CONTENTS

Evaluation Principles and Data Needs

Manager's Viewpoint

Editor's Notes

Director’s Corner

Next Meeting

NEC-63 Fall 1997 October 6-7, 1997 Washington, DC A Symposium to Examine the Effectiveness of Different Nutrition Education Programs

Director's Corner

by Harry M. Kaiser

Although most people think of evaluation when they think of economists' roles in examining promotion programs, another equally important analysis economists can provide promotion organizations with is evaluating whether or not the current allocation of funds is optimal.

Is the current allocation of advertising dollars across markets optimal? Could producers get a bigger bang for their buck by allocating advertising dollars among media types differently? Is the current mix of advertising, promotion, research, new product development, and educational programming maximizing producer investment? Can efficiencies be gained by reallocating advertising among products, e.g., more money on fluid milk and less on butter advertising? These are just a few of the many important questions economists can answer if given appropriate data.

The answers to these questions are important because they provide the potential for promotion organizations to increase profits to farmers at virtually no cost. For example, if an economic analysis revealed that taking 20 percent of television advertising expenditures and reallocating them to radio and print advertising would result in higher producer revenues, then this would represent a no cost strategy that could achieve higher profits to farmers. As it turns out, this is not just a hypothetical example, but rather an actual empirical result of a forthcoming study on optimal media advertising for generic dairy promotion which will appear in a future issue of the NICPRE Quarterly. In some cases, economists have found that reallocating producer checkoff money in some fashion can result in significant returns.

The point is that many people in promotion organizations view economists as adversaries because they evaluate how good or bad a job is being done promoting commodities. While this may be true to some degree, economists can also help managers of commodity promotion groups by providing them with advice on how to better manage checkoff investment activities. Perhaps if economists are used more for the latter task, a greater trust and appreciation of the economist's role in commodity promotion will occur.