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Evaluating the effectiveness of generic advertising versus nonadvertising marketing activities on New York State milk markets

  • Yuqing Zheng

    (Department of Applied Economics and Management, Cornell University, 311 Warren Hall, Ithaca, NY 14853-7801)

  • Harry M. Kaiser

    (Department of Applied Economics and Management, Cornell University, 350 Warren Hall, Ithaca, NY 14853-7801)

This study distinguishes nonadvertising marketing activities from generic advertising and investigates their separate impacts on the retail demand for fluid milk in New York State. Advertising, having an estimated elasticity (of demand) of 0.038 using panel data, is found to be about five times as effective as nonadvertising; therefore, it remains the more powerful marketing tool. Such results have policy implications in benefit-cost analysis and optimal allocation of fluid-milk check-off funds. Our results suggest that NYS dairy producers have much to gain from investing more of their check-off budgets in advertising. [EconLit citations: Q11, M37]. © 2009 Wiley Periodicals, Inc.

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Article provided by John Wiley & Sons, Ltd. in its journal Agribusiness.

Volume (Year): 25 (2009)
Issue (Month): 3 ()
Pages: 351-368

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Handle: RePEc:wly:agribz:v:25:y:2009:i:3:p:351-368
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  1. Todd M. Schmit & Harry M. Kaiser, 2004. "Decomposing the Variation in Generic Advertising Response over Time," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(1), pages 139-153.
  2. Adachi, Kenji & Liu, Donald J., 2006. "Estimating Threshold Effects of Generic Fluid Milk and Cheese Advertising," Staff Papers 13754, University of Minnesota, Department of Applied Economics.
  3. 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), October.
  4. Vande Kamp, Philip R. & Kaiser, Harry M., 1998. "Optimal Temporal Policies in Fluid Milk Advertising," Research Bulletins 122676, Cornell University, Department of Applied Economics and Management.
  5. Verbeke, Wim & Ward, Ronald W., 2001. "A fresh meat almost ideal demand system incorporating negative TV press and advertising impact," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 25(2-3), September.
  6. 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.
  7. Wohlgenant, Michael K., 2006. "Retail-to-Farm Transmission of Generic Advertising Effects," Choices, Agricultural and Applied Economics Association, vol. 21(2).
  8. Philip R. Vande Kamp & Harry M. Kaiser, 1999. "Irreversibility in Advertising-Demand Response Functions: An Application to Milk," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(2), pages 385-396.
  9. 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(01), July.
  10. Lyman, R Ashley, 1994. "Advertising and Sales Promotion in Electricity," Journal of Regulatory Economics, Springer, vol. 6(1), pages 41-58, February.
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