered throughout major market areas. The remaining five percent is handled by 22 distributors. This balance—or imbalance—has led to the charge that Fruehauf does not like to use distributors. Actually, there is no such prejudice. Rather, the company expects certain performance standards from its sales outlets. For that reason it has built and maintains its own outlets but it also uses distributors. Roy Fruehauf’s yardstick for measurement is simple: “We will take on a distributor anywhere we can use one if he can prove he has the money and the ability to do what we do.”
What Fruehauf does is to sell service facilities along with its equipment. Every sales outlet is also a completely equipped garage and machine shop in which a trailer can be rebuilt from the ground up. The company maintains a force of 2,000 mechanics throughout these installations and in each one carries a full line of parts for every type unit it has ever built. Such an operation, though large, Fruehauf considers necessary. Trailers defy obsolescence and except for brakes and tires, practically never wear out (one trailer will survive several generations of the power units used for hauling). Thus it is extremely important for the operator to have sources for maintenance and repair. As Roy Fruehauf puts it: “A trailer traveling across country is never more than a few hours from Fruehauf service.”
Fruehauf installations are generally located on the outskirts of cities because of the acreage required to store and service the large equipment. In large metropolitan areas, the company offers pick-up and delivery service, thus saving operators from tying up their own tractor units hauling the equipment to and from the garage.
All Fruehauf equipment is sold with a warranty covering materials and workmanship for a specified period. The service policy is liberal. The company goes to extremes to satisfy the customers. All incoming complaints, when they occur, are routed directly to the president’s office. Mr. Fruehauf then routs the complaint to the general service manager, with a request for a full report on the matter when it is settled. The company takes absolutely no chances on losing future sales by skimping on service.
Training School Pays Off
Last year, the company embarked on the first stage of an elaborate training program, under executive vice-president L.C. Allman. Initial project was a 12-week correspondence course for the sales force. Local branch managers got material and props from the central office, retailed the material to their staffs at weekly meetings.
However, the company felt better results could be obtained by running a sales training program at headquarters in Detroit. Same time, it decided the same facilities could be used to train other personnel. Accordingly, this year the company started setting up the Fruehauf Technical Institute.
The Institute opened in September, occupies a good sized portion of available plant area in Detroit. A permanent display shows every basic trailer type Fruehauf has ever made; there is also a model parts exhibit and a service department to demonstrate repair techniques. Additionally, the Institute provides classroom space, a series of rooms divided by movable partitions. Wide open, the classroom becomes an auditorium that can house several hundred people. The cost of the installation is considerable, but Roy Fruehauf dismisses it: “It’s a lot cheaper than the high cost of ignorance.”
To supervise the actual training, Fruehauf hired a faculty member of the Engineering College of the University of Michigan. Administration and instruction come from key people in the various divisions of the firm. Currently, Fruehauf is importing its salesmen into the home office 20 at a time for a two-week course. At the Institute, in addition to studying sales techniques and problems, they get a look at the company’s products, parts, paper work—an over-all view that will help them better understand the entire Fruehauf operation. In addition to the actual displays, the Institute uses movies, slide films, easels and other teaching aids. Later the company plans to give a comparable course to office and branch managers, mechanics and others.
The Advertising Concept
Fruehauf’s advertising budget this year, the largest in its history, will total about $1,000,000, for a ratio of 0.71% on net sales—the lowest in the firm’s history (in 1948, the previous peak year, Fruehauf spent almost $900,000 for a ratio of 1.05% on net sales). Fruehauf’s advertising director is Norman Rowe, who works closely with the advertising agency (Zimmer-Keller, Inc., Detroit). However, Mr. Rowe reports to vice-president Allman who also oversees activities of the public relations department headed by John Denler.
Not only the size, but the aim and purpose of Fruehauf advertising has changed considerably. Ten years ago the company was still selling the trailer idea. A 1940 insertion in Collier’s and the Satevepost (the company uses no general magazines now) explained “What is a truck-trailer—and how does it save on advertising costs?” The ad showed a truck chassis (“it can be used either to carry or pull loads”) alongside a “modern Fruehauf Trailer.” The clincher was the old horse and wagon versus pack-horse theme: “Couple the truck to the Fruehauf Trailer and you have a Truck-Trailer with which you can haul three or four times as much because the truck can pull far more than it can carry.”
Nowadays Fruehauf advertising is apparently based on the assumption that the trailer idea has been accepted. A more or less parallel ad, appearing recently in trade publications, completely skipped this elementary concept to drive home a number of more sophisticated selling points. The ad asked: “Looking for ways to cut operating costs?...” Copy said: “Ship via trailer. Fruehauf users find trailers best for faster, better transportation at lower cost!” A series of small cuts and captions explained that trailer transport saves money by allowing less handling and faster deliveries, by eliminating crates and cutting warehousing and by offering greater operating economy. The ad also made the point that a “nation-wide service network ‘comes with the package’ when you buy a Fruehauf Trailer.”
Till this year, the company used newspapers only spasmodically. But currently about half its space budget is going to this medium and the rest is chiefly in trade and business magazines. As a matter of policy, wherever possible all space advertising, direct mail and promotional literature carries the imprint of the local branch office.
The newspaper advertising breaks into two more or less separate campaigns—on service and on truck bodies. Occasionally, however, a “product” ad plugs service and vice versa.
The service campaign started last spring in some 30 branch cities, ran 400 lines once a week for three months. The product campaign, on truck bodies was scheduled to run three months through the summer, using 200 lines once a week in 32 markets, but had to be called off because the advertising oversold plant capacity. Currently Fruehauf is running another newspaper service campaign. Most insertions offer specific jobs at stated prices like brakes, painting, lubrication and so on. A few, however, plug the “Fruehauf Fall Service Specials.” By the middle of next month, Fruehauf will start the newspaper truck body campaign again.
The trailer advertising runs in a long list of specialized trade publications, as well as in such general business publications as Business Week, Chicago Journal of Commerce and Wall Street Journal. Fruehauf’s policy on trailer advertising is to watch sales closely and concentrate the copy on a few selected items from the company’s wide line. Currently, the company is pushing its stainless steel model, claims it is “lighter, stronger and costs less to operate than any other trailer with comparable basic specifications.”
Trade Publications
Fruehauf advertising runs consistently in the trucking trade publications, to reach the truckers, who account for about 65% of the company’s trailer business. But the firm also runs extensive copy in trade books reaching the private carrier, firms in the food, chemical, construction, petroleum and other fields, who use trucks in the conduct of their business. For the most part, copy beamed to both groups is basically similar, except where highly specialized equipment, like an acid hauling trailer, is concerned. Essentially, whatever the target, Fruehauf advertising tends to drive home the same major points regarding the speed and economy of trailer operation, plus the claim that Fruehauf trailers are best of all. The essential difference between contract and private carrier copy is in the art. It is tabu [sic] to run a picture of a trailer emblazoned with a private carrier’s name in a contract carrier publication. Likewise, the company would not show a picture of a contract carrier trailer in an advertisement aimed at a private carrier audience.
Fruehauf advertises regularly in Transport Topics, the official medium of the American Trucking Assns. and in all local trucking association magazines.
Public Relations Advertising
The company takes an active interest in the public relations problems of the trucking industry and runs institutional advertising on its various phases. In its copy, however, Fruehauf steers clear of direct involvement in the railroad-truck controversy, prefers to tell a constructive story with no invidious comparisons.
A recent ad shows the back end of a trailer whisking along the road (by cutting off the trailer body the ad cleverly sidesteps the intra-industry feud between the private and the contract carriers). The headline: “If these wheels stop turning what would happen to 25,000 U.S. cities?”
Copy spells it out, indirectly implying that trucks serve the U.S. vitally in ways that the railroads cannot: “Can you image your community without milk for the children—without bread—without medicines? That’s probably what would happen if the trucks stop coming to your town! Life would slip back to what it was 50 years ago. There are more than 25,000 communities in the U.S. whose citizens depend solely on trucks and truck-trailers for everything they eat, wear and use.
“No system of transportation can perform the service that trucks render the American people. Small towns, villages and farms once were considered outposts in America. But trucks today assure all areas . . . the same high standard of living.”
In a box, the ad additionally details a number of specific ways in which trucks are “vital to our way of life.” Among the evidence cited: farmers own 2.5 million trucks and another 500,000 trucks haul only farm products, 85% of the nation’s urban population receive their fluid milk by truck; 89% of farm products now reach their markets by highway; the field of highway transportation provides one out of every seven American jobs and is the country’s second largest industry.
“Case History” Selling
The economy of trailer operation has always been a major Fruehauf selling point. Till a year ago, the company featured this approach in a series of case study advertisements, citing the experience of a Fruehauf user. The last ad in the series told “How National Biscuit Co. solved a bulk-cargo problem.” Copy stated that Nabisco had to step up deliveries of its crackers and other Nabisco goods, switched from trucks to trailers and achieved “substantially higher” hauling capacity. The ad quoted a testimonial statement by Warren S. Warner, Nabisco’s vice-president in charge of sales: “Each trailer in our fleet of 25 Fruehaufs average 40,000 miles per year. We get more efficient distribution through the use of this . . . equipment . . . and that is important in our sales operations.”
Fruehauf still regards its economy story as a major selling point, but now uses it only in direct mail. Primarily for private operators, the company cooperates in preparing detailed cost analyses on transportation problems, generally at the request of a prospect who needs equipment. The results help sell the initial prospect, then are used as sales ammunition on companies facing similar problems.
One recent cost analysis was undertaken for an automotive parts manufacturer. The company was opening a new plant in Ohio, 135 miles from Detroit, and had to move 250 tons of material and parts a month. The automotive manufacturer undertook a comprehensive study of transportation charges. The issue finally resolved itself to a comparison between rail and motor transport. Fruehauf engineers supplied basic data to the prospect.
Based on the study, the company bought five Fruehauf trailers and three tractor trucks. Compared with rail rates, the savings to the company for the first four months of operation averaged over $1,650 a month, for an anticipated annual saving of over $20,000.
Fruehauf maintains a mailing list of 135,000 U.S. trailer owners and 26,000 truck dealers (these dealers carry certain Fruehauf accessories). So for this year, the company has sent four mailings to the owner list, with one or two more scheduled. All direct mail is localized to the branch. In addition to the national mailings, the company runs local drives when and where needed. A special mail campaign announced the opening of a branch in Evansville (Ind.) and special campaigns are instituted when local branches need help. On such occasions, samples are sent to other branch managers who can get the material for their own use on request.
A typical mailing, on the fall service campaign, went out recently to the owner list. Copy theme was that “Fruehauf Service Pays Off”: the cover picture showed a hand putting a coin into a piggy bank over the caption “Just like money in your bank.” One full page was devoted to plugging four features of Fruehauf service: “finest facilities,” “skilled workmanship,” “quality materials,” and “faster service.”
The rest of the space was given to a hard selling pitch: “Trailers, any make—any model! Bring ‘em in today! Fruehauf branches coast-to-coast offer you big service savings . . . Don’t take chances on crippled equipment cutting into your hauling profits during the winter months ahead . . . “ The mailing then listed a number of the same offers plugged in the newspaper campaign.
Fruehauf is in an excellent position. Orders have been pouring in at a constantly increasing pace. And even if civilian production must be curtailed because of increasing demands for military equipment, the company will undoubtedly get lots of government business. During the last war Fruehauf produced many trailers of different types for the armed forces.
Barring upset in the economy, Fruehauf’s prospects are even brighter.
The motor hauling industry, on the whole, is still on the way up and Fruehauf occupies a commanding position in one segment of the industry. Also, the market for trailers seems promising—even discounting potential growth in the trucking industry—because of the great disparity between the number of straight trucks and truck-trailers in use, a disparity which Roy Fruehauf is confident will begin to level off when his small size trailers go into production. Ask him about future potential of the trailer business. He will tell you: “It’s straight up.”
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