Market Power, Brand Characteristics and Demand for Retail Grocery Products

17 Pages Posted: 14 Mar 2006 Last revised: 10 Apr 2011

See all articles by Paul H. Jensen

Paul H. Jensen

University of Melbourne - Melbourne Institute of Applied Economic and Social Research

Elizabeth Webster

Swinburne University of Technology; University of Melbourne - Melbourne Institute: Applied Economic & Social Research

Date Written: February 1, 2006

Abstract

This paper examines the effects of market power and product differentiation on demand for grocery products in Australia over the period 2002 to 2005. We construct a model of the relationship between demand, market power and brand characteristics and then estimate the model using monthly data on price, quantity and volume sold for a bundle of 92 brands in 12 product categories from major supermarket stores across Australia. We also use data on the characteristics of each brand such as whether the product is environment-friendly, is a "private label", or is made from recyclable materials. Our results suggest that firms are able to affect their demand curves through both product differentiation strategies and through market power.

Keywords: Market power, Product differentiation, Trade marks, Brands, Demand

JEL Classification: L13, L15, L8

Suggested Citation

Jensen, Paul H. and Webster, Elizabeth M., Market Power, Brand Characteristics and Demand for Retail Grocery Products (February 1, 2006). Available at SSRN: https://ssrn.com/abstract=886462 or http://dx.doi.org/10.2139/ssrn.886462

Paul H. Jensen (Contact Author)

University of Melbourne - Melbourne Institute of Applied Economic and Social Research ( email )

Level 5, FBE Building, 111 Barry Street
Parkville, Victoria 3010
Australia

Elizabeth M. Webster

Swinburne University of Technology ( email )

Cnr Wakefield and William Streets, Hawthorn Victor
3122 Victoria, Victoria 3122
Australia

University of Melbourne - Melbourne Institute: Applied Economic & Social Research ( email )

Level 5, FBE Building, 111 Barry Street
Parkville, Victoria 3010
Australia

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