IDEAS home Printed from https://ideas.repec.org/a/ags/joaaec/15054.html
   My bibliography  Save this article

On The Estimation Of Advertising Effects For Branded Products: An Application To Spaghetti Sauces

Author

Listed:
  • Capps, Oral, Jr.
  • Seo, Seong-Cheon
  • Nichols, John P.

Abstract

Using IRI Infoscan data pertaining to six types of spaghetti sauces and employing an extension of the demand systems framework developed by Duffy, estimates are obtained of own-price, cross-price, and total expenditure elasticities as well as own- and cross-product advertising elasticities. We augment the Duffy model through the use of a polynomial inverse lag mechanism to deal with the carryover effects of advertising. We also account for the impacts of features in newspaper fliers, in-store displays, and coupons. Advertising efforts by industry leaders in spaghetti sauce produce positive own-advertising elasticities (ranging from -.000003 to -.0094). Own-price elasticities are in the elastic range, and nearly all compensated cross-price effects are positive, indicative of Hicksian substitutes.

Suggested Citation

  • Capps, Oral, Jr. & Seo, Seong-Cheon & Nichols, John P., 1997. "On The Estimation Of Advertising Effects For Branded Products: An Application To Spaghetti Sauces," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 29(2), pages 1-12, December.
    • Handle: RePEc:ags:joaaec:15054
    DOI: 10.22004/ag.econ.15054
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/15054/files/29020291.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.15054?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
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. R. W. Ward & C. Lambert, 1993. "Generic Promotion Of Beef: Measuring The Impact Of The Us Beef Checkoff," Journal of Agricultural Economics, Wiley Blackwell, vol. 44(3), pages 456-465, September.
    2. Ellen W. Goddard & Alex K. Amuah, 1989. "The Demand for Canadian Fats and Oils: A Case Study of Advertising Effectiveness," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(3), pages 741-749.
    3. Scott A. Neslin & Caroline Henderson & John Quelch, 1985. "Consumer Promotions and the Acceleration of Product Purchases," Marketing Science, INFORMS, vol. 4(2), pages 147-165.
    4. Mitchell, Douglas W. & Speaker, Paul J., 1986. "A simple, flexible distributed lag technique : The polynomial inverse lag," Journal of Econometrics, Elsevier, vol. 31(3), pages 329-340, April.
    5. Peter M. Guadagni & John D. C. Little, 1983. "A Logit Model of Brand Choice Calibrated on Scanner Data," Marketing Science, INFORMS, vol. 2(3), pages 203-238.
    6. S. E. Pudney, 1981. "An Empirical Method of Approximating the Separable Structure of Consumer Preferences," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 48(4), pages 561-577.
    7. Nicholas E. Piggott & James A. Chalfant & Julian M. Alston & Garry R. Griffith, 1996. "Demand Response to Advertising in the Australian Meat Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(2), pages 268-279.
    8. Marc Nerlove & Frederick V. Waugh, 1961. "Advertising without Supply Control: Some Implications of a Study of the Advertising of Oranges," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 43(4_Part_I), pages 813-837.
    9. Jonq-Ying Lee & Mark G. Brown & Gary F. Fairchild, 1989. "Some observations on the impact of advertising on demand," Agribusiness, John Wiley & Sons, Ltd., vol. 5(6), pages 607-618.
    10. Ronald W. Ward & Bruce L. Dixon, 1989. "Effectiveness of Fluid Milk Advertising Since the Dairy and Tobacco Adjustment Act of 1983," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(3), pages 730-740.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Yuan, Yan & Capps, Oral & Nayga, Rodolfo M., 2009. "Assessing the Demand for a Functional Food Product: Is There Cannibalization in the Orange Juice Category?," Agricultural and Resource Economics Review, Cambridge University Press, vol. 38(2), pages 153-165, October.
    2. Lee L. Schulz & Ted C. Schroeder & Tian Xia, 2012. "Studying composite demand using scanner data: the case of ground beef in the US," Agricultural Economics, International Association of Agricultural Economists, vol. 43, pages 49-57, November.
    3. Revoredo-Giha, Cesar & Lamprinopoulou-Kranis, Chrysa & Toma, Luiza & Leat, Philip M.K. & Kupiec-Teahan, Beata & Cacciolatti, Luca, 2009. "Bread Prices, Consumption and Nutrition Implications for Scotland: A Regional Analysis Using Supermarket Scanner Data," Working Papers 109393, Scotland's Rural College (formerly Scottish Agricultural College), Land Economy & Environment Research Group.
    4. Gregory K. Price & John M. Connor, 2003. "Modeling coupon values for ready-to-eat breakfast cereals," Agribusiness, John Wiley & Sons, Ltd., vol. 19(2), pages 223-243.
    5. Revoredo-Giha, Cesar & Lamprinopoulou-Kranis, Chrysa & Toma, Luiza & Kupiec-Teahan, Beata & Leat, Philip M.K. & Cacciolatti, Luca, 2009. "Cereal Prices, Bread Consumption and Health in Scotland," 83rd Annual Conference, March 30 - April 1, 2009, Dublin, Ireland 51069, Agricultural Economics Society.
    6. Revoredo-Giha, Cesar & Lamprinopoulou-Kranis, Chrysa & Toma, Luiza & Kupiec-Teahan, Beata & Leat, Philip M.K. & Cacciolatti, Luca, 2009. "Use of Supermarket Scanner Data to Measure Bread Consumption and Nutrition Choice in Scotland," 2009 Conference, August 16-22, 2009, Beijing, China 50399, International Association of Agricultural Economists.
    7. Seo, Seong-Cheon & Capps, Oral, Jr., 1997. "Testing For Store-Level Differences In Factors Affecting Item Movement Of Prego And Ragu Spaghetti Sauces Using Point-Of-Sale Data," Journal of Food Distribution Research, Food Distribution Research Society, vol. 28(3), pages 1-12, October.
    8. Revoredo-Giha, Cesar & Leat, Philip M.K. & Toma, Luiza & Lamprinopoulou-Kranis, Chrysa & Kupiec-Teahan, Beata & Cacciolatti, Luca, 2009. "Wheat Prices, Bread Consumption and Health in Scotland," Working Papers 109395, Scotland's Rural College (formerly Scottish Agricultural College), Land Economy & Environment Research Group.
    9. Richards, Timothy J. & Patterson, Paul M., 2003. "A Bilateral Comparison Of Fruit And Vegetable Consumption: U.S And Canada," 2003 Annual meeting, July 27-30, Montreal, Canada 21891, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    10. Timothy J. Richards, 2000. "A discrete|continuous model of fruit promotion, advertising, and response segmentation," Agribusiness, John Wiley & Sons, Ltd., vol. 16(2), pages 179-196.
    11. Thompson, Gary D. & Wilson, Paul N., 1999. "Market Demands For Bagged, Refrigerated Salads," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 24(2), pages 1-19, December.
    12. Conley, Dennis M. & Wade, Mark A., 2007. "Consumer Responses to Food Safety Information from Print Media," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 10(3), pages 1-22.
    13. Carlos Arnade & Fred Kuchler & Linda Calvin, 2016. "The changing role of consumers and suppliers in a food safety event: the 2006 foodborne illness outbreak linked to spinach," Applied Economics, Taylor & Francis Journals, vol. 48(25), pages 2354-2366, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Seo, Seong-Cheon & Capps, Oral, Jr., 1997. "Testing For Store-Level Differences In Factors Affecting Item Movement Of Prego And Ragu Spaghetti Sauces Using Point-Of-Sale Data," Journal of Food Distribution Research, Food Distribution Research Society, vol. 28(3), pages 1-12, October.
    2. Sartorius von Bach, Helmke, 1992. "Economic Aspects Of Advertising In Agriculture: A Review," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 31(1), March.
    3. Yadavalli, Anita & Jones, Keithly, 2014. "Does media influence consumer demand? The case of lean finely textured beef in the United States," Food Policy, Elsevier, vol. 49(P1), pages 219-227.
    4. H. W. Kinnucan, 1996. "A Note On Measuring Returns To Generic Advertising In Interrelated Markets," Journal of Agricultural Economics, Wiley Blackwell, vol. 47(1‐4), pages 261-267, January.
    5. David R. Bell & Jeongwen Chiang & V. Padmanabhan, 1999. "The Decomposition of Promotional Response: An Empirical Generalization," Marketing Science, INFORMS, vol. 18(4), pages 504-526.
    6. Kinnucan, Henry W. & Belleza, Evelyn T., 1995. "Price And Quantity Effects Of Canada'S Dairy Adverstising Programs," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 24(2), pages 1-12, October.
    7. Siskos, Y. & Matsatsinis, N. F. & Baourakis, G., 2001. "Multicriteria analysis in agricultural marketing: The case of French olive oil market," European Journal of Operational Research, Elsevier, vol. 130(2), pages 315-331, April.
    8. Holloway, Garth J. & Peyton, L. James & Griffith, Garry R., 2000. "Was the Australian Meat and Live-stock Corporation's advertising efficient?," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 44(1), pages 1-27.
    9. Verbeke, Wim & Ward, Ronald W., 2001. "A fresh meat almost ideal demand system incorporating negative TV press and advertising impact," Agricultural Economics, Blackwell, vol. 25(2-3), pages 359-374, September.
    10. Metin Cakir & Joseph V. Balagtas, 2010. "Econometric evidence of cross-market effects of generic dairy advertising," Agribusiness, John Wiley & Sons, Ltd., vol. 26(1), pages 83-99.
    11. Nayga, Rodolfo M., Jr., 1992. "Scanner Data in Supermarkets: Untapped Data Source for Agricultural Economists," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 60(02), pages 1-8, August.
    12. Jean-Pierre H. Dubé, 2018. "Microeconometric Models of Consumer Demand," NBER Working Papers 25215, National Bureau of Economic Research, Inc.
    13. Baohong Sun, 2005. "Promotion Effect on Endogenous Consumption," Marketing Science, INFORMS, vol. 24(3), pages 430-443, July.
    14. Othman, Jamal B. & McIntosh, Christopher S. & Houston, Jack B., 1994. "Price Competition And Informational Product Differentiation Effectiveness: The Case Of Edible Vegetable Oils In The U.S," 1994 Annual Meeting, August 7-10, San Diego, California 271417, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    15. Williams, Gary W. & Shumway, C. Richard & Love, H. Alan, 2002. "Returns to Soybean Producers from Investments in Promotion and Research," Agricultural and Resource Economics Review, Cambridge University Press, vol. 31(1), pages 97-111, April.
    16. Kinnucan, Henry W. & Venkateswaran, Meenakshi, 1990. "Effects of Generic Advertising on Perceptions and Behavior: The Case of Catfish," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 22(2), pages 137-151, December.
    17. Zhang, Mingxia & Sexton, Richard J., 2000. "Optimal Commodity Promotion In Imperfectly Competitive Markets," 2000 Annual meeting, July 30-August 2, Tampa, FL 21823, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    18. Alam Kazmi, Syed Hasnain, 2015. "Developments in Promotion Strategies Review on Psychological Streams of Consumers," MPRA Paper 65424, University Library of Munich, Germany, revised 05 May 2015.
    19. Jorge M. Silva-Risso & Randolph E. Bucklin & Donald G. Morrison, 1999. "A Decision Support System for Planning Manufacturers' Sales Promotion Calendars," Marketing Science, INFORMS, vol. 18(3), pages 274-300.
    20. Brett R. Gordon & Baohong Sun, 2015. "A Dynamic Model of Rational Addiction: Evaluating Cigarette Taxes," Marketing Science, INFORMS, vol. 34(3), pages 452-470, May.

    More about this item

    Keywords

    Marketing;

    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:joaaec:15054. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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/saeaaea.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.