IDEAS home Printed from https://ideas.repec.org/a/wly/agribz/v36y2020i4p522-541.html
   My bibliography  Save this article

Consumer proximity and brand loyalty in craft soda marketing: A case study of Ale‐8‐One

Author

Listed:
  • Samane Zare
  • Mahdi Asgari
  • Timothy Woods
  • Yuqing Zheng

Abstract

Craft soda has become increasingly popular among consumers. Local manufacturers have opportunities to use a variety of strategies to differentiate their products from nationally recognized brands, including the use of real or natural ingredients, premium ingredients, and locally sourced ingredients, handmade and small batches, and creative taste. Loyal consumers of craft sodas often live within the proximity of the production location, and the manufacturers are normally small with a limited distribution area. From the local manufacturer's standpoint, it is important to segment the market based on the closeness to their distribution territory when studying the market demand, or at least to recognize if such locational preferences exist with a view toward identifying market expansion strategies. In this paper, we focus on the case for a Kentucky local craft soda producer, Ale‐8‐One. We examine the demand for craft and noncraft soft drinks using Nielsen scanner data to test whether consumer behavior is different in the core markets. The results show that, in this case, craft soda consumers are less price responsive and more brand loyal in the core market, compared with the outside market. [EconLit Citations: C55, D12, Q13].

Suggested Citation

  • Samane Zare & Mahdi Asgari & Timothy Woods & Yuqing Zheng, 2020. "Consumer proximity and brand loyalty in craft soda marketing: A case study of Ale‐8‐One," Agribusiness, John Wiley & Sons, Ltd., vol. 36(4), pages 522-541, October.
    • Handle: RePEc:wly:agribz:v:36:y:2020:i:4:p:522-541
    DOI: 10.1002/agr.21661
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/agr.21661
    Download Restriction: no
    File URL: https://libkey.io/10.1002/agr.21661?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. Peter M. Guadagni & John D. C. Little, 1983. "A Logit Model of Brand Choice Calibrated on Scanner Data," Marketing Science, INFORMS, vol. 2(3), pages 203-238.
    2. Okrent, Abigail M. & MacEwan, Joanna P., 2014. "The Effects of Prices, Advertising, Expenditures, and Demographics on Demand for Nonalcoholic Beverages," Agricultural and Resource Economics Review, Cambridge University Press, vol. 43(1), pages 31-52, April.
    3. Okrent, Abigail M. & MacEwan, Joanna P., 2014. "The Effects of Prices, Advertising, Expenditures, and Demographics on Demand for Nonalcoholic Beverages," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 0, pages 1-22.
    4. Hu, Wuyang & Woods, Timothy A. & Bastin, Sandra, 2009. "Consumer Acceptance and Willingness to Pay for Blueberry Products with Nonconventional Attributes," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 41(1), pages 1-14, April.
    5. Okrent, Abigail M. & MacEwan, Joanna P., 2014. "The Effects of Prices, Advertising, Expenditures, and Demographics on Demand for Nonalcoholic Beverages," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 43(1), pages 1-22, April.
    6. Talia Bar & Yuqing Zheng, 2019. "Choosing Certifiers: Evidence from the British Retail Consortium Food Safety Standard," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 101(1), pages 74-88.
    7. Toro-Gonzalez, Daniel & McCluskey, Jill J. & Mittelhammer, Ron, 2014. "Beer Snobs Do Exist: Estimation of Beer Demand by Type," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 39(2), pages 1-14.
    8. Allender, William J. & Richards, Timothy J., 2012. "Brand Loyalty and Price Promotion Strategies: An Empirical Analysis," Journal of Retailing, Elsevier, vol. 88(3), pages 323-342.
    9. Waseem Ahmad & Sven Anders, 2012. "The Value of Brand and Convenience Attributes in Highly Processed Food Products," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 60(1), pages 113-133, March.
    10. Hart, Jarrett, 2019. "Drink Beer for Science: An Experiment on Consumer Preferences for Local Craft Beer," 2019 Conference (63rd), February 12-15, 2019, Melbourne, Australia 285088, Australian Agricultural and Resource Economics Society (AARES).
    11. Rigoberto A. Lopez & Yizao Liu & Chen Zhu, 2015. "TV advertising spillovers and demand for private labels: the case of carbonated soft drinks," Applied Economics, Taylor & Francis Journals, vol. 47(25), pages 2563-2576, May.
    12. Deepak Agrawal, 1996. "Effect of Brand Loyalty on Advertising and Trade Promotions: A Game Theoretic Analysis with Empirical Evidence," Marketing Science, INFORMS, vol. 15(1), pages 86-108.
    13. Zheng, Yuqing & Kaiser, Harry M., 2008. "Advertising and U. S. Nonalcoholic Beverage Demand," Agricultural and Resource Economics Review, Cambridge University Press, vol. 37(2), pages 147-159, October.
    14. Wuyang Hu & Marvin T. Batte & Timothy Woods & Stan Ernst, 2012. "Consumer preferences for local production and other value-added label claims for a processed food product," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 39(3), pages 489-510, July.
    15. Peter M. Guadagni & John D. C. Little, 2008. "A Logit Model of Brand Choice Calibrated on Scanner Data," Marketing Science, INFORMS, vol. 27(1), pages 29-48, 01-02.
    16. Emily Yucai Wang, 2015. "The impact of soda taxes on consumer welfare: implications of storability and taste heterogeneity," RAND Journal of Economics, RAND Corporation, vol. 46(2), pages 409-441, June.
    17. Stefan Hirsch & Ashok Mishra & Niklas Möhring & Robert Finger, 2020. "Revisiting firm flexibility and efficiency: evidence from the EU dairy processing industry," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 47(3), pages 971-1008.
    18. Andreyeva, T. & Long, M.W. & Brownell, K.D., 2010. "The impact of food prices on consumption: A systematic review of research on the price elasticity of demand for food," American Journal of Public Health, American Public Health Association, vol. 100(2), pages 216-222.
    19. Julia Hoffmann & Julia Bronnmann, 2019. "Bottle size matters: Heterogeneity in the German carbonated soft drink market," Agribusiness, John Wiley & Sons, Ltd., vol. 35(4), pages 556-573, October.
    20. Julia Bronnmann & Frank Asche, 2016. "The Value of Product Attributes, Brands and Private Labels: An Analysis of Frozen Seafood in Germany," Journal of Agricultural Economics, Wiley Blackwell, vol. 67(1), pages 231-244, February.
    21. Jagmohan S. Raju & V. Srinivasan & Rajiv Lal, 1990. "The Effects of Brand Loyalty on Competitive Price Promotional Strategies," Management Science, INFORMS, vol. 36(3), pages 276-304, March.
    22. repec:zwi:journl:v:44:y:2012:i:22:p:2859-2865 is not listed on IDEAS
    23. Colchero, M.A. & Salgado, J.C. & Unar-Munguía, M. & Hernández-Ávila, M. & Rivera-Dommarco, J.A., 2015. "Price elasticity of the demand for sugar sweetened beverages and soft drinks in Mexico," Economics & Human Biology, Elsevier, vol. 19(C), pages 129-137.
    24. Enoch M. Kikulwe & Ekin Birol & Justus Wesseler & José Falck‐Zepeda, 2011. "A latent class approach to investigating demand for genetically modified banana in Uganda," Agricultural Economics, International Association of Agricultural Economists, vol. 42(5), pages 547-560, September.
    25. Yuqing Zheng & Chen Zhen & James Nonnemaker & Daniel Dench, 2016. "Advertising, Habit Formation, and U.S. Tobacco Product Demand," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 98(4), pages 1038-1054.
    26. Howard, Philip H., 2018. "Craftwashing in the U.S. Beer Industry," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 4(1), pages 1-13.
    27. Rigoberto A. Lopez & Kristen L. Fantuzzi, 2012. "Demand for carbonated soft drinks: implications for obesity policy," Applied Economics, Taylor & Francis Journals, vol. 44(22), pages 2859-2865, August.
    28. Wuepper, David & Clemm, Alexandra & Wree, Philipp, 2019. "The preference for sustainable coffee and a new approach for dealing with hypothetical bias," Journal of Economic Behavior & Organization, Elsevier, vol. 158(C), pages 475-486.
    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. Xiao Dong & H. Allen Klaiber & Zoë Plakias, 2023. "I scream, you scream, we all scream for local ice cream: Consumer preferences for locally processed foods," Agribusiness, John Wiley & Sons, Ltd., vol. 39(1), pages 51-64, January.
    2. Yiming Zhong & Shukun Tang & Mei Lan, 2023. "Research on the Inheritance Path and the Branding Inheritance Model of Traditional Crafts," Sustainability, MDPI, vol. 15(7), pages 1-21, March.

    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. Julia Hoffmann & Julia Bronnmann, 2019. "Bottle size matters: Heterogeneity in the German carbonated soft drink market," Agribusiness, John Wiley & Sons, Ltd., vol. 35(4), pages 556-573, October.
    2. Bo Chen & Wuyang Hu & Qingjie Zhou, 2020. "Effects of local and national advertising across brands: the case of yogurt in China," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(4), pages 1260-1281, October.
    3. Kim, GwanSeon & Zheng, Yuqing, 2017. "U.S. Non-alcoholic Beverage Demand: Evidence from AIDS Model with Dynamic Effect," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 35(1), April.
    4. Mendez, Samara & Peacock, Jacob & The Humane League Labs, 2021. "Exploring the impact of plant-based milk alternatives in the US," OSF Preprints tdghp, Center for Open Science.
    5. Khanal, Binod & Lopez, Rigoberto, 2021. "Demand for Plant Based Beverages and Market Competition in Fluid Milk Markets," 2021 Conference, August 17-31, 2021, Virtual 315369, International Association of Agricultural Economists.
    6. Leschewski, Andrea & Weatherspoon, Dave D. & Kuhns, Annemarie, 2016. "A Segmented Hedonic Analysis of the Nutritional Composition of Fruit Beverages," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 19(3), pages 1-22, August.
    7. Li, Wenying & Dorfman, Jeffrey H., 2019. "The implications of heterogeneous habit in consumer beverage purchases on soda and sin taxes," Food Policy, Elsevier, vol. 84(C), pages 111-120.
    8. Yuqing Zheng & Chen Zhen & Daniel Dench & James M. Nonnemaker, 2017. "U.S. Demand for Tobacco Products in a System Framework," Health Economics, John Wiley & Sons, Ltd., vol. 26(8), pages 1067-1086, August.
    9. Allender, William J. & Richards, Timothy J., 2012. "Brand Loyalty and Price Promotion Strategies: An Empirical Analysis," Journal of Retailing, Elsevier, vol. 88(3), pages 323-342.
    10. Huang, Lu & Liu, Yizao, 2017. "Health information and consumer learning in the bottled water market," International Journal of Industrial Organization, Elsevier, vol. 55(C), pages 1-24.
    11. Luca Cacchiarelli & Alessandro Sorrentino, 2019. "Pricing Strategies in the Italian Retail Sector: The Case of Pasta," Social Sciences, MDPI, vol. 8(4), pages 1-13, April.
    12. Haeck, Catherine & Lawson, Nicholas & Poirier, Krystel, 2022. "Estimating consumer preferences for different beverages using the BLP approach," Economics & Human Biology, Elsevier, vol. 46(C).
    13. Biondi, Beatrice & Castiglione, Concetta & Mazzocchi, Mario, 2021. "Demand drivers and changes in food-related emissions in the UK: A decomposition approach," Ecological Economics, Elsevier, vol. 188(C).
    14. Hayden Stewart & Fred Kuchler & William Hahn, 2021. "Is competition among soft drinks, juices, and other major beverage categories responsible for reducing Americans' milk consumption?," Agribusiness, John Wiley & Sons, Ltd., vol. 37(4), pages 731-748, October.
    15. Sule Birim & Ipek Kazancoglu & Sachin Kumar Mangla & Aysun Kahraman & Yigit Kazancoglu, 2024. "The derived demand for advertising expenses and implications on sustainability: a comparative study using deep learning and traditional machine learning methods," Annals of Operations Research, Springer, vol. 339(1), pages 131-161, August.
    16. Holzer, Patrick Sebastian, 2020. "The effect of time-varying factors on promotional activity in the German milk market," Journal of Retailing and Consumer Services, Elsevier, vol. 55(C).
    17. Allender, William J. & Richards, Timothy J., 2009. "Measures of Brand Loyalty," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49536, Agricultural and Applied Economics Association.
    18. Onesun Steve Yoo & Rakesh Sarin, 2018. "Consumer Choice and Market Outcomes Under Ambiguity in Product Quality," Marketing Science, INFORMS, vol. 37(3), pages 445-468, May.
    19. Jakina Debnam, 2017. "Selection Effects and Heterogeneous Demand Responses to the Berkeley Soda Tax Vote," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 99(5), pages 1172-1187.
    20. Irz, Xavier & Mazzocchi, Mario & Réquillart, Vincent & Soler, Louis-Georges, 2015. "Research in Food Economics: past trends and new challenges," Revue d'Etudes en Agriculture et Environnement, Editions NecPlus, vol. 96(01), pages 187-237, March.

    More about this item

    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:wly:agribz:v:36:y:2020:i:4:p:522-541. 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: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1520-6297 .

    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.