The intensity of advertising and other selling expenses in food and tobacco manufacturing: Measurement, determinants, and impacts

Abstract

The measurement of selling effort in the food processing industries has improved in several ways. An FTC data set on both advertising and promotional expenses is used to estimate some determinants of variations in the intensity of selling effort. They are found to be related to market sales concentration, the number of brands being sold, elaborateness of packaging, and product perishability. A second analysis finds that the intensity of food-manufacturer selling efforts is nonnegatively associated with grocery wholesalers' or retailers' gross margins. The latter finding challenges the view that manufacturer advertising provides information that ultimately benefits consumers through lower retail prices.

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