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Generic Advertising and Product Differentiation

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  • John Crespi
  • Stéphan Marette

Abstract

This article considers whether generic advertising lowers the differentiation among competing brands of the same good. Analytical results show that if the benefits from generic advertising from increased demand are outweighed by the costs from lower product differentiation then high-quality producers will not benefit from generic promotion. Hypotheses are tested empirically under a conditional-logit approach using retail-market sales and advertising data for the U.S. prune industry. Results from this study provide evidence that generic advertising has a slight differential effect on the perceived qualities of different brands. Copyright 2002, Oxford University Press.

Suggested Citation

  • John Crespi & Stéphan Marette, 2002. "Generic Advertising and Product Differentiation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(3), pages 691-701.
    • Handle: RePEc:oup:ajagec:v:84:y:2002:i:3:p:691-701
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    File URL: http://hdl.handle.net/10.1111/1467-8276.00328
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