Doctoral Dissertations

Date of Award

5-1995

Degree Type

Dissertation

Degree Name

Doctor of Philosophy

Major

Agricultural Economics

Major Professor

David Eastwood

Committee Members

John Brooker, Greg Pompelli, Gary Dicer

Abstract

Because of the shrinking market share, due in part to the distribution of the shopper's dollar for various kinds of variable weight items which has been changing and the competitive nature of the supermarket industry, retail firms are looking for appropriate strategies to reverse the decline. To deal with the eroding market share, part of the response has been increased interest in recent years to identify how food shoppers respond to weekly advertising effects. However, existing studies on the responsiveness of food shoppers to advertising effects has tended to focus on a singular influence of media and/or single dimension advertising measures. For the retail firms, a strategic and beneficial approach may be to examine shoppers' responses to weekly multimedia advertising effects and to the measures of their various dimensions.

Also, the limited shelf-life of variable weight items and their significant contributions to sales total revenue, point to the need for accurate analysis and prediction of consumer purchasing decisions to achieve cost reductions and higher profits. If accurate econometric models can he built, the hurdles to effective planning and decision-making may be surmounted, thus permitting better customer service, smaller inventory levels, and less product spoilage. Further, retail firms will be able to anticipate sales more accurately and identify for producers, processors, distributors and/or suppliers some of the factors that can lead to variations in weekly sales. So, there is a need for a broader research effort on consumer demand for fresh meats at the retail level, because it holds potential for assisting supermarkets and suppliers. Inaccurate prediction of sales can lead to short-run surpluses or shortages in supply. Thus, knowledge of weekly demand elasticities would enable retail firms and their suppliers to handle these situations.

The results based on the econometric analysis of weekly scan data from May 14,1988 through January 1,1994) for both unrestricted and restricted multimedia LA/AIDS models indicate that (1) own-newspaper advertising impacts are important for fresh ground, roast, and steak categories; (2) Own-electronic media advertising effects appear to he important only for ground and roast categories; (3) Own-price effects appear to be important for ground and steak items; and cross-price effects appear to be important for all the foods; (4) spring and summer seasons have positive influences on steak purchases, while July 4 is important for roast; (5) trend and consumption habits have positive effects on both roast and steak; (6) newspaper advertising intensity has a positive influence on the expenditure elasticity for steak; (7) newspaper advertising has a positive on own-price elasticities for ground and steak, while electronic media advertising has positive impact on own-price elasticity for ground, that is, these advertising modes tend to make own-price elasticities more inelastic for the food items; and (8) newspaper advertising has a positive effects on own-newspaper advertising elasticities for all the three beef categories, while electronic media advertising has positive influences on own electronic media advertising elasticities for both ground and roast. Overall, elasticity estimates reveal the sensitivity of shoppers' purchases to price changes and advertising efforts.

This study has demonstrated the applicability of scanner-derived data in modifying and/or developing econometric models to analyze and obtain new estimates of food shoppers' responses to traditional and nontraditional factors at the supermarket level.

Download
Files over 3MB may be slow to open. For best results, right-click and select "save as..."

Share

COinS