Generic Advertising in Concentrated and Differentiated Agricultural Markets

This study develops an analytical framework to examine the impact of generic advertising on brand advertising with alternative assumptions on demand changes (shift-up and rotation), product differentiation, market concentration, and relationship between commodity and brand advertising programs. The newly developed model allows one to determine the relationship between generic and brand advertising, which has not been clearly shown in previous studies. Analytical results show that when generic advertising leads to an inelastic demand, generic advertising would help brand advertising and could decrease the optimal brand advertising expenditures. However, when generic advertising leads to an elastic demand, it would negatively affect the profitability of brand advertising.generic advertising, brand advertising, product differentiation., Agribusiness, Demand and Price Analysis, Industrial Organization, Marketing,

Valuing Quality Attributes and Country Equity in the Korean Beef Market

Demand and Price Analysis, International Relations/Trade,

Asymmetric Adjustments in Vertical Price Transmission in the US Beef Sector: Testing for Differences among Product Cuts and Quality Grade

This study examines the dynamic relationship between wholesale and retail prices of beef products, accounting for product differentiation in cuts and quality grades. We test for long-run association in price transmission relationship in presence of asymmetry caused by threshold-type adjustments. The results indicate that there are significant asymmetric effects such that decrease or increase in wholesale beef prices tend to have different effects on the retail beef prices, and this effect varies across quality grades. Superior quality beef tend to show longer persistence to increase in prices and are adjusted at a slower rate than relatively inferior quality beef. This shows that adjustment of beef prices at retail market is influenced by the level of quality, thus supporting our original hypothesis

Generic Advertising in Concentrated and Differentiated Agricultural Markets

This study develops an analytical framework to examine the impact of generic advertising on brand advertising with alternative assumptions on demand changes (shift-up and rotation), product differentiation, market concentration, and relationship between commodity and brand advertising programs. The newly developed model allows one to determine the relationship between generic and brand advertising, which has not been clearly shown in previous studies. Analytical results show that when generic advertising leads to an inelastic demand, generic advertising would help brand advertising and could decrease the optimal brand advertising expenditures. However, when generic advertising leads to an elastic demand, it would negatively affect the profitability of brand advertising

Willingness to Pay for Beef Quality Attributes: Combining Mixed Logit and Latent Segmentation Approach

This study develops an alternative way of identifying the heterogeneity of WTP estimates for product attributes. The alternative approach combines mixed logit models with a latent segmentation method (MLS). First, the combined MLS approach estimates a mixed logit model and retrieve individual specific parameter estimates based on individual specific posterior distribution derived from the individual sequence of observed choices in the conjoint experiments. Second, WTPs of each choice variables are computed for each individual using the marginal rate of substitution between economic and choice variables. Finally, latent segmentation is conducted based on WTPs, individual perceptions on quality attributes, and demographic characteristics, and WTPs are compared among segments. The MLS approach is applied for estimating willingness to pay for beef quality attributes and country-of-origin in the Korea market. The MLS approach allows us to identify various clusters based on people’s preferences and demographics, and provide estimates of willingness to pay for beef quality attributes and country-of-origin for these clusters

Willingness to Pay for Beef Quality Attributes: A Latent Segmentation Analysis of Korean Grocery Shoppers

A latent segmentation modeling is used in this study to identify the heterogeneity of willingness-to-pay estimates for quality attributes and country-of-origin in the Korean beef market. Three distinctive groups of grocery shoppers are identified based on their level of concern (very, moderately, and not too concerned) about the use of antibiotics and genetically modified organism feed ingredients in beef production. Results indicate that the very concerned group values such attributes as antibiotics-free, genetically modified organism-free, and domestic production the most among the three groups. Results also suggest that the most important factor in determining grocery shoppers’ willingness-to-pay is country-of-origin for all three groups

Optimal Generic Advertising under Bilateral Imperfect Competition between Processors and Retailers

The purpose of this paper is to examine the impact of bilateral imperfect competition between processors and retailers and of import supply on optimal advertising intensity, advertising expenditures, and checkoff assessment rates. First, comparative static analyses were conducted on the newly developed optimal advertising intensity formula. Second, to consider the endogenous nature of optimal advertising, a linear market equilibrium model was developed and applied to the U.S. beef industry. Results showed that the full consideration of retailer-processor bilateral market power lowered the optimal values of assessment rates, advertising expenditures, and advertising intensity for the checkoff board while consideration of importers increases the optimal values. The results indicate that ignoring the import sector in optimal generic advertising modeling should underestimate these optimal values, while ignoring the bilateral market power between processors and retailers overestimates the values