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Optimal Seasonal Allocation of Generic Dairy Advertising Expenditures

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  • Schmit, Todd M.
  • Kaiser, Harry M.

Abstract

Escalating media advertising costs have prompted shifts away from advertising to non-advertising promotion activities in the dairy industry’s generic commodity promotion program. As advertising budgets become tighter, determining the optimal allocation of these funds becomes particularly important. Optimal seasonal generic advertising expenditure shares for the national fluid milk and cheese generic advertising programs were estimated, with shares higher in the first and fourth quarters for fluid milk and relatively even across quarters for cheese. Estimates of producer welfare gains from re-allocation were substantial, with average welfare gains of 12 to 24 percent of annual advertising investments.

Suggested Citation

  • Schmit, Todd M. & Kaiser, Harry M., 2004. "Optimal Seasonal Allocation of Generic Dairy Advertising Expenditures," Research Bulletins 122095, Cornell University, Department of Applied Economics and Management.
    • Handle: RePEc:ags:cudarb:122095
    DOI: 10.22004/ag.econ.122095
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    References listed on IDEAS

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    1. Henry Kinnucan & Olan D. Forker, 1986. "Seasonality in the Consumer Response to Milk Advertising with Implications for Milk Promotion Policy," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(3), pages 562-571.
    2. Donald J. Liu & Olan D. Forker, 1990. "Optimal Control of Generic Fluid Milk Advertising Expenditures," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(4), pages 1047-1055.
    3. Schmit, Todd M. & Kaiser, Harry M., 2002. "Measuring the Impacts of Generic Fluid Milk and Cheese Advertising: A Time-Varying Parameter Application," Research Bulletins 122635, Cornell University, Department of Applied Economics and Management.
    4. Todd M. Schmit & Harry M. Kaiser, 2004. "Decomposing the Variation in Generic Advertising Response over Time," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(1), pages 139-153.
    5. Philip R. Vande Kamp & Harry M. Kaiser, 2000. "Optimal Temporal Policies in Fluid Milk Advertising," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 274-286.
    6. 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.
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    Cited by:

    1. Cuellar, Sandra & Uva, Wen-fei L., 2004. "Marketing and Merchandising Practices for Fresh Sweet Corn in Supermarkets -- Challenges and Opportunities for the New York State Fresh Sweet Corn Industry," Research Bulletins 122100, Cornell University, Department of Applied Economics and Management.

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    More about this item

    Keywords

    Livestock Production/Industries; Marketing;

    JEL classification:

    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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