Market Strategies in Branded Dairy Product Markets

This paper documents the extent of cooperative penetration into branded dairy product markets and presents case study evidence on competitive strategies in the skim/low fat milk, whole milk, cottage cheese, butter, margarine, and ice cream markets. We employ data for 51 local market areas from the Information Resources, Inc. "Supermarket Review" data base for 1988 and 1989. Using national data, we identify the twenty top brands (by volume sales) and all cooperatives that market one or more brands in each of the above categories, and report their national market shares, averages prices, number of local markets in which they are sold, and a summary of their local rankings. Using local data for selected brands, we graphically analyze how prices, quantities, and shares change over time in particular markets. We find that cooperatives have much stronger positions in local markets than their national market shares indicate. When looking at the brand share-price relationships for particular brands across local markets, we find examples of positive, negative, and no relationships.Agribusiness, Industrial Organization, Livestock Production/Industries, Marketing,