Who is Reacting to the Food Industry’s Generic Advertising Messages?

Since 1984, U.S. dairy producers and milk processors have contributed more than $300 million annually to promotions, with a relatively large share committed to generic advertising programs. Hence, it is very important for farmers, processors, and policy makers to understand the economic impact of generic advertising. This article reports the results of a recent study that used household-level data to analyze the impact that generic advertising has on the demand for dairy products, including its effect on the likelihood of purchase and levels of consumption. This is particularly important when evaluating advertising programs to determine to whom – new or current consumers – the message has been successfully delivered. Purchasing data for fluid milk and cheese for home consumption and annual household demographic data were obtained from the ACNielsen Homescan Panel sample of U.S. The effects of numerous factors on the demand for dairy products are considered in this study. Product price, household income, household size, and generic advertising are the basic factors analyzed. Because price often varies due to volume and store discounts, we include variables that reflect the proportion of purchases in various package sizes and store types, and the