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The intensity of advertising and other selling expenses in food and tobacco manufacturing: Measurement, determinants, and impacts

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  • John M. Connor

    (Department of Agricultural Economics, Purdue University, West Lafayette, Indiana)

  • Scott Weimer

    (Graduate student with the Department of Agricultural Economics, Purdue University, West Lafayette, Indiana)

Abstract

The measurement of selling effort in the food processing industries has improved in several ways. An FTC data set on both advertising and promotional expenses is used to estimate some determinants of variations in the intensity of selling effort. They are found to be related to market sales concentration, the number of brands being sold, elaborateness of packaging, and product perishability. A second analysis finds that the intensity of food-manufacturer selling efforts is nonnegatively associated with grocery wholesalers' or retailers' gross margins. The latter finding challenges the view that manufacturer advertising provides information that ultimately benefits consumers through lower retail prices.

Suggested Citation

  • John M. Connor & Scott Weimer, 1986. "The intensity of advertising and other selling expenses in food and tobacco manufacturing: Measurement, determinants, and impacts," Agribusiness, John Wiley & Sons, Ltd., vol. 2(3), pages 293-319.
    • Handle: RePEc:wly:agribz:v:2:y:1986:i:3:p:293-319
    DOI: 10.1002/1520-6297(198623)2:3<293::AID-AGR2720020304>3.0.CO;2-R
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    References listed on IDEAS

    as
    1. Comanor, William S & Wilson, Thomas A, 1979. "The Effect of Advertising on Competition: A Survey," Journal of Economic Literature, American Economic Association, vol. 17(2), pages 453-476, June.
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    Cited by:

    1. Connor, John M & Peterson, Everett B, 1992. "Market-Structure Determinants of National Brand-Private Label Price Differences of Manufactured Food Products," Journal of Industrial Economics, Wiley Blackwell, vol. 40(2), pages 157-171, June.
    2. Roucan-Kane, Maud & Peake, Whitney O., 2007. "Milking The Most From Your Promotional Dollars: An Analysis Of Agribusiness Firms Serving U.S.Agricultural Producers," Working papers 7331, Purdue University, Department of Agricultural Economics.
    3. H. W. Kinnucan, 1996. "A Note On Measuring Returns To Generic Advertising In Interrelated Markets," Journal of Agricultural Economics, Wiley Blackwell, vol. 47(1‐4), pages 261-267, January.
    4. Rodgers, Trey & Ali Jafri, S. Hussain & Padberg, Daniel I., 1993. "Price Competition Between National Brand And Private Label Food Products: 1966-1992," Journal of Food Distribution Research, Food Distribution Research Society, vol. 24(2), pages 1-7, September.
    5. Van Cong Nguyen & Thi Ngoc Lan Nguyen & Thanh Hang Pham & Song Hoa Vu, 2019. "The Impacts of Selling Expense Structure on Enterprise Growth in Large Enterprises: A Study from Vietnam," JRFM, MDPI, vol. 13(1), pages 1-22, December.

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