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Dynamic strategic responses among advertisers: the case of meat products

Author

Listed:
  • Jeffrey Hyde

    (The Pennsylvania State University)

  • Brent Gloy

    (Cornell University)

Abstract

The case of strategic advertising response is examined for branded and generic meat products (beef, pork, and poultry). A dynamic conceptual model is developed to identify the determinants of advertising expenditures. A time-series model is then used to examine the competitive behavior of branded and generic meat advertisers. The results identify two types of advertising strategies those based upon changes in revenues and those based upon changes in competitor advertising expenditures. Most groups employ a mix of revenue-based and advertising-based strategies. The results identify examples of both strategic substitutes and strategic complements. No long-run response to generic advertising by brand advertisers in the same commodity group is found.

Suggested Citation

  • Jeffrey Hyde & Brent Gloy, 2007. "Dynamic strategic responses among advertisers: the case of meat products," Economics Bulletin, AccessEcon, vol. 13(3), pages 1-14.
    • Handle: RePEc:ebl:ecbull:eb-07m30001
    as

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    References listed on IDEAS

    as
    1. Jeffrey Hyde & Kenneth Foster, 2003. "Estimating Dynamic Relationships between Pork Advertising and Revenues," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 25(2), pages 279-293.
    2. Marcel Boyer & Michel Moreaux, 1999. "Strategic Underinvestment in Informative Advertising: The Cases of Substitutes and Complements," Canadian Journal of Economics, Canadian Economics Association, vol. 32(3), pages 654-672, May.
    3. Thomas, Louis A., 1999. "Incumbent firms' response to entry: Price, advertising, and new product introduction," International Journal of Industrial Organization, Elsevier, vol. 17(4), pages 527-555, May.
    4. Julian M. Alston & John W. Freebairn & Jennifer S. James, 2001. "Beggar-Thy-Neighbor Advertising: Theory and Application to Generic Commodity Promotion Programs," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(4), pages 888-902.
    5. 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.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    advertising strategy;

    JEL classification:

    • M3 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

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