The U.S. Canned Soup Market: A Competitive Profile

This paper follows the path of eight studies of U.S. markets: Men’s Shaving Cream, Beer, Shampoo, Shredded/Grated Cheese, Refrigerated Orange Juice, Men’s Razor-Blades, Women’s Razor-Blades, and Toothpaste.Porter associates high market share with cost leadership strategy which is based on the idea of competing on a price that is lower than that of the competition. However, customer-perceived quality—not low cost—should be the underpinning of competitive strategy, because it is far more vital to long-term competitive position and profitability than any other factor. So, a superior alternative is to offer better quality vs. the competition.In most consumer markets a business seeking market share leadership should try to serve the middle class by competing in the mid-price segment; and offering quality better than that of the competition: at a price somewhat higher, to signify an image of quality, and to ensure that the strategy is both profitable and sustainable in the long run. Quality, however, is a complex concept that consumers generally find hard to understand. So, they often use relative price, and a brand’s reputation, as a symbol of quality.In 2008 the U.S. retail sales for the Canned Soup market were $3.44 Billion. The market leader Campbell had a commanding share of 52.5%, followed by a far-distant second Progresso with a share of 17.8%. A notable feature of this market was the tremendous variety of soups, albeit many with minor variations, that equaled the unbelievable figure of 1011!We focused our attention on the two best-selling varieties of soup: (1) Chicken Broth canned, the market leader, with 11.1% market share, and (2) Chicken Noodle Soup canned, with a 7.4% share. Within each variety we chose the can-size range with the highest sales.Using Hierarchical Cluster Analysis, we tested Hypotheses I that a market leader is likely to compete in the mid-price segment. Employing U.S. retail sales data for 2008 and 2007, we found that for both Chicken Broth and Chicken Noodle Soup—for 2008 and 2007—the market leader Campbell was a member of the mid-price segment.For Hypothesis II we wanted to test the proposition that the unit price of the market leader would be somewhat higher than that of the nearest competition. For Chicken Broth we could not test this hypothesis because Progresso, the runner-up, could not be included in this analysis.However, for Chicken Noodle Soup the results did not support the hypothesis because Progresso happened not to be a part of the mid-price, but that of the premium segment.Finally, we discovered four strategic groups in the industry.

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The U.S. Toothpaste Market: A Competitive Profile

Journal of Economics and Public Finance ◽

10.22158/jepf.v6n1p145 ◽

2020 ◽

Vol 6 (1) ◽

pp. p145

Author(s):

Y. Datta

Keyword(s):

Market Share ◽

Strong Support ◽

Hierarchical Cluster ◽

Relative Price ◽

Unit Price ◽

Fundamental Result ◽

Retail Sales ◽

Benefit Segmentation ◽

Market Leader ◽

The U.S

This paper follows the path of seven studies (see below). However, it is different in one important respect: it also offers a benefit segmentation profile of the U.S. Toothpaste Market.Porter associates high market share with cost leadership strategy which is based on the idea of competing on a price that is lower than that of the competition. However, customer-perceived quality—not low cost—should be the foundation of competitive strategy, because it is far more vital to long-term competitive position and profitability than any other factor. So, a superior alternative is to offer better quality vs. the competition.In most consumer markets a business seeking market share leadership should try to serve the middle class by competing in the mid-price segment; and offering quality better than that of the competition: at a price somewhat higher, to signify an image of quality, and to ensure that the strategy is both profitable and sustainable in the long run. Quality, however, is a complex concept that consumers generally find difficult to understand. So, they often use relative price, and a brand’s reputation as a symbol of quality.In 2008 retail sales in the U.S. were $1.27 Billion for the Toothpaste Market. The market leader Crest had a market share of 34.7%, closely followed by Colgate with a share of 33.5%. We focused on the most popular pack-size—5.8-6.5oz—which had a 45.3% share. Employing Hierarchical Cluster Analysis, we tested two hypotheses: (1) That a market leader is likely to compete in the mid-price segment, and (2) That the unit price of the market leader is likely to be somewhat higher than that of the nearest competition. Employing U.S. retail sales data for 2008 and 2007, we found that, for both 2008 and 2007, the market leader in the U.S. Toothpaste market—Crest—was a member of the mid-price segment. Furthermore, the unit price of Crest was somewhat higher than that of Colgate, the runner-up, which was also a member of the mid-price segment.Thus, the results fully supported both Hypothesis I and II—for 2008 and 2007.We also found strong support for the idea, that relative price is a strategic variable, as we have hypothesized.We discovered five benefit segments. The most fundamental result of this analysis is that it revealed an avalanche of various brands of toothpaste that not only whitened teeth, but were also helpful in preventing tooth decay, as before.Finally, we discovered four strategic groups in the industry.

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The U.S. Shampoo Market: A Competitive Profile

Journal of Economics and Public Finance ◽

10.22158/jepf.v4n2p180 ◽

2018 ◽

Vol 4 (2) ◽

pp. 180

Author(s):

Y. Datta

Keyword(s):

Market Share ◽

Low Cost ◽

Strong Support ◽

General Purpose ◽

Relative Price ◽

Unit Price ◽

Complex Concept ◽

Size Groups ◽

Market Leader ◽

The U.S

Porter associates high market share with cost leadership strategy which is based on the idea of competing on a price that is lower than that of the competition. But, customer-perceived quality-not low cost-should be the foundation of competitive strategy, because it is far more important to long-term competitive position and profitability than any other factor. So, a superior alternative is to offer better quality vs. the competition.In most consumer markets a business seeking market share leadership should try to serve the middle class by competing in the mid-price segment: and offering quality better than that of the competition: at a somewhat higher price to connote an image of quality, and to ensure the strategy is both profitable and sustainable in the long run. Quality, however, is a complex concept, consumers generally find difficult to comprehend. So, they often use relative price and a brand’s reputation as a symbol of quality.The U.S. Shampoo market is very competitive and consists of a large number of brands. Most brands are sold at supermarkets, drug stores, discount stores, and department stores. However, many premium and super-premium brands—called salon brands—are sold by beauty salons.The salon shampoo segment had captured 11.4% of market share in 2008.Most of the shampoos covered in this study are general-purpose shampoos—with the exception of five anti-dandruff and two psoriasis brands. Almost all are aimed at women. However, three are for men, one for babies, and four for kids.One characteristic of this market is the proliferation of bottle sizes that ranged all the way from 1 to 42 oz. These can be classified into three broad size groups. By far the largest is the medium group (11.6-15.4 oz) with a market share of 52%; next is the large group (22.5-25.4 oz) with a 17% market share; and small (8-11.5 oz) with a market share of 14%. We tested two hypotheses: (1) That a market leader is likely to compete in the mid-price segment, and (2) That the unit price of the market leader is likely to be somewhat higher than that of the nearest competition. Employing U.S. retail sales data for 2008 and 2007, we found that Procter and Gamble’s (P&G) Pantene, the overall market leader, was a member of the mid-price segment for both years—and for all three bottle-size groups.However, the results did not support the second hypothesis. This is because the runner-up happened to be P&G’s Head & Shoulders anti-dandruff shampoo: a type of specialty shampoo that is generally priced higher than general-purpose shampoos.Another notable result is that we found strong support for the notion that relative price is a strategic variable. Finally, we discovered four strategic groups in the industry.

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The U.S. Men’s Razor-Blade Market: A Competitive Profile

Journal of Economics and Public Finance ◽

10.22158/jepf.v5n3p354 ◽

2019 ◽

Vol 5 (3) ◽

pp. p354

Author(s):

Y. Datta

Keyword(s):

Market Share ◽

Low Cost ◽

Strong Support ◽

Relative Price ◽

Unit Price ◽

Razor Blade ◽

Market Strategy ◽

Complex Concept ◽

Market Leader ◽

The U.S

This paper follows the footsteps of five studies: the U.S. Men’s Shaving Cream, the U.S. Beer, the U.S. Shampoo, the U.S. Shredded/Grated Cheese, and the U.S. Refrigerated Orange Juice markets.Porter links high market share with cost leadership strategy which is based on the idea of competing on a price that is lower than that of the competition. However, customer-perceived quality—not low cost—should be the underpinning of competitive strategy, because it is far more vital to long-term competitive position and profitability than any other factor. So, a superior alternative is to offer better quality vs. the competition.In most consumer markets a business seeking market share leadership should try to serve the middle class by competing in the mid-price segment; and offering quality better than that of the competition: at a price somewhat higher, to signify an image of quality, and to ensure that the strategy is both profitable and sustainable in the long run. Quality, however, is a complex concept consumers generally find difficult to understand. So, they often use relative price, and a brand’s reputation as a symbol of quality.In 2008—and 2007—the Gillette brand dominated the U.S. Men’s Razor-Blade market like a colossus, with a 90%, and 78% share, respectively, in Blades and Razors in 2008. In 2008 sales for the U.S. were $111 million for Men’s Razors, and $591 million for Men’s Blades.We tested two hypotheses: (1) That a market leader is likely to compete in the mid-price segment, and (2) That the unit price of the market leader is likely to be somewhat higher than that of the nearest competition. Employing U.S. retail sales data for 2008 and 2007, we found that for both 2008 and 2007 the market leader in the Razor market was not a member of the mid-price segment, but the premium segment. Likewise, in the Blade market the leader was part of the premium segment, not the mid-price segment.Several arguments can be offered to explain this deviation: (1) Gillette had a virtual monopoly of the industry because it was pursuing “First to market” strategy of innovation and on-going improvement, (2) The technology of producing Razors and Blades has become more complex and consequently more expensive, (3) Producers are now offering many more new feature—and benefits--than ever before that further raise the cost of production, and (4) Many men regard shaving an important part of personal grooming which they regard an “affordable luxury”.Whereas Gillette had positioned itself as a premium brand in the past, it stepped up the ladder and placed Fusion Blades in the Super-premium segment in 2007 and 2008.We also found strong support for the idea, that relative price is a strategic variable.Finally, we discovered three strategic groups in the industry.

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The U.S. Potato Chip Market: A Competitive Profile

Journal of Economics and Public Finance ◽

10.22158/jepf.v6n4p86 ◽

2020 ◽

Vol 6 (4) ◽

pp. p86

Author(s):

Y. Datta

Keyword(s):

Cluster Analysis ◽

Market Share ◽

Potato Chip ◽

Hierarchical Cluster ◽

Relative Price ◽

Unit Price ◽

Retail Sales ◽

Consumer Markets ◽

Market Leader ◽

The U.S

This paper follows the footsteps of ten studies that have tried to analyze the competitive profile of U.S. consumer markets: Men’s Shaving Gel, Beer, Shampoo, Shredded/Grated Cheese, Refrigerated Orange Juice, Men’s Razor-Blades, Women’s Razor-Blades, Toothpaste, Canned Soup, and Coffee.Porter associates high market share with cost leadership strategy which is based on the idea of competing on a price that is lower than that of the competition. However, customer-perceived quality—not low cost—should be the underpinning of competitive strategy, because it is far more vital to long-term competitive position and profitability than any other factor. So, a superior alternative is to offer better quality vs. the competition.In most consumer markets a business seeking market share leadership should try to serve the middle class by competing in the mid-price segment; and offering quality better than that of the competition: at a price somewhat higher, to signify an image of quality, and to ensure that the strategy is both profitable and sustainable in the long run. Quality, however, is a complex concept consumers generally find difficult to understand. So, they often use relative price, and a brand’s reputation, as a symbol of quality.In 2008 the U.S. retail sales for the Potato Chip market were $3.07 Billion. The pack sizes varied from 0.8oz to 50oz, with the 9-13oz packs being the most popular with a 33% share. So, we have focused cluster analysis on this size.In 2008 the U.S. Potato Chip market was highly competitive—notwithstanding the dominance of Pepsi Co.’s Lay’s brand family—with a total of 254 brands.Using Hierarchical Cluster Analysis, we tested two hypotheses: (1) That the market leader is likely to compete in the mid-price segment, and that (2) Its unit price is likely to be higher than that of the nearest competition. Employing U.S. retail sales data for 2008 and 2007 we found that the results supported Hypothesis I; both the market leader Lay’s Plain Potato Chip brand--and the runner-up Pringles Original Potato Chip brand--were members of the mid-price segment. However, while the unit price of the market leader was somewhat higher than that of the runner-up for 2008—as we have hypothesized--this was not the case for 2007, although the price difference between the two brands did not seem statistically significant.We found that relative price was a strategic variable, as hypothesized.We also discovered four strategic groups in the industry.This is the eleventh in the study of U.S. consumer markets we have cited above. In eight of these—that exclude Men’s and Women’s Razor-Blades, and Ground Coffee—a pattern has emerged. In all eight cases the market leader was a member of the mid-price segment, as we have hypothesized.Finally, in the words of Dirk Burhans, the author of Crunch, it is important to realize that a “potato chip could be such a subtle, delicate experience”.

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The U.S. Refrigerated Orange Juice Market: A Competitive Profile

Journal of Economics and Public Finance ◽

10.22158/jepf.v4n4p389 ◽

2018 ◽

Vol 4 (4) ◽

pp. 389

Author(s):

Y. Datta

Keyword(s):

Market Share ◽

Orange Juice ◽

Low Cost ◽

Strong Support ◽

Relative Price ◽

Unit Price ◽

Retail Sales ◽

Consumer Markets ◽

Market Leader ◽

The U.S

Porter links high market share with cost leadership strategy which is based on the idea of competing on a price that is lower than that of the competition. But, customer-perceived quality—not low cost—should be the foundation of competitive strategy, because it is far more vital to long-term competitive position and profitability than any other factor. So, a superior alternative is to offer better quality vs. the competition.In most consumer markets a business seeking market share leadership should try to serve the middle class by competing in the mid-price segment; and offering quality better than that of the competition: at a price somewhat higher, to signify an image of quality, and to ensure that the strategy is both profitable and sustainable in the long run. Quality, however, is an intricate concept consumers generally find difficult to understand. So, they often use relative price and a brand’s reputation as a symbol of quality.Total U.S. Refrigerated Orange Juice retail sales for 2008 were $2.6 Billion. There were ten package sizes ranging all the way from 6 oz to 128 oz. Of these the 64- and 59-oz size captured about two-thirds of the market at 66%.It is a very competitive market with 142 brands in 2008. However, we have focused analysis on 32 brands whose 64oz- or 59oz-pack sales were over $1Million.We tested two hypotheses: (1) That a market leader is likely to compete in the mid-price segment, and (2) That the unit price of the market leader is likely to be somewhat higher than that of the nearest competition. Employing U.S. retail sales data for 2008 and 2007, we found that the results supported both hypotheses for 2008, as well as 2007.We also found strong support for the idea, that relative price is a strategic variable.We compared the results of this project with four similar studies: the U.S. Men’s Shaving Cream market, the U.S. Beer market, the U.S. Shampoo market, and the U.S. Shredded/Grated Cheese market. We found the results to be very similar, indicating a pattern emerging for consumer markets.Finally, we discovered five strategic groups in the industry.

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The U.S. Alkaline AA Battery Market: A Competitive Profile

Journal of Economics and Public Finance ◽

10.22158/jepf.v7n2p35 ◽

2021 ◽

Vol 7 (2) ◽

pp. p35

Author(s):

Y. Datta

Keyword(s):

Market Share ◽

Low Cost ◽

Hierarchical Cluster ◽

Relative Price ◽

Unit Price ◽

Complex Concept ◽

Long Run ◽

Consumer Markets ◽

Market Leader ◽

Strategic Variable

This paper follows the footsteps of eleven studies that have tried to analyze the competitive profile of U.S. consumer markets: Men’s Shaving Gel, Beer, Shampoo, Shredded/Grated Cheese, Refrigerated Orange Juice, Men’s Razor-Blades, Women’s Razor-Blades, Toothpaste, Canned Soup, Coffee, and Potato Chips.Porter associates high market share with cost leadership strategy which is based on the idea of competing on a price that is lower than that of the competition. However, customer-perceived quality—not low cost—should be the underpinning of competitive strategy, because it is far more vital to long-term competitive position and profitability than any other factor. So, a superior alternative is to offer better quality vs. the competition.In most consumer markets a business seeking market share leadership should try to serve the middle class by competing in the mid-price segment; and offering quality better than that of the competition: at a price somewhat higher to signify an image of quality, and to ensure that the strategy is both profitable and sustainable in the long run. Quality, however, is a complex concept consumers generally find difficult to understand. So, they often use relative price, and a brand’s reputation, as a symbol of quality.For 2008 we chose the Alkaline AA Battery because its sales were $667 million vs. $283 million for AAA. By the same token, we have focused our analysis on AA 4-pack because it was the most popular size with 2008 sales of $190 million.In 2008 the AA 4-pack Alkaline Battery market was quite competitive with 30 brands with sales over $25,000.Using Hierarchical Cluster Analysis, we tested two hypotheses: (1) That the market leader is likely to compete in the mid-price segment, and that (2) Its unit price is likely to be higher than that of the nearest competition.For 2008 the results supported Hypothesis I and II. Both the market leader Energizer, and the runner-up Duracell, were members of the mid-price segment. Moreover, the unit price of Energizer was higher than that for Duracell, as we have hypothesized.For 2007 the results did not support Hypothesis I, because Energizer found it to be a member of the premium segment, even though Duracell maintained its association with the mid-price segment. We found that relative price was a strategic variable, as hypothesized.We also discovered four strategic groups in the industry.

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The U.S. Women’s Razor-Blade Market: A Competitive Profile

Journal of Economics and Public Finance ◽

10.22158/jepf.v5n4p491 ◽

2019 ◽

Vol 5 (4) ◽

pp. p491

Author(s):

Y. Datta

Keyword(s):

Market Share ◽

Low Cost ◽

Strong Support ◽

Relative Price ◽

Unit Price ◽

Razor Blade ◽

Complex Concept ◽

Long Run ◽

Market Leader ◽

The U.S

This paper follows the path of six studies: the U.S. Men’s Shaving Cream, the U.S. Beer, the U.S. Shampoo, the U.S. Shredded/Grated Cheese, the U.S. Refrigerated Orange Juice, and the U.S. Men’s Razor-Blade markets.Porter associates high market share with cost leadership strategy which is based on the idea of competing on a price that is lower than that of the competition. However, customer-perceived quality—not low cost—should be the foundation of competitive strategy, because it is far more vital to long-term competitive position and profitability than any other factor. So, a superior alternative is to offer better quality vs. the competition.In most consumer markets a business seeking market share leadership should try to serve the middle class by competing in the mid-price segment; and offering quality better than that of the competition: at a price somewhat higher, to signify an image of quality, and to ensure that the strategy is both profitable and sustainable in the long run. Quality, however, is a complex concept consumers generally find difficult to understand. So, they often use relative price, and a brand’s reputation as a symbol of quality.In 2008 sales in the U.S. were $83 million for the Women’s Razors, and $192 million for the Women’s Blades. In both markets there were two major players. In the Women’s Razors market P&G’s Gillette had a 58% market share, followed by Schick, a distant second, with a 31% share. Likewise, in the Women’s Blade market, Gillette had a 61% share, and Schick a 35% share.We tested two hypotheses: (1) That a market leader is likely to compete in the mid-price segment, and (2) That the unit price of the market leader is likely to be somewhat higher than that of the nearest competition. Employing U.S. retail sales data for 2008 and 2007, we found that for 2008 the market leader in the Women’s Razor market—Gillette Venus Embrace—was not a member of the mid-price segment, but the super-premium segment. Likewise, in the Women’s Blade market, the market leader—Gillette Venus Original (Note 1)—was part of the premium segment, not the mid-price segment.Several arguments can be offered to explain this deviation: (1) There is not much competition in this market with only two major players, (2) The technology of producing Razors and Blades has become more complex and consequently more expensive, (3) Producers are now offering many more new feature—and benefits—than ever before that further raise the cost of production, and (4) For many American women, having smooth armpits and legs is an important social norm they must observe for which they are willing to pay a premium price.Based on Gillette Fusion, the first men’s five-blade Razor, Gillette introduced Venus Embrace, a first five-blade Razor for women. Whereas Gillette had positioned itself as a premium brand in the past, it moved up the ladder and placed Venus Embrace in the super-premium segment in 2008.We also found strong support for the idea, that relative price is a strategic variable.Finally, we discovered three strategic groups in the industry.

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The U.S. Beer Market: A Competitive Profile

Journal of Economics and Public Finance ◽

10.22158/jepf.v3n4p541 ◽

2017 ◽

Vol 3 (4) ◽

pp. 541

Author(s):

Y. Datta

Keyword(s):

Market Share ◽

Low Cost ◽

Relative Price ◽

Unit Price ◽

Complex Concept ◽

Bivariate Correlation ◽

Leadership Strategy ◽

Consumer Markets ◽

Market Leader ◽

The U.S

Porter equates high market share with cost leadership strategy which is based on the idea of competing on a price lower than that of the competition. However, customer-perceived quality—not low cost—should be the underpinning of competitive strategy, because it is far more critical to long-term competitive position and profitability than any other factor. So, a superior option is to offer better quality vs. the competition.In most consumer markets a business seeking market share leadership should cater to the middle class by competing in the mid-price segment: and offering better quality than that of the competition at a somewhat higher price. Quality, however, is a complex concept consumers generally find difficult to understand. So, they often use relative price and a brand’s reputation as a symbol of quality.The U.S. Beer market is one of the most complex industries. It has two product-segments: Lager and Ale, with lager being the overwhelmingly dominant segment. Also, it has three market groups: Traditional, Imports, and Craft. We have focused most of our statistical analysis on the lager segment. First, we tested the hypothesis that a market leader is likely to compete in the mid-price segment. Second, the price tag of the market leader is going to be somewhat higher than that of the nearest competition. Employing U.S. retail sales data for 2008 and 2007, we used cluster analysis based on unit price of 12-packs and six-packs (Note 1). The results strongly supported both hypothesis for both years—and for both packs. We have proposed an alcohol-based system for classifying beer: Low vs. High. This proposal is based on the premise that alcohol and calories are closely tied to each other. We performed bivariate correlation on 50 popular lager and ale brands, and the results were significant at the 0.01 level.Finally, we discovered five strategic groups in this market.

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The U.S. Coffee Market: A Competitive Profile

Journal of Economics and Public Finance ◽

10.22158/jepf.v6n3p138 ◽

2020 ◽

Vol 6 (3) ◽

pp. p138

Author(s):

Y. Datta

Keyword(s):

Market Share ◽

Unit Price ◽

Cost Leadership ◽

Leadership Strategy ◽

Consumer Markets ◽

Market Leader ◽

Coffee Market ◽

Cost Leadership Strategy ◽

The U.S ◽

Ground Coffee

This paper follows the path of nine studies of U.S. consumer markets: Men’s Shaving Gel, Beer, Shampoo, Shredded/Grated Cheese, Refrigerated Orange Juice, Men’s Razor-Blades, Women’s Razor-Blades, Toothpaste, and Canned Soup.Porter associates high market share with cost leadership strategy which is based on the idea of competing on a price that is lower than that of the competition. However, customer-perceived quality—not low cost—should be the underpinning of competitive strategy, because it is far more vital to long-term competitive position and profitability than any other factor. So, a superior alternative is to offer better quality vs. the competition.In most consumer markets a business seeking market share leadership should try to serve the middle class by competing in the mid-price segment; and offering quality better than that of the competition: at a price somewhat higher, to signify an image of quality, and to ensure that the strategy is both profitable and sustainable in the long run. Quality, however, is a complex concept consumers generally find difficult to understand. So, they often use relative price, and a brand’s reputation, as a symbol of quality.In 2008 the U.S. retail sales for the Coffee market were $3.78 Billion. The market featured five varieties of coffee: Ground, Soluble (Instant), Whole Bean, Liquid, and Flavored. We have focused our analysis on Ground Coffee which had a 70% share in 2008.In 2008 the Ground Coffee market leader was the Folgers brand family with a market share of 21.8%, followed by the Maxwell House brand with 11.6%. The pack sizes varied from 1.3- to 52oz, with the 10-13 oz packs being the most popular. So, we have focused cluster analysis on this pack.The Ground Coffee market was highly competitive. In 2008 it had 450 brands.Using Hierarchical Cluster Analysis, we tested two hypotheses: (1) That the market leader is likely to compete in the mid-price segment, and that (2) Its unit price is likely to be higher than that of the nearest competition. Employing U.S. retail sales data—for both 2008 and 2007—we found that the results did not support our hypothesis that the market leader would be a member of the mid-price segment. Instead, the results show that both the market leader, the Folgers flagship brand—and the runner-up Maxwell House—were members of the economy segment, although Folgers’ unit price was higher than that of Maxwell House, as we have hypothesized.This implies that both Folgers and Maxwell House were following the cost leadership strategy based on lower price than better quality, and treated coffee as a commodity to gain market share. This is truly a stunning result! In all similar nine studies preceding this one, not a single market leader—or runner-up—competed in the economy segment! The spectacular success of Starbucks demonstrated in no uncertain terms that the consumers were no longer content to treat coffee as a run-of-the mill drink—but rather something special—that deserved to be relished, and for which they were willing to pay a premium price.Finally, we discovered five strategic groups in the industry.

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Three essays on the economic value of innovation and quality within the soybean supply chain

10.32469/10355/48720 ◽

2015 ◽

Author(s):

◽

Jewelwayne Cain

Keyword(s):

Supply Chain ◽

Drought Tolerance ◽

Market Share ◽

Oil Content ◽

Economic Value ◽

The Philippines ◽

Relative Price ◽

Global Food ◽

The U.S

Population growth and rise in personal income worldwide have led to a high rate of increase in global food demand. Efforts by global agricultural supply to meet this demand, however, is threatened by a decreasing number of agriculture workers across the globe and a slowing expansion of agricultural acreage. Crucial to this effort is agricultural innovation that leads to increases in agricultural productivity. One of the most important global agricultural crops is soybeans. So far, innovations in the seed quality of soybean has enabled farmers to meet growing global food and energy demands--particularly on specific nutrient components such as protein and oil--and to mitigate the effects of several stresses facing soybean plants including droughts. However, the farmer's ability to remain competitive and meet demand through innovation still requires further understanding of several areas, three of which are the focus of this dissertation. These areas, each one contained in one chapter, addresses a specific topic while following a general theme: analyzing the economic value of innovation and quality within the soybean supply chain. The first chapter looks at the evolution of soybean drought-tolerance to consider if the impact of innovation is evenly distributed geographically in three U.S. relative soybean maturity zones--divided areas defined by how long soybean crops mature based on environmental factors. Results show that crops planted in all three relative maturity zones are exhibiting increasing tolerance over time only against droughts occurring between August and October. There is evidence, however, that soybeans planted in relative maturity zone 4 exhibited the largest improvement in drought tolerance, while those planted in relative maturity zone 3 exhibited the least. In the second chapter, the values of two important soybean traits--protein and oil content--are estimated and the demand and supply factors that affect these values are also analyzed. The results show significant positive values, suggesting that there is an incentive for U.S. farmers to produce soybeans with higher quantities of protein and oil content. Finally, the third chapter uses data on four soybean exporters to the Philippines--United States, Canada, China, and the rest of the world--to determine whether the downward trend in the U.S. market share is due to differences in the quality of soybeans or due to changes in relative prices. Results show that the Philippine demand for imported soybeans is less responsive to relative price changes and is more determined by quality differences. This strongly indicates that the decline in the U.S. import market share may be due to shifting of preferences of Philippine consumers toward soybean qualities inherent in non-U.S. soybeans.

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