An Estimation of Consumer Benefits From the Public Campaign To Lower Cereal Prices

Ronald Cotterill () and Andrew Franklin

No 18, Issue Papers from University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy

Abstract: Using 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 brands 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 percent, 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.

Keywords: jawboning; net of trade promotion prices; price trend lines; branded cereal; private label cereal; advertising; manufacturer coupons. (search for similar items in EconPapers)
JEL-codes: L10 L41 L66 (search for similar items in EconPapers)
Pages: 25 pages
Date: 1998-10
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: An estimation of consumer benefits from the public campaign to lower cereal prices (1999)
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