Article
Generic Advertising and Product Differentiation Revisited
Journal of Agricultural & Food Industrial Organization
(2007)
Abstract
This paper revisits the analysis of generic commodity advertising under product differentiation by Crespi and Marette. Crespi and Marette had shown that a dominant firm producing high-quality goods and facing a competitive fringe of lower quality producers could be harmed by a generic advertising campaign while the fringe was left unaffected. Under this dominant-firm model, a question remained why these producers might support a program for which they were indifferent. In this paper we show that under a duopoly model a high-quality firm
may be harmed while its lower-quality rival may be made better off by a generic program, thus helping to explain why some producers might favor a program while others do not. Further, this paper dismisses the claim made by some litigants that increased branded advertising is the result of a deleterious effect of generic advertising.
Keywords
- generic advertising,
- commodity promotion,
- product differentiation,
- checkoffs
Disciplines
Publication Date
2007
DOI
10.2202/1542-0485.1153
Publisher Statement
2007, Walter de Gruyter. Posted with permission.
Citation Information
John M. Crespi. "Generic Advertising and Product Differentiation Revisited" Journal of Agricultural & Food Industrial Organization Vol. 5 Iss. 1 (2007) p. 1 - 19 Available at: http://works.bepress.com/john-crespi/10/