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Advertising, Collective Action, And Labeling In The European Wine Markets

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Author Info

  • Marette, Stephan
  • Zago, Angelo M.

Abstract

In this paper we consider the role for collective action in advertising investments needed to compete on foreign markets and/or to enter into new markets. We model the choices facing producers in regions where both AO (high quality) and table (low quality) wines are produced. By joining forces with producers of other regions to invest in advertising, producers may penetrate into new markets. We show that it is profitable to enter into the new markets when, other things being equal, the size of the new market is relatively big, when the traditional market is relatively small, and when the size of the fixed investment in advertising is relatively small. We discuss the policy implications of the results, examining possible modifications of the AO system to facilitate collective action and improve investment levels.

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File URL: http://purl.umn.edu/27049
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Bibliographic Info

Article provided by Food Distribution Research Society in its journal Journal of Food Distribution Research.

Volume (Year): 34 (2003)
Issue (Month): 03 (November)
Pages:

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Handle: RePEc:ags:jlofdr:27049

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Web page: http://fdrs.ag.utk.edu/
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Related research

Keywords: Marketing;

References

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  1. Luis M.B. Cabral, 2000. "Stretching Firm and Brand Reputation," RAND Journal of Economics, The RAND Corporation, vol. 31(4), pages 658-673, Winter.
  2. Nelson, Phillip, 1970. "Information and Consumer Behavior," Journal of Political Economy, University of Chicago Press, vol. 78(2), pages 311-29, March-Apr.
  3. Seale, James L., Jr. & Merchant, Mary, 2002. "Imports versus Domestic Production: A Demand System Analysis of the U.S. Red Wine Market," Technical Papers 15637, University of Florida, International Agricultural Trade and Policy Center.
  4. Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August.
  5. Wittwer, Glyn & Berger, Nick & Anderson, Kym, 2003. "A model of the world's wine markets," Economic Modelling, Elsevier, vol. 20(3), pages 487-506, May.
  6. Sullivan, Mary, 1990. "Measuring Image Spillovers in Umbrella-Branded Products," The Journal of Business, University of Chicago Press, vol. 63(3), pages 309-29, July.
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Cited by:
  1. Henneberry, Shida Rastegari & Armbruster, Walter J., 2003. "Emerging Roles For Food Labels: Inform, Protect, Persuade," Journal of Food Distribution Research, Food Distribution Research Society, vol. 34(03), November.
  2. Yue, Chengyan & Marette, Stephan & Beghin, John C., 2006. "How to Promote Quality Perception in Wine Markets: Brand Advertising or Geographic Indication?," 2006 Annual meeting, July 23-26, Long Beach, CA 21310, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  3. Stephan Marette & Roxanne Clemens & Bruce Babcock, 2008. "Recent international and regulatory decisions about geographical indications," Agribusiness, John Wiley & Sons, Ltd., vol. 24(4), pages 453-472.

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