Impacts of Advertising and Promotion on the Demand for Scanned Purchases of Vidalia Onions

Abstract

This study evaluates the advertising and promotion impacts on the demand for scanned purchases of Vidalia onions and estimates returns to such expenditures. The analysis uses supermarket scanner data collected from scanned purchases of Vidalia onions and advertising and promotion expenditure data generated by the Vidalia Onion Marketing Order. An error components model is estimated to determine the impacts of advertising and promotion expenditures for scanned purchases of Vidalia onions, own price, prices of substitutes and complements, demographics, and seasonal variables for 10 different markets over a 260-week period from 1996 to 2001. Results indicate that sales of other onions have a negative impact on demand for Vidalia onions, income has a positive impact, and other vegetables may be complements to Vidalia onions. Advertising and promotion expenditures yielded a positive return to Vidalia onion producers in the period studied.