Three Essays on Marketing Strategies in Food and Beverage Industries

My dissertation consists of three chapters, investigating marketing strategies in the food and beverage industries. My first chapter uses a random coefficient demand model to empirically investigate how soft drink firms strategically determine their pricing strategies in response to a tax change, considering the market exhibits oligopoly and imperfect information. By allowing strategic pricing and considering tax salience effects, this chapter further compares the effects of excise and sales taxes on soft drink demand. Conclusion and implication from this chapter will help policy makers focus their efforts to adopt the most appropriate instrument to address public health problem such as obesity. Using market level San Track data for the cereal industry, I examine cereal manufacturers’ product strategies in chapter two. Due to arising public awareness of the importance of healthy diet, the organic market has dramatically grown. Cereal firms compete for the market share by launching so called “natural” products, which have no difference from ordinary ones but carry higher prices and hold an image of being as healthy as organic. This chapter quantifies the threats of “natural” to organic foods, which provides important information for policy makers. It further offers potential marketing strategies for organic producers. Focusing on the cereal market, I explore firms’ pricing and promotion strategies in chapter 3. Specifically, I investigate how retailer pricing and couponing change based on competitor’s coupon issuance; and whether different types of coupons (manufacturer verses retailer) have different impacts on retailer’s pricing