Promotion Research Program
Books and Book Chapters
Books and Book Chapters
Forker, O.D. and R.W. Ward. Commodity Advertising: The Economics and Measurement of Generic Programs. New York: Lexington Books, 1993.
Over $750 million are spent annually to promote agricultural commodities. Here, for the first time, is a book that explores how that advertising money is raised and spent, the economic effectiveness of commodity promotions, and the differences between commodity and brand advertising. Forker and Ward evaluate the legislation affecting beef and dairy, and state programs such as Florida citrus, California raisins, and Washington apples. Case studies of many other commodity advertising and promotion campaigns, including cotton, wool, pork, fish, soybeans, honey, tomatoes, and potatoes, illustrate the strategies and techniques used to promote these products and to evaluate the effectiveness of the type and intensity of their advertising.Forker, Olan D., Harry M. Kaiser, and John E. Lenz. "Public Policy on Program Evaluation and Disclosure of Program Expenditure," in Public Policy in Foreign and Domestic Market Development. Padberg (ed). The Food and Agricultural Marketing Consortium and NEC-63 Research Committee on Commodity Promotion, 1995.
About $1 billion is diverted each year from the retail to farm income stream to support commodity promotion programs. Since this is not a trivial amount, this immediately raises a basic question: Does commodity promotion represent the best use of the funds from that income stream? Would farmers, consumers and/or society be better off if that money were invested in other ways, e.g., technology to further reduce production and distribution costs or improve quality? It is hard to answer that question without sound economic analysis. Given the substantial level of investment in commodity promotion, we advocate in this paper public intervention in the economic evaluation of domestic promotion and foreign market development programs. The purpose of the intervention would be to make sure that appropriate economic analyses are conducted to determine whether the programs satisfy the public interest.Kaiser, Harry M. and Nobuhiro Suzuki. "Imperfect Competition Models and Commodity Promotion Evaluation: The Case of U.S. Generic Dairy Advertising," in New Methodologies for Commodity Promotion Economics. Kaiser, Kinnucan, and Ferrero (eds). Proceedings of the NEC-63 Conference held October 5-6, 1995 in Sacramento, California. Ithaca: NICPRE, 1996.
The purpose of this paper is to determine whether the assumption of perfect competition in the U.S. dairy industry biased the findings of economic impacts of generic dairy advertising in the United States. Two models of the U.S. dairy industry were used to simulate the impacts of generic dairy advertising: (1) an imperfect competition model, and (2) a perfect competition model. The imperfect competition model endogenized the degree of market competition using an approach similar to Appelbaum. The perfect competition model treated the price premiums obtained by cooperatives through bargaining power as exogenous. The imperfect competition model demonstrated that greater market power resulted in larger returns from generic milk advertising than the perfect competition model. Therefore, the traditional perfect competition model may underestimate the magnitude of impacts of the U.S. generic milk advertising.Kaiser, H.M., D.J. Liu, O.D. Forker, and T.D. Mount. "Impacts of Dairy Promotion from Consumer Demand to Farm Supply," in Commodity Promotion. Kinnucan (ed). Ames: Iowa State University Press, 1991.
There are two important methodological implications of this research. The first is the need to conduct policy analysis on both the fluid and manufactured sectors of the dairy market simultaneously, due to the interaction and competition for raw milk between the two sectors. Research on the fluid sector in isolation of the manufactured sector, or vice versa, may miss some important interaction effects of advertising impacting the isolated market. The second implication is the need to use a model that distinguishes between competitive and government support regimes. We have shown that the impact of alternative advertising strategies on important market variables may be quite different depending upon whether or not the market is competitive. Hence, models that assume the market is always noncompetitive may produce misleading results.Kaiser, Harry M., Henry W. Kinnucan, and Jennifer L. Ferrero (eds). New Methodologies for Commodity Promotion Economics. Proceedings of the NEC-63 Conference held October 5-6, 1995 in Sacramento, California. Ithaca: NICPRE, 1996.
On October 5 and 6, 1995, NEC-63 (with the California Agricultural Issues Forum), hosted a conference entitled, "Evaluation of Mandated Promotion Programs." There were two main purposes of the conference: (1) to examine issues and case studies regarding the economic and legal implications of mandatory promotion programs, and (2) to examine new methodologies for economic evaluation of commodity promotion. Due to recent decisions by the Ninth District Court regarding mandatory commodity promotion programs, interest in this conference was extremely high and attendance reached a record for NEC-63 with over 135 people present.Liu, Donald J. and Harry M. Kaiser. "The Effectiveness of Generic vs. Brand Advertising Expenditures: The Case of U.S. Dairy Promotion Program," in Economic Evaluation of Commodity Promotion Programs in the Current Legal and Political Environment. Ferrero and Clary (eds). Proceedings of the NEC-63 Research conference held October 7-8, 1996 in Monterey, California. Ithaca: NICPRE, 1997.
This paper compared the effectiveness of generic vs. branded advertising for fluid milk and cheese. The analysis was based on econometric estimation of fluid milk and cheese demand equations, and simulations of optimal reallocations between generic and branded advertising expenditures. The issue of generic vs. branded advertising effectiveness is particularly timely given recent litigation over the constitutionality of mandatory checkoff programs. The econometric results indicated that generic advertising elasticities were larger than branded advertising elasticities in two out of three equations. However, the simulation results indicated that some reallocation of generic expenditures to branded fluid advertising would result in increases in milk volume and farmers' revenues. A strategic implication of the results is that dairy farmers should consider establishing some type of fund- matching relationship with branded fluid companies.