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Optimal Choice Of Generic Milk Advertising Expenditures By Media Outlet

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  • Pritchett, James G.
  • Liu, Donald J.
  • Kaiser, Harry M.

Abstract

The largest portion of dairy and milk checkoff funds is spent on generic fluid milk advertising. These funds are distributed among four distinct media outlets-television, radio, print, and outdoor. Spending too little on one media outlet or too much on another constitutes a missed opportunity to garner higher returns. Using 1984-93 data, this study compares historical advertising expenditures in each media outlet to the advertising expenditure decision of an optimal control model. Results show profits would have increased if funds had been reallocated from television to radio, print, and outdoor media outlets.

Suggested Citation

  • Pritchett, James G. & Liu, Donald J. & Kaiser, Harry M., 1998. "Optimal Choice Of Generic Milk Advertising Expenditures By Media Outlet," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 23(1), pages 1-15, July.
    • Handle: RePEc:ags:jlaare:31179
    DOI: 10.22004/ag.econ.31179
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    References listed on IDEAS

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    1. Capps, Oral & Schmitz, John D., 1991. "Effect of Generic Advertising on the Demand for Fluid Milk: The Case of the Texas Market Order," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 23(2), pages 131-140, December.
    2. Jonq-Ying Lee & Mark G. Brown, 1992. "Lag structures in commodity advertising research," Agribusiness, John Wiley & Sons, Ltd., vol. 8(2), pages 143-154.
    3. Donald J. Liu & Olan D. Forker, 1988. "Generic Fluid Milk Advertising, Demand Expansion, and Supply Response: The Case of New York City," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 70(2), pages 229-236.
    4. 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.
    5. E. W. Goddard & M. L. McCutcheon, 1993. "Optimal Producer Investment in Generic Advertising: The Case of Fluid Milk in Ontario and Quebec," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 41(3), pages 329-347, November.
    6. Kinnucan, Henry W., 1986. "Demographic Versus Media Advertising Effects On Milk Demand: The Case Of The New York City Market," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 15(1), pages 1-9, April.
    7. Henry W. Kinnucan & Maria Thomas, 1997. "Optimal Media Allocation Decisions For Generic Advertisers," Journal of Agricultural Economics, Wiley Blackwell, vol. 48(1‐3), pages 425-441, January.
    8. Kaiser, Harry M. & Forker, Olan D. & Lenz, John E. & Sun, Chin-Hwa, 1992. "Evaluating Generic Dairy Advertising impacts on Retail, Wholesale, and Farm Milk Markets," Journal of Agricultural Economics Research, United States Department of Agriculture, Economic Research Service, vol. 44(4), pages 1-15.
    9. Ronald W. Ward & Bruce L. Dixon, 1989. "Effectiveness of Fluid Milk Advertising Since the Dairy and Tobacco Adjustment Act of 1983," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(3), pages 730-740.
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    Cited by:

    1. Beach, Robert H. & Murray, Brian C. & Piggott, Nicholas E. & Wohlgenant, Michael K., 2002. "Interaction Effects Of Promotion, Research, And Price Support Programs For U.S. Cotton," 2002 Annual meeting, July 28-31, Long Beach, CA 19803, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Nicholson, Charles F. & Kaiser, Harry M., 2007. "The Impact of Generic Fluid Milk and Cheese Advertising on Regulated Dairy Product Markets: A System Dynamics Analysis," Working Papers 127001, Cornell University, Department of Applied Economics and Management.
    3. Nicholson, Charles F. & Kaiser, Harry M., 2008. "Dynamic market impacts of generic dairy advertising," Journal of Business Research, Elsevier, vol. 61(11), pages 1125-1135, November.
    4. Holloway Garth J. & Aydogus Osman, 2004. "Promotion Carryover as a Missing-Data Problem," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 2(1), pages 1-18, February.
    5. Fare, Rolf & Grosskopf, Shawna & Seldon, Barry J. & Tremblay, Victor J., 2004. "Advertising efficiency and the choice of media mix: a case of beer," International Journal of Industrial Organization, Elsevier, vol. 22(4), pages 503-522, April.
    6. Dong, Diansheng & Schmit, Todd M. & Kaiser, Harry M., 2007. "Optimal Media Allocation of Generic Fluid Milk Advertising Expenditures: The Case of New York State," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 36(2), pages 1-14, October.
    7. Pimbucha Rusmevichientong & Harry M. Kaiser, 2009. "Measuring the effectiveness of U.S. rice export promotion programs," Agribusiness, John Wiley & Sons, Ltd., vol. 25(2), pages 215-230.
    8. Parcell, Joseph L. & Kastens, Terry L. & Dhuyvetter, Kevin C. & Schroeder, Ted C., 2000. "Agricultural Economists' Effectiveness In Reporting And Conveying Research Procedures And Results," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 29(2), pages 1-10, October.
    9. Harry M. Kaiser & Donald J. Liu & Ted Consignado, 2003. "An economic analysis of California raisin export promotion," Agribusiness, John Wiley & Sons, Ltd., vol. 19(2), pages 189-201.
    10. Yuqing Zheng & Harry M. Kaiser, 2009. "Evaluating the effectiveness of generic advertising versus nonadvertising marketing activities on New York State milk markets," Agribusiness, John Wiley & Sons, Ltd., vol. 25(3), pages 351-368.

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