The Use of Voluntary Marketing Initiatives to Improve the Nutritional Profile of Kids Cereals

Michael Cohen, Rui Huang and Chen Zhu

No 148344, Working Paper series from University of Connecticut, Charles J. Zwick Center for Food and Resource Policy

Abstract: This article develops a framework to analyze voluntary marketing initiatives aimed at reducing children’s exposure to high-calorie packaged foods. Our empirical investigation focuses on children’s ready-to-eat cereal; we begin by estimating a limited awareness differentiated product demand model using a panel of consumer purchase and television advertising data. We use the demand estimates in a dynamic model of pricing and advertising competition in which firms have the option of participating in an initiative that defines nutritional standards for products targeted toward children. Participation requires that firms either comply with nutritional standards by reformulating their product or stop advertising. Results from our analysis indicate that leading firms should choose participation and reformulation as the strictly dominant strategy as long as prospective product reformulation costs do not exceed the marginal profitability of reformulation.

Keywords: Food Consumption/Nutrition/Food Safety; Marketing (search for similar items in EconPapers)
Pages: 55
Date: 2012-05
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Working Paper: The Use of Voluntary Marketing Initiatives to Improve the Nutritional Profile of Kids Cereals* (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:ucozwp:148344

DOI: 10.22004/ag.econ.148344

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