IDEAS home Printed from https://ideas.repec.org/a/ags/jlcoop/46410.html
   My bibliography  Save this article

Do Agricultural Marketing Cooperatives Advertise Less Intensively Than Investor-Owned Food-Processing Firms?

Author

Listed:
  • Gruber, Jennifer E.
  • Rogers, Richard T.
  • Sexton, Richard J.

Abstract

A common belief is that agricultural marketing cooperatives advertise less than their investor-owned counterparts, holding other factors constant. This paper presents both a conceptual and an empirical analysis that questions this conventional wisdom. Our conceptual model analyzes a cooperative’s optimal advertising-to-sales (A/S) ratio under three alternative objective functions. In each instance, the optimal A/S ratio is characterized by the well-known Dorfman-Steiner condition that also characterizes optimal advertising for an investor-owned firm. The empirical analysis examines forty-nine processed food markets, each containing at least one cooperative. The results do no support the conventional wisdom that cooperatives advertise less, ceteris paribus. The appearance that cooperatives advertise less is due to their predominance in industries with low margins and little product differentiation, factors that are associated with low advertising intensity regardless of a firm’s organizational form.

Suggested Citation

  • Gruber, Jennifer E. & Rogers, Richard T. & Sexton, Richard J., 2000. "Do Agricultural Marketing Cooperatives Advertise Less Intensively Than Investor-Owned Food-Processing Firms?," Journal of Cooperatives, NCERA-210, vol. 15, pages 1-16.
    • Handle: RePEc:ags:jlcoop:46410
    DOI: 10.22004/ag.econ.46410
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/46410/files/Volume%2015%20Article%203.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.46410?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zhang, Mingxia & Sexton, Richard J. & Alston, Julian M., 2002. "Does Branded Food Product Advertising Help Or Hurt Farmers?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 27(2), pages 1-25, December.
    2. Kyriakos Kyriakopoulos & Matthew Meulenberg & Jerker Nilsson, 2004. "The impact of cooperative structure and firm culture on market orientation and performance," Agribusiness, John Wiley & Sons, Ltd., vol. 20(4), pages 379-396.
    3. Hardesty, Shermain D., 2005. "Cooperatives as Marketers of Branded Products," Journal of Food Distribution Research, Food Distribution Research Society, vol. 36(1), pages 1-6, March.
    4. Julia Hohler & Rainer Kuhl, 2014. "Position and Performance of Farmer Cooperatives in the Food supply Chain of the EU-27," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 85(4), pages 579-595, December.
    5. Hardesty, Shermain D. & Salgia, Vikas D., 2004. "Comparative Financial Performance of Agricultural Cooperatives and Investor-Owned Firms," 2004 Annual Meeting, November 2-3 31797, NCERA-194 Research on Cooperatives.
    6. Panagiotou, Dimitrios, 2019. "Pricing behavior in a mixed spatial duopsony with an agricultural cooperative under asymmetric information," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 0(Issue 1).

    More about this item

    Keywords

    Agribusiness;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:jlcoop:46410. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/daksuus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.