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Optimal Media Allocation Decisions For Generic Advertisers

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  • Henry W. Kinnucan
  • Maria Thomas

Abstract

Media allocation rules are derived for generic advertisers under a variety of market structures, marketing technologies and policy settings. The rules indicate that once the budget is set, allocation decisions can proceed strictly on the basis of media‐specific advertising elasticities. The investment decision, however, is more complex. In addition to the media‐specific advertising elasticities, generic advertisers need to take into account the price sensitivity of consumers, supply response, markup behaviour, advertising ‘tax’ incidence, policy setting, and competitive conditions. A general finding is that protection blunts the incentive to advertise collectively, while imperfect competition enhances the incentive.

Suggested Citation

  • Henry W. Kinnucan & Maria Thomas, 1997. "Optimal Media Allocation Decisions For Generic Advertisers," Journal of Agricultural Economics, Wiley Blackwell, vol. 48(1‐3), pages 425-441, January.
    • Handle: RePEc:bla:jageco:v:48:y:1997:i:1-3:p:425-441
    DOI: 10.1111/j.1477-9552.1997.tb01163.x
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    References listed on IDEAS

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    1. Kehar Singh & Madan M. Dey & Prasanna Surathkal, 2014. "Seasonal and Spatial Variations in Demand for and Elasticities of Fish Products in the United States: An Analysis Based on Market-Level Scanner Data," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 62(3), pages 343-363, September.
    2. Kinnucan, Henry W., 2003. "Optimal generic advertising in an imperfectly competitive food industry with variable proportions," Agricultural Economics, Blackwell, vol. 29(2), pages 143-158, October.
    3. Meza, Liliana & Sanjuan, Ana I. & Mascaray, Maria A. & Albisu, Luis M., 1999. "An integrated approach to evaluate generic promotions," 67th Seminar, October 28-30, 1999, LeMans, France 241042, European Association of Agricultural Economists.
    4. Craig A. Gallet, 1999. "The effect of the 1971 advertising ban on behavior in the cigarette industry," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 20(6), pages 299-303.
    5. Patterson, Paul M. & Richards, Timothy J., 1998. "Print Advertisement Characteristics and Apple Variety Attraction: A Mimic Model Approach," Working Papers 28537, Arizona State University, Morrison School of Agribusiness and Resource Management.
    6. Yuqing Zheng & Harry M. Kaiser, 2009. "Evaluating the effectiveness of generic advertising versus nonadvertising marketing activities on New York State milk markets," Agribusiness, John Wiley & Sons, Ltd., vol. 25(3), pages 351-368.
    7. Pritchett, James G. & Liu, Donald J. & Kaiser, Harry M., 1998. "Optimal Choice Of Generic Milk Advertising Expenditures By Media Outlet," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 23(1), pages 1-15, July.
    8. Dong, Diansheng & Schmit, Todd M. & Kaiser, Harry M., 2007. "Optimal Media Allocation of Generic Fluid Milk Advertising Expenditures: The Case of New York State," Agricultural and Resource Economics Review, Cambridge University Press, vol. 36(2), pages 253-266, October.

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