The development of a marketing program for a downtown Los Angeles club and its attendant problems

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Content THE DEVELOPMENT OP A MARKETING PROGRAM
FOR A DOWNTOWN LOS ANGELES CLUB
AND ITS ATTENDANT PROBLEMS
A Thesis
Presented to
the Faculty of the College of Commerce
The University of Southern California
In Partial Fulfillment
of the Requirements for the Degree
Master of Business Administration
by
Robert Van Buskirk
May 1958
UMI Number: EP43478
All rights reserved
INFORMATION TO ALL USERS
The quality of this reproduction is dependent upon the quality of the copy submitted.
In the unlikely event that the author did not send a complete manuscript
and there are missing pages, these will be noted. Also, if material had to be removed,
a note will indicate the deletion.
Published by ProQuest LLC (2014). Copyright in the Dissertation held by the Author.
Dissertation Publishing
UMI EP43478
Microform Edition © ProQuest LLC.
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unauthorized copying under Title 17, United States Code
ProQuest LLC.
789 East Eisenhower Parkway
P.O. Box 1346
Ann Arbor, Ml 4 81 0 6- 1346
3^°
(^ovn M6A '5?
This thesis, written by
ROBERT VAN BUSKIRK
under the guidance of the Faculty Committee,
and approved by all its members, has been
presented to and accepted by the Faculty of
the School of Commerce in partial fulfill
ment of the requirements for the degree of
MASTER OF BUSINESS ADMINISTRATION
Approved
TABLE OP CONTENTS
CHAPTER PAGE
I* THE PROBLEM AND THE DEFINITION OP
TERMS USED* . ................... 1
The Problem • •••••••••*.••• 1
Statement of the problem *•••••* 1
Definition of Terms Used • ••••••• 2
The Downtown Club • •••••••••• 2
Service Industry • •••••••••• I 4 .
Membership • ••••••••••••• U
Limitations of the Report • *•*•••• 5
Lack of Prior Studies • •«••••••• 5
Sources of Data *•••••••••••• 6
Organisation of the Remainder of the
Term Paper • •*•.•••*.•*•• 6
II* HISTORY, FACILITIES AND SIGNIFICANCE
OP THE DOWNTOWN CLUB .......... 7
History • •••••••••••••.*• 7
Facilities • ........ •••*.••••10
Location •*•••••••••••••10
> The buildings * • • • •.........•••10
Parking * • • • • • • • ............ .11
Environment ••••••••••••••12
Significance of the Downtown Club • • • • 13
Summary • • • • • •............. • • • 1S
CHAPTER
III#
IV.
i
i
I
I
I
i
ANALYSIS OF MEMBERSHIP ... .......... ♦
Tbs Members hip Survey • • • •
B&ekground •
Methodology #«•••••»»••«•
Data eolleetion .••••••••..
Sample •
Response •
Findings of the Survey
The Profile ♦ . . • . ............. .
Facilities and Use . . ♦ • . •
Suggestions •••••••••••»••
Summary • .»».•••••••••••
THE PAST RECORD OF THE C L U B........... ♦
Measurable Factors of Growth • ••...
Number of members •
Income
Profits .•••••••• ........ •
The relation of the foregoing factors.
Effect of Past Dues Increases • . • • •
The October 1950 dues increase . . . •
The January 1952 dues increase . • . •
The December 1953 dues Increase • • •
Recapitulation of effect of dues
increase •
ill
PAGE
17
17
17
17
18
18
18
18
2 k
25
26
27
29
29
29
30
38
i n
k9
1*9
51
53
56
iv
CHAPTER PAGE
Summary • ••••••• #•••«••*. 59
V. RELATIONSHIP OF EXTERNAL FACTORS TO
THE DEVELOPMENT OF THE CLUB 6l
Restatement of the Trends of Growth
of the Downtown Club* • ••••••** 6l
General Business Conditions Since 19U&* • 62
Local Business Conditions •••••••* 63
Local index • • * • • • • • • • • • • • 6 3
Population . * * * * * * * • • * * • * *63
The Downtown Central Business Dlstrlet* * 6 1 ) .
Loss of evening trade ........• . 61f
Decentralization 6I4 .
Population ......... . . . . 6I4 .
Sales ............. 67
Central business dlstrlet ♦ . * * *. *6?
Department store sales .**.•••. 69
Correlation .•..••#.••#••*. 69
Summary • ••*#• • •..«••#•*• 71
VI. THE EFFECT OF A DUES INCREASE......... . • • 75
Background •••#«••••#•#••. 75
Tax ... . ......... 75
Previous dues •.••••*•*.•••76
iiVJrJ
77
73
73
73
79
82
83
85
85
85
86
89
89
90
91
93
93
96
97
Relationship of Previous Dues
Increase to Measurable Factors
of Club1 a Economy and to the
Oeneral and Local Economy ••••••
The Proposed Increase in Dues • • ♦ • •
Background • ••»»•«••••••
Effect on number of members • • • • •
Effect on income and profit • • * • •
Business activity • •••*•••••
Summary *««*♦••••••»♦»»•
THE MARKETING PROGRAM: WHAT TO SELL . • ♦
The Changing Functions of the
Downtown Club ••••*•••••*♦
Historical background ••••••••
The pattern of change • ««••••»
The Club Today* •••••«*•»•••
Profile of member •••••••••*
Intangible, not tangible • •••«•
Multipoint Sales Approach • ••••••
Business Benefits •
The business lunch •••••••••
Private dining rooms •»•••*•«
Intra-company tables and executive
dining rooms * • • • . ..........
Vi
CHAPTER PAGE
Cocktail:; facilities 99
Living quarters 100
Speeial events • -.«♦- 101
Catering service ...••.*••» 101
Health Benefits *••.•«•...«• 102
Family Benefits • ••...*••.•• l O i ) .
Junior sports program • • • • • . • . I0I4 .
For the ladies 105
The family as a unit 105
Benefits for the Lady Executive • . • • 105
Social Benefits • *••••••«..• 107
Society • 109
Summary «..••••.•...••.. 111
VIII. THE MARKETING PROGRAM (CONTINUED):
WHERE TO SELL • ....•.••••.• 113
Where to Market the Business Benefits
Flowing from Membership in the
Downtown Club • ...•••.••• + 113
Present members as the best market
for improved additional facilities. III4 .
Resident and non-resident • . « • • . 115
Where to Market the Health Benefits
Flowing from Membership in the
Downtown Club 116
vii
CHAPTER PAGE
Where to Market the Family Benefits
Flowing from Membership in the
Downtown Club •••••••••••« 118
Where to Market the Facilities
Designed for the Use of the Lady
Executive •••»•••••••••• 118
Where to Market the Social Benefits
Flowing from Membership In the
Downtown Club •••••••••••• 119
The Circle of Interest •••«•••» 121
Summary . . . . . . . . . . . . . . . . 122
XX. THE MARKETING PROGRAM (CONTINUED) s
HOW TO SEEL .................. 1 2 1 } .
How to Market the Business Benefits
Flowing from Membership in the
Downtown Club ••••»••••••• 1 2 l | .
The executive lunch ••••••»•« 12$
Private dining-rooms •••••••« 127
Cocktail facilities and the Lancers • 128
Special events................. 129
Catering «••••••••••«•* 129
Intra-company tables •*•«•••• 130
Executive dining rooms and living
quarters• • « • • • • • • • ♦ * • • 130
viii
CHAPTER PAGE
How to Market the Health Benefits
Flowing from Membership in the
i
Downtown Club ♦•«••••••••• 131
How to Sell the Family Benefits
Flowing from Membership in the !
Downtown Club •••••••«•••• 132
How to Sell the Benefits of
Membership in the Downtown Club
to the Lady Executive ••••»••• 133
How to Sell the Social Benefits
Flowing from Membership in the
Downtown Club • • • • • • • • • • • • 13U-
Broad Promotional Efforts ••••••« 136
Participation in Community Affairs* • 136
Publicize events and members • • • • 137
General Promotion • •«••••*•* 137
Summary • •••••••••••••«• 137
X* THE BASIC PROBLEMS OF MARKETING THE
DOWNTOWN CLUB 139
The Changing Function of Clubs • • • • 139
The Changing Market Area • ••»••• lifl
Lack of Mobility «•••••••••• li+2
i
The Handicap Imposed by the Need
for Exclusiveness ••»••••••• lli-3
CHAPTER PAGE
The Screened Approach •••«•••• l!0
The Need for & Sales Organization • • « litf
Summary •»••«••••••••••• l i | . 7
XX. SUMMARY AND CONCLUSIONS • . . ........ 349
Summary • •«••••••••••••♦ l l j . 9
Conclusions • • « * . . . . . . . . ♦♦ 153
BIBLIOGRAPHY ♦ * • ♦ ♦ ♦ ♦ ...........♦ 155
LIST OP TABIES
TABLE PAGE
I* Tabulation of Information About
Members ....•.•••• ,. . • • . . 20
II. Use of tbe Club's Facilities ...... 21
III. Job Title or. Profession • •...•••. 22
IV. Use of Facilities . . . . t . . . .... 23
V. Unclassified Total Membership— .
Downtown Club 31
VI. Monthly Income From Dues of Members
- at the Bom town Club and Monthly
Net Ope rat 1% Income for Period
January 19^6 to December 1957 in
Dollars ................... 32
VII. Totals for the Years 19l*6-1957 For
Annual Dues and Annual Operating
Income ...••••••••••••. 3I4 .
VIII. Gross Revenue Figures in Dollars of
the Downtown Club for the Period
April 1952 Through December 1957* ♦ • • 37
IX. Net Profits in Dollars of the
Downtown Club Monthly from
January 19^6 Through December 1957 • • 39
X. The Yearly Net Profit Figures ...... i | . 0
TABLE
XI.
XII.
XIII.
XIV.
xi
PAGE
The Relationship of the Average
Number of Members, Annual Dues,
Annual Operating Income, Annual
Gross Revenue and Annual Net
Profit........... .'........... 1+2
Population of Selected Census
Tracts of the City of Los Angeles,
February 25# 1956 and April 1,1950 • • • 66
Seasonally Adjusted Index of
Retail Sales of Downtown Los Angeles
Department Stores (Major) for Period
191+6-1957 (191+7-1+9 100)................ 70
Comparison of GNP, Security Bank
Index and Membership Monthly for
Years 1953 and 1951+........... 7l+
LIST OF CHARTS
CHART PAGE
I* Unclassified Membership of the
Downtown Club Monthly for the
Period 191+6-1957......................1+1+
II# Membership Dues in Dollars of the
Downtown Club Monthly for the
Period 191+6-1957................. * . . 1+5
III# Net Operating Income in Dollars
of the Downtown Club Monthly
for the Period 191+6-1957 ..............I46
IV. Net Profits in Dollars of the
Downtown Club Monthly for the
Period 191+6-1957 ................ 1+7
V# Trend Lines Showing Members*
Member ship Dues * Ope r at ing
Income and Net Profits of the
Downtown Club Monthly for the
Period 191+6-1957...................... 1+8
CHAPTER I
THE PROBLEM AND THE DEFINITION
OF TERMS USED
There has been no previous Inquiry into the factors,
both internal and external, that affect the number of mem
bers , income and profit of a club such as the Downtown
Club* With such a study and by examining the changes in
the function and use of the Club, it should be possible rto
develop a realistic marketing program for the Club in light
of the marketing problems inherent in the nature of the
Club*
I. THE PROBLEM
Statement of the problem* It was the purpose of
this study (1) to summarize the history, facilities and
| significance of the Downtown Club; (2) to measure the past
i
j record of the Downtown Club for the period 19^6-19575 (3)
! to show composition of the membership; (it) to consider the
Internal and external factors that influenced the member-
s
I ship, income and profit of the Downtown Club; (5) to weigh
the effect of a dues increase to meet the ever rising
costs; (6) to develop a marketing program: what to sell,
where to sell and how to sell; and (7) to examine the basic
problems attendant upon the marketing program*
i Importance of the study# The Downtown Club Is a
profit-type corporation and as such seeks to make profits
to enable it to pay dividends to its shareholders* Since
the war, membership has fallen and costs have been con
stantly increasing* This double squeeze makes a comprehen
sive market study of the membership, dues, income, profit
and the general and local business indicators for the
period 19ijj6-19f>7 both necessary and valuable* From such a
study should come a marketing program that would enable the
Downtown Club to increase its membership and profits*
II. DEFINITION OF TERMS USED
The Downtown Club* The name and style of the Down
town Club was assumed but this study was based upon an
actual club which has been given this fictitious name for
the purpose of anonymity* The history of the Club is
stated more fully in Chapter 11 hereof, and it is suffi-
i
cient here to state that the Club is a stock corporation,
operated by stock owning management for the benefit of
stockholders* The members are not, by virtue of their
memberships, stockholders in the corporation* As a result,
the members do not have capital invested in the Club near do
they have any of the risk attendant upon the operation of
the Club* It also follows that the members are not eon-
i
t t
i suited officially nor collectively by management as to
[operating problems or policy*However, since the members
| have no capital Invested (save only a very small Initiation
fee, currently $36*00), If the Club is not run in a manner
to satisfy the needs of a member, the member ean imraedi- j
ately resign without sustaining a loss of capital invest
ment* The operation of the Club is definitely planned to j
meet the needs and desires of the majority of the members* j
i
Experience has shown this to be the path of enlightened
self-interest*
The Club is run as a combined athletic and social
club, offering facilities which have been tailored to a
family type membership* For example, complete athletic
facilities are available for men and women and with special:
i
Integrated programs designed for children of all ages and
skills* In addition, the Club offers hotel and dining
service with special provisions for ladles and sponsored
groups* Social events range from special epicurean dinners;
in foreign styles to bridge and dancing* A new activity
i destined to have an Important Impact In future years is the
annual Debutante Presentation when a small number of care
fully selected young ladles are presented to society under
' the auspices of the Club*
It Is a Club with a large membership and is classi
fied on snob appeal or social acceptance in the community
as somewhat below the A Club and the J Club which are j
! ' - j
I actually of a different type* being City Clubs of purely |
i i
j social purposes* The members of the latter two clubs are 1
stockholders and, theoretically at least, control and
direct the operation of the Clubs* It costs considerably
more to join either of these two Clubs than the Club, with
the current cost for a regular membership, if memberships
were readily available which they are not, of over
#1,500,0c1 for the J Club and over §3#000,00^ for the A
Club, Since the members are not stockholders, the Downtown
Club has no artificial limitation on its size as is the
case where the members are stockholders and where the
amount of stock is set in the articles of Incorporation,
There are waiting lists at the A Club and the J Club, but
not at the Downtown Club,
Service Industry, The Club, of course, has some
tangibles; for example, rooms, meals, drink and athletic
i
equipment. Yet, in the marketing sense, the Club is not
; a tangible product and the intangibles constitute the
greatest part of the saleability of memberships. It is
akin to hotels, and is classified as part of the service
industry.
Membership, There are several types of memberships
In the Downtown Club: regular, non-resident, life, athletic
! Assumed to be accurate based upon last known
| transaction,
2Ibid.
and honorary* Only the first two pay monthly dues* How
ever, for the purpose of this study, all types of member
ship have been Included in the totals used in the statis
tics because the number of members in the last four
categories were extremely small and varied slightly over
the month but were fairly constant over the period studied*
III. LIMITATIONS OP THE REPORT
The figures used in the statistical studies were
based on actual figures but have been subjected to a
deliberate bias* The trends and movements are still sig
nificant because the same ratio of bias was applied to all
figures in the same amount and direction* This report did
not seek to compare the performance of the Downtown Glub
with that of Glub A or Club J but confined itself to a
study of the Downtown Glub* The membership survey dates
i from 1953; & current survey would have been more timely*
' IV. LACK OP PRIOR STUDIES
There were no prior studies of any depth and the
i
only studies which exist were two departmental studies, one
which dealt with the 1953-5N* monthly dues Increase and the
second with a membership profile* The profile study was
used in Chapter III* In addition, certain statistical
j analysis has been done in the past but, because of its
[ form, it was not us able in this present study*__
V* SOURCES OF BATA
6
The data herein was obtained from primary sources
within the Club's official business records* It is* therer
fore* fully authentic except that it has been biased as
stated above* While a fictitious name^ has been used* the
Club is a real* existing and going concern and the data
relates to an actual problem with only the name of the Club
being changed*
VI* ORGANIZATION OF THE REMAINBER
OF THE TERM PAPER
The balance of the paper is devoted in Chapters IT
through X to the text of the report and Chapter XI contains
the summary and conclusions* Chapter II presents a history
of the Club and its facilities and significance* Chapter 1
III makes an analysis of the membership of the Club*
Chapter IV deals with membership* income* profits and dues*
Chapter V discusses the important external factors that
have affected the Club* Chapter VI considers a dues
increase* Chapter VII presents the first part of the
marketing program* what to sell* The second part* where to
sell* is covered by Chapter VIII and Chapter IX concerns
the how to sell phase of the program* In Chapter X the
attendant problems of the marketing program are discussed* I
CHAPTER II
HISTORY, FACILITIES AND SIGNIFICANCE
OF THE DOWNTOWN CLUB
I. HISTORY
The Club Is the oldest soelal club in the City of
Los Angeles; it is also the largest. While the present
corporate structure of the Club dates from 1905# its
earlier origins go back all the way to 1880 and the Club
has been housed in its present building since 1912. The
building of the present club house was undertaken on a
most unusual concept: a club facility should be available
for young men to Join which would not require them to buy
their proportionate share of the bricks and mortar. To
accomplish this, stock was sold and also Life Memberships
j (holders not to be charged monthly dues). This brought
I enough capital to get started and the balance needed for
i
construction of the Club building was borrowed. The Club
prospered on the concept that membership need not be
| dependent upon stock ownership. When more capital was
i
needed, the stockholders, under the then existing law which
i
| permitted it, were assessed but not members1
j Since 1912, the Club's basic tenent has been fol-
! lowed and many thousands have been able to avail themselves
i
1 of the advantages of the Club without having to make a
sizeable capital investment to do so* This is still a
unique idea as far as the other clubs of the city are con-
jcerned* Due to the founding principle, it is still today
ipossible to enjoy all of the benefits and privileges of
f
the Club and its enormous club building for a $36#00
iinitiation fee and $12*00 monthly dues*
I
The gala ball opening the main dining room was the
social event of that decade and a roster of its past and
present members includes most of the men who have been
prominent in the affairs of the city* Dilution of this
I
[exclusive social prestige commenced with the building of
i
the structures housing the present A Club and the J Club*
I
! However, as pointed out in an earlier section, the
jciub is something more than an eclat city social club— it
i
:1s an athletic and family club as well and is geared to a
i
'much wider market than the other two purely social clubs
which are little more than noontime centers for business
and high society* In fact, no exact comparisons can be
made since the function and facilities of the clubs are
not the same* There is room for both and a place for both.
! It is also interesting to note that there are fre
quent overlapping of memberships between the Downtown Club
i
and one or both of the others* This is particularly true
of the younger men who desire an active athletic program
for themselves and for their children* Present management
i
i
has strengthened the broader appeal of the Club and at the
| same time it has quietly been at work to inerease the
; purely soelal standing of the Club in the community*
Through the years, a significant change has taken
place in the ownership and destiny of the Club* From the
widely held, small block type of ownership, time has
brought about a centralisation of ownership to where the
majority of the stock is held by a very few who manage the
Club* With the owners in active management, special atten
tion has been paid to profits and to long range planning*
As a result, the Club building is in constant day to day
maintenance and repair and major changes in the building
and facilities have already been made and are in process,
with more yet to come*
To recapitulate, the Club Is owned by the stock-
!
j holders, but operated to suit the needs of its members. It
is today a powerful, healthy, vibrant club with a broad
i base of membership, well regarded and an Integrated part of
i
; the life of the city* The Club, unique among the other
| clubs of the city, is, and must be, tireless In its efforts
to keep up to date, it must keep pace with the times or the
! members, with no large capital investment, will resign*
! Also, it must gauge very accurately how much the members
are willing to pay for dues, goods and services* Improve-
i
! ments and dividends can only be paid out of profits*
XI* FACILITIES
Location* The Downtown Club Is located in the sane
building In the central business district of the City of !
Los Angeles that it has occupied since 1912* Its location
at Seventh and Olive Streets remains excellent; it is j
i
within walking distance of most of the large downtown j
buildings and of major downtown retail stores* is handy to
the Pershing Square garage and adjacent to the off ramps
from the freeway system*
The buildings * The building housing the Club dates
from 1912 but it is in excellent condition and management
Is constantly at work to maintain its traditional charm
while keeping up with modern needs such as air condition
ing* color and freshness* The public club rooms* dining
| rooms and kitchens are a good example of what management
1 has done and work has already commenced on the living and
i
private rooms*
In addition to offering club rooms* dining rooms and
living quarters* the Glub also offers full athletic facll-
; ities* complete with swimming pool* gymnasium and Indoor
track* Under the Director of Athletics* programs are con
stantly in process for children of both sexes* men* women
and also the highly specialized team efforts such as its
*
I world famous swimming and diving teams* Moreover* there
i ' i
: are monthly splash parties and other events where the
XI
entire family can play together.
Of additional benefit are such facilities as the
steam and body massage rooms, habadashery, barber shop# j
i
billiards room# beauty shop and special ladies dining room
and cocktail lounge. From valet service to first night
i
i
tickets# from travel groups to football and baseball buses9
the Downtown Club furnishes the facilities to meet the
needs of its members.
Management has modernized and Improved some of these
special facilities and plans for a much needed overhaul of
the athletic facilities (both men and women) are now ap
proved and work will start soon after the first of the yearw
I
Parking. Built before the age of automobiles# the
parking facilities are not as good as they should be* Were
it not for its prime location within walking distance of
most downtown buildings# this condition could be fatal. As
it is# noonday use frequently taxes the capacity of the
Club* Fortunately for those who must drive# two parking
lots are immediately adjacent to the Club and Pershing
Square also helps to alleviate this problem*
However# management recognizes the need for a car
riage entrance to the Club where milady can step from her
ear onto a red carpet under a marquee and thence through
the door into the Club* There isnft much night dining or j
!
entertaining in the Downtown Club nor in either of the two
social clubs downtown* With a carraige entrance equal to,
if not superior to, that of the other two major clubs,
management hopes to increase its evening business and to
recover its share of the first night entertaining for the
opera, musical events and the theater* The social pres
tige will probably be as valuable as the actual evening
business*
Environment* Every club creates its own Impression
and the Downtown Club does also* Public acceptance and
opinion of the club are one facet of the Impression; this
Is the reaction people have to the Club and the Club does
not have complete control over this* The other facet of
this impression, environment, does lie within the control
of the Club. Everything the Club is, of course, is
environment; but here it is meant to be the total result
of the combination of such varied things as location,
I facilities, carpets, chandeliers, furniture, elevators,
I paintings and the like* These all combine to create an
i
!environment for the member that is either pleasant or
■ unpleasant*
I
The Club strives to create the most pleasant envi
ronment possible* It does so through its efforts to
!
maintain the traditions of the building and to afford
comfort to the members as well* In this sense, environment
Is the raiment, consisting of the physical furnishings, the
service and the frame of mind of management, the Club
offers the member who comes within its fold* Part of this
has already been discussed; the others, service and man
agement , will now be considered*
Service of the Club is very good* On direct com
parison, the attendants at the Downtown Club were as
pleasant and effective in performing their tasks as those
of the other two clubs* In many instances, this direct
comparison showed the Downtown Club to be far superior*
This comparison included-such diverse attendants as
elevator operators, waiters, private dining room personnel
and hat checkers* Even so, management is forever at work
Improving and shoring up- the whole fabric of service*
Since the Club is operated by management for
profit, personal reward and advancement are used as induce
ments for good service* The other clubs, being non-profit
are largely run under a committee type supervision by the
member-owners and the committee largely leaves matters to
the paid staff whose Interests are not so apt to encompass
maximum efficiency or service*
III* SIGNIFICANCE OF THE
DOWNTOWN CLUB
How does the public rate the Downtown Club in
| comparison to the A and J Clubs? The question should be
phrased more accurately, how do the members of the public
who are available for membership in the three clubs rate
the clubs? Unf ortunately there is no answer to either
question* Mo opinion poll has been taken and the only
answer that can be given here is based upon the general
reputation of the Club* Earlier, it was pointed out that
there is no real standard of comparison of the three clubs*
An athletic club is something more than a social and
luncheon club*
However, it is believed that if any poll were taken,
the A Club would be first in public acceptance, the J Club
second, and the Downtown Club third*
Inhere are some people who will prefer one club to
the other purely because the one has a higher public
acceptance* This is akin to snob appeal but is a real
factor that must be accepted* There can be no doubt but
j
I that the snob appeal has been a hardship for the Downtown
i Club in some instances* However, it would be more so if
j
it were not for the fact that for most applicants, there is
i
j a long waiting period at both the A and J Clubs but not at
the Downtown Club* Most people who really want a club,
will find the Downtown Club available but the other two
non-available* To some extent this overcomes the lower
| ranking of the Club in public acceptance while at the same
[ time it contributes to the maintenance of the snob appeal*
| Moreover, with only a nominal initiation charge,
$36*00 and no invested capital, some members of the Down
town Club might well be quicker in their decision to
resign for some real or fancied lack of attention or upon
finding their dues increased, than would the members of a
club ranked number one in public prestige and for which
membership the member paid a substantial sum*
In the past, the Club has not always pursued a
vigorous public relation and publicity course* This made
it easier for the public prestige of the Club to drop*
Present management of the Club has been aware of this for
sometime and signs of Improvement are beginning to become
apparent*
IV. SUMMARY
The Downtown Club is a corporation operated for
profit by an owner-management group; its members do not
• own shares in the corporation nor do they participate in
i its management* It is both the oldest and the largest of
1
I the social clubs of the city; but it is more than a mere
; social club— it is an athletic club and family club* As
! such, no direct comparison can be made between it and the
| A and J Clubs.
1
| The Club is well loeated and adequately housed in
j a building that while old, has been and is being kept in a
j jstate of excellent repair. Its facilities, environment
and service are excellent.
It is a healthy, active club with a broad base of
membership. While it is integrated into the life of the
city, on snob appeal it rates below the A and J Clubs*
CHAPTER XII
ANALYSIS OF MEMBERSHIP
I. THE MEMBERSHIP SURVEY
Background* In the summer of 1953 the management of
the Downtown Club agreed to a survey of its members re com- i
mended by the Membership Director# The questionnaire was
compiled by the Membership Director and mailed to the mem
bers In August# The membership of the Club at that time
was 3#l53» The results of this analysis# then# are that of
August# 1953 end not 1957♦ To this extent# the results
lack timeliness# However# the results were significant
then and are still# since the results profiled the member
ship and# in the considered opinion of the management which
| follows closely upon such things# the profile has not sig-
|
j nificantly changed# neither have the facilities or the
j
; building Itself#
While not yet eomplete, major improvement projects
are now underway based in part upon the 1953 findings#
When completed# management again plans to survey Its mom-
! ..
bershlp as the basis for future planning#
j Methodology* A written questionnaire form was eare-i
! fully constructed to give basic Information# This was
! mailed to each member with clear and concise Instructions
, 1
■ on how the members should answer and a return envelope was !
18
enclosed* The questionnaire was designed to reveal infor
mation about the member and the use of the facilities* In
a special section the members were invited to make critical
i *
or constructive suggestions*
Data collection* I he questionnaires that were i
received were processed by and correlated by the Membership:
Director* The results were summarized by him.
Sample* Since the entire universe represented by
the entire membership of the Downtown Club received the
same questionnaire form, the problems of a representative
sample were avoided*
Response* The response was most gratifying* Over
thirty-four per cent of the members completed and returned
the questionnaire; l,08l j . replied out of the 3,153 mailed*
Of course, not every question on the form was answered by
every member, so the totals of the various questions were
not always the same*
II. FINDINGS OF THE SURVEY
The complete tabulated results of the questionnaire
are set forth in Tables I through IV (See pages 20, 21, 22
and 23 )• Table I deals with personal information about
the members; Table II concerns the use of the Club’s j
facilities; Table III classifies the members by profession;;
19
and Table IV delves further Into the use of the facilities*
20
TABLE 1
TABULATION OF INFORMATION ABOUT MEMBERS
ANNUAL INCOME
| Grouping Number Percent
1 Under 30 41 3.9
! 30-39 225 21.1
! 40-49 325 30.5
50-59 298 27.9
60 and Over m 16.6
| Total 1066 100.0
i
i
j Grouping Number Percent
1 Male 957 95.5
| Female
JSl 4,5.
Total 1002
100.0
Level
Under $7,500
$7,500 - 10M
Number Percent
181 18.7
204 21.1
264 27.3
319 3219
968 100.0
- 15M .
$15M and Over
Total
CHILDREN UNDER 18
Grouping Number Percent
or not stated 687 63.3
1 138 12.7
2 159 14.7
3 64 5.9
4 27 2.5
Over 4
_io
0.9
Total 1085 100.0
ADULTS IN IMMEDIATE FAMILY,
INCLUDING MEMBER •
Description Number Percent
1 175 17.5
2 634 63.7
3 123 12.3
4 44 4.4
5
12 1.2
Over 5 9 0,9
Total 997 100.0
MARITAL STATUS
Description
Married
Single
Total
Number
782
150
932
Percent
84.0
100.0
OWN OWN HOME
Reply Number Percent
Yes 796 74.2
No 271 25.8
m m m m m —mrn
Total 1067 100.0
TABLE 11
21
USE OF THE CLUB’S' FACILITIES
On an average each respondent checked between six and seven facilities*
32 members did not check any facilities* In all, there were 7,217
responses to this question, by 1053 members*
Athletic
General
Dining and Social
Total
ATHLETIC
Plunge-Swimming
Gymnasi um-Cali stheni cs
Handball and Squash
Father and Son Events
Weight Lifting
Badminton
Ladies' Gym Class
Volleyball
Boxing
Judo
Fencing
Wrestling
Total
Responses
492
204
109
80
53
47
37
31
19
16
11
1
1106
Number Percent
1103 15.3
2432 33.7
3682
5if0
7217 100.0
GENERAL
Cigar Stand
Steam Room
Barber Shop
Massage
Haberdashery
Card Room
Ultra Violet Lamp
Library
Billiard Room
Sun Deck
Total
440
358
290
200
161
156
85
83
78
63
1914
DINING AND SOCIAL
Main Dining Room
Grill
Men's Bar
Ladies Dining Room
Ladi es Gocktai1
Sunday Buffet
Private Dining Rooms
Parties and Dances
Shows and Concerts
Ladies Fashion Show
Total
Responses
921
641
354
240
225
125
85
-55
3685
22
TABLE 111
JOB TITLE OR PROFESSION
PROFESSIONAL
Medicine (physician, dentist, etc#)
Law (attorney, judge, etc.)
Accounting (accountant, CPA, etc.)
Science (chemist, geologist, etc.)
Education (teacher, instructor, etc.
Engineering (engineer— civil, mechanical, etc.)
Other
Total
EXECUTIVE
President (president, vice president)
— * ------- ----- s9~ v s / => /
Supervisor (supervisor, forman, etc.)
Other (superintendent, operator, etc.)
Total
MERCHANTS AND PROPRIETORS
Manufacturers
Merchant (merchant, partner, etc.)
Small business operation
Other
Total
SALES
Salesman (salesman, sales engineer, etc.)
Agent
Broker
Representati ve
Other (dealer, distributor, buyer, etc.)
Total
CLERICAL
RETIRED
CIVIL SERVICE
MISCELLANEOUS (consultant, counselor, ranching,
housewife, etc.)
TOTAL
Number of
Members Percent
28 2.9
61 6.5
42 4.5
7 0.7
13 1.3
58 6.1
4 0.4
213 22.4
74 7.8
) 20 2.1
.) 162 17.3
9 1.0
51 M
316 33.6
15 1.6
14 1.4 !
20 2.1 i
17 i*8 :
66 6.9 ;
i
56 5.9 !
53 5.6
60 6.3
20 2.2 :
49
5*2 !
238 25.2
17 1.8
34 3.6
11 1.1
51 5.4
946 100.0
23
TABLE IV
USE OF FACILITIES
Frequency of use
By member
By other adults in member's family
Rarely
(Less than
once a month)
27$
36$
By children under 18 in member's family 74$
How member's use the Club
Members using all three classifications of Club
facilities: Dining and Social, General
and Athletic
Members using the Dining and Social, and General
Members using the Dining and Social, and Athletic
only
Members using the Athletic and General only
Members using the Dining and Social only
Members using the General only
Members using the Athletic only
Total
.Members employed downtown
Members using 61ub for business entertaining
Members whose companies paid some part of expenses
Members walking to the Club
Members driving to Club in private automobiles
Members using public transportation
Often,
(More than
once a month)
73$
64$
26$
46$
31$
6$
1$
15$
0$
100$
53$
80$
32$
43%
51$
6 $
III. THE PROFILE
Based upon the response, certain general conclusions
could be drawn as to the make-up of the membership in
August of 1953s
1* Over one-half of the members were between the
ages of thirty and forty-nine*
2* The substantial nature of their character was
indicated by their income bracket, and by
their degree of home ownership* Almost two-
thirds of the members enjoyed an annual Income
over ten thousand dollars a year, and the sin
gle largest group of members was in the over
fifteen thousand dollars a year class*
3* Members evidently believe in owning their own
home, as almost three-quarters of them did*
I j . * Eighty-four percent of the members were married,
and sixteen percent were single* The most
usual number of children reported living at
home was two, with one and three being close
runners-up*
5. As might be presumed from the income figures
above, the members held very responsible jobs*
Over twenty-two percent of them were profes
sional people, Including Medicine, Law,
Accounting, Science and Engineering*
6. Over thirty-three percent of the members were in
the Executive class, including corporate
officers, branch managers, etc*, and twenty- j
five percent of them were in sales work,
I
including salesmen, dealers, distributors, !
i
etc* The balance of approximately twenty per- |
t
cent divided in occupations all the way from
ranching to retired.
7« Fiftyithree percent of the members were employed
in downtown Los Angeles. Almost eighty per
cent of the members said they used the Club at
times for business entertaining, and one-third ;
indicated that their company paid some portion
of their dues or entertaining expenses.
S. More than half of the members who use the Club
during business hours came by way of their own i
automobile. The majority of those who did not
come by auto, walked to the Club, and less than
; six percent used any form of public transpor
tation.
!
f
' IV. FACILITIES AHD USE
j From the responses on the facilities and uses, the
! foilowing results were indicated:
i
| 1. The Pining Room and the Men*s Grill were the
| . - i
! favorites, with 921 members indicating they '
used the Dining Boom, and 700 reporting they
used the Grill*
2* The dining and social side of Club life proved >
i
very popular all the way down the line* The
i
Ladles Dining Boom was indicated by 35^ mem-
j
berst the Sunday Buffet by 2I 4 .O, the Private j
j
Dining Booms by 225, and the Ladies1 Fashion j
i
Show with 55 indicating an interest# (Ladies*
events perhaps did not receive an entirely
fair representation, however, as ninety-five
pereent of our members reporting were men, and
they may not have consulted their wives before
answering#)
3* In the General Facilities department, the Cigar
Stand was most used, with I 4 I 4.O members favoring
it# The Steam Boom drew 353* the Barber Shop
290, Massage 200, and the Haberdashery, the
Card Boom, and other facilities following
close behind*
! { . * Undisputed champion in the Athletic Department
was the Plunge, with i | . 9 2 members using it*
The Gym drew 20I 4. enthusiasts, Handball and
Squash 109#
I
1
V. SUGGESTIONS
I
The members were asked to make suggestions or give
criticisms* Replies were received from 193 were most
interesting*
1* Sixty-three thought something should he done
about the Gym and the Athletic Department*
2* Thirty wanted a low calorie luncheon*
3* Forty-two made suggestions as to special
interest programs*
if. Forty-one members went out of their way to say
something nice about the Club and its manage
ment*
VI. SUMMARY
Given a choice, a membership survey in 1957 would be
the most desirous; in the absence of this, the results of a
| survey in August of 1953 have been analyzed* The survey
I was not based upon a sample but included the entire member
ship* Since thirty-four percent responded, it gave a clear
picture of the membership and their use of the facilities*
From these responses, valid conclusions as to the members
could be made* Several of the suggestions of the mes&ers
have already been acted upon* From the profile of the mem
bers, it was apparent that the membership was composed of
| members in the higher income brackets, the biggest single
I group was in the highest income bracket of an excess of
!
i fifteen thousand a year, who were young, energetic,
married and family oriented* With over fifty-three percent
{employed in the downtown Los Angeles area, the Club Is
definitely committed to the rythm of that area eentered
around the main dining room and Its noontime use*
i CHAPTER IV
]
THE PAST RECORD OP THE CLUB
i
i
i
I. MEASURABLE FACTORS OP GROWTH :
i
i
There are three ready yardsticks by which the growth
|
of the Club can be measured* These are: (1) the number of 1
members, (2) income, and (3) profits. These factors have, j
over the period 191+6 through 1957# been examined for the
subsequent consideration of the effect of a dues increase.
Humber of members. Quantitatively, the number of
members is strong evidence of the size of the Clubfs opera-;
I
tion, but as will be seen in the subsequent section on
income, it may not be the best test of profits. The fol
lowing table shows the rise and fall of the membership from
January of 19^6 through December of 1957* The figures
! include all types of memberships in the Club— Regular,
i
i Life, Honorary and non-Resident.
Starting with 3,725 members in January, 19U&, the
1
highest count was reached in December of 19^-6 when there
| were I 4 .,2k3 members. Prom that huge number, the general
trend has been down, unbroken save for spasmodic upturns.
The bottom was reached in December of 195k when the lowest ;
number for the twelve year period, 19^6-1957# was reached <
I
at 2,713* The last three years have been remarkably stable;
and membership rose^ to a secondary peak of 2,810 for !
September of 1957 and closed December, 1957 with. 2,799*
(See Table V on page 31).
Income. While there are different kinds of income,
this study dealt with: (1) income from dues, and (2) net
operating income (less expenses but before deduction for
insurance, depreciation, property taxes, head office
allocation and income taxes).
Table VI, on pages 32 and 33* presents the dual
figures of monthly Income from dues and net operating
Income for the months starting January, 1946 through
December, 1957* The dues income rose from the starting
figure of $16,518 in January, 1946 to a high of $20,269 in
February of 1947* It then dropped off to a record low of
$14,021 in September of 1943 and reached the record height
of $26,020 in January of 19514- The next low was January of
1955 with $23*159 and closed December of 1957 with $24*270.
During bhis same period, the net operating income
j
| rose from $24*343 in January of I9I 4 - 6 to a record high of
| $34*047 in December of that same year and dropped to a
jreeord low of $9*323 in September of 1949 and thereafter
i
| rose to a high of $26,046 in December of 1951 and closed
December, 1957 at $21,500.
TABLE V
UNCLASSIFIED TOTAL MEMBERSHIP— DQWNTdN CLUB
Month
1946 1947 1948 1949 1950 1951
1952
A
1953 1954 1955
1956 1957
Jan. 3,725 4,206 3,549 3,287 3,165
3,149 3,311 3,235 2,947
2,719 2,729 2,736
Feb. 3,771 4,146 3,514 3,301 3,161 3,174 3,293 3,227
2,893 2,716 2,728 2,741
Mar. 3,778 4,081 3,472 3,287 3,164 3,237
3,276 3,225
2,843 2,726 2,724 2,748
April
3,736 4,033 3,430
3,273 3,274 3,284 3,277 3,212 2,819 2,729 2,719 2,764
May
3,779 3,967 3,391 3,259 3,180 3,273 3,279 3,193 2,799 2,736 2,730 2,765
June
3,814 3,938 3,359 3,245 3,165
3,289 3,387
3,182 2,774 2,738 2,737 2,778
July 3,851
3,863 3,322 3,229 3,158 3,309 3,213 3,164 2,777
2,738 2,738 2,791
Aug. 3,945 3,825
3,329
3,222 3,147 3,341 3,328 3,153 2,767 2,737 2,741 2,803
Sept. 4,010 3,770 3,358 3,208 3,126 3,359 3,310 3,145 2,751 2,735 2,740 2,810
Oct.
4,138 3,710 3,355
3,208 3,07s1 3,376 3,273 3,126 2,740 2,728 2,734 2,801
Nov.
4,216 3,656 3,349 3,193 3,122 3,396 3,246 3,106 2,723 2,740 2,732 2,794
Dec. 4,243 3,596 3,310 3,168 3,135 3,382 3,250 3,023* 2,713 2,723 2,726
Source: Monthly Chanae in Number of Members of All Classifications as Prepared by The
Accounting Department of the Downtown Club.
*Dues increase October 1, 1950 from $6.00 ($5.00 plus $1.00 tax) to $7.80 ($6.50 plus
$1.30 tax).
2Dues increase January 1, 1952 from $7.80 ($6.50 plus $1.30 tax) to $9.60 ($8.00 plus
2,799
,*60 tax).
^Dues increase December 1953 from
plus $2*00 tax).
>.60 ($8.00 plus $1.60 tax) to $12.00 ($10.00
TABLE VI
MONTHLY INCOME FROM DUES OF MEMBERS AT THE DOWNTOWN
CLUB AND MONTHLY NET OPERATING INCOME* FOR PERIOD
JANUARY 1946-DEGEMBER 1957 IN DOLLARS
1946 1947 1948
Month
Dues
Opera
ting
1ncome
Dues
Opera-
ting
1ncome
Dues
Opera
ting
1ncome
Jan. $16,518 $24,343 $20,579 $28,943
$18^076 $23,322
Feb. 16,795
25,152 20,269 29,499 17,790 24,688
Mar. 17,018 25,515
20,267 28,772 16,959 24,215
April 16,958 26,540 19,774 26,884 17,276 21,313
May 17,616 25,049 19,625 25,101 17,079 21,640
June 18,731 26,407 19,447 24,737 16,922 19,921
July 17,879 25,229 19,160 22,605
16,938 18,072
Aug. 18,069 23,638 19,022 21,376 16,447 18,439
Sept. 18,620
25,742 18,825 22,819 14,021 17,193
Oct. 18,481 23,006 18,624 24,183 15,103 17,225
Nov. 19,587 27,798 18,350 22,047 15,053 16,912
Dec.
20,012 34,047 17,976 27,013 14,900 22,323
1 9 4 9
19 5 0 1 ' > 5 1
Month
Dues
Opera
ting Dues
Opera
ting Dues
Opera
ting
Jan. $14,737
1ncome
$16,000 $14,077
1ncome
$13,576 $17,834
1ncome
$15,860
Feb. 14,731 15,762 17,721
22,501 17,764 12,500
Mar. 14,753 15,446 14,324 15,205 18,049 16,916
April . 14,649 14,265 14,489 14,683 18,463 17,808
May 14,552 13,073 14,278 15,086 18,654 16,422
June 14,522 13,221 14,363 14,092 18,819
18,485
July 14,535 10,876 14,313
14,525 18,634 15,686
Aug. 14,438 10,842 14,204 11,112 19,969 17,629
Sept. 14,480 9,823 14,212 11,278 19,129 17,973
.
o
o
14,283 11,936 14,6812
CM
C * -
00
C T \
•H
18,973 19,976
Nov. 14,516 11,018 17,326
15,625 19,264 18,590
Dec. 14,353 16,755 17,557 17,216 20,003 26,046
Source: Monthly Financial Statements for years involved as prepared by
the Accounting Department of Downtown Club*
*Gross Revenue less operating expense not including: Insurance, Property
Taxes, Head Office Allocation and Income Taxes*
2
Dues increase October 1, 1950 from $6*00 ($5*00 plus $1.00 tax) to $7.80
($6.50 plus $1.30 tax).
TABLE VI (continued)
1 9 5 2 1 9 ! 5 3 1 9 ! 5 4
Month Opera Opera Opera-
Dues ting Dues ting Dues ting
1ncome 1ncome Income
Jan. $23,5281 $22,052* $22,934 $19,606 $26,020 $22,124
Feb. 23,007 22,793 22,600 19,590 25,208 23,175
Mar. 23,141 21,778 22,400 20,823 24,653 21,509
April 23,118 20,401 22,409 20,383 24,310 22,257
May 22,932 19,469 22,375 18,840 24,091 18,637
June 22,997 18,083 22,219 18,473 23,852 18,546
July 23,187 18,575 22,133 16,719 23,713 19,226
Aug. 23,138 17,852 21,933 16,717 23,613 17,294
Sept. 23,380 18,808 21,822 17,168 23,363 17,275
Oct. 23,023 20,145 21,880 19,532 23,422 16,370
Nov. 22,825 18,873 21,681 19,073 23,349 15,503
Dec. 22,676 26,963 24,0492 24,0942 23,178 21,357
1 S 1 5 5 1 S > 5 6 1 9 5 7
Month
Dues
Opera Opera Opera
ting
1ncome
Dues ting
Income
Dues ting
Income
Jan. $23,159 $20,939 $23,938 $20,413 $23,840 $18,674
Feb. 23,544 23,319 23,704 18,563 23,762 22,549
Mar. 23,290 22,645 23,650 20,295 23,734 22,604
April 23,340 19,964 23,749 19,542
24,037 20,687
May 23,541 20,714 23,671 15,664 24,104 19,167
June 23,483 21,736 23,742 17,986 24,081 20,296
July 23,440 18,739 23,732 18,423 24,301 18,686
Aug. 23,519 20,250 23,779 19,552
24,325 15,827
Sept. 23,486 17,145 23,860 19,505 24,485 19,714
Oct. 23,538 19,511 23,769 18,528 24,234
20,905
Nov. 23,244 21,948 23,723 20,501 24,330 20,958
Dec. 23,577 23,485 23,643 22,969 24,270 21,500
SourceI Financial Statements for the years involved as prepared by the
Accounting Department of Downtown Club*
*Dues increase January 1, 1952 from $7*80 ($6*50 plus $1.30 tax) to
$9.60 ($8.00 plus $1.60 tax).
2
Dues increase December 1, 1953 from $9.60 ($8.00 plus $1.60 tax) to
$12.00 ($10.00 plus $2.00 tax).
34
TABLE VI I
TOTALS FOR THE YEARS 1946-1957 FOR
ANNUAL DUES AND ANNUAL OPERATING
INCOME
Year Dues Operating Income
1946 $216,284 $312,466
1947 231,918 303,979
1948 196,564 245,263
1949 174,549 159,017
1950 181,545® 176,886®
1951 225,555 213,891
1952 276,952® 245,792®
1953 268,435 ® 231,018®
1954 288,772 233,273
1955 281,161 250,395
1956 284,960 231,941
1957 289,503 241,567
Sources Financial Statements for the years involved as
prepared by the Accounting Department of the Downtown Club*
^Dues increase, October of 1950 from $6*00 ($5*00 plus
$1.00 tax) to $7.80 ($6.50 plus $1.30 tax).
^Dues increase, January of 1952 from $7.80 ($6.50 plus
$1.30 tax) to $9.60 ($8.00 plus $1.60 tax).
^Dues increase, December of 1953 from $9.60 ($8.00 plus
$1.60 tax) to $12.00 ($10.00 plus $2.00 tax).
1 35
I Xt is apparent from the foregoing Table VII that the
highest yearly dues was reached In 1957# but that the
highest operating Income was reached In 1910* This Is j
understandable since operating Income, of course, Is
dependent upon other Income as well as from dues and mem- j
bershlp stood at a record high In 191^6* It should be noted;
that 19^8 marks the last year the total annual operating
income exceeded the annual total of the monthly dues. From
19^9 to date, the amount of dues has been In excess of the
operating Income, Overall there was an actual loss In
operations and the dues Income had to be used to cover some
of the costs for services and goods furnished directly to
the members on a charge ticket.
In addition to the foregoing, gross revenue will now
be considered, Gross revenue figures Include all opera-
i tional Income, Gross revenue figures are not available
t |
* > beyond April of 1952 but those available dearly establish
the seasonal nature of the Club’s operations. Each year
; peaks in December, with 1957 being the highest with
approximately $10l|.,22l|. for the month. This compares to:
| $ 97,193 for December of 1952,
, 93,188 for December of 1953#
9 i | . # 9 1 4 - 0 for December of 19514-#
99,598 for December of 1955#
I 95#27t for December of 195^# ;
[ I
I 10l4-#22l|- for December of 1957•.
The lows were also seasonal with the Club reaching
a low of $62*266 in June of 1954* This compares to other
years as follows:
■ 66*780 August* 1952
6k, 981* September, 1953
62,266 June^ 1954
62,583 July* 1955
66,1 * 1*9 July, 1956
67,1 * 1*2 Augus t * 1957
In totals for the year* the highest figure was
reached in 1957 when it went to 922*536. This compares
to other years as follows:
TABLE VIII
GROSS REVENUE FIGURES IN DOLLARS OF THE
DOWNTOWN CLUB FOR THE PERIOD APRIL
1952 THROUGH DECEMBER 1957
Month
Jan.
Feb.
Mar.
April
May
July
Aug.
Sept.
Oct.
Nov.
Dec.
Total for
the Year
1952 1953 1954 1955 1956 1957
n/a1 72,297 71,590 68,991 71,493 73,336
N/A1 68,970 70,751 69,427 70,413 75,902
N/A1 73,634 72,866 74,158 73,506 76,796
73,497 72,696 72,372 67,977 70,350
76,272
73,122 71,374 68,573 69,604 70,999 77,488
69,140 69,055 66,266 73,190 79,905 72,723
70,650 68,980 66,287 62,583 66,449 71,814
66,780 65,529 64,250 65,227 68,524 67,442
69,752 64,984 65,475 66,877 66,714 71,375
74,913 73,111 71,782 67,884 75,659 77,814
68,878 72,305„ 70,196 73,475
78,443 77,350
97,193 93,188^ 94,940 99,599 95,274 104,224
1
866,123 855,348 858,992 877,729 922,536
Source: Financial statements for the years involved as prepared by the
Accounting Department of the Downtown Club.
*Not available prior to April, 1952.
^Dues increase December, 1953 from $9.60 ($8.00 plus $1.60 tax) to $12.00
($10.00 plus $2,00 tax).
Profits. The previous section tabulated the
operating profits along with the monthly dues from members
and gross revenue. This section will consider net profits
for the period 191*6-1957. Net profit, in this study, is
all gross revenue from operation of the Club less all
expenses except Income tax.
Net profit, of course, is the ultimate test of
management, i.e. without profit the business enterprise
is doomed; with profit, growth and expansion can be had.
The monthly net profits on the Clubf s operation have been
tabulated in Table IX, shown on page 39*
It will be seen the highest monthly net profit was
reached in December of 191*6 when it was $21,231*; the lowest
was a net las a-of $2,011 in February of 1951 • As was true
of the gross revenues and operating Income figures, net
profits follow a seasonal cycle too, peaking in December
and ebbing during the summer months.
From Table X, shown on page 1*0, it is clear that
|the annual net profits of recent years do not compare
i
j favor ably with those of the last post war years of 191*6-
|lpi|_S. The lowest year was in 195k- with a substantial
j
increase in 1955* and further improvements were experienced
in 1956, with 1957 being the best year since 191*8.
TABLE IX
NET PROFITS IN DOLLARS OF THE BOtNTOBN CLUB MONTHLY
FROM JANUARY 1946 THROUGH DECEMBER 19571
Month 1946 1947 1948 1949 1950 1951
Jan. 9,437 15,287 10,064 6,542 4,008 4,298
Feb. 12,767 16,064 10,398 6,305 5,028 -2,011
Mar. 12,900 14,498 9,414 4,912 5,136 3,450
April 12,235 13,549 6,995 4,204 5,520 3,811
May 12,243 11,745 5,918 3,796 4,392 2,797
June 12,173 11,526 5,074 3,983 4,902 5,582
July 12,342 9,394 1,595 2,001 1,600 2,358
Aug. 10,739 7,486 9,395 1,754 * 1,758 3,765
Sept. 13,123 9,509 8,702 1,153 2,314 3,682
Oct. 14,815
10,729 7,875 3,585 6,2l32 4,675
Nov. 14,451
8,683 7,489 1,673 7,575 4,855
Dec. 21,234 14,400 14,178 8,059 11,061 12,747
Month 1952 1953 1954 1955 1956 1957
c_
§
•
7,2773 4,459 5,677 3,593 5,945 4,686
Feb. 6,889 4,397 6,679 6,184 4,135 9,029
Mar. 6,359 4,896 3,125 5,028 5,115 8,260
April 4,656 3,703 5,238 1,644 4,828 5,489
May 4,547 3,491 1,769 3,723 -409 5,239
June 3,128 3,091 2,125 4,649
3,805 6,435
July 3,701 1,065 2,988
1,665 4,175 4,595
Aug. 3,055 1,559 1,389 3,213 5,677 1,608
Sept. 3,724 2,060 1,137 39 5,596 5,863
Oct. 6,282 4,994 123 2,363 4,049
7J027
Nov. 4,809 4,483 -1,464 3,949 3,483 8,089
Dec. 12,487 9,0024 4,248
11,275 6,556 9,500
- Source: Financial Statements--for -the—years - involved as Prepared .by the
Accounting Department of Downtown Club*
*Does not include income taxes*
2
5yes increase October 1, 1950 from |6*00 ($5.00 plus $1.00 tax) to $7.80
($6.50 plus $1.30 tax).
3
/*» — 2ue? incr®ase January 1, 1952 from $7.80 ($6.50 plus $1.30 tax) to $9.60
($8.00 plus $1.60 tax).
<-a,n n r , , DS?sJ>n?re?se Deoeraber 1, 1953 from $9.60 ($8.00 plus $1.60 tax) to $12.00
viplU.UU plus $^«0Q tax).
u>
NO
40
TABLE X
THE YEARLY NET PROFIT FIGURES
ARE AS FOLLOWS
Year Total New Profit
1946 $158,459
1947 142,870
1948 97,097
1949 47,967
1950 59,5071
1951
50,009
1952 66,9142
1953 47,2003
1954 33,079
1955 47,325
1956 52,955
1957 75,820
Sources Financial Statements of the years involved as
prepared by the Accounting Department of the Downtown Club*
*Dues increase October 1, 1950 from $6*00 ($5*00 plus
$1*00 tax) to $7.80 ($6.50 plus $1.30 tax).
2
Dues increase January 1, 1952 from $7.80 ($6.50 plus
$1.30 tax) to $9.60 ($8.00 plus $1.60 tax).
3
Dues increase December 1, 1953 from $9.60 ($8.00 plus
$1.60 tax) to $12.00 ($10.00 plus $2.00 tax).
The relation of the foregoing factors# The relative
measurements of growth and achievement of the Club set
forth in the foregoing sections of this chapter are of
interest and value# Their value increases when their
relationship to each other is shown# The accompanying
Table XI has been made by collectively tabulating the
items heretofore set forth separately in the proceeding
section# The average number of members are obtained by
totaling the monthly membership figures and dividing by
twelve, and the membership dues per year is the total of
the dues received in the year# Annual operating income Is
the total net income from operations for the year Involved
before deduction for depreciation, insurance, property
! tax, head office allocation and Income tax; it is thus
I
akin to the net sales figure of a mercantile company* The
annual net profit Is the total of the net profits per
| month for the year# Annual gross revenue measures the
i total receipts from the operation of the Club for the year
TABLE XI
THE RELATIONSHIP OF THE AVERAGE NUMBER OF MEMBERS, ANNUAL DUES,
ANNUAL OPERATING INCOME, ANNUAL GROSS REVENUE AND ANNUAL NET PROFIT
Average No.
of Members
Per Month
Year (in numbers)
1946 3,917
1947 3,898
1948 3,394
1949 3,239,
1950 3,148
1951 3,297.
1952 3,2863
1953 3,1714
1954 2,782
1955 2,731
1956 2,731
1957 2,752
Annual Dues
(in dollars)
216,284
231,918
196,564
174,549,
181,545
225,555,
276,9523
268,4354
288,772
281,161
284,960
289,503
Operating
Income
(in dollars)
312,466
303,979
245,263
159,017,
176,8862
213,891
245,7923
231,0184
233,273
250,395
231,941
241,567
Annual Gross
Revenue
(in dollars)
N/A
1
n/a1
N/A.
n/a1
n/a}
N/A1
866,123
855,348
858,992
877,729
922,536
4
Annual Net
Profits
(in dollars)
158,459
142,870
97,097
47,967
59,507^
50,009
66,914^
:47,2004
33,079
47,325
52,955
75,820
Source: Financial Statements of the years involved as prepared by the Accounting
Department of Downtown Club*
*Not available prior to April, 1952*
2
Dues increase October 1, 1950 from $6*00 ($5*00 plus $1*00 tax) to $7*80 ($6*50
plus $1.30 tax).
^Dues increase Jan. 1, 1952 to $9.60* ^Dues increase Dec. 1, 1953 to $12.00
| Charts X to IV whieh follow present the foregoing
tabulated material from the prior sections In a separate
series of moving monthly lines while Chart V gathers the ,
separate series Into one study, done In a series of trend
lines.
i
i
As stated before, membership has generally gone down
from 1910, but for 1955-1957 It has stabilized and slightly
upward for 1957 and this is easily seen In Chart !• Mem
bership dues have In general gone up from 1910 but had
three dues Increases to do it; it, too, has stabilized
1955-1957 with Chart IX showing an improvement for 1957*
In Chart XIX operating Income shows as decreasing from
1910, with a highly seasonal pattern of high for Becember
and low for the summer. Chart IV shows the net profit to
have gone down from 1910# with 1957 the highest year since
1910.
! From Chart V It can be seen that operating Income
i
I and net profits over the period have been down and
! generally ran in the same direction as membership and
opposite to dues. Moreover, since 1910 the Club has been
!
! unable to show operating income equal to or In excess of
; dues.
"61 151 "61 "61
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DEC.
II • EFFECT OF FAST DOES INCREASES
The occurrence ©f the past dues increases has.; been
noted on the proceeding Charts and Tables of Chapter IV '
measuring membership, income and profits of the Club* Has ;
each increase In dues been followed by a drop in member- j
ship? Has each Increase in dues been followed by:
1* An Increase in total dues received?
2* An increase in operating Income?
3* An Increase in net profits?
To answer these specific inquiries* the effect on
number of members* dues received* operating income and net
profits of each of the three dues increases since World
War II was studied and compared* In making the comparison*
■ I
two time periods were used* The first took the difference
between the results of the third month prior to the
Increase and the third month after the Increase* covering
i a seven month period* The second comparison was based on
i
a thirteen month period* taking the spread from the sixth
month before and after the increase*
! The October 1950 dues increase* In October of 1950*
the dues were increased from $6*0® ($5*00 plus #1*00 tax)
to #7*80 (#6*5® plus #1*3® tax) and the following results
occurred: j
i
! - 1
| 1* Average annual monthly number of members was |
[ _________ 3 #239 for l?l|-9# dropped to 3*ll4-8 for 195® end
rose to 3>297 in 1951*
fable V, on page 31* showed 3*158 members in
July, 1950, 3*l47 in August, 3*126 in Septem
ber, 3*078 for October, 3*122 for November,
3*135 for December of 1950 with 1951 going
from 3*149 in January to 3*382 in December.
On a six month spread before and after, the
results showed April, 1950 to have 3*274
members against 3*284 for April, 1951* (See
fable V, page 31)
fotal annual dues rose from #174*549 in 1949 to
#181,545 in 1950, and #225*555 in 1951.
In 1950, the dues per month rose from #l4»313
in July to #14,204 in August to #14*212 in
September, #l4*68l in October, #17*326 in
November and #17*557 in December with 1951
going from #17*834 in January to #20,003 in
December* (See fable VI, page 32, for
further detail.)
April, 1951 was up to #18,463 compared to
#14*489 for April of 1950 (See fable VI,
page 32).
fotal operating income rose from #159*017 in
1949 to #176,886 in 1950 and #213*891 in 1951.
July of 1950 had #l4*525* #11*112 for August,
$11,278 for September, $11,987 for October,
$15>625 In. November and $17#216 In December
i
with 1951 moving from $15,860 in January to
$26,0 1 4 . 6 in December (See Table VI, page 32
for further detail).
Operating income for April, 1950 was only
$ll|.,683 as against $17,808 for April of 1951
(See Table VI, page 31)*
I ) . * Total net profits went from $14-7*967 for I9I 4 9 to
$59,507 In 1950 and $50,009 in 1951*
July, 1950 had a net profit of $1,600, August
$1,758, September $2,3ll4-, October $6,213,
November $7,575 and December $ll,06l with 1951
going from $1j.,298 in January to a $2,011 in
February and closed In December at $12,7^7*
(See Table IX, page 39, for further detail.)
There was a decrease in net profits from $5,520
in April of 1950 to only $3,811 in April of
1951.
The January 1952 increase. In January, 1952 the
!
dues were increased from $7-80 ($6.50 plus $1.30 tax) to
$9*60 ($8.00 plus $1.60 tax) and this is what happened:
i
1. Average annual monthly number of members was
3,297 in 1951, dropped to 3,286 in 1952 and
3,171 in 1953 (but 1953 saw a further increase
in dues in December of 1953)*
52
October, 1951 &ad 3*376 members, 3*396 in
November, 3*382 in December, 3*311 in January,
1952, 3*293 in February, 3*2?6 in March, 3*27?j
in April, turned up in June with 3*387 and J
closed December, 1952 with 3*250 (See Table
V, page 31). |
Members increased from 3*309 in July, 1951 to j
i
3,313 in July of 1952 (See Table V, page 31). ■
2. Total annual dues went up from $225*555 in 1951
to $276,952 in 1952 and d'ropped to $268,14-35 in
1953.
In October, 1951 dues were $18,973* $19*2614 in i
j
!
November, $20,003 in December, peaked at j
$23*528 in January, 1952, went to $23*007 in
February, $23*ll|l in March and $23*118 in
April, closing December, 1952 at $22,676
(See Table VI. page 33).
The before and after comparison on a six month
basis showed a big gain for dues, up to
$23*187 Tor July, 1952 over $18,6314 for July,
1951 (see Table VI, page 33).
3. Total operating income went from $213*891 in
1951 to $2i4.5»792 in 1952 and $231*018 in 1953*
The October, 1951 figure for operating income
was $19*976, $18,590 for November, $26,0146 for
53
December, $ 2 2,0 52 for January, 1952, $22,793#
In February, $2 1,778 in March dropping to
$20,i|.01, in April and closing December with j
$26,963. 1953 opened with $19,606 in I
January and closed at $2l|.,09i|- in December of
1
1953 (S®e Table VI, page 32). '
Monthly operating income went from $15,686 in
f
July of 1951 to $18,575 in July of 1952 (See !
Table VI, page 33)*
l j . e Total net profits went from $50,009 for 1951 to
$66,9lil- in 1952 and dropped to $i|.7,200 in
1953. '
i
Net profit for October, 1951 was $i|.,675, $lj-,855 '
for November, $12,7l|-7 for December, $7,277 for'
January, 1952, $6,889 for February, $6,359 for
March and $i|.,656 for April and Closed December;
at $12,1 4 . 8 7 with 1953 opening at $ i j . , l } . 5 9 in
January and going to $9 ,00 2 in December (See
Table IX, page 39)•
There was an Increase in the six months before
and after comparison from $2,358 in net
profits from July, 1951 to $3,701 for July,
1952 (See Table IX, page 39)• I
1
The December. 1953 increase. In December of 1953,
the dues were raised from $9*60 ($8.00 plus $1.60 tax) to
$12.00 ($10.00 plus $2.00 tax) with, these results:
1. Average annual monthly number of members was
3,286 in 1952# dropped to 3#171 in 1953 and j
I
fell again in 1954 to 2,782. I
i
In September of 1953 the exaet monthly count
was 3,11*5 members, 3#126 for October, 3»106
!
for November and 3#029 for December; January |
i
of 1954 had 2,947# February 2,893# March j
2,843 and 1954 closed in December with 2,713
(See Table V, page 31).
There was a big drop in monthly members from j
June, 1953 with 3#182 members to only 2,774
for June of 1954 (See Table V, page 31)*
i
2. Total annual dues went down from $276,952 In j
1952 to $268,14.35 In 1953 and rose to $288,772 j
in 195k. !
September of 1953 recorded $21,822 in dues,
October $21,880, November $21,681, December j
$24#049# January, 1954 $26,020, February
$25#208 and March $24#653 and dropped to
$23,178 in December of 1954 (See Table VI,
page 33).
Dues showed an increase from $22,219 i» June of j
1953 to $23,852 in June, 1954*
3* Total operating income went down from $245,792
in 1952 to $231,018 in 1953 and was $233,273
55
in 195%.
The figure for September, 1953 was $17*168,
$19*532 for October, $19*073 for November,
$2%,09% for December, $22,12% for January of
195%* $23*175 for February, $21,509 for March
and ended December, 195% at $21,357 (See
Table VI, page 33)•
There was a slight gain in operating income up
to $18,5146 for June, 195% over $18,%73 for
June of 1953 (See Table VI* page 33)•
%. Total net profits went from $66,91% in 1952 to
$%7*20© for 1953 and $33*079 for 195%.
Net profit for September, 1953 was $2,060,
$%*99% for October, $%,%83 for November,
$9,002 in December, $5*677 for January, 195%*
$6*679 for February, $3*125 for March and
closed December, 195% with $%,2%8 (See Table
IX page 39).
A loss was experienced In net profits, down
from $3*091 in June of 1953 to $2,125 for
June of 195% (See Table IX, page 39).
5. While the figures are not available for other
periods, the comparison of gross revenue
shows $866,123 for 1953 and $855*3%8 for
195k.
The gross for September of 1953 was $614.,981^.*
$73,111 for October, $72,305 for November,
$93#188 for December, $71*590 for January,
195k* $70,751 for February, $72,866 for
March and reached $9^*914-0 in December of
1951+ (See Table VIII, page 37').
The before and after figures for the six month
comparison shows a loss from $69,055 in June
of 1953 to $66,266 in June of 195^1-
Recapitulation of effect of dues increases♦
1* The October, 1950 increase,
a) July, 1950 compared to January, 1951.
Membership Down
Dues Up
Operating income Up
Net profits Up
b) April, 1950 compared to April, 1951*
Membership Up
Dues Up
Operating income Up
Net profits Down
2. The January, 1952 increase.
a) October, 1951 compared to April, 1952.
Membership Down
Dues Up
Operating income Up
Net profits Down
b) July, 1951 compared to July, 1952.
Membership Up
Dues Up
Operating income Up
Net profits Up
The December, 1953 increase,
a) September, 1953 compared to March, 19$t.
Membership -• Down
Dues Up
Operating income Up
Net profits Up
Gross revenue Up
(Not available for earlier periods.)
b) June, 1953 compared to June, 195&-*
Membership Down
Dues Up
Operating income Up
Net profits Down
Gross revenue Down
(Not available for earlier periods*)
58
In simple chart form, the results are as follows:
Year Members Dues
Operating
Income Net Profits
Gross
Revenue
1950
3 mos. Down Up
Up
Up
Not
Availa
6 mos. Up Up Up Down ble
1952
3 mos. Down Up Up Down
Not
Availa
6 mos • :Up - Up Up
Up
ble
1953
3 mos. Down Up Up Up Up
6 mos. Down Up Up Down Down
From the foregoing, the following conclusions were
reached:
On a three months before and after.
1* Each dues increase resulted in a loss of
members•
2* Each Increase in dues has been followed by an
increase in:
a) the monthly dues received, arid
b) the operating income,
3* Hot every dues increase resulted in an increase
in net profits; two went up, and one went
down.
i | . . Gross revenue received as a result of the 1953
dues increase went up*
59
On a six months before and after
1* Not every dues increase resulted In a loss of
members; one (1953) did* two did not*
2* Each increase in dues has been followed by an
increase in:
a) the monthly dues received* and
b) the operating income*
3* Not every dues Increase resulted in an increase
in net profits; one went up (1952)* two went
down*
1 | . * Gross revenue declined as a result of the 1953
dues increase*
III. SUMMARY
It has been shown that membership has decreased
from 19M> but that for the 1955-1957 years, it has stabi
lized and actually is somewhat higher in 1957 over 1956.
{Monthly dues have been Increased three times and income
i
from dues has gone up substantially from 19) 46* Operating
1
j income has a repetitive seasonal pattern* peaking in
December and reaching lows In the summer* In the over-all*
the net profit has decreased from I9I 46 although 1957 was
1
the best since 1948* Thus* while membership dues have
been up from I9I 46* membership* income and net profits
have been down*
_ Membership has followed its own pattern without
regard to the amount of the monthly dues * The three dues
Increases have had no long term adverse effect upon mem
bership. On the long trend, one increase resulted in a
loss of members while two did not*
| CHAPTER V
RELATIONSHIP OP EXTERNAL FACTORS TO THE
DEVELOPMENT OF THE GLOB
In Chapter IV the membership, dues, income and
profits of the Downtown Club were presented for the period
191^6-1957• This chapter will seek a relationship between
the external economic factors and the record as given in
the prior chapter*
I. RESTATEMENT OF THE TRENDS OF GROWTH
OF THE DOWNTOWN CLUB
As stated in Chapter IV, the growth of the Club was
measured by: (1) number of members, (2) dues income, (3)
net operating income, (4) net profits, and (5) gross
revenue. These results were tabulated in Tables V through
i
| XI, charted in Charts I through IV, and the trend lines
| were shown in Chart V. To avoid undue repetition of this
material, reference is made to these prior tables and
charts. From Chart V It is apparent that from \9k& member-
j
ship in the Club has dropped substantially as has net
operating Income and net profits, notwithstanding a
material Increase in dues income and a slight increase in
gross revenue for the period for which the latter figures
are available.
I 62
XI. GENERA!. BUSINESS CONDITIONS
SINCE 19^6
I
On the whole, general business conditions have shown
substantial improvement from January, 1946 to December,
1957• Without exception, the economy closed the period
substantially higher than when it started*
There has been a rise in GNP from 1929 through 1955*
GNP attained $4l2*4 billion for 1956 and was reported at
$432*6 billion for the fourth quarter of 1957*^ This is a
spectacular gain in GNP of $20 billion; over twice the
figure for 1946*
Business-economic--stock trends for the post war
era from January, 1945 through December, 1956 end sub
stantially higher for 1956 over the beginning of 1946*
These same factors for 1957 have not changed materially
: enough to effect the comparison*
When comparing the Dow-Jones Industrial stock
1 average with GUP a remarkable increase is shown between
, January, 1946 and December, 1957#^ even when allowance
| is made for a drop in the Dow-Jones average to 437*93^
1
^Survey of Current Business* US Department of Com
merce, Vol* 38, No* 2 (February, 1958)* P* S-l*
I »
I A Positive Investment Policy, (Dean Witter and
I Company,""19^8), p* 3*
j g I
L_ Wall Street Journal (January 2, 1958),............. 1
by December 31# 1957♦
t
XXI. LOCAL BUSINESS CONDITIONS
Local index. The best local Indicator for the Los ;
f
Angeles area Is found In the Security First National Bank's j
- I
Index for business activity which shows a tremendous gain !
i
from 93 for January, 1914-7 to 185*9 for November of 1957# j
with an all time high of 191*3 recorded in July, 1957#^ j
Population# As shown on the Security-First National j
7 1
Bank's Index for Southern California,' there has been a
i
substantial Increase in population in the Southern j
California area# Moreover, the Besearch Department of the
Los Angeles Chamber of Commerce^ gives the following pop
ulation figures for the City of Los Angeles: January 1, j
I9I 4. 7— 1#8i|.0,000; December 31# 1957— 2#350,000 (Estimated)# j
t
This represents over a twenty-five percent gain in popula-
tion#
^Security-First National Bank of Los Angeles,
Besearch Department, Monthly Summary# Vol# 36, No# 12
(December# 1957)# P* I*
7Ibld.
“Chamber of Commerce, Los Angeles, Research Depart- ;
ment, "1957 Business Outlook Conference," The Researcher.
Vol. XV, No. 1 (1957). p. 3. - ‘ '
IV. THE DCWNTOWN CENTRAL
BUSINESS DISTRICT
Loss of evening trade. When the Club took up quar
ters In its present building in 1912, it was the focus of |
t
social and club activity; it was also within the dynamic
business center of the city and county; it was also geo
graphically allied to the main residential areas of the
city. Thus, the members worked, lived, and played within •
an area that included the Club.
I
Decentralization. Today, the Club is no longer
within the center of the residential areas of its members;
except for special occasions, neither the Downtown Club,
i
the A Club nor the J Club enjoy much evening trade from its ]
I
I
members— they play elsewhere. Business is so scattered 1
that it Is difficult anymore to say where it is centered. I
i
The doctors led the professional group out of the old down-j
town area, starting in the Thirties; lawyers joined the
i
*
flight after the World War II. Insurance companies and
the Tishman Corporation moved into Wllshlre Boulevard and
Sixth Street. Retail stores went out to the suburbs.
i
Population. The February 25* 1956 Special Census of!
i
Los Angeles City conducted by the United States Bureau of
65
the Census^ is some help# A total was given as 2,243*901
persons# This was a gain of 13#9 percent since 1950*
Tracts in the older, built up, central portion of the city j
have lost population while the outlying portions (particu
larly San Fernando Valley) have shown substantial gains
t
However, the rate of loss for the large central area (not j
that of Downtown Los Angeles) has dropped from 20,300 per
i
year (as measured by the 1950 Census and 1953 Special
Census) to 4,300 per year (as measured by the 1953 and 1956
11
Speelal Censuses#)
In a subsequent section on sales, reference is made
to a central business district for the City of Los Angeles#
Table XII, on the following page, shows the loss of resi
dent population for the nine (9) census tracts embraced
within that area#^
Thus, while population in Los Angeles City was
increasing, the area closest to the Club and included
within the central business district lost 7*829*
^TJS Department of Commerce, 11Current Population
Reports— Special Census, Bureau of the Census Series,
No# 927 (Washington, D#C.: October l8, 1956), p# £8#
^Security-First National Bank of Los Angeles,
Research Department, Monthly Summary, Vol# 35* No# 6
(1956), p. 3.
^US Department of Commerce, loc# cit# ;
^2Ibid# i
TABLE XII
POPULATION OF SELECTED CENSUS TRACTS OF THE
CITY OF LOS ANGELES, FEBRUARY 25, 1956
AND APRIL 1, 1950
Tract 1950
1956
112 5,572 3,911
117 3,889 3,271
180 3,027 1,367
181 5,265 9,841
182 4,503 2,974
183 3,7,45 3,294
00
r — I
2,881 2,268
185A
1,475
1,636
185B 4t582 3.548
TOTALS 34,939 27,110
Source; Current Population Reports—
Special Census, US Department of Commerce, Bureau
of the Census Series, No. 927, October 18, 1956,
p. 28.
67 ,
V. SALES
I
Population is not a reliable guide to the progress j
i
of the Club since Pew of the local residents would consider j
(or be considered for) membership* The Club simply is not |
designed for the present residents of Bunker Hill* Bust- j
ness activity in the actual area served by the Club* if !
j
i
available, would furnish the most valid guide* Sales is j
i
part of that business activity*
i
Central business district* A Special Census of |
, . . . . .' . . . . . i
B u s i n e s s ^ selected a central business district (herein
i
called CB2>) and a study of establishments, sales and pay
roll of 19$k were compared to those of 1943 for retail
stores and selected services, hotels, and motion picture j
theaters* It makes a comparison and shows 1943 to be more j
favorable except for hotels which, no doubt due to the j
j
presence of the new Statler Hotel, found 1954 a better yearj
i
for CBD hotels*
^ * I
The study of the CBD also Included the Los Angeles
City and the Standard Los Angeles Metropolitan Area where
comparative percentages change in sales were given*^
13us Department of Commerce* Bureau of the Census,
Census of Business, Bulletin GBD-44* Revised (Washington,
1956*
Department of Commerce, op* cit*, p* 9* I
Department of Commerce, op* cit*, p* 12* ___
It is noted that the CBD lost 6*7 of sales In the
six year period 19^8-195^- while the entire city was showing’
I
an Increase of 28*k percent and the Los Angeles Metropoli
tan area Increased 50*5 percent*^ The relationship of j
i
CBD1 s. sales to the total city and metropolitan area was j
shown* Here the loss Is even more apparent* CBD sales J
dropped from 19*8 percent of total city sales In 19l|-8 to
ll|.«k percent In 195k and lost 3*7 percent of the metropol
itan total sales * • * • 7
If this study of CBD Included all other activities
such as banking* manufacturing and services* it would then
be a valid statistical study upon which to draw the firm
and unqualified conclusion that the CBD has been losing
ground* for the period 19k8-195k* This would then corre- i
i
late with the Clubfs experience in sustaining a loss of
members* operating income and net profit over the same
period* As part of the decline of the whole area* this
loss could be better understood* Unfortunately* the CBD
study is limited to retail sales (plus hotels and theaters
1
|for the same purpose); it can only serve as an indication
t
of what has happened in the CBD served by the Club and not
1
as a final conclusion*
1
l6ibia«
■*-'US Department of Commerce, op. cit.. p. 13.
Department store sales. One other measurement is
available, the Index of Los Angeles Department Stores Sales*
Table XIII, shown on page 70* sets this forth*
|
VI. CORRELATION j
I
A comparison of the Downtown Los Angeles Department |
»
- • • j
Store sales and the members of the Downtown Club for the !
period 1914-6-1957 shows more than a general correlation* j
f
Even though the Club*3 membership did not peak as sharply
» 1
as the 1950-1951 Korean upturn for Department Store sales* j
it did go up. The period 1956-1957 has less correlation;
here the Club membership has held steady with a slight
increase while the stores9 sales have gone down.
On a strictly comparative basis the activities of
i
the Club* as measured by membership* net operating income i
1
and net profit have been in a decline even though dues I
1
income from members and gross revenue have been up. The j
!
Club has failed to keep pace with the general rise of busi
ness activity for the nation* Southern California and Los
Angeles City. However* the Club is a part of the CBD and
in many ways is now more dependent upon what happens to it
i
than before since It does not embrace the residential dls~
trlcts as it once did and since the carriage trade now
goes to other areas than the CBD.
TABLE XII I
■SEASONALLY ADJUSTED INDEX OF RETAIL SALES OF DOWNTOWN LOS ANGELES
DEPARTMENT STORES (MAJOR) FOR PERIOD 1946-1957 (1947-49 100)
Month 1946 1947 1948 1949 1950 1951
1952 1953 1954 1955
1956 1957
Jan* 91 106 101 101 91 107 90 88 81 86 80 80
Feb# 91 106 100 93 91 103 88 89 79 81 77 73
Mar. 105 106 100 91 91 89 88 89 80 80 76 75
April 98 107 104 94 89 93 84 88 80 79 75 70
May 92 104 104 94 91 94 92 90 78 82
75 70
June 105 99 106 93 93 96 84 89 79 73 72 71
July 104 104 102 89 117 97 85 88 80 81 87 81
Aug. 100 104 108 90 97 89 88 85 80 79 72 67
Sept* 107 105 103 88 97 90 88 87 78 77 73 70
Oct. 110 105 100 94 90 91 90 82 80 79 77 68
681
Nov. 107 105
102 92 93 93 88 83 80 78 75
Dec. 109 104 100 92 94 91 89 76 80 77 77 681
Yearly
Average 103 105
102 93 95 94 88 85 80 79 76 721
Source: Security-First National Bank of Los Angeles, Research Department,
Federal Reserve Index.
Preliminary. -j
It is all too clear that while the total Los Angeles
i
Metropolitan (including Long Beach) Department Stores have
gained remarkedly from I9I 4 - 6, the major Downtown Los Angeles j
Department Stores have lost**® Compared to 19U&, Downtown ^
i
Los Angeles Department Store sales are down approximately ;
thirty percent but up forty-nine percent in the whole j
area.1^
While no absolute reliance can be placed upon the
CBD statistical analysis based upon retail sales within the
CBD and while any broad conclusion based upon it could be j
questioned for its exclusion of other activities such as !
banking, manufacturing and services, such study is the only
one of any depth that is available* Judged by this study,
the business activity has gone down not up for the CBD in
the period 1948-19514-
I
i
l
VII. SUMMARY I
I
I
To the extent that the X9$h Census of Business ,
Report^® represents business activity, the Club in losing
members, operating Income and net profits, has only
mirrored the economy of its market* Not only did the
volume of sales go down, but so also did the number of |
i
J
Insecurity, og* cit*, Vol* 36, No* 12*
19Ibid*
___2%s Department of Commerce, loc* cit* ________
business establishments and their payrolls*
A somewhat similar result is found in the Index of
Downtown Los Angeles Department Stores Retail Sales*21
which index effects only one of the fields of sales covered
by the Special 195k- Census of Business* There is a very
close correlation between the drop of sales in the downtown
area and the decline of Club members * net operating income
and net profits* In 1956 and through 1957» the Club has
had a better showing than the Downtown Department Stores*
To attract and hold members in the Club* not only must
there be a physical plant of proper environment and accept
ance* but also there must be prospects who are in an
economic climate favoring membership* which is to say* that
membership in the Club depends upon the number of prospec
tive members who are in the marketing area served by the
Club (in this ease the CBD) and who have the economic means
to pay the cost of membership*
On this test* applied to the results of the Sales
Index and the loss in sales in the CBD* the Club1s decline
since 19U-6 is both understood and expected* It echoes the
over-all result of the business activity as measured by the
best and only means at hand*
The lack of positive correlation between the Club’s
^Security, loc* cit*
73
activity and that of GNP and the Security Bank's Index does
not necessarily mean that an adverse movement in business ;
has no effect at all* Economic climate is important*
Prospective and current members must be able to afford the
expense of the Glub before they can enjoy it*
Let us look at the record established in the 1953*
i
195k business recession* GNP went down and the Security
Bank Index also took a dip* During this time* members
dropped from 3*182 in June* 1953 to 2 ,7 1 3 in December of
i
195k; each month's figure was lower than the preceding I
month for each of the twenty~four month periods* Table XI7*:
shows this comparison (See page 7k) •
The membership had been falling since 19k6 with a
rise to a second high In November of 1951 to 3 *3 9 6 and
i
held fairly even through 1952* 1953 brought a sharper
decline which anticipated the fall in GNP by about six
!
months and 19 5k intensified the sharpness of the decline* |
i
The December, 1953 dues increase is an additional factor
in the degree of loss but the movement on the whole was
downward before the dues increase and in spite of the dues
increase, membership stabilized with the January, 1955
upturn and continues slightly upward to date* While GNP
and members did not coincide, the 1953~195k drop in GNP
was reflected In a further drop in membership*
TABLE XIV
QOt/PARISON OF GNP, SECURITY BANK INDEX AND MEMBERSHIP MONTHLY FOR YEARS 1953 AND 1954
1953
im
Mpnth GNP1
2
Sec. Bank Membership GNP1
2
Sec. Bank
Jan* 144.5 3,235 145.4
Feb. 145.7 3,227 144.4
Mar. 361.6 149.4 3,225 357.6-upturn 146.0-upturn
April 151.0 3,212 146.9
May 151.4 3,193
146.0
June 367.4 150.6 3,182
358.5 149.0
July 150.9 3,164
151.0
Aug. 149.1 3,153
151.8
Sept. 366.3 147.5 3,145 359.4 152.6
Oct. 145.8 3,126 152.1
Nov. 145.9
3,106 155.4
Dec. 357.5 146.0 3,029s 367.1 158.3
Membership
2,947
2,893
2,843
2,819
2,799
2,774
2,777
2,767
2,751
2,740
2,723
2,713*
Sources: GNP, Economic Report of the President, January, 1957 (US Government Printing
Office, Washington, 1957)5 Security-First National Bank of Los Angeles, Research Department,
Monthly Summary, Vol. 36, No* 12 (December, 1957)5 Monthly Change in Number of Members of All
Classifications as Prepared by the Accounting Department of the Downtown Club*
*ln billions of dollars measured quarterly, seasonally adjusted*
21947-49 100.
^Dues increase*
Upturn started in January, 1955 with 2,719.
CHAPTER VI
THE EFFECT OF A DUES INCREASE j
In light of rising costs and falling operating mar- !
gins and net profits , the Downtown Club needs to increase
its incone by all means available. The three most logical
(
steps are: (1) to Increase dues, (2) to Increase the num
ber of members, and (3) to Increase the rate of spending
of the members. The latter two items are considered in
the next three chapters, this will consider a dues increase!
from $12.00 ($10.00 plus $2.00 tax) to $15.00 ($12.$0 dues |
plus $2.50 tax) and will establish that in the long run,
such an Increase will, under conditions noted, increase
Income without having an adverse effect on membership and
net profit.
1
I. BACKGROUND !
!
Tax. Monthly membership dues are subject to a |
twenty percent Federal excise levy.^2 Hence, twenty per
cent of any billed amount does not represent Income to the
i
| Club. There is some movement at the national level to
i
reduce this tax on membership but there can be no assur- j
a nee that it will be reduced.
i
22Internal Revenue Code, Secs. Ij.,2iil-i4.,2k2, as in
Federal Tax Guide (Commerce Clearing House, 1956), para-
graph f/fljS. • _________________ ___________________
Previous dues* The dates and amounts of previous
monthly dues for the period January, 19I 46 through December
1957 are set forth as follows:
1* January 19k& to October 1950
Total amount of Monthly dues: $6*00
Tax 1*00
Club income 5*00
2* October 1950 to January 1952
Total amount of monthly dues: 7*80
Tax 1.30
Club income 6.50
3* January 1952 to December 1953
Total amount of monthly dues: 9*60
Tax 1*60
Club income 8*00
i | . # December 1953 through December 1957
of monthly dues: 12*00
Tax 2*00
Club income 10*00
of monthly dues: l5#00
Tax 2*50
Club Income 12*f>0
Total amount
Proposed increase*
Total amount
77
II. RELATIONSHIP OP PREVIOUS DUES INCREASES
TO MEASURABLE FACTORS OF CLUB'S ECONOMY
AND TO THE GENERAL AND LOCAL ECONOMY
In Chapter IV we examined the effect of each of the i
three dues increases during the period 19l | . 6-1957 upon the: j
i
(1) number of members, (2) total monthly dues, (3) xiet j
operating income, (I 4 .) net profit, and (5) gross revenue j
i
(for period available)* The effect was measured in two
ways, one, by taking a seven month period, comparing the
third month prior to the increase to the third month after ,
the increase, and two, by taking a thirteen month period, j
comparing the sixth month prior to the increase to the j
sixth month after the increase. :
That examination led to the following conclusions:
For a seven month period.
1. Each dues increase resulted in a loss of
members.
2. Each increase in dues was followed by an
increase in:
a) The monthly dues received, and
b) the operating income.
3* Not every dues increase resulted In an
increase in net profits; two went up,
one went down.
4* Gross revenue received as a result of the
1953 dues increase went up*
I
!
For a thirteen month period* J
1. Not every dues increase resulted in a loss of
members; one (1953) did, two did not*
2. Each increase in dues has been followed by an
increase in: |
a) The monthly dues received* and I
b) the operating income* j
3* Not every dues increase resulted in an increase
i
in net profits; one went up (1952)* two went j
down* |
I ] . * Gross revenue declined as a result of 1953
dues increase*
III. THE PROPOSED INCREASE IN DUES j
Background* As indioated* to offset rising costs
and dipping profits* dues increase is a logical step to
take and it is here recommended* The increase should be
ffrom #12*00 (#10*00 plus $2*00 tax) to #15*00 (#12*50 plus
#2*50 tax)* This leaves for discussion at this time only
i
the probable effect of such a dues increase* I
Effect on number of members * What about members*
will a dues increase necessarily work a decline in members?
As pointed out in Chapter IV* past experience with
79
| three prior dues increases led to the conclusion that not
every dues increase resulted In a loss of members; on the
long trend, one did, two did not* The short term effect,
however, is to show a loss but the long term result shows
an increase, two to one* j
It is here concluded that a dues increase In |
i
September of 1953 might show a short term loss of members
but that in the long run, there would be no adverse effect .
from the dues Increase* Membership has followed its own
pattern without regards to dues and the present stability
should be sufficient to absorb the impact of a dues
Increase* In short, it is felt there Is no long term
causal relationship between a dues Increase and number of
members*
1* If the foregoing conclusion is sound and over !
the long term no loss of members will
result, the dues increase should: 1
a) Increase dues income
b) Increase gross revenue
e) Increase operating profit
d) Increase net profit
2* If the foregoing conclusion is not sound and
j
if over the long term, the number of mem- i
bers decreases due to the Increase In dues, j
Effect on income and profit*
80
then:
a) Dues income will probably still increase
since this represents a twenty-five per
cent increase in income to the Club, i.e.
from a spendable $10*00 to a spendable
$12.50.
b) Fewer members would probably result In a
loss of gross revenue and it is probable
that there would also be a loss in net
operating income.
c) But it does not necessarily follow that net
profits would fall even though on the
long term, net profits went down twice
and up only once after the prior dues
increases.
Dues (except for the tax) represents the single
largest item of gross revenue and disregarding overhead
for handling the billing and collection of dues and the
Investment of capital to erect and maintain the physical
plant and service, dues are a net figure. Other items,
which go to make up the larger segments of gross revenue,
e.g. dining and bar facilities, all have costs Involved.
The margin of profit made on food and drink is good but
many of the other services for which charges are made are
conducted at a loss. Since December, 19h9$ operation
costs have exceeded operation Income and so costs of
| operations have eaten into the dues income*
A twenty-five percent increase in dues income
would increase operating ineome* With operating income
increased, net profit ought to increase* It is for man
agement to correctly equate its own business to reflect a
higher profit from increased operating income* This
should be especially true over the long term, when manage
ment can reduce staff and tailor its program to a smaller
number of members, even if the management cannot make such
decisions coincidental with the accelerated loss of the
members to affect the short term* Short term profits
would go up; long term profits, based on the past, would
go down, but the point is here made that it need not do
so if management can fit supply to demand*
i
In a practical sense, of course, net profits will
be adversely affected over the very long term by added
i
! costs to the Club for labor and materials* This further
i
i
increase in cost of operations would come, even if the
number of members went up and if there were no dues in
creases; size of membership or amount of dues cannot stop
i
| Inflation nor the spiral of rising eosts* It therefore
appears that future inflationary costs and the resulting
j cut in net profits should have no bearing upon the ques-
! tion here being considered* In fact, the only reason for
j this Inquiry at all is to try to offset the rise in costs
ijBilready experienced and expected over the near and far
term*
Business activity* The lack of positive eorrela- j
!
tion between the Club's activity and that of G N P and the j
i
Security Bank's Index has been previously discussed in j
Chapter V* The 1953-19514- drop in GNP was reflected in a I
j
further drop in membership which had fallen since 19M> |
|
but had reached a plateau through most of 1952* But 1953 j
f
brought a sharp decline, proceeding the fall in GNP by
about six months* |
Membership In the Downtown Club is undoubtedly J
i
Influenced by economic conditions, both local and general
even though no positive correlation can be established on
the data currently available* A membership in the Club is j
not a necessity of life and there is a constant turnover j
i
of members at all times* For most people, the Club is in !
some way connected to a business expense deductible from I
i
their Income or reimbursable from their company*
i
Certainly the economic climate should be considered !
on the matter of timing of the dues increase* In looking
at the present situation in January, 1956, GNP is not
strong;^3 Security Bank's Index^lf is down as Is the Down-
i
town Department Store Sales2^ (see charts and tables,
23**Busimess Bound Up,w Forecast of Fortune Magazine.
Vol. hVII, No. 1 (January, 1958), p. 25#
_______ 2%ecurity, _loc. cit*_____ 2?Commerce , loc• cit*____
Chapter VI). It would be well for management to wait until
i
the 1957 let-down has levelled out and we have a turn-up. j
An increase in dues is apt to cause less short term nega- I
j
tive effect if done (as the first two of the three prior ■
i
increases were) on a rising business economy.
When will this turn-up occur? At this time the
probable answer is sometime this summer or fall. There- j
i
i
fore, It is recommended to management that the dues
increase be scheduled for September of 1953 because by that
i
time the effect of the resurgent GNP should be generally i
felt and the psychological value of the upswing should be i
most helpful. In addition, the summer seasonal drop should
be over; next fall should be the best time. However,
’
caution should still be exercised and the necessary exam-
i
ination made to ascertain if GNP does in fact experience |
i
the upswing expected and if not, the increase should be j
i
delayed until it does go up. !
i
IV. SUMMARY
It is concluded that a dues increase should result
in the maximization of profits over the long term and that
management need not be concerned over long term adverse |
j
j
results of such an Increase in dues. However, prudence
dictates that the dues increase be timed, unlike the 1953
increase which coincided with the 1953-19514- Inventory
Recession, to a favorable business climate. The_ up-turn
| should come this summer or fall, and September would he a
good month for the increase, hut the increase should he
delayed until the economy is definitely going up for less
resistance is hound to he encountered in a rising economy
than in a falling or flattened one*
i
CHAPTER VII
THE MARKETING PROGRAM: WHAT TO SELL
Generally, we have seen in the earlier sections that
»
for the period 1946-1957 the trend of growth of the Club,
as measured by number of members, Income and profit, has j
moved down while population and general and local economic j
i
i
trends were moving up. Thus, not only was the Club vexed +-
with ever rising costs of labor and goods, but it had to '
face such increased costs with a declining profit* As one
way of overcoming part of the problems, an increase in dues
to augment income and, hopefully, profits was considered ln:
i
I
the prior chapter* This increase, however, would not be j
i
likely, of itself, to increase either the number of members:
or the use of the Club facilities by members. !
I
In this, and the next two chapters, we shall develop I
a marketing program aimed at the latter point of view* So,
in Chapter VII, What to Sell will be presented, while Chap
ter VIII will deal with Where to Sell and Chapter IX will
i
: study How to Sell*
I. THE CHANGING FUNCTION OP
THE DOWNTOWN CLUB
26 !
Historical background. The Club, when it opened
| ^
t
2^Supra Chapter II. j
86 :
its present building in 1912, was the center of both the
business and social activities of the city* In addition, |
i
the residential areas were all closely clustered around j
the downtown area* People lived,, worked and played within j
i
a small compact area and the Downtown Club was the center* j
j
The pattern of change* A different picture is pre
sented today* For the most part, present and prospective j
members do not reside near the Club* The flight of
families to the suburbs coupled with the growth of decen- |
i
tralized business districts has affected the number of j
I
members and their use of the Club* This change in use is j
most apparent in the loss of evening trade* Following the j
impact of the depression days as it did, gas rationing !
I
during the war intensified the reluctance of and difficulty j
for people to get to downtown Los Angeles in the evenings*
Add television, outlying shopping districts and loss of
exclusive first run shows for the downtown theaters and the |
result has been a tremendous loss of evening trade to the
Downtown Club*
In the days now gone, wrote Cleveland Amory, nthe
American gentleman found • • • that his club and not his
I
home was his real castle*t t ^
^Cleveland Amory, nThe Great Club Revolution,*1
American Heritage, Volume VI, Number 1 (December,
p* 28*
As Ip# Amory so aptly summarized the golden era of
the private club, ,
Here he had the best of his well-bred friends, the
most comfortable of his well-stuffed chairs, the best
of food, drink and cigars from his well-stocked larders '
and cellars, the least irritating of reading material |
from a well-censored library and the best of games from
well-mannered losers* Here he could do what he pleasedj
when he pleased, where he pleased and with whom he j
pleased* . .28 j
!
It is true that while the author was referring to j
New York social clubs, the philosophy expressed applied
equally to the Downtown Club* Just as it was true of the j
\
New York Clubs it has been true of the Downtown Club that
!
the four male freedoms— freedom of speech against democracy
freedom of worship of aristocracy, freedom from want of
tipping, and freedom from fear of women— have v a n i s h e d . j
First came the rise of the country club* Then came |
Prohibition* At first thought to be a boom to the
clubs, with their secret bars and lockers, it proved,
in the end, a bane* Clubmen found it easier to stop
off at a speakeasy than risk arrest at their own club* j
And finally, of course, there came the Depression* The:
first two club freedoms--versus democracy and pro- j
aristocracy-seemed, in their political implications of i
that era, slightly to the right of Charlemagne*j
Moreover, with the Great Depression, two and a half
world wars, and inflation, the great clubs had to levy
assessments and made a grab bag out of waiting lists* Today;
t
t
many of New York’s leading social clubs are under major
28.,.,. _
Ibid* Ibid*
3°Ibid.
88
housing- and financial diff iculties• ^ But the worst thing
of all, from the club point of view, has been the king and
a half size servant p r o b l e m * ^
For, as Mr* Amory wrote,
The whole tenor of club life depended upon service, ,
and yet the problem of keeping servants and at the i
same time maintaining the precious • • • (freedom from j
tipping) • • • became an almost impossible task*33
The fourth freedom--freedom from the presence and
fear of women--has also gone *3^- in its place has come
women1 s clubs and the admission of women Into the formerly
exclusively men's clubs* This is true of New York^ and
Is also true of Los Angeles, and as we shall see, espe
cially true of the Downtown Club*
31Ibld. 32Ibld.
33ibid.
ft is historically interesting and perhaps signi
ficant that President Hoover was either an honorary or
actual life member of every major New York social club;
President Roosevelt was an actual member of but two;
President Truman was neither an actual nor honorary member
of any; and President Eisenhower, like Hoover, belongs to
most of the city clubs*
3^-Ibld.
Who recites the interesting custom of the retainer
of old, delivering the perfumed notes to the male members
in their clubs, face down, to conceal the handwriting of !
the sender— lest she be the wife, daughter or mistress of
another memberX
35ibld. i
II. THE CLUB TODAY
i
In the introductory Chapter II* the history,
facilities and significance of the Downtown Clmb was set !
i
forth at length. Its size and financial record was studied!
in Chapter IV and Chapter III analyzed the membership.
It would unduly extend this present chapter to
repeat the material so it will here be summarized: The
Downtown Club is the oldest and largest club in Los Angeles
it has both men and women members In their own rights; it
is essentially a city club, strongly Influenced by its
athletic and family facilities and programs. It Is, to
varying degrees^ part of the center of the business,
social and cultural activities of the city and its present j
use is largely as a downtown business and lunch club. Like |
its New York counterpart, the Downtown Club has had to I
accept that the four male freedoms are but relics of a
gilded past and the Club has also,had to face the changes
attended upon the shift in the structure of membership and
in the uses of its facilities.
Profile of member. Based upon an analysis of mem- t
r
bership^the average member can be described as being: j
1
_
3^Supra Chapter II.
3?Supra Chapter III.
1* I f l ftlO y
2* between thirty to forty-nine years of age,
3# with two or more children, j
U* employed in, adjacent to or near the Downtown
Los Angeles area, j
5* in professional or executive positions, j
t
6* in higher ineome group (two-thirds over j
i
$10,000*00 annual income and biggest single j
i
group over $15#000*00 annual income),
7* using the Club primarily for business, and
8* confining this use to the dining facilities at
noon*
I
i
I
Intangible, not tangible * In the real sense, the j
I
Club has no product to sell; this is true even though .
there are physical facilities in a tangible building* j
These are important, but of far greater importance are the i
Intangible environment and public acceptance that constitute
the character of the Club*^® It is this unique combination |
[
that cDisposes the sales item of the Club*
i
The Club, as a private right of use of the members,
draws its real value from the right of exclusive use* In
addition, what is being offered must measure up to the real;
I
or imagined uses of the members* It is the presence of
3®Supra Chapter II* j
91
desired facilities on an exclusive basis tbat makes the
members willing to pay for the right to enjoy the physical ;
facilities of the Club— always with the prestige attached j
to the right to that use— to the exclusion of the non- .
39 !
paying public*
Such then is the Club today* It is appropriate,
i
also, to acknowledge that the management of the Club has |
i
made it a profitable operation even in the face of the twin;
forces of loss of members and ever increasing costs* This
ability to show a continuing profit, even though at a !
i
lesser amount in 1957 than in 19I 4 . 6 is strong evidence of |
a competent and adaptable management* Recognizing that |
this is true, the suggested marketing program presented i
here and in the next two chapters is not Intended in any
i
way to be critical of that management but is set forth in j
the hope that such a program will increase the number of j
i
members, the use of the Club facilities and the profits as !
well* |
III* MULTIPOINT SALES APPROACH
In the earlier sections of this chapter, the nature ;
and characteristics of the Downtown Club have been sum- '
1
marized and a profile of its average members was presented*j
i
Yet, the Club is more than these things and there are many
.^Compare Chapter X* ______ _____________
92
facets to the Club* This section will now consider the
more Important of them in order to delineate what it is
!
that the Club has to sell* For it is just as true of the
Club as any other business* the laws of economics and of !
j
the market place still function and control* The success j
of the Clubrs operations* in the future as In the past*
depend upon its ability to satisfy the demands of the j
community*
i
A fundamental part of any marketing program is the
establishment of the demand to be met by the sales item* j
In dealing with an Intangible like the Downtown Club* it j
i
I
would seem proper to approach the satisfaction of demand j
from a slightly different point of view; one that gives
i
due observance to the realistic laws of economics* but j
i
i
which uses phrases more easily understood when ascribed |
to a Club* Thus the term benefit in the sense of an |
I
advantage will be employed to mean* as the case may be* a
satisfied demand* or a demand that can be satisfied* Let j
us now turn to the consideration of what benefits the
Downtown Club can offer to the members for it is these
benefits that can be sold* The next five sections will be
devoted to the following five categories of such benefits: j
(1) business* (2) health* (3) family* ( I j . ) the lady execu
tive, and (5) social*
93
IV. BUSINESS BENEFITS
!
The day has long since passed, If Indeed it ever
existed, when a member could obtain business solely as a
j
result of membership In any club; certainly this Is so In j
the Downtown Club of today* None-the-less, business I
|
benefits flowing from a membership In the Downtown Club !
constitute one of the best sales approaches* Over eighty
percent^ of the members of the Downtown Club use It for !
business purposes* Those purposes range through a wide
j !
area, Including such diverse uses as a place for business |
lunch engagements to room and guest privileges for the
visiting executive or customer*
j
i
The business lunch* The greatest single use of all
of the Downtown Clubfs facilities, understandably, Is Its i
main dining room at noon*^ Speaking of business lunches, j
Robert Sheehan describes a business lunch In these terms: j
For all its social overtones, the lunch engagement j
is almost Invariably purposeful* It may have an air I
of relaxation, but that kind of atmosphere around the
table Is exactly what Is sought and prized as a
climate for better communication, the freer flow of
Ideas, and less restraint In the meeting of minds*
• •* Few executives approach the lunch table with the;
Intention of making major commitments or of wrapping up:
^Supra Chapter III*
^•Robert Sheehan, MThe Executive Lunch,” Fortune
Vol* LVII, No* 1 (January, 1958)# P* 120*
i
a particular problem then and there* It is an oppor
tunity, rather, for exploring a situation, acquiring j
information, and for leading up to a deal or decision
that, in all prudence and) propriety, is ultimately
eonsumated in the office*4* - 2
The experience of the Downtown Club Is similar to
that reported by Mr* Sheehan when he wrote:
But the typical 0*S* executive never lunches alone,
and rarely with non-business friends* Far from
offering a respite from business, the lunch period is
regarded as a logical extension of the working day;
indeed, the very best part of the day in the opinion
of many executives, for the accomplishment of certain !
business objectives*4 *^
Fortunately, the Downtown Club Is Ideally suited to |
meet this important community need* There are five choices j
!
of where to luneh at the Club* The most impressive and j
- . . . . . . |
best is In the main dining room* Here, atmosphere, service;
and food are carefully blended to give the member and his
guest a feeling of privacy, an atmosphere of relaxation
and a feeling of well being*
This main dining room is a huge, full two-storied !
room, beautifully panelled with rich mahogany, decorated |
with tasteful oils, fine piled carpets and lovely ehande-
liers* Fully air conditioned it offers modern comfort
amid the traditionally orpulant setting of yesteryear*
Here, in this room, since 1912 at one time or another have ■
1 4 - 2
Ibid*
^3Ibld.
95
come the business, civic and social leaders of the com-
i
member may choose from other eating facilities j
such as: (1) the men*s grill, which is an anachronistic, j
severly plain room with bare wooden tables and trophies
of the hunt on dingy walls, (2) a casserole from the buffet
in the card room, (3) quick service at the lunch counter,
and ( 1 | . ) a beautifully appointed separate dining room with
a sumptuous hot and cold buffet if the member is aceom-
panied by a lady*^
There is no doubt but that the lunch facilities at
the Club are varied and well used* The service in the
main dining room and ladles* dining room is very good; in
the other rooms, spotty*
The food in all rooms is far, far above average and j
the management is constantly at work in this area* In fact[
the Club, uniquely among local clubs, has a weekly Taste I
Panel to choose Taste Panel Selections, gourmet items and j
to maintain, improve and standardize the quality and service
of the food generally*
One criticism is justified, however, and to a person
eating there with regularity, there is a sameness and a
Usually used by the member when he Is alone and In
a hurry as it is not conducive to privacy or confidence*
k5
Supra Chapter II*
seeming lack of originality in the menu planning. More
over# the grill# the card room buffet and the lunch counter
are long overdue for modernization and certainly it would
be part of this marketing program that the menu planning
i
and the three areas mentioned be upgraded to where they j
.. . ,
could be a bigger help in the selling of the Club as the |
place for luncheon engagements. But# even as is# the
record is sufficient to establish the present facilities
as filling a real need.
i
I
t
Private dining rooms. Part of the executive lunch
Includes the noonday meeting of civic# service# self
interest and fraternal organizations# director's meetings#
inter-company meetings# regional HAM and other Industry j
!
group meetings# etc. These meetings usually are at noon#
f
but increasingly more of them are scheduled for six o'clock,
in the evening and there has been some activity in break- 1
fast meetings. Private dining room business is an lmpor-
t
tant item for the Club and it is also important for a ;
member to be able to arrange one of them at the Club.
Six rooms are now available for such purpose and
the rooms have a consistently high use. Even so# as part
i
i
of the marketing program, except for two recently re-done# ,
the rooms should be renovated and upgraded to be more
attractive to the eye and ear. In this connection# there
should be one superbly appointed room that would be
97
superior t© any other room of its type In the city* How-
i
ever9 even at present, the private dining rooms meet a
growing need and are a benefit to the member* !
j
i
Intra-company tables and executive dining rooms.
In today*s world of bigness* many corporations are so
,
large and have so many executives — junior and senior— that i
!
there would be many advantages for the executives not !
i
otherwise occupied to lunch informally at a regular intra
company table* Exchanges of ideas, keeping up with the j
latest conq>any Industry or competition news, visiting, are
some of the advantages of such a plan, but probably the
biggest is the development of the team spirit* This is
not a new idea as Bank of America officials in San Fran- !
i
cisco have joined at sueh a regular round table luncheon
for years* j
i
The Club is not doing anything along this line and
I
I
management may well feel that with a full main dining
room, it isnTt necessary* However* there is no reason why !
i
i
| such intr a-company tables could not be established in a
| renovated grill room or in special quarters if the plan
i ■
i :
could be developed* Finding a place is not an insur
mountable problem and it id doubted if management should j
or would stand on present volume if there were a chance to
Increase it— particularly if It could also increase the
number of members*
‘ 98
Closely akin to the intra-company table is the
growing use of Executive Dining Rooms They are gener
ally thought of as being housed in the same building as
the company. Such a service in the company building does
provide the greatest convenience and saves the most time#
Other advantages to an Executive Dining Room besides time
and convenience are that nit Induces team play among a
company's executives and gives them an Important visiting
time with one another# •
Yet, such facilities are expensive to install,
maintain and staff and could be very hard to explain to
dissident shareholders or public regulatory bodies# The
perennial problem is to find and keep a chef; hardly a
fit task for the President or Executive Vice Presidents
In perspective, the Downtown Club could offer
private dining facilities to a company desiring an
Executive Dining Room, furnish and appoint it to suit the
company, staff it and serve the caliber of meals the
company wanted# Thus, the company would have its room
and the Club would have the housekeeping problems# While
such a plan might not work in many areas, for a compact
area like the Central Downtown Business District,^® It is
^Sheehan, loo# cit#
^Sheehan, loc, cit#
^®Sheehan, loc# cit#
99
practical* Consider log also the lack of facilities In the
plants in the manufacturing districts, tied to the Down- j
town District as they are by rapid freeways, such a plan
might well have broader appeal them the immediate area* i
A marketing program for the Downtown Club should j
i
include the intra-company table and the Executive Dining
Boom*
Cocktail facilities* A comfortable, friendly place
to pause for a minute to break the hurried routine of the j
day and to partake of an alcoholic beverage is of real
Interest to many people# though not all* Moderate, social
i
I
drinking is not considered immoral under todayfs morals 1
i
i
and certainly one of the benefits of a club is to furnish j
a place for the member to have a social drink and to meet |
for cocktails# |
According to a study made by Bobert Sheehan,^
even though there Is less noontime drinking among the j
| executives of today than of the last decade, it is still
| prevalent* To many people--as evidenced by the number
I
j gathered around the bar— a drink at lunch and before facing
i the ordeal of driving home through traffic, is very much
in order# j
Unfortunately, the Downtown Club*s facilities for
^Sheehan, loc* cit* !
this activity does not measure to Its high standards in
other places* Except for the male purist who hankers
after yesteryear* most would find the present bar lacking
In warmth and intimacy* Yet* even with inadequate facili
ties and no programming* the big bar Is busy at lunchtime
and to some extent in the late afternoon*
The marketing program would seek* first* better
facilities* and second* programming to encourage the
observance of the cocktail hour by complimentary tasty
hot hors droeuvres and special events* An example of the
latter would be the wassil cup at Christmas and the before
and after ball game festivities* It would also be worth
an effort to form a group from within the members having
some resemble nee to the famed Viking Organization at the
renowned Seandia Restaurant in Hollywood* California*
Such a group could be called the Lancers and would enhance
the spirit of the Club and at the same time serve the
i
| needs of the community* If use increased* it might prove
i
j profitable and helpful to establish a special facility for
I members only* Here a member could come for complete
I relaxation and privacy* to seek comfort or jovialty among
his peers*
Living quarters * The availability of living
quarters for the member is a factor that should not be
overlooked* Whether it be for temporary use or semi-
. permanent use, the Tact that the rooms are there makes the
Club an asset to the members* In addition* the member cam |
i
also house a guest or business associate at the Club* j
This is not confined to individual members either* j
t
for several companies have requested permanent suites at i
i
the Club* both for the convenience of its own local j
offices* and also to have suitable quarters for out of ]
i
town officers and customers* The suites are furnished
and decorated to suit the desires and taste of the com-
|
pany and partitioned as directed* Thus* the company*s
suite can be used as an informal conference area* for j
housing* or as a place of refuge* The twenty-four hour
switchboard and Club service gives the eon^pany the benefits
of an office penthouse without its burdens of housekeeping*
The Club is already at work to bring the rooms to j
a proper and modern standard* The marketing program would
emphasis the individual and company benefit of having
modern living facilities available*
Special events* Like other clubs* the Downtown
Club assists the members to obtain tickets and bus
transportation to special events* The marketing program
would care for a step-up in the promotional efforts given {
!
these events*
Catering service* While the Club has a catering
102
I record, much more could be done* The effort should he to
take over all of the party details whether at home, In the,
office or in the Club* There Is a need for this in busi- j
■ I
ness and, programmed and promoted, could he a source of ;
profit to the Cluh and satisfaction and relief to the j
member* j
i
j
V. HEALTH BENEFITS j
I
One of the greatest traditions associated with the .
Downtown Cluh is Its heritage of athletic Interest* Even j
!
In its present dilapidated state, Its athletic facilities j
i
are used hy more people, more times, than either of the j
A or J Clubs * ^ Moreover, the Cluh has the most collate i
i
facility and fully integrated athletic department In the i
i
community* Management Is about ready to complete the j
plans for the renovation of this facility* When done,
i
It will embody the most modern thinking on every phase
from lockers to steam room walls* This is the facility '
* • > 1
that is second In use hy the members^ and more than one
member of the A and J Clubs has also joined the Downtown
; Club for the express purpose of using the athletic '
■
■■■— |
^Personal observation*
51
Supra Chapter 1X1*
facility#-®- The Doan town Club can take justifiable pride
i
In the number of athletic champions who have completed
under the Club’s ensignia* Moreover, its Olympic cham-
i
plons competing for the United States have brought both I
!
prestige and added luster and interest to the emphasis
on a sound body*
The present athletic programs for both junior^ and j
senior members are the best in the elty^* and are enthusi- i
astlcally supported by the members who use them* ,
In marketing there should be more programming of !
I
the facilities, but the greatest effort should be to sell
i
i
to top management of companies, the need all executives j
have for an Integrated sports program and to continuously j
I
emphasize the personal gain to the company of prolonging !
i
the life and health of its best people* Probably the best
i
; i
way to do this would be to set up intra-company athletic j
schedules where the company’s officials actually played j
or exercised as a team and on company time* This could be
worked into the intra-company dining table or Executive
Dining Boom approach and be marketed as a package*
52
Source: Membership Applications*
^ Infra next section— Family Benefits*
^Personal comparison*
VI# FAMILY BENEFITS
Not only does membership In the Club afford busi-
nees and health benefits* but it is unexcelled^ in its j
i
family benefits • Chief among these is its justifiably j
famed Junior Sports Program* :
!
Junior Sports Program# Listed below are a repre- j
i
sentative selection from the Downtown Club's Junior Sports
i
Program:
I
1# Boys and girls beginning swimming
i
a) Tiny tots
b) Beginners1 classes
i
2# Recreational Swim j
i
3# Boys and girls Intermediate swimming
I
a) Intermediate and advanced j
. j
b) Advanced
I
I j . * Boys and girls beginning and intermediate
diving !
5# Girls beginning and advanced dancing
6# Boys gymnasties
7# Boys exercise class and wrestling
6# Boys and girls beginning fencing
9* Boys and girls beginning trampoline and diving
^Personal observation#
exercise elass
10# Swim teams
Such a program speaks proudly for itself*
For the ladles♦ Special athletic and other events, i
including fashion shows are conducted to appeal just to
the ladies* j
I
!
The family as a unit* The Cluh also has monthly
splash parties for the whole family, dinners, holiday
I
parties, sports days, and assorted outings* All are
designed to appeal to all members of the family*
With all that has been done, it does not seem that
i
more programming could be possible, but the marketing ;
i
program would ask that more effort be given to promoting |
the facilities, programs and events* For a member who |
f
t
wants an integrated sports program for all of his family,
a membership in the Downtown Club is almost a necessity* '
i
VII* BENEFITS FOR THE LADY EXECUTIVE
i ■
Under earlier sections, reference was made to the
special ladies1 dining room (men permitted only when
accompanied by a lady)* In addition there is also a spe
cial lounge, refreshment room, and athletic facilities for
them* These collective facilities are grouped under this
heading to give added weight to the unique opportunity the
Downtown Club has of selling Its facilities to the lady
executives#
Basically, the lady executive is like her male
counterpart— a professional woman or company executive#
The Downtown Club is the only one that is set up
for the lady executive (or the wife of a member)# A lady
may hold membership In the Club, In her own name as a
i
matter of right, or she may have only a family card from
her husband# She is welcomed in either event, can come
in the front door with her male escort, and ride with him
j
in the elevator# This is a far cry from the ancient club j
e *6 1
traditions •-* When properly registered she may occupy a j
room (although on a segregated floor) in the Club, with
or without her husband#
This follows the national trend of the growth of
i
women clubs and the break-down of barriers for the women
in other clubs #^ But at the Downtown Club, a lady is not
only tolerated, she Is welcomed and not only does she |
enjoy a dining facility second to none, but more and
better facilities are being planned for her comfort#
There is no doubt but that the present facilities
together with the projected improvements, and acceptance 1
£6
Amory, loc# cit#
^7Ibld.
of the ladies, can be a powerful factor in the marketing
program for the Downtown Club* Moreover, greater effort
should be given to promote this more broadly among the
professional women and lady executives, with emphasis upon
the lawyer, publicist, buyer, and others who have the
greatest need for a facility of this kind*
VIII* SOCIAL BENEFITS
Man is gregarious; there is a certain advantage to
being part of a group* Membership in the Downtown Club
affords that advantage for It surely is a plaee where a
member can be among people* Also, there is a benefit from
being able to entertain at the Club, be it a business
luncheon or a dinner dance* It also is helpful and
satisfying for a member to be able to offer a guest card
to his out-of-town visitor or to ask for and obtain a
guest*s privilege for himself in affiliated clubs in other
j cities In the United States* These, the Downtown Club
!
| obviously have and as such the needs of the community are
met*
j
I There are other items of a similar nature that
i
could be added; these include the duplicate bridge tourna-
i
ment, special around the world dinners, the Sunday and !
Thursday buffets and also such events as the splash party,
dinner dances and so on, mentioned in an earlier section*
All of these serve a need of people and hence of a !
108
community and surely should be part of the marketing pro
gram* Others should be introduced to appeal to still more
interests— for example, sueh special interests as a gourmet;
i
group, a dancing group, and a photographing group— to where
i
the Club would be many sided, famed for its gourmet pro- j
gram as well as for its athletic program* These would J
have to be promoted and while being promoted could well j
be part of an over-all promotional effort to encourage the ;
i
greater use of the Club* s facilities by its members*
In Chapter IX, the heed for a carriage entrance
from the parking lot was discussed* With the completion
of that, the marketing program should make a concentrated j
effort to be all things to all people* Being so large,
there is little reason to fear that the clubs within the
Club, for the special interests would be as undeslrous !
as is in a small, compact group of concentrated similar
Interest, sueh as clubs for those Interested in horses or
swimming* In fact, the successful blending of golfing
i
i
and non-golfing memberships at many of the local golf
courses^ has worked well and should work equally well for
the Downtown Club*
58
Personal observation*
109
59
Society, Not only is a Club a social organism,
but it also is a part of Society. As such, it has its own
level in the social order of the community based largely
upon public acceptance. On this score, as pointed out in ;
j
Chapter II, the Downtown Club would probably be ranked !
below the A Club and the J Club. If this order could be I
i
inverted, the Club could then sell its social position to
prospective members. j
That it is not easy to do, must be conceded. Yet,
a start has been made with the annual Sweethearts Ball
which presents eligible young ladies (related to a member)
to Society in a traditional debutante presentation. This
I
proves that it not only can be done but from the success
of the program, that there is a demand for it in the
community. It should, of course, be continued and the
| marketing program, in addition, should seek to form a
j cotillion group of Its own for the young boys and girls
| (related to a member), similar to the one that functions
i
I so smoothly In the Pasadena-San Marino area.
i
j In time, when the cotillion gains strength,
| separate boy and girl clubs, similar to the renowned
: Batchelor and Spinster Clubs of Los Angeles, should be
^^Supra Chapter II, while the conclusion was reached!
that the Downtown Club was not really a competitor of Clubsj
A and J which were primarily social clubs, this projected
program would make for competition. ;
I 110
introduced whieh would permit a continuing membership
until marriage or some pre-set age.
Also, a social-charitable group should be started ,
for ladies in the usual age groups similar to the As sis t-
j
ance League where the Young Debs could be admitted as
■ i
Provisionals and then graduate into the Junior Group and j
f
finally on with the Senior Group. Such an overall program,;
i
when added to the Junior Sports Program, would earry the
youngsters through sports to a cotillion, and the girls
into the Debutante Presentation and the Junior and Senior
Social-Charitable Groups.
There are, of course, many problems in such a bold |
i
approach. Public acceptance is, perhaps, the biggest
external problem. Yet, if there is a community demand it
will be sucessful. It stands to reason that in the City
i
and County of Los Angeles, there are many more people who j
i
are eligible to and want membership in recognized social
!
| groups, than there is room or desire for them in existing
i
| organizations. In the truest senses, Society is not
I limited to those individuals listed In the Los Angeles
60
City Blue Book or Its equivalent. In fact, In a city
the size of Los Angeles, there really isinbt any ./one
1
^Los Angeles Blue Book, 1957 Society Register of
Southern California. Beverly Hills: William Hord
Richardson, 1956*
J society* rather a series of socially minded people
pursuing a more or less common goal who have gathered
together usually through a school* sororlety or religious I
affiliations* A program as outlined* in the Club* J
available to Club members* would simply enlarge the areas j
of selection* |
I
Let it be said at the outset* that such a program,
i
sponsored by the Downtown Club for its members, would not j
appeal, for the most part, to those listed in the Blue
6l
Book, but it is true, basically, because such indi
viduals have other choices* The Club's social program
would not be designed for such individuals. It is
i
i
designed to meet the needs of those members who desire it
but who may not now have an alternate choice for an
accepted socially significant group.
Time alone will tell the result and one thing is
sure* the origins of most organizations and peoples were
humble once* What others have done, the Glub can do in ■
i I
| its sponsored soeial programs.
i
i
j IX. SUMMARY
i
! In Chapter VI* an Increase in dues was deemed
practical as a means of augmenting income and profits*
It was, of course, actually a part of the marketing
6lIbid.
112
program since cost is an integral factor* The present
chapter considered, as a portion of the marketing program,
what the Club could sell* The conclusion was reached I
that while there is a physical item of a club and a '
facility there was no tangible product to be sold* This !
led to a close look at the Club today^ and a profile^
i
of the average member and it was found that the Club was ;
not only physically located in Downtown Los Angeles but j
that its present members were employed in the downtown
area overwhelmingly and used it for business purposes.
With all the foregoing in mind, a multiple sales
approach was deemed the most logical method upon which to !
base a marketing program to meet the various aspects of ^
demand, actual or prospective, that the Club could satisfy!*
In broad outline, these ranged through five categories:
(1) business, (2) health, (3) family, ( I j . ) lady executive, *
i
and (5) social* For some, the present facilities, program!
and promotion were adequate; for others, new facilities,
better programing, or more promotion were called for* The
result of the analysis was the creation of a multipoint
approach, yet integrated into a total marketing program
that was designed to increase both the number of members
and members use of the Club's facilities*
i
i
^ Supra Chapter II. ^Supra Chapter III.
CHAPTER Vlll
THE MARKETING PROGRAM (CONTINUED):
WHERE TO SELL j
I
The last chapter, as the first of three chapters i
dealing with the development of a marketing program, |
considered the nature of what the Club had to sell* It i
was found that there were five broad categories of j
demands that the Club either was already satisfying or
could satisfy* Those classifications included: (1)
business, (2) health, (3) family, ( I j . ) social, and (5)
i
the special opportunity arising from the lady executive* j
i
A marketing program of what to sell was evolved around
them* The present chapter will continue the marketing j
program with the study of where to sell that program*
The next chapter will discuss the How to Sell aspects of
the prograa.
I. WHERE TO MARKET THE BUSINESS BENEFITS |
FLOWING PROM MEMBERSHIP IN THE
DOWNTOWN CLOB
Aa we have seen In the analysis of membership,^
fifty-three percent of the members worked in the Downtown j
area, eighty percent of the members used the ClubTs exist-
6i|Supra Chapter 111. !
ing facilities for business entertaining, and the
dining rooms were used most of all the facilities.
A major effort has already been successfully made
by the Club to enjoy this high density of business use.
General promotion within present members of existing
facilities would not appear warranted* An added sales
effort stressing business benefits must either be based
upon additional facilities or be addressed to persons
not now members*
Present members as the best market for improved
additional facilities» Let us first look at additional
facilities, or what amounts to the same thing,
improvements in present facilities* Here, the largest
and nearest market is fpund in the present members. Thus,
when the grill, card room, buffet area and lunch counter
66
have been upgraded, the sales program to Increase and
promote the use thereof, should first be addressed to
the present members* At the same time, the upgraded
facilities are being promoted among present members,
they will also make the club more attractive to pros
pective new members* So also with the modernization of
the private dining rooms and cocktail facilities.^
^Supra Chapter Vll
67Ibid.
U5
Executive dining rooms can toe aimed at tooth present and
prospective members as can the upgrading and promotion
of the living quarters for Individuals and companies*68
Resident and non-resident♦ Sales programs
directed at present members can toe confined to a
definite market toecause their identity is known* For
the prospective new members, the market is wide open and
divides itself into two general classifications, the
resident member and the non-resident member*
The test Is residence within Los Angeles or
69
Orange Counties for six months in any year. A person
living out of this area pays lesser dues at only one-
half of the resident rate*
It should toe stated that the term Resident, when
applied to the Where of marketing, is not referring to a
resident member,’tout to the location of the prospect,
14,e. a prospective member residing in Los Angeles or
Orange Counties*?® By the same token, non-resident
means the location of the prosectlve member living
outside Los Angeles or Orange Counties*
68Ibld.
^By-Laws, Rules and Regulations of the Downtown
Club, Section i l l } . , Non-Resident and Absent Members, Los
Angeles, California (1956)*
TOltoid.
116
Obviously, the non-resident prospect would be more
interested in the living quarters and dining facilities
than in the other business items discussed in detail in
Chapter VII# Southern California, the State and the
entire Pacific Mountain States are a fertile field for the
marketing of the Club and its modernized facilities among
non-residents for their use in business# An additional
market can be found among new residents particularly the
officers and employees of corporations which move their
national or regional headquarters to this area or who open
or buy a division or subsidiary# Moreover, any business
opening in the Downtown Area would be a likely source#
So, also, for professional people who enter the Downtown
area# Nor should the professional and executive people
who work in this area be overlooked, for they have a real
need and should be most receptive if they have had to do
without a Club affiliation#
II# WHERE TO MARKET THE HEALTH BENEFITS
FLOWING- FROM MEMBERSHIP IN THE
DCWNTOWN CLIP
The athletic facilities are to be modernized#
When this is done, some consideration should be given to
more programming— this, in spite of the obvious success
to the present outstanding events typified by the Junior
I 11?
Sports Program and Competitive Swimming and Diving Teams.
The programing would he to induce still more members and
children to use the facilities. This, and promotion,
would find the closest market in the present members
but, of eourse, would be an additional selling point for
new members as well. Also, effort should be made to sell
the Club's membership to corporations and business both
as to those now in the area and those coming
subsequently as a protective measure for the executives
71
and other key men in their own best interest.1 A sound
mind in a sound body Is an irrefutable principle.
Controlled exercise under hygienic standards should
appeal to the far thinking chief executive faced with
the foreseeable duty of replacing respected associates*
If the approach to the top management of business
to take memberships for their executive for this
principle and to encourage them to use the athletic
facilities is unsuccessful, then the sales effort could
I
i be made direct to the executives themselves, and also,
i
to the younger group, composed of those just out of
school, or those junior executives and professionals who
; are seeking to maintain top efficiency.
It Is not likely that many non-residents would be
Interested in the Club solely for this benefit, so the
^Supra, Chapter VII.
1X8
effort should be confined to those who are within the
resident designation*
|
III* WHERE TO MARKET THE FAMILY BENEFITS j
FLOWING FROM MEMBERSHIP IN THE
DOWNTOWN CLUB !
i
In Chapter VII* it was recommended that more
programming and promotion be given family activities*
The purpose of the recommendation was to encourage a
greater use of the Clubfs facilities* As such* the
logical market is the present members* While it might
weigh some in the balance* except for the Junior Sports |
Program referred to in the programming of family parties*
it is doubtful if it would greatly increase the saleability
of membership; it might help* but it would not be control
ling of itself* Clearly, sales effort among the non- '
resident category would not be warranted* except as an
added inducement*
IV* WHERE TO MARKET THE FACILITIES DESIGNED
FOR THE USE OF THE LADY EXECUTIVE
Earlier* we considered the growing importance of
the lady executive and found that of the clubs in Los j
Angeles* the Downtown Club was In the unique position to
119
receive maximum benefits from it.^ This conclusion was
based upon the fact that the Club permits ladies to have ;
memberships in their own names (not merely as a courtesy j
to their husbands) and has had facilities specially !
j
prepared for them and further improvement in their j
public and private rooms are projected* j
i
There is a growing market both for the increased
use of the modernized facilities and also for more i
lady members • An all out effort should be made among
the lady executives, primarily in the Downtown Los
Angeles area, and only secondarily in the other areas.
Non-resident lady executives who frequently come into
this city would also be likely prospects for membership '
and should be Included in the sales approach* !
V. WHERE TO MARKET THE SOCIAL BENEFITS
FLOWING FROM MEMBERSHIP IN THE
DOWNTOWN CLUB
i
In considering the social benefits, we discovered
that there were three broad classes into which most of
the items of social nature could be grouped: (1) those
A
that resulted merely from belonging to a Club, such as
i
being a part of a large group enjoying the same
privileges and prerogatives of membership, a place to j
i
i
^ Supra» Chapter VII. j
dine and entertain, gu.est facilities for out of town
♦
visitors, and the right to use facilities of out of
town affiliates, (2) those resulting from a special
event, such as bridge, dances and parties, and (3) those
resulting from acceptance into Society.
The marketing program for the first two is rel
atively simple: improve facilities, increase the
programing and promote among present members. This
7I1
could be accomplished by building a carriage entrance1^
and by encouraging special interest groups such as
gourme t or dancing•'*
The Society aspect of the social benefits l£ more
difficult to program* As pointed out in the prior
chapterthe Club itself would have to institute and
promote the integration of the Junior Sports Program
with the proposed new Junior Cotellion* These would
then be geared to the existing Debutante program and a
1
] new social-charitable group (Provlsionals, Juniors and
I Seniors) added*
In the beginning, the market area would be
^Supra ♦ Chapter VII.
^Supra* Chapter II.
?5supra* Chapter VII.
76Ibid.
confined to present members, but ultimately, the
t
existence of a successful integrated social program,
moving freely and smoothly from sports to cotillion, to
the Debutante Presentation and then into the charitable
organization would serve as a powerful magnet for new
members who desired to participate in it* Moreover,
such a social program would also favorably affect the
over-all market area since the higher the public accept
ance of the Downtown 0lub, the easier it would be to
sell memberships at all levels.
VI. THE CIRCLE OF INTEREST
Another approach to the question of where to
market the Club and its facilities can be found in a
series of geographical circles radiating from the
Downtown Club* In the circle of greatest interest Is
the area nearest the Club. Sales effort, no matter how
oriented to the specifics of the earlier sections of
j
; this chapter, should find a greater response from those
I
, working in the Downtown area but for the most part those
i
j living in the nearest area would not be likely prospects
for membership as those areas now stand.??
Going out from-the center of the imaginary
??Supra» Chapter V.
122
circle, the interest of those working in the areas
would lessen until finally, there would be little if
any interest in the Club among those working in remote
areas but residents of the outlying area might well be
interested in the'Club for its social, family or health
benefits.
VIII. SUMMARY
The development of marketing program for the
Downtown Club is be£ng presented in three chapters. The
first -part, Chapter VII, discussed at length What to
Sell. Chapter IX will consider the How to Sell. This
;
Chapter presented the Where to Sell. In doing so, the
same basic approach was followed as in the last chapter.
The five categories (business, health, family,the lady
executive and social) were analyzed to reach the most
logical marketing areas.
In the business phase, it Was felt that to obtain
a higher use of the facilities for dining and cocktails,
some of the facilities would have to be modernized and
that when done, the logical market would be from among
existing members to Increase the use of the facilities
by present members. However, the promotion of intra
company tables and executive dining rooms could be
directed profitably to both present and prospective
123
members. So, also with the modernized living quarters.
If the health and family benefits were programed
and promoted, the logical market would be among present
members.
Lady executives, wherever located, should be
susceptible to the Clubf s program to increase both the
number of lady members and their use of facilities#
Socially, greater use by present members could
be encouraged through improved facilities, more pro
graming and greater promotion. The complex Social
Organizations could be started by enlisting present
membership but the real benefit ot the Club is founded
on the anticipated greater acceptance among
prospective new members.
CHAPTER IX
THE MARKETING PROGRAM (CONTINUED): HOW TO SELL
This is the third of three chapters devoted to
the developing of a Marketing Program for the Downtown
Club* Chapter VII considered What to Sell, Chapter VIII
Where to Sell# The format of the prior two chapters
approached the problem from the community demands that
could be satisfied by membership in the Club; the same
format will be followed in the present chapter* Thus,
the collective How to Sell will be presented in five
parts dealing with business, health, family, social and
the special needs of the lady executives*
I. HOW TO MARKET THE BUSINESS BENEFITS
FLOWING FROM MEMBERSHIP IN
THE DOWNTOWN CLUB
From the earlier chapters we have seen that there
are eight broad subdivisions of the business benefits
offered from membership in the Club* In some instances
these are already being exploited extremely well, while
in others, little Is being done. Having developed the
detail of the nature of these items in Chapter VIII,
there is no purpose in repeating that information here*
It will be sufficient merely to list these items and
! 125
| then to discuss how to sell them*
The executive lunch. When the grill room, counter
and card room buffet are brought to the necessary
standard and the menu reworked the most obvious market
Is to try to Increase the use of these facilities among
present members* Basically, the best way to sell these
Improved facilities is to improve them; members will
follow the improvement work with interest since it is all
on the main dining floor* If the food, service and
environment proves acceptable to the members they will
use it with little urging for it will fill a genuine
need as the dining facilities are the most heavily used
facility at noon time..
In addition to the mute promotion from the
progress of the work of modernization, further promotional
efforts should be utilized, but such efforts can be
i
directed to the present members as a class* Lead
stories in the house magazine, broadsides to all members,
and bulletin board announcements, would be typical of
I this method of telling the stories of the new rooms and
urging their use* Local newspaper and other news
coverage as well, would be most helpful as would special
articles in the Sunday supplements* Use of celebrities
(members or not) would increase the llkllhood of success
in obtaining such space.
126
Here, as in the balance of this chapter, it must
be reeognlzed that the purpose of this report is not to
re-write the sales primers but to select from the broad
approaches those sales promotional devices that seem
most appropriate.
Present and proposed modernization facilities
present the means of satisfying the need a business or
professional executive has for a place to participate
in the business lunch* Hence, find a business or
professional man who does not have a elub affiliation,
show him where he and his client, or visitor can be
satisfactorily handled at a business lunch and the sales
task is complete. The selling program is narrowed to
finding a source of business and professional men
within the downtown area or whose offices are closely
connected to this area through the growing network of
freeways, who do not now enjoy such opportunity.Without
attempting to be all inclusive, these could be found
from among the membership rosters of: (1) professional
groups such as lawyers, doetors, accountants; (2)
industry lists obtainable from the industry associations,
(3) publications of the Chamber of Commerce, Merchants
and Manufacturers Associations, and National Association
of Manufacturers; ( 1 | . ) localized regional publications
dealing with prominent people (5) annual reports of
12?
corporations having offices In the desired areas; and
(6) classified telephone directories# These lists
i
should then be compared with the present membership to
avoid duplication and to help formulate the best
approach# It would also be helpful to cross check the j
final list against publications such as the Los Angeles |
Blue Book^® to eliminate those who are now members of
I
the A or J Clubs . While there are many duplicated !
79
memberships it is most likely that the highest return
will be from those who were not affiliated with any of
the other clubs.
!
As to the actual mode or address of the sales !
approach for new members, the only one that is feasible
for a club is the type designated as a screened approach !
8©
to individuals discussed in the next chapter the 1
sales approach to the present members can be directed ^
to the gropp as distinguished from the individual
member •
Private dining rooms. When the private rooms
are modernized, the way to sell the members on using
78qe. cit.
70
'^Membership records of the Downtown Club.
^Infra. Chapter X
them more Is the same as outlined in the preceding
section for direct promotional effort to be aimed at
i
the present members* j
Cocktail facilities and the Lancers * The present j
I
members are the most likely market for greater use of j
l
the improved cocktail facilities. Also* the present j
members are the obvious and first choice for members i
i
to be solicited to form the proposed new special j
Qi
social group to be known as the Lancers. It was
pointed out in Chapter VII that the present facilities
are heavily used at noon but only sparingly at the
cocktail hour* In addition to the promotional items j
i
set forth for the executive lunch facilities to present
members* it would be will to program a reason to come
and enjoy the facilities during the coctail hour*
f t p
Examples of this would Include free edibles such as
delicious hot hors Df oeuvres, background music along
with participating group singing led by someone
especially trained* The existence of the Lancers and
their colorful glasses and regalia would add color and
warmth to the room* To encourage the formation of this
group and their attendance at the weekly meetings the
^ Supra Chapter VII.
Ao
^Reminescent of the free lunch of the old time bars
and saloons * .
129
Club should donate a hot specialty (or other suitable
items) and share the cost of the glasses* The group
could be publicized in the house organ and efforts to
plant stories in all the news media should be under
taken*
Here* too, the sales approach being geared to
members, should be directed to the group and include all
general promotional media*
Special events * Efforts to obtain a greater use
of the Club for special events should be aimed at the
present members. As such, general group promotion is
available* The greatest need here is in the increased
selection of such events and then to publicize and
promote them* The market is known, the promotional
medium is familiar; all that is really needed is good
programming which requires imagination to seek out
special events to appeal to more members*
Catering* Here, too, the question of how to sell
can be answered as in the preceding sections, but first
must come the planning necessary to meet the business
entertainment needs of the member--at his home, at his
office or in the club* After such planning, then it
must be promoted* The present members are of course
the obvious market although screening of members
(through an analysis of their membership records) could
reduce the total to a smaller group, perhaps small
enough to warrant a direct and Individual approach*
Intra-company tables. Basically, once the club
determines on a policy of intra-company tables the first
market to exploit is the present membership* This can
best be done by promotional methods similar In nature
to the group promotional effort previously discussed in
the prior sections* Later the availability of an intra-
company table might well be part of the over-all sales
approach to the prospective members from business since
It would emphasize a direct and positive business
reason for membership in the Downtown Club*
Executive dining rooms and living quarters * At
such time as these are made available by the Club,
group promotional effort among present members would be
one way to sell it; a more restricted, but more pro-
i
ductive method would be analyze the present membership
l
: for those companies or individuals having the greatest
| need and then to make a personal and direct approach*
i
Also the existence of these facilities would
sustain a sales program to obtain new members through
| selling such new members on the advantages of such
facilities* For this approach, the sales method could
131
follow the pattern presented in the earlier section on
the executive lunch* Like the latter, the new members
should be contacted only under the screened approach
discussed in the next chapter.
IX* HOS TO MARKET THE HEALTH BENEFITS
FLOWING FROM MEMBERSHIP IN
THE DOWNTOWN CLOT
The way to sell the health benefits, like the
business benefits, 1# to encourage new members and a
greater use of facilities* Once the new facilities^
are finished, the Club can promote a greater use among
present members* This can be done as a group
promotion using the promotional tools available and
briefly referred to in the above Sections. Programming
aimed at special groups as determined by analysis of
the membership records would also make it possible to
personalize the promotion by aiming it as those special
groups* Purely as an example, such groups, to be found
from present members, could be c omp any groups,
Industry groups, professional groups * age groups or
special sports interest groups like swimming, volley
ball, etc*
Infra Chapter X ^Supra Chapter VTI
Like selling business benefits, the health
benefits could well be the basis of a membership sales
campaign keyed to a business* As pointed out in Chapter |
»
VIII, it should be an Important business objective to
I
maintain the health and working ability of its tbp i
I
management* The corporations to be approached could j
i
be selected in the same manner outlined in the j
foregoing section on business benefits* f
If the top management fails to support the sales
approach, the individual corporate officers could be
approached themselves* In either event, the screened
method should be observed*®5
i
i
III. HOW TO SELL THE FAMILY BENEFITS FLOWING
i
FROM MEMBERSHIP IN THE DOWNTOWN CLUB j
In Ghapter VII, we saw that the family activity •
turned upon the junior sports program and the special
! family parties ranging from a splash party to family
| dinners. It is unlikely that many new members eould
j be recruited solely in reliance upon these events*
1 86
| With more programming, the sales effort should be
! directed to present members in order to encourage
^Infra Ghapter X
^Supra Ghapter VIII
133
greater use of the clubs facilities* Such effort
should be promotional in nature directed to the group
of present members* j
IV. HOW TO SELL THE BENEFITS OF MEMBERSHIP
IN THE DOWNTOWN GLUB TO THE |
i
LADY EXECUTIVE !
While modernization of facilities will no doubt j
i
increase the use of facilities by present lady
executives, the greatest market is to be found among
those not now members. Tbe> need for such facilities for
the ladies and the unique position of the Downtown Club !
was stated in Chapter VII.
The needs of a lady executive are known and the
available and projected facilities of the club are
designed to meet those needs. The hardest part of how
to sell the Club to the lady executive is to find her.
So, now the lady must be brought to the Club*
A list of such ladles should be prepared in much
the same way as outlined for the business and
professional men in the first section of this chapter.
Special emphasis should be given to the business and
professional womenrs organization and to the secretarial, ■
retail and publicists fields. By the same token, no
!
effort should be wasted to find the lady engineer or '
scientist--for there is not enough of them# When the
list has been completed and cross checked against
existing membership, the sales effort must follow the
Screened Approach of the next chapter#
V# HOW TO SELL THE SOCIAL BENEFITS FLOWING
FROM MEMBERSHIP IN THE DOWNTOWN CLUB
The previous two chapters grouped these broad
benefits into three general classifications:^ (1)
those resulting from membership in any organized club;
(2) those resulting from special events involving those
members having special Interest and (3) those
resulting from a recognized social-charitable
organization#
The first classification stands by itself and
does not lend Itself to any promotional effort# All
management can do here, is to continue to maintain the
! facility in the best possible condition and to
i
j cultivate a desirable environment#
i
In the second broad classification, the effort
should be to encourage greater use of existing
i
facilities by present members# The programming of
special interest events should be founded upon an
^ Supra Chapters VII and VIII.
135
analysis of the members special interests* It will
then become a matter of special promotion to place the
invitation to participate in the hands of those members
most likely to be interested, Group promotion is
possible for the larger events but is not restrictive
enough In these smaller segments of special interests,
«
The selling of the society advantages must await
the adoption by the Club of the proposed integrated
social program,Then it becomes a matter of promoting
it among the present members, In time new members
could be recruited on the strength of such an
integrated social program* Group promotion should not
be used; instead it must be promoted on an individual
basis, selecting from the membership those who are most
likely to be interested in the various divisions of the
program, A social secretary will be necessary and
preferrably one who is familiar with the existing
social organizations and their leaders. The usefulness
of such a secretary will depend largely upon her
acceptance by recognized social groups and leaders*
Great caution must be exercised to avoid trying to
rush too fast into the whole complex program*
Acceptance by the other groups is both the ultimate
88Supra Chapter VII.
objective and test*
VI. BROAD PROMOTIONAL EFFORTS
Participation in Community Affairs. Closely
allied with the effort to increase public acceptance
and sell future membership on the basis of a
recognized social-charitable society groups is the
matter of participation by the executive officers of
the Club in all levels of community affairs* This
would range from sports events to the Cala Opera Ball*
The goal should be to identify the Club, through its
top officials as belonging* This would no doubt re
quire careful programming by the Club to achieve the
maximum result with the smallest number of executives*
With that participation should also come the
studied use of the Club as a means of entertaining the
social and business leaders that the Club*s
| representatives already know and others they would
i
| meet in new organizations* Entertainments by the
1 officers at the Club, before and after the events
t
!
! should be publicized as widely as possible but of course
the emphasis would be upon the guest rather than the
officer* From such united effort with the known goal
in mind, it should be possible to build, however slowly,
the symbol of the Club as an accepted social and
cultural participant* It is not necessarily the favor
able reaction of the leaders who are entertained at the
Club that counts, nearly so much as the public reaction
to releases showing the leaders at the Club*
Publicize events and members. Already the Club
has done much to activate a continuous publicity
program for its events. Part of selling the Club (i.e.
membership in the Club) is to sell its members. Also,
it Is easier to obtain press notices of members rather
than of the club itself* Of course, what the member
does must be related in some way to the Club.
general Promotion. Present programs of promotion
in the Club have had a high degree of sucess* If more
yet could be done it would make the task of selling
easier as public acceptance builds up*
VII. SUMMARY
As part of a triparty marketing program, this
chapter presented How to Sell the benefits of Club
Memberships outlined in Chapter V I I . Where to Sell
was considered in Chapter VIII. The three chapters
were based upon a multipoint sales approach that
®^The Market Program: What to Sell
Supra Chapter VII
classified Club membership benefits into five categories:
business, health, family, social and the special
opportunity presented by the lady executive. j
It was concluded that the most likely market for
the increased use of facilities by present members were !
I
through group or specialized promotion while the effort j
to obtain new members should be through a Screened
I
Approach. The next chapter in considering some of the
major problems In marketing the Club describes this
latter method and explains why It is necessary in
marketing the Downtown Club. In addition-to the
foregoing, the selling effort would be made easier if
the Club would enlarge its general promotional efforts,
Increase the publicity program for members, and have its
top officials entertain at the Club and broadly
participate in community events. The Club needs to
become identified in the public mind as belonging to
the highest business, social and civic levels and this
is one way In which it can be done.
CHAPTER X
THE BASIC PROBLEMS OP MARKETING
THE DOWNTOWN CLUB
The last three chapters presented the marketing
program for the Club in three parts: (1) What to Sell;^®
(2) Whore to Sell;91 and (3) How to Sell.92 This
chapter will consider some of the basic problems
involved in marketing the Downtown Club* These can
best be grouped into the following categories: (1) The
changing function and use of the Club; (2) the changing
market area of the Club; (3) the lack of mobility; (I 4 . )
the handicap of exclusiveness; and (5) the need for
acceptance of a sales organization* Included in the
fourth group will be the discussion of the Screened
Approach referred to in Chapter IX*
I* THE CHANGING FUNCTION OP CLUBS
We have already commented on the change in the
function and use of clubs*^3 The title of Mr* Amory’s
provocative article, ’The Great Club Revolution* , 9 ^ 4 -
^ Supra Chapter VII* ^ Supra Chapter VIII.
92Supra Chapter IX* ^Supra Chapter VII*
9^-Op* cit.
itself mirrors that change. While that article was
concerned with New York city Clubs, it is equally true
of the Downtown Club. Gone are the freedoms found in
yesteryear when a club was an impregnable fort; in its
plaee is an institution that is vulnerable to financial
and labqr problems.
The Downtown Club has had to change along with
the times. The building housing the Club is of 1912
vintage, while magnificently kept^ and full of charm
and tradition, it was built on the old concept. It
must be marketed, however in terms of the realities of
today. This presents operating problems not only in
the continuance of a number of inflexible facilities
but also in selling a greater use of the Club's
facilities and memberships. Expenses of running and
servicing the Clubs1 facilities are high. Since 19M**
operating income has not been sufficient to meet
q Z !
operating expenses. Over the years 19^6-1947 w©
have seen members, income and profit all go down and
since 191+8 it has been necessary to look to a sub
stantial portion of the dues income to meet the rising
operation costs.^
Supra Chapter II
97Ibid.
9 Supra Chapter IV
Management must either increase the direct cost
of the goods and services or increase the dues. In
9 8
this dilema management has actually done bothr and
Chapter VI concluded favorably on a further dues
increase in the near future. Yet, either way, in
creased prices or dues, the task of selling services
as well as membership is affected. From the inherent
9 9
nature of the membei1 ^ low investment in the Club, ^
present as well as new members are affected by this
economic squeeze between rising costs and fewer members.
II. THE CHANGING- MARKET AREA
There is the additional problem of the decline
of the market area and the shift in the nature of the
use of the Club. In Chapters II and VII, we saw that
the Club in its early days was oriented to a market
area covering three fields: living, working, and
social entertaining. We saw, also, that over the years,
the residential sections moved away from the Club,
business decentralized and there was a great loss of
evening trade as members entertained elsewhere.
This shift in use was highlighted by the analysis of
^ Supra Chapter III
^$36.00 Supra Chapter II
membership which found that the basic use of the Glub
is as a place for business and professional people to
lunch. In the foreseeable future, no sudden change
can be predicted.
Thus, management in its marketing program is
faced with carrying more lines (other facilities j
beside the dining room areas) than the customers want
and further, being unable to eliminate such unprofitable i
lines•
III. LACK OF MOBILITY
101
So far, the preceding Chapters developing
the marketing program for the Downtown Olub have been
based on its present location and facilities. It thus
has been a question of encouraging more members: (1)
to join and (2) to use its facilities.
For a moment, let us look at an alternate. If,
102
as we have seen, the members are no longer orbiting
around the Club and simply do not come downtown in
the evenings, the Club could move out to where the
members are living and entertaining. This could be
Supra Chapter III
^^Supra Chapters. VII, VIII, IX
^®^Supra Chapter . II
343
done either by establishing one or more branch
facilities within the spread of the higher income
residential areas in the hope of reaping the benefit |
of supporting and interlocking use and memberships, or, '
establishing the facility as a separate unit with no
i
l
interlocking rights. ,
Either way, this concept would present a new
sales item as well as a new marketing program* However,
this inquiry is predicted upon the present location
and there is no opportunity within the framework of
this study of taking the Club to the suburban markets.
IV. THE HANDICAP IMPOSED BY THE ;
NEED FOR EXCLHSIVENESS
It is standard In Sales textbooks, other things
i
being equal, the broader the appeal, the more sales. |
So it Is that with most sales efforts, the effort Is
to spread the news of the product over the widest area.
Advertising is founded upon that principle and
marketing programs, Ideally, are based upon It.
Yet, the Glub cannot avail Itself of this
indescriminate mass appeal* This is a basic limitation
in planning a sales campaign* The limitation is based
i
* • !
upon the inherent nature of a club* Members pay for j
the right to enjoy facilities not available to j
non-members. This is the hallmark of a private club.
The value of the 'For members only' sign cannot be
overemphasized, as it separates the members from the
general public and restricts its rights and benefits
to the members.
It is also more than the private uses; it must
also be that the right of membership is restricted and
not available to everyone. Not only does it mean that
the members can use the Club facility to the exclusion
of the general public, but that it is exclusive also
in the sense that the right of membership is a thing
of value and worth paying for. Management has striven
to make the Downtown Club exclusive in both instances
and has established and observed membership qualifi
cations. So, membership Is not a commodity that can
be offered to everyone for not everyone will be able
to meet the membership requirements. The sales effort
must also conform to this limitation.
This problem is further heightened by the fact
that the principles of supply and demand are applicable
to selling the Downtown Club. As previously stated^0^
there is no long waiting list at the Downtown Club
and there are long waiting lists at the A and J clubs.
^Q^Supra Chapter II
Part of the public preference^®^" for those clubs can
b© attributed to the fact that they are very hard to
get Into and the very availability of memberships in
i
the Downtown Club without a long wait might be to the j
Club’s disadvantage. Fortunately this is more apparent j
than real since for most people, there will be no j
opening at the A and J Clubs for a very long time, if !
i
ever. The principle however should be borne in mind !
and to a limited extent affects the marketing program.
By the same token if the Club tried a broadside
approach in selling members on a non*individual basis,
the result would be to tend, directly, to destroy the
exclusive character of the Club and this would b©
disasterous• Efforts to build memberships on a non* !
i
exclusive basis at two clubs in Santa Monies have
had consistent records of failure for the last few
years.
Thus, the inherent problem in selling new
memberships in the Club is that the sales effort must
be done on an individual rather than a broad, public
appeal. This requirement greatly hampers and handicaps
the marketing program.
105
The Deauville Club and the Del*Mar Club ;
since World Ifar II. j
The Screened Approach* Under the skilled
direction of the Membership Director, the Club in the
last several years has been able to stabilize its
membership. This has been possible due largely to the
ability to devise group sales endeavors as individual
appeals# The references to Screened Approach in
Chapter IX, meant that the sales campaigns to doctors
or lawyers, while in fact aimed at a group, had the
appearance of having been intended only for the
individual doctor or lawyer#
This type of group appeal aimed at specific
members of the group requires careful cross checking
with membership records to avoid soliciting a present
member and the communication must appear to be an
original. Robot and mechanical typewriters will
produce mass letters having every semblence of
individual ones# Use of mass media for broad group
i •
i
| appeal without such safeguards can not be tolerated#
j Personal selling is also a part of the Screened
j Approach# Prom the appropriate lists, likely candi-
I
| dates are selected and subjected to the comparatively
safe approach— ’You were recommended for membership
by one of our members' and I wondered if you have an
interest in knowing more about the Club•* This sort
i
I of appeal (preferably when done in person, or a
telephone call and least preferable through an Indi
vidual appearing letter) has produced results without
destroying the exclusive nature of the Club.
V. THE NEED FOR A SALES ORGANIZATION
This section is intended to point out that in
at least one instance, marketing the Club is like
selling any product; there is a need for a good sales
organization. It is not the purpose of this paper to
summarize the textbooks on this point and it is
sufficient to say that one of the problems faced by
the Downtown Club is the need to maintain and expand
its sales organization. This, in turn poses the
classic problems common to all sales organizations.
VI. SUMMARY
Earlier chapters have developed the marketing
problem for the Club. The What to Sell, Where to Sell,
and How to Sell have been presented in the last three
chapters. This chapter has considered the problems
inherent in any marketing program for the Downtown
Club. Special problems were grouped into the broad
classifications of the changing nature of the club,
the change in the market area of the Club, the lack
of mobility, the Screened Approach, and the effect of
exclusiveness. In addition* is the general problem of*
maintaining and improving a sales organization.
CHAPTER XI
SUMMARY AND CONCLUSIONS
I* SUMMARY
It was the purpose of this study to develop a
marketing program that would increase both the number
of members and the use of the facilities of the
Downtown Club*
T© do so, It was first necessary to examine the
history, facilities and community significance of the
Club* We found the Club was not only the oldest and
largest social club in the city but that it was also
an athletic and family club as well* The Club was
founded upon the unique principle that it should be
possible to enjoy membership and facilities in a club
without having to pay for a share of the bricks and
mortar* This principle has been rigidly followed and
ownership and membership are completely separate*
The Club is well located and adequately housed
in a building that although old is being kept in a
state of excellent repair* Its facilities, Including
five dining areas and complete athletic equipment and
living quarters, far exceed those offered by other
clubs in the clj>y. It is a healthy, active club with
150
a broad base of membership and its environment and
service are excellent• While it is integrated into
the life of the community, two of the other clubs of
the city enjoy greater public acceptance.
Armed with this background information on the
Club, an analysis of its membership was made. This
disclosed that the average member was in the higher
income brackets (in excess of ten thousand dollars a
year), under fifty, married with two children, employed
in an execitive or professional position in downtown
Los Angeles, used the Club primarily for business and
confined his uses to noonday luncheons.
The inquiry then studied the past record of the
Club for the years 1914-6-1957 as to members, dues,
operation, income and profit. It was found that
although membership had decreased from 1914-6 it had
reached stability in 1955* Monthly dues income had
risen, principly because of three dues increases.
Operating income was down from I9I 4 . 6 and since 1914-8 it
had not met the operating expenses. Net profit was
down from I9I 4 - 6 although 1957 was the best year since
1914-6.
A causal relationship was sought between the
record of the Club and general and local business
conditions, but an analysis showed that while GNP and
i5i
the local index were moving up during 191+6-1957* the
Club was loosing members and suffering a diminition
of income and profit* The closest correlation was
found in the department store sales for the major
downtown Los Angeles department stores (which went
down about thirty percent during that period) and in
the retail sales in the CBD* To this extent only, the
record of decline for the club, mirrored the economy
of its downtown market. Nonetheless, the economic
climate must be considered in pricing the club's
membership*
To offset the continuing drop in income and ever
rising costs of goods and. services, a proposed in
crease was evaluated* Based upon the experience of the
last three dues increases, it was concluded that an
increase in monthly dues would not have an adverse
effect over the long term and that such a dues in
crease would, in fact, tend to maximize profits* It
was pointed out, however, that prudence would require
the dues increase to be linked to a favorable business
climate and that it would be well to wait the expected
economic up-turn.
The marketing program was then developed in
three parts, What to Sell, Where to Sell, and How to
Sell. A multiple sales approach was used to discuss
the various aspects of community demand that the Club
could satisfy* In broad outline these Included the
following five categories: (1) business; (2) health;
(3) family; (l\.) social; and (5) the special opportunity
presented by the lady executives* The desired result
of the marketing program would be to increase the
number of members and the use of the Club's facilities*
In the business phase* it was felt that some
of the facilities for dining and drinking would have
to be modernized and that the logical market would be
for increased use from among present members while the
promotion of Intra-company tables, executive dining
rooms, and living quarters could be directed profitably
to both present and prospective members.
The health and family benefits should be both
programmed and promoted among the present members*
Socially, greater use could be sought from
present members through better programming and more
vigorous promotion, and the Society complex could be
started with present members but the real benefit
would be in the Increased acceptance among new members.
The facilities for the lady executive would be
promoted among non-members although programming should
Increase use of present facilities by present members*
The facilities for the lady executive would be
153
promoted among non-members although programming should
Increase use of present facilities by present members.
In promoting greater use by present members,
the approach could be general or specialized but that
the more specialized the better the result. The effort
to obtain new members, though, should be individualized
through the Screened Approach so as not to destroy the
intrinsic value of exclusiveness.
The marketing program as developed was and Is
subject to the problems attendant upon the club from
its very nature. These problems which were considered
in formulating the program included: (1) the changing
function and use of the Club; (2) the changing market
area; (3) the laek of mobility; (I 4 . ) the handicap of
exclusiveness; and (5) the sales organization. In the
course of studying these, it became apparent that the
Club was caught in a falling market with a facility
that was in excess of the current use and with no
opportunity of moving into the new business or
residential areas.
II. CONGLUSKMS
The Club has a proud heritage and is healthy
and prosperous. Present management is alert, able and
vigorous and shows a profit from the operation. It has
15^
been able to do this in spite of the changing market
and function of the Club. Even though it has lost
members and has sustained a decline in income and
profit over the years 19^6-1957, the Downtown Glub
continues to satisfy community needs*
Current levels of'membership and profit probably
could be maintained by management under existing
policies. This study has been made and the marketing
program developed in the belief that it would make the
capable management even more effective and would serve
as a basis for expansion.
The adoption of the marketing program should
result in: (1) increasing the number of members for
the Glub; (2) increasing the use of its facilities;
(3) increasing the community stature of the Glub and
the public acceptance of it; and (4) increasing income
and profits.
BIBLIOGRAPHY
156
BIBLIOGRAPHS
I
"A Positive Investment Policy," Dean Witter and Company, !
1958. . j
"Business Round Up," Foreeast of Fortune Magazine,
Vol. LVXX, No. 1, January, 19^8.
Chamber of Commerce, Los Angeles. "1957 Business Outlook '
Conference," The Researcher.,Vol, XV, No. 1. pre
pared by Res earch Department, 1957#
Downtown Club. Financial Statements prepared by the
Accounting Department.
Internal Revenue Code, Sec.Ij.,21^1 to Sec. I 4 .,2I 4 . 2, as reported
*n Federal Tax Guide. Commerce Clearing House, 1956.
Security-First National Bank of Los Angeles, Research
Department. Monthly Summary, Vol. 35* No. 6, June,
1956; Vol. 36, No. 12, December, 1957*
US Department of Commerce. Survey of Current Business.
November, 1957#
_______• "Current Population Reports— Special Census,"
Bureau of the Census Series, No. 927. Washington,
r o r. “ 65ioESr xs7~i9$&; — ■
. Bureau of the Census. Census of Business.
j Bulletin CBD-I4J 4 . , Revised. Washington, 1956*
1
Wall Street Journal, January 2, 1958.
llfihrersftv of SanthMm CdBferai*

Asset Metadata

Creator Van Buskirk, Robert (author)

Core Title The development of a marketing program for a downtown Los Angeles club and its attendant problems

Contributor Digitized by ProQuest (provenance)

Degree Master of Business Administration

Degree Program Business Administration

Publisher University of Southern California (original), University of Southern California. Libraries (digital)

Tag business administration, marketing,OAI-PMH Harvest

Language English

Advisor Dockson, Robert R. (committee chair), Gilchrist, Franklin W. (committee member), Mead, Richard R. (committee member)

Permanent Link (DOI) https://doi.org/10.25549/usctheses-c20-141661

Unique identifier UC11263599

Identifier EP43478.pdf (filename),usctheses-c20-141661 (legacy record id)

Legacy Identifier EP43478.pdf

Dmrecord 141661

Document Type Thesis

Rights Van Buskirk, Robert

Type texts

Source University of Southern California (contributing entity), University of Southern California Dissertations and Theses (collection)

Access Conditions The author retains rights to his/her dissertation, thesis or other graduate work according to U.S. copyright law. Electronic access is being provided by the USC Libraries in agreement with the au...

Repository Name University of Southern California Digital Library

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