An estimation of consumer benefits from the public campaign to lower cereal prices

Ronald Cotterill () and Andrew W. Franklin
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Andrew W. Franklin: Food Marketing Policy Center, Agricultural and Resource Economics, 1376 Storrs Road, U-21, Storrs, CT 06269-4021, Postal: Food Marketing Policy Center, Agricultural and Resource Economics, 1376 Storrs Road, U-21, Storrs, CT 06269-4021

Agribusiness, 1999, vol. 15, issue 2, 273-287

Abstract: According to monthly IRI scanner data for January 1993 to March 1998, cereal prices declined even after adjusting for trade promotions and reduced manufacturer coupons during the public campaign in 1995 and early 1996, as well as after the industry's announced shelf price reductions in Spring 1996. The gap between branded and private label prices also declined. This was due to unexpected increases in private label prices during the jawboning campaign as well as decreases in branded prices. As predicted by the Dorfman Steiner theorem, branded advertising declined when the price cuts reduced brand price cost margins. Quaker's lower priced bagged copies of other firms' leading brands have grown rapidly and advanced Quaker's market share to over 10%, as Kellogg's share continues to decline and General Mills' share is stable. Consumer benefits due to lower prices for the 35-month period commencing April 2, 1995 are 2.633 billion dollars. [EconLit cites: L100, L410, L660] © 1999 John Wiley & Sons, Inc.

Date: 1999
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Persistent link: https://EconPapers.repec.org/RePEc:wly:agribz:v:15:y:1999:i:2:p:273-287

DOI: 10.1002/(SICI)1520-6297(199921)15:2<273::AID-AGR11>3.0.CO;2-3

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