Generic Versus 'Brand' Promotion: A Model with Application to International Trade
By Henry W. Kinnucan and Oystein Myrland
ABSTRACT
Building on an earlier study by Goddard and Conboy, a model is developed to determine the relative effectiveness of generic versus 'brand' (country-of-origin) promotion. Comparative static analysis indicates that no simple rule can be used to determine relative effectiveness a priori. In particular, GC's conclusion that generic promotion is preferred when second-stage demand is price elastic could not be supported in the general case. Applying the model to Norwegian salmon promotion in France, price enhancement appears to be greater for a generic campaign than for a brand campaign, especially if supply of the promoted product is relatively price inelastic. When spillover effects are considered, a generic strategy is almost always preferred to a brand strategy, since the latter generates a negative externality for competing suppliers.
KEYWORDS: generic advertising, product differentiation, non-price promotion, salmon demand
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