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Functional Foods as Differentiated Products

Listed author(s):
  • Alessandro Bonanno


    (University of Connecticut)

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    In spite of growing consumers’ interest for functional foods and strong growth of their markets, limited knowledge of the demand for these products and their profitability is available. Adapting the LA/AIDS model by means of Pinkse, Slade, and Brett’s (2002) distance metric method, this article assesses the demand, substitution pattern, and profitability of conventional and functional alternatives inside the yogurt category in the Italian market. Results indicate that functional alternatives’ demand is often less elastic than conventional ones’, that brand loyalty plays a key role, and that 25% of the profitability of functional yogurts comes from the functional attribute itself.

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    Paper provided by University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy in its series Food Marketing Policy Center Research Reports with number 113.

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    Length: 39 pages
    Date of creation: Apr 2009
    Handle: RePEc:zwi:fpcrep:113
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