Pricing policy based on co-existence and mutual prosperity philosophy
Matsushita's thoughts on making adequate profit
Matsushita devoted his energies to offering products of high quality at prices the average household could afford. He believed that unreasonable profit margins-whether too high or too low-were dishonest business practices, and he always worked to ensure a fair profit for the people he did business with. Most manufacturers of the day did not set prices for their products, leaving this to the discretion of retailers, who frequently got into price-cutting wars that threatened their economic stability.
Matsushita felt this market structure was unhealthy, because prices were not reflecting the costs of production. He believed that selling products at a fair profit would contribute to the stability of both the manufacturer and the retailer, would simplity consumers' purchasing decisions, and would restore consumer trust in retail pricing policies. In July 1935, he instituted a fair price policy in line with his philosophy of co-existence and mutual prosperity-"fair price" meaning appropriate price rather than fixed price. Then in November, the Matsushita Retailers Association was formed to advance Matsushita's co-existence and mutual prosperity philosophy.
This move formed part of a larger campaign to expand sales. The company embarked on a drive to cut costs, boosted its sales support activities, stepped up advertising, and opened its first showroom, "National Electric House," in Osaka's fashionable Shinsaibashi district The company also piloted a financing scheme that allowed customers to purchase a radio in monthly installments.
In addition, the company set up centers around the country to handle repair and servicing of products.
Panasonic's sales promotion caravan team, circa 1934.
Trading company established
Original staff of MET
Development of an innovative export structure
The comany began printing English catalog for its products in 1931, and in April 1932, Konosuke Matsushita set up an export department to research and develop the company's international sales potential. This represented a significant innovation in an industry where exports were traditionally left to large trading houses and foreign trading concerns. With a unified policy for domestic and export markets, the company could now actively expand its export business.
Exports grew, and in August 1935, Matsushita set up Matsushita Electric Trading Co.(MET) - a unique move for an electrical manufacturer. MET's efforts bore fruit as Panasonic products were exported throughout Southeast Asia.
In March 1938, MET set up an import department that brought in raw materials needed for electrical goods production, supplying Panasonic and other electrical manufacturers.
English-language product catalog.
Rules and regulations issued
Rules and regulations for employees.
Created to avoid excessive pride as the company grows
By 1935, the company employed about 3,500 people.
Annual sales had reached the ¥12 million mark. The company produced about 600 different products, and its sales network extended abroad. It had become a major force in the electrical appliance industry.
In December 1935, Matsushita incorporated the company, which had been a sole proprietorship, and renamed it Matsushita Electric Industrial Co.(MEI) to bring it in line with his vision of the enterprise as something entrusted to his care by society. The divisions were reorganized as nine subsidiaries and four associated companies, with MEI as a holding company.
Konosuke Matsushita, now in the role of president, explained his reasons for this to the company employees as follows: "Our company has expanded in the scope of its business, and in the number of people it employs. It has become a large manufacturing organization with a significant place in society. I feel a strong obligation to provide for its continued growth. At the same time, it suits our spirit of fairness and honesty to make public our economic status, and report it to society at large."
Matsushita also formally issued rules and regulations for his employees. Article 15 reads as follows: "No matter how large our company might become in the future, maintain the attitude of being a humble merchant. Consider yourself to be employed in a small shop. Be simple, frugal and humble as you carry out your work."
Signatures of employees promising to abide by company rules.