IDEAS home Printed from https://ideas.repec.org/a/ags/nejare/29064.html
   My bibliography  Save this article

Allocation Of Generic Advertising Funds Among Products: A Sales Maximization Approach

Author

Listed:
  • Kinnucan, Henry W.
  • Forker, Olan D.

Abstract

With the passage of the Dairy and Tobacco Adjustment Act of 1983, dairy farmer investment in product research, nutrition education, advertising, and promotion in the United States increased from $60 million to $200 million annually. A key decision faced by boards managing these funds is how best to allocate available advertising funds among the various dairy products. In this paper an economic model is developed that shows the allocation of funds among products that would maximize sales in a given market. The model is applied to the New York City market with results suggesting that over the study period diverting funds from fluid milk to cheese advertising would have enhanced milk-equivalent sales in the market by as much as 1.17% or 8.21 million gallons annually. Alternatively, the model suggests that the same sales level could have been achieved with a different allocation of funds resulting in an estimated 14.6% savings in the amount spent advertising the two products.

Suggested Citation

  • Kinnucan, Henry W. & Forker, Olan D., 1988. "Allocation Of Generic Advertising Funds Among Products: A Sales Maximization Approach," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 17(01), pages 1-8, April.
    • Handle: RePEc:ags:nejare:29064
    DOI: 10.22004/ag.econ.29064
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/29064/files/17010064.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.29064?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. 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(01), pages 1-9, April.
    2. Marc Nerlove & Frederick V. Waugh, 1961. "Advertising without Supply Control: Some Implications of a Study of the Advertising of Oranges," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 43(4_Part_I), pages 813-837.
    3. H. E. Doran & J. J. Quilkey, 1972. "Harmonic Analysis of Seasonal Data: Some Important Properties," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 54(4_Part_1), pages 646-651.
    4. Gunjal, Kisan R., 1985. "The Effects Of Trade Promotion On Canadian Agricultural Exports," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 14(2), pages 1-10, October.
    5. C. P. Rosson & M. D. Hammig & J. W. Jones, 1986. "Foreign market promotion programs: An analysis of promotion response for apples, poultry, and tobacco," Agribusiness, John Wiley & Sons, Ltd., vol. 2(1), pages 33-42.
    6. Ronald W. Ward & William F. McDonald, 1986. "Effectiveness of generic milk advertising: A ten region study," Agribusiness, John Wiley & Sons, Ltd., vol. 2(1), pages 77-89.
    7. Stanley R. Thompson & Doyle A. Eiler, 1977. "Determinants of Milk Advertising Effectiveness," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 59(2), pages 330-335.
    8. Novakovic, Andrew M., 1986. "Detailed Summary of the Dairy Provisions of the Food Security Act of 1985," EB Series 185828, Cornell University, Department of Applied Economics and Management.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Suzuki, Nobuhiro & Kaiser, Harry M. & Lenz, John E. & Forker, Olan D., 1994. "An Analysis Of U.S. Dairy Policy Deregulation Using An Imperfect Competition Model," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 23(01), pages 1-10, April.
    2. Capps, Oral, Jr. & Park, Jaehong, 2002. "Impacts Of Advertising, Attitudes, Lifestyles, And Health On The Demand For U.S. Pork: A Micro-Level Analysis," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 34(01), pages 1-15, April.
    3. Suzuki, Nobuhiro & Kaiser, Harry M. & Lenz, John E. & Forker, Olan D., 1993. "Evaluating U.S. Generic Milk Advertising Effectiveness Using An Imperfect Competition Model," Research Bulletins 123015, Cornell University, Department of Applied Economics and Management.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Goddard, E.W. & Tielu, A., 1987. "The OMMB'S Fluid Milk Advertising," Working Papers 244815, University of Guelph, Department of Food, Agricultural and Resource Economics.
    2. Capps, Oral, Jr. & Schmitz, John D., 1991. "Effect Of Generic Advertising On The Demand For Fluid Milk: The Case Of The Texas Market Order," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 23(2), pages 1-10, December.
    3. Chanjin Chung & Harry M. Kaiser, 2000. "Determinants of temporal variations in generic advertising effectiveness," Agribusiness, John Wiley & Sons, Ltd., vol. 16(2), pages 197-214.
    4. Kinnucan, Henry W. & Venkateswaran, Meenakshi, 1990. "Effects of Generic Advertising on Perceptions and Behavior: The Case of Catfish," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 22(2), pages 137-151, December.
    5. 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).
    6. Capps, O., . "Targeted Advertising and Promotion Campaigns_A Case Study of the National Pork Board," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 38(01).
    7. Williams, Gary W. & Capps Jr., Oral, 2020. "Generic promotion of Norwegian seafood exports," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 23(3), August.
    8. de Boer, A.J., 1977. "Rural Product Promotion: Economic Aspects Of Promotability, Organization And Public Assistance," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 45(04), pages 1-25, December.
    9. Reberte, J. Carlos & Kaiser, Harry M. & Lenz, John E. & Forker, Olan D., 1996. "Generic Advertising Wearout: The Case Of The New York City Fluid Milk Campaign," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 21(2), pages 1-11, December.
    10. Tomek, William G. & Robinson, Kenneth L., 1977. "PART V. Agricultural Price Analysis and Outlook," AAEA Monographs, Agricultural and Applied Economics Association, number 337217.
    11. Chung, Chanjin & Kaiser, Harry M., 1998. "Determinants of Temporal Variations in Advertising Effectiveness," Research Bulletins 122689, Cornell University, Department of Applied Economics and Management.
    12. Nicholas J. Powers, 1989. "A study of demand response to grocery advertising of fresh California-Arizona navel oranges," Agribusiness, John Wiley & Sons, Ltd., vol. 5(5), pages 423-435.
    13. Kinnucan, Henry W. & Chang, Hui-Shung (Christie) & Venkateswaran, Meenakshi, 1993. "Generic Advertising Wearout," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 61(03), pages 1-15, December.
    14. Abbott, Malcolm, 2016. "A long-term view of the effectiveness of wool promotion schemes," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 54(3), January.
    15. Williams, Gary W. & Myers, Lester H., 1982. "The Economic Effectiveness Of Foreign Market Development Programs: The Case Of Soybeans And Soybean Products," 1982 Annual Meeting, August 1-4, Logan, Utah 279211, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    16. Kinnucan, Henry W., 1985. "Evaluating Advertising Effectiveness Using Time Series Data," Research on Effectiveness of Agricultural Commodity Promotion, April 9-10, 1985, Arlington, Virginia 279492, Regional Research Projects > NECC-63: Research Committee on Commodity Promotion.
    17. Richards, Timothy J. & Patterson, Paul M., 1998. "Dynamic Complementarity In Export Promotion: The Market Access Program In Fruits And Vegetables," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 23(2), pages 1-19, December.
    18. Lohr, Luanne & Park, Timothy A., 1992. "Certification And Supply Response In The Organic Lettuce Market," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 17(2), pages 1-13, December.
    19. Capps, Oral & Seo, Seong-Cheon & Nichols, John P., 1997. "On the Estimation of Advertising Effects for Branded Products: An Application to Spaghetti Sauces," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 29(2), pages 291-302, December.
    20. Hayes, Dermot J. & Jensen, Helen H., 1992. "Generic Advertising Without Supply Control: Implications Of Mandatory Assessments," Commodity Promotion Policy in a Global Economy, October 22-23, 1992, Arlington, Virginia 279575, Regional Research Projects > NECC-63: Research Committee on Commodity Promotion.

    More about this item

    Keywords

    Marketing;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:nejare:29064. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/nareaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.