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Butter and Cheese: Sales Changes Associated with Three Levels of Promotion

Author

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  • Henderson, Peter L.

Abstract

Butter and cheese sales related to three levels of promotion investment were compared to sales with no promotion. The study period was May 1972-July 1973. For cheese, annual investments of 6 and 9 cents per capita produced sales gains of 15-18 percent in the test markets. Butter sales rose about 4.5 percent at the 9-cent promotion level, but showed no gains at lower levels, apparently because of the effect of counterpromotions for oleomargarine. Projecting test market results to all U.S. supermarkets gave an increase of 244 million pounds in annual cheese sales, or the equivalent of 24.4 million hundredweight of fluid milk, for a promotion cost of $12 million, or 50 cents per hundredweight for the additional milk sold. For butter, the increase would be 21 million pounds, unadjusted for oleomargarine advertising. The milk equivalent would be 4.5 million hundredweight, and the cost of the national promotion campaign, $18 million. Adjusted for oleomargarine counterpromotion, the increase in butter sales would be 60 million pounds, or 12.7 million hundredweight of milk equivalent. The value of added milk sales would be about $100 million, for a promotion cost of about $1.42 per hundredweight.

Suggested Citation

  • Henderson, Peter L., 1976. "Butter and Cheese: Sales Changes Associated with Three Levels of Promotion," Agricultural Economic Reports 307566, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uerser:307566
    DOI: 10.22004/ag.econ.307566
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    Cited by:

    1. Kinnucan, Henry, 1984. "Evaluating Farm Commodity Promotional * * Programs," 1984 Annual Meeting, August 5-8, Ithaca, New York 279028, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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