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Marketing Agencies And The Economics Of Market Segmentation

Author

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  • Martin, S.K.
  • Zwart, A.C.

Abstract

Increasing importance is being attached to market segmentation strategies as a means of increasing producer returns. In this paper, a generalised model of price discrimination without supply control is developed to analyse the implications of optimal segmentation strategies for non-homogeneous products. It is shown that the magnitude of producer returns is dependent on demand and supply conditions, with increases in returns falling as price elasticities of demand and supply increase. The model is applied to the New Zealand sheep meats industry to reveal that returns to producers from market segmentation strategies could be quite low in the long run.

Suggested Citation

  • Martin, S.K. & Zwart, A.C., 1987. "Marketing Agencies And The Economics Of Market Segmentation," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 31(03), December.
  • Handle: RePEc:ags:ajaeau:22271
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    References listed on IDEAS

    as
    1. John W. Freebairn & Fred H.G. Gruen, 1977. "Marketing Australian Beef And Export Diversification Schemes," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 21(1), pages 26-39, April.
    2. Alston, Julian M. & Freebairn, John W., 1988. "Producer Price Equalization," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 56(03), December.
    3. Cronin, M.R., 1979. "Export Demand Elasticities With Less Than Perfect Markets," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 23(01), April.
    4. Chris M. Alaouze & A. S. Watson & N. H. Sturgess, 1978. "Oligopoly Pricing in the World Wheat Market," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 60(2), pages 173-185.
    5. Reeves, G.W. & Longmire, James L., 1982. "A Note on the Theory of Price Determination in the Australian Beef Market," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 50(01), April.
    6. M.R. Cronin, 1979. "Export Demand Elasticities With Less Than Perfect Markets," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 23(1), pages 69-72, April.
    7. Schmalensee, Richard, 1981. "Output and Welfare Implications of Monopolistic Third-Degree Price Discrimination," American Economic Review, American Economic Association, vol. 71(1), pages 242-247, March.
    8. Rae, Allan N., 1978. "An Evaluation Of A New Zealand Marketing Board'S Supply Diversion Strategies," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 22(01), April.
    9. Phlips,Louis, 1983. "The Economics of Price Discrimination," Cambridge Books, Cambridge University Press, number 9780521283946, May.
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    Keywords

    Marketing;

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