The role of retail market power and state regulations in the heterogeneity of farm‐retail price transmission of private label and branded products

Given the leading role of private label brands in the fluid milk market, it is of special interest to focus on possible differences in farm‐retail price transmission between private label and branded milk as well as the causes of heterogeneity. This article examines the heterogeneous effects of private label and branded products on price transmission in the fluid milk market using a panel threshold asymmetric error correction model. Results indicate that upward retail‐price adjustment is faster than the downward price adjustment for both private label and branded milk. The speed of adjustment of private label products is significantly faster than branded products in three different price regimes. We further investigate the reasons of heterogeneity in farm‐retail price transmission of private label milk. We find that both retailer market power and state pricing regulations contribute to the heterogeneity in asymmetric price transmission. Higher retailer market power causes retail prices of private label milk to rise faster and to fall slower. The existence of a state pricing regulation slows down the adjustment speed of retail prices of private labels back to the long‐run equilibrium, regardless of whether the retail price is low or high.     

Consumer-Defined Attributes and Choice Methods for Fresh Produce Purchases in Australia

The aim of this research is to identify ways of increasing sales by understanding how household food buyers choose fresh produce items. Three hundred responses were obtained from a questionnaire randomly distributed in one city in Australia. Fresh produce items are frequent, low-value purchases. Their most important attributes are taste, price, and freshness, and the buyer choice method used for individual products varies from occasional “impulse” purchases to regular “planned” purchases of staples. With planned purchases some are seen as “destination” products whereas for others “substitutes” are available. In order to optimize sales, retail outlets should avoid becoming out-of-stock for destination products and co-locate substitute products. Sales may also be increased by displaying impulse products in prominent positions.     

Estimating the Effect of Ethnicity on the Demand for Food

A straightforward regression equation approach is used to investigate why different consumers buy varying quantities of the same item in outlets of the same retail food chain. Eighteen items were studied. Demand for thirteen seems to be significantly related to ethnicity, demand for five is positively related to income. As the study employs census data, the technique can easily be used by marketing managers to obtain useful market information.     

Willingness to pay for brands: a cross‐region,cross‐category analysis

Using survey data collected in multiple locations (California and Texas in the United States and Revohot in Israel), we quantify category‐ and location‐specific variations of consumers’ willingness to pay (WTP) for brand products after controlling for consumer characteristics. We find that consumers have a similar qualitative assessment of brand value in different product categories across different locations. That is, consumers have a stronger preference and higher WTP for brands in consumer electronics, followed by clothing and then processed food, and the lowest in fresh produce. Furthermore, we simulate price premiums and market shares of brands relative to generic products in different categories. Simulation results suggest that brands in fresh produce have the highest price premium but lowest market share. Despite the similarities, the magnitude of WTP for brands as well as the simulated price premium and the corresponding market share in the same product category are location variant. The similarities and dissimilarities suggest validity of having global brand strategies adapted to local conditions, that is, the so‐called “thinking globally and acting locally” strategy.     

Understanding Heterogeneous Consumer Preferences in Chinese Milk Markets: A Latent Class Approach

We examine heterogeneous consumer preferences in Chinese milk markets. Using a discrete choice experiment, we examine how the brand, quality certification, traceability label and price influence consumers' milk choices. We identify four consumer segments using a latent class model: price conscious (9.8%), balanced thinking (19.8%), health conscious (57.5%), and environment conscious (12.9%) consumers. These four segments have distinct preferences: price conscious consumers prefer green certification; balanced thinking consumers have the highest willingness to pay for traceability labels; health conscious consumers have strong brand awareness; and environment conscious consumers prefer organic certification and traceability labels and use price as a quality signal. Such diversity of consumer preference can be explained by four psychological factors: price consciousness, food safety concerns, health consciousness and environmental concerns.     

水产品市场营销策略的研究

本文在分析水产品市场主要特点的基础上,结合我国水产品市场营销的实际,提出了创新、低价、优质、服务、促销、差异化、品牌、概念、包装这九大水产品营销策略.     

IMPERFECT COMPETITION AND THE COBWEB THEOREM: A VEGETABLE CASE

Producer price changes are dependent on final demand, marketed volume and marketing cost, but the less than perfect competition which may determine this last is ignored in formulating the cobweb theorem. Attention to monopsonistic buying of farm products has importance in the choice between stabilisation measures directed at producers and marketing firms, and also as regards the need for integration of the theory of imperfect competition and the analysis of agricultural price cycles. Cyclical instability is a serious problem in the New Zealand vegetable industry. The size and inflexibility of retail margins significantly accentuate producer price fluctuations. Auctions are the main mechanism for price formation, and high retail margins appear to be permitted by the non-competitive elements in this marketing system. The most promising avenues for improvement would be in reform of auction procedures and exploration of alternative marketing channels for vegetables.     

Effect of Consumers’ Personality on Store Brand Choice in Grocery Stores: Insights from France and Germany

Abstract

Consumers’ personality can influence choice behavior. Considering disparities between food store brand market shares across countries, we investigate the impact of personality on food store brand decision making. We carried out two non-hypothetical choice experiments for milk, ice-cream, and cereal, one in France and one in Germany for a total of N?=?505 participants. Results show that in France neurotic and in Germany conscientious consumers purchase significantly less store brands for the food items in question. This study contributes to the literature by providing evidence that both, personality and country-effects, influence consumer food choice behavior and serve as a motivating factor for multi-category purchases of grocery store brands.     

Retail Demand for Natural Dye Plants and Dye Plant Products: A Conjoint Analysis

Herbalists, fiber artists, and herb growers are increasingly interested in growing, marketing, and using local plants as natural dyes. As the market in the United States and Canada develops, fiber art and quilting stores are the primary retail market outlets for natural dye plants and dye plant products. Conjoint analysis was used to evaluate U.S. and Canadian retailer interest in natural dye plants/dye plant products and to estimate market shares. The largest retail market share was for dyed materials, such as yarn or fabric, that are dyed in primary colors, using certified organic plants, and grown on farms in the United States or Canada.     

Sparkling wine choice from supermarket shelves: the impact of certification of origin and production practices

We report the results of a study based on revealed and stated preference data on choice of Prosecco wines in retail stores close to the origin of production in Northern Italy. Emphasis is placed on ability to reconcile the utility structure of stated preference data with that underlying revealed preference data. We extend the analysis to cover nonattendance of key attributes, such as price and certification of origin, while controlling for the large range of brand effects.     

Food Beliefs: Elicitation,Estimation and Implications for Labeling Policy

We present a model in which consumers use product attributes (or labels) and their own beliefs to form expectations about the quality of a product. We use best–worst scaling to elicit beliefs, and study how information may influence these beliefs. In our ranking experiments, participants sort different milk products according to (perceived) nutritional or environmental quality, and we use the resulting choice data to recover beliefs econometrically. In a nutritional quality experiment, we measure how food labels (i.e. front‐of‐package, back‐of‐package and ratio of recommended to restricted nutrients) alter consumers’ beliefs, finding that truthful attribute information may sometimes mislead consumers. The discussion explains how similar experiments could be used to distinguish informative labels from marketing messages.     

Energy‐milk price transmission at the product brand level

This article estimates the pass‐through rates between diesel fuel and retail milk prices at the product brand level. Using a random coefficient logit demand model and taking the direct and indirect impacts of energy prices, this research identifies changes in pass‐through rates before and after the great recession in 2008. Empirical results show that diesel prices significantly impacted the retail prices of milk products and are an important determinant of food price inflation. Pass‐through rates are estimated to range from 0.16 to approximately 0.60 through 2008 with an average of 0.22 for the whole period. Statistical tests indicate that pass‐through rates before June 2008 were significantly higher than after June 2008 when they dropped significantly to 0.04 to 0.17. Interestingly, private label brands have the lowest pass‐through rates, implying that compared to manufacturer brands, private label prices are more insulated from diesel price shocks.     

数字经济时代农产品品牌资产形成影响因素的实证研究

目的 数字经济时代如何提升农产品品牌资产,对构建新型品牌农业格局,促进农业现代化发展具有重要的价值和意义。方法 文章运用结构方程模型和层次回归模型,对有过实体店和互联网购买农产品经历的消费者进行了问卷调研,分析数字经济时代企业营销策略（即服务策略、体验策略和传播策略）、数字特征及品牌内涵对农产品品牌资产的影响。结果 数字经济时代,企业的服务策略能正向影响品牌忠诚;体验策略能正向影响品牌认知和品牌联想;传播策略正向影响品牌联想;数字特征正向影响品牌认知和品牌联想;品牌内涵则能同时正向影响品牌认知、品牌联想和品牌忠诚。结论 （1）企业可以根据农产品品牌资产的不同需求,采用针对性的营销策略。（2）在技术波动和竞争强度的数字经济时代,企业可以使用机器学习等新技术,同提升农产品运营效率。（3）企业要深入挖掘品牌内涵,根据不同品牌类型选择高效宣传方式。     

Promotion and Fast Food Demand

Many believe that fast food promotion is a significant cause of the obesity epidemic in North America. Industry members argue that promotion only reallocates brand shares and does not increase overall demand. We study the effect of fast food promotion on market share and total demand by estimating a discrete / continuous model of fast food restaurant choice and food expenditure that explicitly accounts for both spatial and temporal determinants of demand. Estimates are obtained using a unique panel of Canadian fast food consumers. The results show that promotion primarily increases demand and has a smaller effect on restaurant market shares.     

Notes on farm‐retail price transmission and marketing margin behavior

Perfect farm‐retail price transmission sometimes is taken to mean an elasticity of price transmission (EPT) equal to 1. We show that this definition is inconsistent with Gardner's (1975) model. We also show that the absolute marketing margin (defined as the difference between the retail price and farm price) responds differently to shifts in retail demand, input supply, and technical change in the marketers’ production function than does the relative marketing margin (defined as the ratio of the retail price to the farm price). The empirical implications of these results are discussed in some detail.     

The influence of African swine fever information on consumers’ preference of pork attributes and pork purchase

This paper uses a randomized survey instrument to study the impact of African Swine Fever (ASF) information on Chinese consumers’ preference for pork attributes and purchases during the recent peak of the ASF pandemic in 2019. We study consumers’ preference for pork attributes including brand, meat texture and taste, quality safety assurance, and traceability under different information treatments. Results show that the willingness to pay (WTP) for quality safety assurance is the highest, followed by brands and traceability systems, and the WTP is lowest for good taste. We show that providing detailed ASF information substantially changes consumer preference by altering the relative importance of pork attributes and price sensitivity, which enables consumers to focus more on safety-related attributes while paying less attention to price and taste attributes. Furthermore, we find that a higher belief in the future of ASF occurrence reduces the frequency of purchases marginally but does not significantly influence for amount per purchase and the total purchase amount.     

Assessing Consumer and Producer Preferences for Animal Welfare Using a Common Elicitation Format

We assess pig farmers’ willingness‐to‐accept (WTA) higher farm animal welfare (FAW) standards and consumers’ willingness‐to‐pay (WTP) for thus enhanced standards. The analysis is based on discrete choice experiments with nearly identical choice sets for both farmers (N=140) and consumers (N=554). Based on preference estimates from a random parameter logit (RPL) model, supply and demand curves for high‐welfare pork in Germany are estimated and market equilibria are derived for alternative levels of FAW. We find that estimates of consumer WTP are significantly positive for all FAW attributes: consumers value more surface space per pig, more bedding and manipulable material, less surgical interventions and shorter transportation times. In contrast, our model revealed significant producer WTA estimates only for surface area per pig and the amount of bedding material on offer, but not for the other FAW attributes. Farmers who expect to continue farming and engage in direct marketing are more likely to adopt higher FAW standards. Male consumers and those who find price more important than brand, origin or taste are less likely to buy high‐welfare pork, as are consumers who never purchase organic meat products. Market simulations for high‐welfare pork indicate increasing divergence between demand and supply with rising FAW standards. We estimate a market share of 44.6% for pork produced in compliance with an entry‐level FAW programme with standards only slightly above the legal minimum. Programmes with more demanding standards are estimated to gain much smaller market shares.     

Optimal Storage by Crop Producers

When post–harvest marketing strategies are restricted by disallowing speculative purchases, sales out of storage becomes an irreversible decision and the dynamic marketing problem becomes analogous to the optimal exercise of a financial option. The optimal marketing strategy is to hold at low prices and to sell at high prices with a cutoff price function marking the boundary between low and high prices. A method for estimating the cut–off price function is developed and applied to Illinois soybean prices. The decision rule is demonstrated to result in substantial gains from storage.     

Demand for milk quantity and safety in urban China: evidence from Beijing and Harbin

Urban households account for most of the milk consumption in China, but their consumption is hampered by safety concerns. Using survey data collected in Beijing and Harbin in 2010, this paper simultaneously analyses urban households' milk consumption using a multiple linear model and their willingness‐to‐pay for milk safety using an ordered choice model. The results of this study show that as income increases, urban households consume more milk and are willing to pay a higher premium for milk safety. Modern food marketing channels play a positive role in stimulating milk consumption and building consumers' confidence in milk safety. The growth in the elderly population influences milk consumption positively, but their demand for milk safety is negatively affected by higher price. The combined analysis of households' demand for milk quantity and safety may be useful to the Chinese government in promoting the development of the domestic milk industry and to dairy firms in exploring the milk market in China.     

Studying composite demand using scanner data: the case of ground beef in the US

This article reports tests of aggregation over elementary ground beef products and estimates composite demand elasticities. Results suggest that we obtain reliable information on consumers’ actual ground beef purchases by grouping data according to either lean percentage or brand type. The results also suggest that we obtain reliable information by using the data to form a single ground beef composite. By testing for valid aggregates and providing estimates of composite demand elasticities the analysis provides economists and policymakers with information regarding the effects of food and agricultural policies on consumers and producers that buy and produce ground beef.