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Branded Product Marketing Strategies in the Cottage Cheese Market: Cooperative versus Proprietary Firms

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  • Lawrence E. Haller

Abstract

This paper examines structural and strategic factors affecting price determination in the branded cottage cheese industry. Special emphasis is placed on the presence and conduct of cottage cheese brands marketed by dairy cooperatives. The data examined in this study cover cottage cheese sales in 47 markets for the fourth quarter of 1988. We find evidence supporting the premise that market power is being exercise in the cottage cheese market. One of the strongest influences of the price of cottage cheese is the extent of market penetration of the brand. Brands' prices rise with an increase in the price of private label cottage cheese. We also find strong evidence that cooperatives are not exercising market power. Cooperatives charge a lower price than their IOF competition under the same conditions and, unlike their IOF competition, co-ops do not capitalize on higher share to raise price. Moreover, the presence of cooperatives in a market brings the price of competing brands down. Cooperatives do not differ greatly from IOFs in the use of merchandising tools, using them as much or slightly more in most cases.

Suggested Citation

  • Lawrence E. Haller, 1992. "Branded Product Marketing Strategies in the Cottage Cheese Market: Cooperative versus Proprietary Firms," Food Marketing Policy Center Research Reports 016, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
  • Handle: RePEc:zwi:fpcrep:016
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    File URL: http://fmpc.uconn.edu/publications/rr/rr16.pdf
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    References listed on IDEAS

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    3. Azzam, Azzeddine M. & Pagoulatos, Emilio, 1989. "Testing for Oligopoly and Oligopsony Power," Working Papers 115906, Regional Research Project NE-165 Private Strategies, Public Policies, and Food System Performance.
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    6. Bresnahan, Timothy F., 1989. "Empirical studies of industries with market power," Handbook of Industrial Organization,in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 17, pages 1011-1057 Elsevier.
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    Cited by:

    1. Kachel, Yael & Finkelsthain, Israel, 2009. "Antitrust Legislation and Cooperation in Fish Marketing," Journal of Rural Cooperation, Hebrew University, Center for Agricultural Economic Research, vol. 37(2).
    2. Kachel, Yael & Finkelshtain, Israel, 2010. "A Comparative Analysis of Antitrust Regulations in the Agricultural Sector in Israel, the US and the EU," Journal of Rural Cooperation, Hebrew University, Center for Agricultural Economic Research, vol. 38(1).
    3. Zahir Dossa, 2012. "Cooperatives: A Development Strategy? An Analysis of Argan Oil Cooperatives in Southwest Morocco," Euricse Working Papers 1229, Euricse (European Research Institute on Cooperative and Social Enterprises).

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