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Generic Advertising and Product Differentiation

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  • John Crespi
  • Stéphan Marette

Abstract

This article considers whether generic advertising lowers the differentiation among competing brands of the same good. Analytical results show that if the benefits from generic advertising from increased demand are outweighed by the costs from lower product differentiation then high-quality producers will not benefit from generic promotion. Hypotheses are tested empirically under a conditional-logit approach using retail-market sales and advertising data for the U.S. prune industry. Results from this study provide evidence that generic advertising has a slight differential effect on the perceived qualities of different brands. Copyright 2002, Oxford University Press.

Suggested Citation

  • John Crespi & Stéphan Marette, 2002. "Generic Advertising and Product Differentiation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(3), pages 691-701.
  • Handle: RePEc:oup:ajagec:v:84:y:2002:i:3:p:691-701
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    File URL: http://hdl.handle.net/10.1111/1467-8276.00328
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    Citations

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    Cited by:

    1. John M. Crespi & Stéphan Marette, 2003. "Are uniform assessments for generic advertising optimal if products are differentiated?," Agribusiness, John Wiley & Sons, Ltd., vol. 19(3), pages 367-377.
    2. Kolavalli, Shashidhara & Birner, Regina & Flaherty, Kathleen, 2012. "The comprehensive Africa agriculture program as a collective institution:," IFPRI discussion papers 1238, International Food Policy Research Institute (IFPRI).
    3. Kim, Hyeyoung & Zansler, Marisa & House, Lisa A., 2016. "The imperfect price responses of orange juice demand in the U.S," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 235511, Agricultural and Applied Economics Association.
    4. Daniela Benavente, 2010. "Geographical Indications: The Economics of Claw-Back," IHEID Working Papers 11-2010, Economics Section, The Graduate Institute of International Studies.
    5. Bhatt, Meghana A., 2012. "Evaluation and associations: A neural-network model of advertising and consumer choice," Journal of Economic Behavior & Organization, Elsevier, vol. 82(1), pages 236-255.
    6. Teuber, Ramona, 2011. "Protecting Geographical Indications: Lessons learned from the Economic Literature," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 116081, European Association of Agricultural Economists.
    7. Gunderson, Michael A. & Lusk, Jayson L. & Norwood, F. Bailey, 2005. "Getting Something From Nothing: An Investigation of Beef Demand Expansion and Substitution in the Presence of Quality Heterogeneity," 2005 Annual meeting, July 24-27, Providence, RI 19465, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    8. Nilsson, Tomas K.H. & Foster, Kenneth A., 2004. "Product And Process Certification In Imperfectly Competitive Markets," 2004 Annual meeting, August 1-4, Denver, CO 19933, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    9. Ferrier, Peyton & Lamb, Russell, 2007. "Government regulation and quality in the US beef market," Food Policy, Elsevier, vol. 32(1), pages 84-97, February.
    10. Sylvie Tchumtchoua & Ronald W. Cotterill, 2010. "Optimal Brand and Generic Advertising Policies in a Dynamic Differentiated Product Oligopoly," Food Marketing Policy Center Research Reports 126, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
    11. Yu-ter Wang, 2008. "Product Differentiation: An Alternative To Cvds," South African Journal of Economics, Economic Society of South Africa, vol. 76(3), pages 513-517, September.
    12. Roma Paolo & Perrone Giovanni, 2010. "Generic Advertising, Brand Advertising and Price Competition: An Analysis of Free-Riding Effects and Coordination Mechanisms," Review of Marketing Science, De Gruyter, vol. 8(1), pages 1-29, October.
    13. Benavente, Daniela, 2010. "Geographical Indications: The Economics of Claw-Back," Miscellaneous Papers 119117, Agecon Search.
    14. Suh, Daeseok & Chung, Chanjin, 2009. "Does Generic Advertising Help or Hurt Brand Advertising?," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49557, Agricultural and Applied Economics Association.
    15. Tauber, Ramona & Anders, Sven M. & Langinier, Corinne, 2011. "The Economics of Geographical Indications: Welfare Implications," Working Papers 103262, Structure and Performance of Agriculture and Agri-products Industry (SPAA).
    16. Benavente, Daniela, 2010. "The Economics of Geographical Indications: GIs modeled as club assets," Miscellaneous Papers 119116, Agecon Search.
    17. Boland, Michael A. & Crespi, John M. & Silva, Jena & Xia, Tian, 2012. "Measuring the Benefits to Advertising under Monopolistic Competition," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 37(1), April.
    18. repec:ags:jrapmc:122308 is not listed on IDEAS
    19. Daniela Benavente, 2010. "The Economics of Geographical Indications: GIs Modelled As Club Assets," IHEID Working Papers 10-2010, Economics Section, The Graduate Institute of International Studies.
    20. Crespi, John M. & James, Jennifer S., 2007. "Bargaining rationale for cooperative generic advertising," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 51(4), December.
    21. Roma, Paolo & Perrone, Giovanni, 2016. "Cooperation among competitors: A comparison of cost-sharing mechanisms," International Journal of Production Economics, Elsevier, vol. 180(C), pages 172-182.
    22. Han, Sungill & Chung, Chanjin & Suh, Daeseok, 2011. "Generic Advertising in Concentrated and Differentiated Agricultural Markets," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103739, Agricultural and Applied Economics Association.

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