In an effort to increase sales, the marketing manager of the World Widget Co. Ltd. introduced a…

In an effort to increase sales, the marketing manager of the
World Widget Co. Ltd. introduced a co-operative advertising campaign, in which
it agreed to pay 50 percent of the widget-advertising expense of any retailer
selling World Widget products, provided that the retailer agreed to advertise
widgets at the “suggested retail price.” No assistance would be given to the
retailer if the retailer did not include the price of the product in its
advertisement. The 50-percent payment would be based upon the dollar cost of
the advertising and would be open to all who sold the company product,
»

In an effort to increase sales, the marketing manager of the
World Widget Co. Ltd. introduced a co-operative advertising campaign, in which
it agreed to pay 50 percent of the widget-advertising expense of any retailer
selling World Widget products, provided that the retailer agreed to advertise
widgets at the “suggested retail price.” No assistance would be given to the
retailer if the retailer did not include the price of the product in its
advertisement. The 50-percent payment would be based upon the dollar cost of
the advertising and would be open to all who sold the company product,
regardless of sales volume. The memorandum to retailers advised all retailers
taking part in the campaign that they were free to sell the product at any
price they wished to establish. The memorandum also stated that retailers were
free to advertise at their own expense, if they wished to advertise widgets at
a price different from the suggested retail price. The proclaimed purpose of
the advertising campaign, according to the marketing manager, was to promote
the product on a national basis, and not to advertise the product as a special
sale item. Assess the activities of the company in the light of current
restrictive trade-practices legislation.

»

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