Abstract

This study examines the role of advertising on consumers' quality perception as a method to vertically differentiate in the baking mix market. Two companies, General Mills and Chelsea Mills have competed head to head since 1930s, using drastically different strategies. General Mills has consistently promoted Bisquick and provided recipes for its use. Chelsea Mills has never advertised its product, Jiffy, preferring instead to minimize cost and provide service to retailers. Both strategies have been successful, resulting in an equilibrium resembling theoretical vertical differentiation models.

Submitted: February 24, 2003 · Accepted: July 12, 2003 · Published: September 11, 2003

Recommended Citation

Eales, James and Binkley, James K. (2003) "Vertical Product Differentiation in Theory and Practice," Journal of Agricultural & Food Industrial Organization: Vol. 1 : Iss. 1, Article 16.
Available at: http://www.bepress.com/jafio/vol1/iss1/art16