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Burger Thy Neighbour

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  • Torshizi, M.

Abstract

Labels such as hormone-free and antibiotics-free are being advertised more often than ever. One cannot help but wonder about the underlying negative perception that such labels might create about products that may contain hormones and antibiotics in the consumers mind. This paper develops a theoretical model that helps provide a better understanding of the effect of such hostile marketing and advertisement strategies on competition. We show that marketing campaigns that negatively impact consumers perception of their rivals products can change the nature of competition by impacting the distribution of consumers preferences and subsequently elasticity of demand for own and rival products. We show that negatively influencing consumers perception of rivals products may be a more effective marketing tool than the beggar-thy-neighbor advertising where one firm steals some market share from its rivals by means of positive promotion of its own product. This may explain the increasing popularity of such strategies in the food industry in the last few years. Acknowledgement :

Suggested Citation

  • Torshizi, M., 2018. "Burger Thy Neighbour," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277558, International Association of Agricultural Economists.
  • Handle: RePEc:ags:iaae18:277558
    DOI: 10.22004/ag.econ.277558
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    File URL: http://ageconsearch.umn.edu/record/277558/files/2343.pdf
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    References listed on IDEAS

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    1. Jeffrey M. Perloff & Steven C. Salop, 1985. "Equilibrium with Product Differentiation," Review of Economic Studies, Oxford University Press, vol. 52(1), pages 107-120.
    2. Bester, Helmut, 1992. "Bertrand Equilibrium in a Differentiated Duopoly," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 33(2), pages 433-448, May.
    3. Nicholas E. Piggott & James A. Chalfant & Julian M. Alston & Garry R. Griffith, 1996. "Demand Response to Advertising in the Australian Meat Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(2), pages 268-279.
    4. Julian M. Alston & John W. Freebairn & Jennifer S. James, 2001. "Beggar-Thy-Neighbor Advertising: Theory and Application to Generic Commodity Promotion Programs," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(4), pages 888-902.
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    Keywords

    Livestock Production/Industries;

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