- Email: [email protected]
Egg Promotion: A Controlled Experiment Evaluation1
226
D. ROSE, N. T. GRIDGEMAN AND D. A. FLETCHER
done by selecting for a high yield of yolk (as a percent of egg contents) as yolk size seems to be the major factor controlling solids content of eggs from hens of a given age. ACKNOWLEDGMENTS
REFERENCES Anonymous, 1949. Live stock and live stock products Act—The frozen egg regulations. Canada Gazette, (Part II) Apr. 27.
Egg Promotion: A Controlled Experiment Evaluation1 R. J. PEELER, JR. AND R. A. SCHRIMPER Department of Economics, North Carolina State University, Raleigh (Received for publication August 4, 1965)
E
XPANSION of consumer demand through various forms of advertising has attracted increased attention of many agricultural commodity groups during the current decade. Five years ago, eleven hundred farm groups in this country spent some $75 million in various commodity promotional efforts (Frye et al., 1962). It is estimated that today similar groups number over twelve hundred and have an annual budget over $90 million.2 Numerous methods are being used to evaluate the effectiveness of promotional efforts. Evaluations are generally based on the extent to which sales volume is ex1 Published with the approval of the Director of the North Carolina Agricultural Experiment Station as Paper No. 2023 of the Journal Series. 2 Estimates obtained through personal correspondence with Marketing Economics Division, U.S. Department of Agriculture.
panded after promoting the product. Basically, the idea of measuring increased sales is sound, if handled properly. However, accurate measurement of increased sales due solely to a particular promotional effort is not an easy task because of the many variables that may be relevant, i.e., price, season, location, previous promotional efforts, etc. In addition, considerable caution should be exercised before making general application from experiences of an isolated event. A description of recent studies of commodity promotion programs may be found in a published 1964 address to the National Peach Council (Hoofnagle, 1964). Promotional efforts for agricultural commodities include a wide array of activities from providing school children with book covers promoting the nutritional value of a given commodity to purchasing
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The authors wish to thank Mrs. E. Javorsky and Messrs. H. Tessier, J. Marier and T. Buckley, Division of Biosciences, N.R.C., for technical assistance, and the Biometrics Section, N.R.C. for statistical evaluation of the data.
Cotterill, O. J., A. B. Stephenson and E. M. Funk, 1962. Factors affecting the yield of egg products from shell eggs. Proc. X I I World's Poultry Congress, p. 443-447. Hill, A. T., 1964. A biometrical evaluation of the component parts of an egg and their relationship to other economically important traits in a strain of White Leghorns. Dissertation. Texas A and M College. Lineweaver, H., J. J. Meehan, J. A. Garibaldi and L. Kline, 1962. Shell egg factors and egg product quality. Proc. X I I World's Poulty Congress, p. 439-442. Marion, W. W., A. W. Nordskog, H. S. Tolman and R. H. Forsythe, 1964. Egg composition as influenced by breeding, egg size, age and season. Poultry Sci. 43 : 2SS-264. Romanoff, A. L., and A. J. Romanoff, 1949. The Avian Egg, p. 69. J. Wiley and Sons, Inc., N.Y.
EGG PROMOTION
PROCEDURE Changes in egg purchases for three groups of families during the first six months of 1964 were analyzed to isolate possible effects associated with the receipt of promotional material. The North Carolina Egg Marketing Association (NCEMA) 4 selected and pre3
A more detailed description of this study may be found in Schrimper and Peeler (1Q65). There are slight differences in the magnitude but not in direction of some of the estimates in this article compared to those in the earlier report due to a computational error brought to our attention by Dr. R. H. Anderson, Utah State University. 4 The NCEMA is a producer-sponsored promotional organization with a full-time executive
pared promotional materials for three contacts by mail using their official personally addressed envelopes. Each mail-out contained a letter and a booklet concerning various methods of preparing eggs. The letter was in color, carried the NCEMA trademark (Mr. Goodforyou) and gave some information concerning the enclosed booklet. Booklets enclosed in the order sent were (1) Nine Easy Ways to Cook Eggs, (2) 12 Easy Ways with Omelets and (3) Look What You Can Do With Eggs. These booklets were prepared by the Poultry and Egg National Board as a part of their promotional program. All families in the study were participants in the North Carolina State Consumer Panel. This panel consisted of approximately 200 Raleigh households that reported their weekly food purchases on a continuing basis from September 1960 through June 1964. The consumer panel was constructed using a stratified sampling design based on the family characteristics of income, structure, and race. Four income classes, three types of family composition and two racial categories resulted in 24 established strata. Families in the consumer panel were divided into three similar groups, hereafter referred to as A, B, and C, on the basis of the above family characteristics. It was intended that each of the three groups contain an equal number of families from each of the 24 strata. However, if the total number of families in a particular strata was not divisible by 3 the resulting inequalities were distributed among the three groups such that each group had practically the same proportion of families of each race, income level and family structure. Assignment of particular families to particular groups was random, as was the assignment of treatments to groups. secretary and is financed by an assessment of one cent per hen slaughtered within the state.
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time on major television networks. Detailed analyses designed to measure the effectiveness of promotional efforts to increase the sales of eggs are limited. A recent study (Angus et al., 196S) deals with newspaper advertising of eggs by retail food stores. In this study no association was found between egg sales and square inches of sample firms advertising, competitors advertising, or egg prices. Egg sales were shown to be a function of day of the week, holiday periods, and deliveries of eggs made in the previous time period. Direct mail advertising accounted for 15.8 percent ($1.9 billion) of the total national advertising budget in 1961 and was second only to newspaper advertising (Sandage and Fryburger, 1963). No estimates are available as to the amount of expenditures by agricultural commodity groups on direct mail advertising but it is widely used. If producers are to continue to support programs of this nature, more accurate evaluations of the benefits and cost of commodity promotion are needed. The basic objective of this study was to estimate the effects on egg purchases of selected families who received special promotional material pertaining to eggs by mail.3
227
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R. J. PEELER, JR. AND R. A. SCHRIMPER
In order to have a consistent set of data for the first six months of 1964, it was necessary to eliminate the data from 47 families from consideration. Family data were eliminated if the family dropped out of the panel during the test period, received eggs as gifts, missed sending more than one weekly food diary or if the family demonstrated an irregular purchase pattern for eggs which was directly associated with a large number of meals away from home or guest meals in the home. These omissions did not cause any significant difference in the composition of the groups. Data were analyzed in a manner which produced estimates of difference in egg purchases for each group prior to and following the receipt of promotional material after taking account of other factors affecting purchases. Thus, the two groups which received promotional material could be compared with the control group and each other. Factors other than promotional efforts which could have influenced changes in egg purchases between the time periods being
considered were included as variables in the analysis in order to more accurately isolate the net effect of changes in purchases associated with the promotional effort. One such factor was the influence of declining egg prices that occurred during a large part of the time period under study. Variables were included in the analysis to evaluate the effects of March Egg Month and the occurrence of Easter.5 In addition, another variable was included to attempt to explain the week-to-week changes in a family's egg purchases as affected by the quantity purchased during the previous week. In order to incorporate this lagged measure into the analysis, without using data from the last week in 1963 which could have been abnormally affected by the holiday season, the first week's data for 1964 were deleted from the analysis. This resulted in a total of 25 weekly observations for each group which were based on approximately 3,650 observations of weekly egg purchases for individual families. The basic statistical model for estimating the net effects of the mail-out promotional effort of eggs was as follows: Ykt = a + b i P k t + b 2 L k t + b 3 M k t + b 4 E k t +bjS k t-t-b 6 A k t+b7C k t+«kt
where Y kt = per capita egg purchases for k th group in t th week expressed as a percent of average purchases for k th group during first 15 weeks of 1964. k = A, B, or C. t = l , 2, • • • , 26 corresponding to first 26 weeks in 1964. Pkt = average price of eggs per pound purchased by k th group in t th week expressed as a percent of the aver5
March Egg Month refers to the special industry wide egg promotion effort made during the month of March. Easter Sunday was on March 19 in the year 1964.
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It was recognized that the allocation of families to the three groups such that each group contained a similar distribution of family characteristics might result in slightly different initial egg consumption levels among groups. However, it was felt that response to promotion would be more closely related to family characteristics than initial egg consumption levels. Families in group B were used as a control group and received no promotional material. Group C households were sent the first mail-out and households in group A were sent three mail-outs. The material sent to families in group C and in the first of three mail-outs to group A were identical. Mailouts were made on April 14, 28 and May 12, 1964. These families were not aware that they were participating in this specific study.
EGG PROMOTION
The coefficients of the last three independent variables in the above equation can be used to evaluate the net effectiveness of the promotional material on egg purchases. The coefficient of Skt represents the average change in purchases or the demand for eggs between the base period and test period after adjusting for all the other effects of the variables contained in the equation. For group B, the control group, the difference would be indicated by b 5 ; however, the net difference for groups A and C would be indicated by b 5 + b6 and b 5 + b 7 , respectively. Hence, b 6 and b r represent the respective amounts by which the average
change in purchases for groups A and C differed from that experienced by group B and therefore would be attributable to the different promotional experiments applied to each group. These coefficients express the difference as a percent of the base purchases for each group. RESULTS AND DISCUSSION Several modifications of the basic statistical model were used to analyze various aspects of the egg promotional plan. These included attempts to determine whether there was a significant difference between the "long-run" and "short-run" effects of this promotion as well as to investigate other aspects of differences in egg purchase patterns among the three groups of families. Estimates obtained for the basic model using the 25 weekly observations for each group were the following:8 (1) Y k t = . 6 3 - . 3 8 P k t - . 3 S L k t +.73 M k , (1.74)** (3.38)*** (.21)N.S. + 12.01 E k t -12.51 S kt (2.10)** (2.72)*** + 28.12 A kt +9.28 CM R 2 =.46 (6.72)*** (2.49)*** These estimates indicate that egg purchases during the latter part of this period were on the average approximately 12 percent below the purchases of the first 15 weeks after considering other factors influencing egg purchases. However, the purchases for group A were approximately 16 percent above the quantities purchased in the base period and, consequently, the average net change in purchases between "The t values for the regression coefficients are indicated in parentheses under the respective estimates. One-tailed t tests were used to test the significance of the various coefficients since there was a priori information to suggest the expected direction of several of the relationships. Significant levels of .01, .05 and .10 levels are indicated by ***, ** and * throughout this discussion.
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age price per pound reported by k th group for first half of 1964. Lkt = purchases per capita for k th group in t— 1 week = Ykt_i. M k t= 1 when t = 10,11, 12,13 and zero for all other values of t to represent observations in March to indicate possible effects of general promotion. E k t = 1 when t = 13 and zero for all other values of t to indicate observations representing purchases made for Easter. Skt= 1 when t = 16, 17, • • • , 26 and zero for all other values of t to represent shifts in purchases which occurred after the base period for all three groups. A k t = l when t = 1 6 , 17, • • • , 26 and k = A, zero for all other values of t and k, to represent those observations which occurred after the base period for group A. Ckt=l when t = 1 6 , 17, • • • , 26 and k = C, zero for all other values of t and k, to represent those observations which occurred after the base period for group C. ekt = random error which was assumed to be NID (0,
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R. J. PEELER, JR. AND R. A. SCHRIMPER
230
Group A
15.61_
I .2 I
0
u
Group C
-3.23
0)
Group B
-12.51 _ -I
1/4
I—I—I—L.
2/1
J
I I I t
3/7
I II 4/4
-I—I
5/2
6/6
6/27
Time (month/day 1964) FIG. 1. Comparison of egg purchases for three groups before and after mail-outs after adjusting for other factors affecting purchases.
group A and group B was equivalent to more than 28 percent of group A's average purchases in the base period. Families in group C also indicated a positive difference in their purchases during the latter part of the period from the overall average of this period. The net change from the base period for group C however, was approximately a 3 percent decrease. These comparisons are graphically presented in Figure 1 where the average purchases of each group during the first IS weeks of 1964 are represented as zero and the percentage deviations from the base values for the different groups during the test period are indicated. The other coefficients in the model indicate how egg purchases during this period were affected by other factors. For example, for every one percent decline in egg prices, purchases increased by approximately .38 percent. This estimate is in the same range as the — .30 estimate of the retail price elasticity of demand for eggs reported by Brandow (1961).
Another variable which explained part of the week-to-week variation in egg purchases for these three groups was the purchases of the previous week. The results indicated approximately .35 percent more eggs would be purchased in a given week for every one percent decrease in the previous week's purchases. This would indicate that consumption was very cyclical or that the purchases of eggs are partly influenced by the number of eggs that consumers have on hand from the previous week's purchases. A significant change in the purchases of eggs was associated with the week immediately preceding Easter. Slightly over a 12 percent average increase in the purchases for the three groups occurred during this week than otherwise would have been expected. After taking into consideration the effects associated with the week preceding Easter, egg purchases during the month of March were not significantly different from the average purchases of the base period.
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a
EGG PROMOTION
FURTHER INSIGHTS
7
For a discussion of decay curves in advertising, see Waugh (1959),
the test period were investigated. Second, the test period was divided into four intervals consisting of three two-week periods and the final five-week period for analysis. Group A exhibited strong evidence of the decay effect in both cases. Average increases in purchases for group A were approximately 15 percent higher for the first six weeks of the test period compared to the average increase in purchases for the entire eleven-week test period. Analysis based on the subdivision of the first six weeks of the test period into two-week periods added further support to the presence of the decay effect. Differences between the averages for group C and group B for the different time periods were not as diverse as those between group A and the control group which is consistent with the lower overall change in purchases for group C and a strong decay effect for group A. COSTS AND RETURNS FOR SPECIAL CASE
The preceding analyses indicate that the promotional effort significantly increased egg purchases for group A in this experiment. Increased sales are necessary for success of a sales promotion program but not sufficient. For sales promotion to be successful, it must also increase total revenue more than the cost of the promotional effort thus increasing net returns to those sponsoring the promotion. Some insights into the costs and returns of the special case covered in this analysis can be made by examining expenditures and added returns associated with the forty-four families in group A. Costs of postage ($.050), envelopes ($.010), printing ($.015), and booklets ($.025) per contact amounted to approximately $.10 per family per contact. Three contacts per family involved a total cost of the promotional effort to the forty-four families of $13.20. The preceding analysis shows that fami-
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The above model contains only one variable relating price to quantity purchased and thus the coefficient of this variable represents an average reaction for all groups. In order to determine whether part of the differences in purchases between the test period and base period among the three groups were due to differences in response to changes in egg prices the above model was modified to permit separate price effects to be estimated for each group. This was accomplished by separating P k t into three variables representing the respective prices for each group. This change did not make a significant contribution to explaining the variation of egg purchases. However, considerable difference was exhibited with respect to reaction to price changes among the three groups. More specifically, the major difference was between group C as compared to groups A and B. Price elasticities for the latter two groups were approximately — .50 while group C indicated little if any response to price changes. These differences, however, did not change the relative size or direction of the comparisons between the test period and the base period for the three groups although there were slight adjustments in some of the relevant coefficients. The initial evaluation of the promotional effort considered average effects over the entire test period. Theory and research results indicate that, in general, a decay effect would be expected to occur in most promotional efforts.7 In order to determine if decay effects existed during the eleven week test period, two further types of analyses were made. First, differences between the base period and first six weeks of
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R. J. PEELER, JR. AND R. A. SCHRIMPER
A gross return of $6.97 based on a return of $.04 per dozen was estimated for the additional eggs purchased during the test period as a result of the promotional effort. Thus the increased sales during the test period were not sufficient to allow for full "These estimates are based on budgets prepared by Coutu and Mangum (1960).
payoff of the promotional effort; however, the total effects of the promotional program may have included additional changes in purchases beyond the eleven-week period. Data were not available to measure purchases following the eleven-week test period. However, an average increase of 6.75 percent in egg purchases for the group would have been required during the succeeding forty-one weeks to break even on an annual basis. If increased purchases amounted to 10 percent for the remainder of the year, a return of 22.7 percent would be made on the funds invested in this promotional effort. In like manner, a 15 percent average increase in purchases would yield a return of 57.5 percent. Although a decay effect of the promotional effort would be expected, there is no basis from this report to suggest extended effects of the promotional effort. The range of possibilities suggests an area for further investigation. SUMMARY
This report provides information regarding the effects of mail-out promotional material and other variables on egg purchase patterns. Results indicate that egg consumption can be increased for a period of time through a mail-out promotional effort. Coefficients estimated for group A indicate rather conclusively that the purchases of these families were substantially different after they received letters containing promotional material about eggs. Also, there is strong evidence which suggests that the degree to which purchases were influenced declined over time and especially after the last letter was mailed. However, significant increases in consumption over an extended period of time are necessary to obtain a payoff for this type of promotion. REFERENCES Angus, R. G, R. O. Farrish and F. D. Rollins, 1965. Newspaper advertising of eggs by retail stores. Poultry Sci. 44: 337-340.
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lies in group A increased their purchases of eggs by 28.1 percent as a result of the promotional effort. This estimate assumes that purchases by group A would have changed in the same proportion and direction as the control group (B) if there had been no promotional effort. The estimated increase in group A's consumption is equivalent to .36 dozen eggs per family per week or an increase of 15.84 dozen per week for the 44 families. For the eleven-week test period this amounts to an increase in sales of 174.24 dozen eggs. In order to compare this additional quantity of sales with the costs of promotion, it is necessary to place a value on the increased sales. In this experiment, only a small percentage of the consumers in the market area received advertising. Therefore, it seems reasonable to assume that any increase in demand for these families would not have any perceptible effect on the total demand in the market and, consequently, price would not be altered. Thus, it is assumed that these families could purchase the desired number of dozen at the going weekly price, i.e., they faced a perfectly elastic supply. By assuming some expected margin per dozen, a crude estimate of the payoff of additional sales can be made. A return to labor and management of $.80 per hen is the indicated return in the production of commercial eggs during recent years.3 This amounts to approximately $.04 per dozen. Using a return of $.04 per dozen, a total of 330 additional dozens of eggs would have had to be sold to cover the promotional cost of $13.20.
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ness. Published address to National Peach Council, Fresno, California. Economic Research Service, U.S. Department of Agriculture, Washington. Sandage, C. H., and V. Fryburger, 1963. Advertising Theory and Practice. Richard D. Irwin, Inc., Homewood, Illinois. Schrimper, R. A., and R. J. Peeler, Jr., 196S. Commodity promotion: A controlled experiment evaluation. A. E. Information Series No. 119, Department of Agricultural Economics, N.C. State of the University of North Carolina, Raleigh. Waugh, F. W., 19S9. Effectiveness of promotion. J. Farm Economics, 4 1 : 364-376.
Variability in Microbiological Samplings of Chickens by the Swab Method A N T H O N Y W.
KOTULA
Market Quality Research Division, Agricultural Research Service, United States of Agriculture, Beltsville, Maryland
Department
(Received for publication August 20, 1965)
INTRODUCTION
T
HE bacterial population on the surface of ready-to-cook chicken is a good index of its shelf life. Procedures for microbiological sampling of birds fall into 3 general categories: 1) using a prescribed weight of excised tissue, 2) washing the entire bird or piece, and 3) removing the organisms from a definite surface area. Lockhead and Landerkin (1935) and May et al. (1961) among others, estimated bacterial numbers on poultry by washing a piece of excised tissue in diluent. Gunderson et al. (1954) ground the sample in a blender prior to making the serial dilutions. Yacowitz et al. (1957) and Goresline and Haugh (1959) dipped chicken parts into the diluent whereas Drewniak et al. (1954) and Corey and Barnes (1963) submerged the whole bird. Removal of bacteria from a prescribed area of the bird's surface has been accomplished using pressed or poured
agar, contact with millipore filter pads or by flushing with diluent by Gunderson and Gunderson (1954); Silliker et al. (1957) and Wells (1959) respectively. The use of swabs to wipe bacteria from a known area was reported by Walker and Ayres (1956, 1959), Morris and Ayres (1956), May (1961, 1962), Kraft and Ayres (1961), Kotula et al. (1962), and Williams et al. (1962) to mention just a few. Mallmann et al. (1958), Seekins et al. (1958) and Ayres (1959) compared several sampling methods and found the wash method to be superior to the other methods studied, including the swab method. Removal of bacteria from a prescribed surface area with swabs continues to be used, however, because of the ease of sampling by this method. The present study was undertaken to determine the variation in numbers of total aerobic microorganisms when the swab method was used to sample six different po-
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Brandow, G. E., 1961. Interrelations among demands for farm products and implications for control of market supply. Pennsylvania State University Experiment Station Bulletin No. 680, University Park. Coutu, A. J., and F. A. Mangum, 1960. Farm management manual. A. E. Miscellaneous Publication No. 1, Department of Agricultural Economics, N.C. State College, Raleigh. Frye, R. E., W. B. Harper and R. Westfall, 1962. Advertising procedures and practices of agricultural commodity promotion groups. Marketing Research Report No. 567, U. S. Department of Agriculture, Washington. Hoofnagle, W. S., 1964. Measurement tools for examining advertising and promotion effective-
D. ROSE, N. T. GRIDGEMAN AND D. A. FLETCHER
done by selecting for a high yield of yolk (as a percent of egg contents) as yolk size seems to be the major factor controlling solids content of eggs from hens of a given age. ACKNOWLEDGMENTS
REFERENCES Anonymous, 1949. Live stock and live stock products Act—The frozen egg regulations. Canada Gazette, (Part II) Apr. 27.
Egg Promotion: A Controlled Experiment Evaluation1 R. J. PEELER, JR. AND R. A. SCHRIMPER Department of Economics, North Carolina State University, Raleigh (Received for publication August 4, 1965)
E
XPANSION of consumer demand through various forms of advertising has attracted increased attention of many agricultural commodity groups during the current decade. Five years ago, eleven hundred farm groups in this country spent some $75 million in various commodity promotional efforts (Frye et al., 1962). It is estimated that today similar groups number over twelve hundred and have an annual budget over $90 million.2 Numerous methods are being used to evaluate the effectiveness of promotional efforts. Evaluations are generally based on the extent to which sales volume is ex1 Published with the approval of the Director of the North Carolina Agricultural Experiment Station as Paper No. 2023 of the Journal Series. 2 Estimates obtained through personal correspondence with Marketing Economics Division, U.S. Department of Agriculture.
panded after promoting the product. Basically, the idea of measuring increased sales is sound, if handled properly. However, accurate measurement of increased sales due solely to a particular promotional effort is not an easy task because of the many variables that may be relevant, i.e., price, season, location, previous promotional efforts, etc. In addition, considerable caution should be exercised before making general application from experiences of an isolated event. A description of recent studies of commodity promotion programs may be found in a published 1964 address to the National Peach Council (Hoofnagle, 1964). Promotional efforts for agricultural commodities include a wide array of activities from providing school children with book covers promoting the nutritional value of a given commodity to purchasing
Downloaded from http://ps.oxfordjournals.org/ at Serials Section, Dixson Library on June 9, 2015
The authors wish to thank Mrs. E. Javorsky and Messrs. H. Tessier, J. Marier and T. Buckley, Division of Biosciences, N.R.C., for technical assistance, and the Biometrics Section, N.R.C. for statistical evaluation of the data.
Cotterill, O. J., A. B. Stephenson and E. M. Funk, 1962. Factors affecting the yield of egg products from shell eggs. Proc. X I I World's Poultry Congress, p. 443-447. Hill, A. T., 1964. A biometrical evaluation of the component parts of an egg and their relationship to other economically important traits in a strain of White Leghorns. Dissertation. Texas A and M College. Lineweaver, H., J. J. Meehan, J. A. Garibaldi and L. Kline, 1962. Shell egg factors and egg product quality. Proc. X I I World's Poulty Congress, p. 439-442. Marion, W. W., A. W. Nordskog, H. S. Tolman and R. H. Forsythe, 1964. Egg composition as influenced by breeding, egg size, age and season. Poultry Sci. 43 : 2SS-264. Romanoff, A. L., and A. J. Romanoff, 1949. The Avian Egg, p. 69. J. Wiley and Sons, Inc., N.Y.
EGG PROMOTION
PROCEDURE Changes in egg purchases for three groups of families during the first six months of 1964 were analyzed to isolate possible effects associated with the receipt of promotional material. The North Carolina Egg Marketing Association (NCEMA) 4 selected and pre3
A more detailed description of this study may be found in Schrimper and Peeler (1Q65). There are slight differences in the magnitude but not in direction of some of the estimates in this article compared to those in the earlier report due to a computational error brought to our attention by Dr. R. H. Anderson, Utah State University. 4 The NCEMA is a producer-sponsored promotional organization with a full-time executive
pared promotional materials for three contacts by mail using their official personally addressed envelopes. Each mail-out contained a letter and a booklet concerning various methods of preparing eggs. The letter was in color, carried the NCEMA trademark (Mr. Goodforyou) and gave some information concerning the enclosed booklet. Booklets enclosed in the order sent were (1) Nine Easy Ways to Cook Eggs, (2) 12 Easy Ways with Omelets and (3) Look What You Can Do With Eggs. These booklets were prepared by the Poultry and Egg National Board as a part of their promotional program. All families in the study were participants in the North Carolina State Consumer Panel. This panel consisted of approximately 200 Raleigh households that reported their weekly food purchases on a continuing basis from September 1960 through June 1964. The consumer panel was constructed using a stratified sampling design based on the family characteristics of income, structure, and race. Four income classes, three types of family composition and two racial categories resulted in 24 established strata. Families in the consumer panel were divided into three similar groups, hereafter referred to as A, B, and C, on the basis of the above family characteristics. It was intended that each of the three groups contain an equal number of families from each of the 24 strata. However, if the total number of families in a particular strata was not divisible by 3 the resulting inequalities were distributed among the three groups such that each group had practically the same proportion of families of each race, income level and family structure. Assignment of particular families to particular groups was random, as was the assignment of treatments to groups. secretary and is financed by an assessment of one cent per hen slaughtered within the state.
Downloaded from http://ps.oxfordjournals.org/ at Serials Section, Dixson Library on June 9, 2015
time on major television networks. Detailed analyses designed to measure the effectiveness of promotional efforts to increase the sales of eggs are limited. A recent study (Angus et al., 196S) deals with newspaper advertising of eggs by retail food stores. In this study no association was found between egg sales and square inches of sample firms advertising, competitors advertising, or egg prices. Egg sales were shown to be a function of day of the week, holiday periods, and deliveries of eggs made in the previous time period. Direct mail advertising accounted for 15.8 percent ($1.9 billion) of the total national advertising budget in 1961 and was second only to newspaper advertising (Sandage and Fryburger, 1963). No estimates are available as to the amount of expenditures by agricultural commodity groups on direct mail advertising but it is widely used. If producers are to continue to support programs of this nature, more accurate evaluations of the benefits and cost of commodity promotion are needed. The basic objective of this study was to estimate the effects on egg purchases of selected families who received special promotional material pertaining to eggs by mail.3
227
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R. J. PEELER, JR. AND R. A. SCHRIMPER
In order to have a consistent set of data for the first six months of 1964, it was necessary to eliminate the data from 47 families from consideration. Family data were eliminated if the family dropped out of the panel during the test period, received eggs as gifts, missed sending more than one weekly food diary or if the family demonstrated an irregular purchase pattern for eggs which was directly associated with a large number of meals away from home or guest meals in the home. These omissions did not cause any significant difference in the composition of the groups. Data were analyzed in a manner which produced estimates of difference in egg purchases for each group prior to and following the receipt of promotional material after taking account of other factors affecting purchases. Thus, the two groups which received promotional material could be compared with the control group and each other. Factors other than promotional efforts which could have influenced changes in egg purchases between the time periods being
considered were included as variables in the analysis in order to more accurately isolate the net effect of changes in purchases associated with the promotional effort. One such factor was the influence of declining egg prices that occurred during a large part of the time period under study. Variables were included in the analysis to evaluate the effects of March Egg Month and the occurrence of Easter.5 In addition, another variable was included to attempt to explain the week-to-week changes in a family's egg purchases as affected by the quantity purchased during the previous week. In order to incorporate this lagged measure into the analysis, without using data from the last week in 1963 which could have been abnormally affected by the holiday season, the first week's data for 1964 were deleted from the analysis. This resulted in a total of 25 weekly observations for each group which were based on approximately 3,650 observations of weekly egg purchases for individual families. The basic statistical model for estimating the net effects of the mail-out promotional effort of eggs was as follows: Ykt = a + b i P k t + b 2 L k t + b 3 M k t + b 4 E k t +bjS k t-t-b 6 A k t+b7C k t+«kt
where Y kt = per capita egg purchases for k th group in t th week expressed as a percent of average purchases for k th group during first 15 weeks of 1964. k = A, B, or C. t = l , 2, • • • , 26 corresponding to first 26 weeks in 1964. Pkt = average price of eggs per pound purchased by k th group in t th week expressed as a percent of the aver5
March Egg Month refers to the special industry wide egg promotion effort made during the month of March. Easter Sunday was on March 19 in the year 1964.
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It was recognized that the allocation of families to the three groups such that each group contained a similar distribution of family characteristics might result in slightly different initial egg consumption levels among groups. However, it was felt that response to promotion would be more closely related to family characteristics than initial egg consumption levels. Families in group B were used as a control group and received no promotional material. Group C households were sent the first mail-out and households in group A were sent three mail-outs. The material sent to families in group C and in the first of three mail-outs to group A were identical. Mailouts were made on April 14, 28 and May 12, 1964. These families were not aware that they were participating in this specific study.
EGG PROMOTION
The coefficients of the last three independent variables in the above equation can be used to evaluate the net effectiveness of the promotional material on egg purchases. The coefficient of Skt represents the average change in purchases or the demand for eggs between the base period and test period after adjusting for all the other effects of the variables contained in the equation. For group B, the control group, the difference would be indicated by b 5 ; however, the net difference for groups A and C would be indicated by b 5 + b6 and b 5 + b 7 , respectively. Hence, b 6 and b r represent the respective amounts by which the average
change in purchases for groups A and C differed from that experienced by group B and therefore would be attributable to the different promotional experiments applied to each group. These coefficients express the difference as a percent of the base purchases for each group. RESULTS AND DISCUSSION Several modifications of the basic statistical model were used to analyze various aspects of the egg promotional plan. These included attempts to determine whether there was a significant difference between the "long-run" and "short-run" effects of this promotion as well as to investigate other aspects of differences in egg purchase patterns among the three groups of families. Estimates obtained for the basic model using the 25 weekly observations for each group were the following:8 (1) Y k t = . 6 3 - . 3 8 P k t - . 3 S L k t +.73 M k , (1.74)** (3.38)*** (.21)N.S. + 12.01 E k t -12.51 S kt (2.10)** (2.72)*** + 28.12 A kt +9.28 CM R 2 =.46 (6.72)*** (2.49)*** These estimates indicate that egg purchases during the latter part of this period were on the average approximately 12 percent below the purchases of the first 15 weeks after considering other factors influencing egg purchases. However, the purchases for group A were approximately 16 percent above the quantities purchased in the base period and, consequently, the average net change in purchases between "The t values for the regression coefficients are indicated in parentheses under the respective estimates. One-tailed t tests were used to test the significance of the various coefficients since there was a priori information to suggest the expected direction of several of the relationships. Significant levels of .01, .05 and .10 levels are indicated by ***, ** and * throughout this discussion.
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age price per pound reported by k th group for first half of 1964. Lkt = purchases per capita for k th group in t— 1 week = Ykt_i. M k t= 1 when t = 10,11, 12,13 and zero for all other values of t to represent observations in March to indicate possible effects of general promotion. E k t = 1 when t = 13 and zero for all other values of t to indicate observations representing purchases made for Easter. Skt= 1 when t = 16, 17, • • • , 26 and zero for all other values of t to represent shifts in purchases which occurred after the base period for all three groups. A k t = l when t = 1 6 , 17, • • • , 26 and k = A, zero for all other values of t and k, to represent those observations which occurred after the base period for group A. Ckt=l when t = 1 6 , 17, • • • , 26 and k = C, zero for all other values of t and k, to represent those observations which occurred after the base period for group C. ekt = random error which was assumed to be NID (0,
229
R. J. PEELER, JR. AND R. A. SCHRIMPER
230
Group A
15.61_
I .2 I
0
u
Group C
-3.23
0)
Group B
-12.51 _ -I
1/4
I—I—I—L.
2/1
J
I I I t
3/7
I II 4/4
-I—I
5/2
6/6
6/27
Time (month/day 1964) FIG. 1. Comparison of egg purchases for three groups before and after mail-outs after adjusting for other factors affecting purchases.
group A and group B was equivalent to more than 28 percent of group A's average purchases in the base period. Families in group C also indicated a positive difference in their purchases during the latter part of the period from the overall average of this period. The net change from the base period for group C however, was approximately a 3 percent decrease. These comparisons are graphically presented in Figure 1 where the average purchases of each group during the first IS weeks of 1964 are represented as zero and the percentage deviations from the base values for the different groups during the test period are indicated. The other coefficients in the model indicate how egg purchases during this period were affected by other factors. For example, for every one percent decline in egg prices, purchases increased by approximately .38 percent. This estimate is in the same range as the — .30 estimate of the retail price elasticity of demand for eggs reported by Brandow (1961).
Another variable which explained part of the week-to-week variation in egg purchases for these three groups was the purchases of the previous week. The results indicated approximately .35 percent more eggs would be purchased in a given week for every one percent decrease in the previous week's purchases. This would indicate that consumption was very cyclical or that the purchases of eggs are partly influenced by the number of eggs that consumers have on hand from the previous week's purchases. A significant change in the purchases of eggs was associated with the week immediately preceding Easter. Slightly over a 12 percent average increase in the purchases for the three groups occurred during this week than otherwise would have been expected. After taking into consideration the effects associated with the week preceding Easter, egg purchases during the month of March were not significantly different from the average purchases of the base period.
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a
EGG PROMOTION
FURTHER INSIGHTS
7
For a discussion of decay curves in advertising, see Waugh (1959),
the test period were investigated. Second, the test period was divided into four intervals consisting of three two-week periods and the final five-week period for analysis. Group A exhibited strong evidence of the decay effect in both cases. Average increases in purchases for group A were approximately 15 percent higher for the first six weeks of the test period compared to the average increase in purchases for the entire eleven-week test period. Analysis based on the subdivision of the first six weeks of the test period into two-week periods added further support to the presence of the decay effect. Differences between the averages for group C and group B for the different time periods were not as diverse as those between group A and the control group which is consistent with the lower overall change in purchases for group C and a strong decay effect for group A. COSTS AND RETURNS FOR SPECIAL CASE
The preceding analyses indicate that the promotional effort significantly increased egg purchases for group A in this experiment. Increased sales are necessary for success of a sales promotion program but not sufficient. For sales promotion to be successful, it must also increase total revenue more than the cost of the promotional effort thus increasing net returns to those sponsoring the promotion. Some insights into the costs and returns of the special case covered in this analysis can be made by examining expenditures and added returns associated with the forty-four families in group A. Costs of postage ($.050), envelopes ($.010), printing ($.015), and booklets ($.025) per contact amounted to approximately $.10 per family per contact. Three contacts per family involved a total cost of the promotional effort to the forty-four families of $13.20. The preceding analysis shows that fami-
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The above model contains only one variable relating price to quantity purchased and thus the coefficient of this variable represents an average reaction for all groups. In order to determine whether part of the differences in purchases between the test period and base period among the three groups were due to differences in response to changes in egg prices the above model was modified to permit separate price effects to be estimated for each group. This was accomplished by separating P k t into three variables representing the respective prices for each group. This change did not make a significant contribution to explaining the variation of egg purchases. However, considerable difference was exhibited with respect to reaction to price changes among the three groups. More specifically, the major difference was between group C as compared to groups A and B. Price elasticities for the latter two groups were approximately — .50 while group C indicated little if any response to price changes. These differences, however, did not change the relative size or direction of the comparisons between the test period and the base period for the three groups although there were slight adjustments in some of the relevant coefficients. The initial evaluation of the promotional effort considered average effects over the entire test period. Theory and research results indicate that, in general, a decay effect would be expected to occur in most promotional efforts.7 In order to determine if decay effects existed during the eleven week test period, two further types of analyses were made. First, differences between the base period and first six weeks of
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R. J. PEELER, JR. AND R. A. SCHRIMPER
A gross return of $6.97 based on a return of $.04 per dozen was estimated for the additional eggs purchased during the test period as a result of the promotional effort. Thus the increased sales during the test period were not sufficient to allow for full "These estimates are based on budgets prepared by Coutu and Mangum (1960).
payoff of the promotional effort; however, the total effects of the promotional program may have included additional changes in purchases beyond the eleven-week period. Data were not available to measure purchases following the eleven-week test period. However, an average increase of 6.75 percent in egg purchases for the group would have been required during the succeeding forty-one weeks to break even on an annual basis. If increased purchases amounted to 10 percent for the remainder of the year, a return of 22.7 percent would be made on the funds invested in this promotional effort. In like manner, a 15 percent average increase in purchases would yield a return of 57.5 percent. Although a decay effect of the promotional effort would be expected, there is no basis from this report to suggest extended effects of the promotional effort. The range of possibilities suggests an area for further investigation. SUMMARY
This report provides information regarding the effects of mail-out promotional material and other variables on egg purchase patterns. Results indicate that egg consumption can be increased for a period of time through a mail-out promotional effort. Coefficients estimated for group A indicate rather conclusively that the purchases of these families were substantially different after they received letters containing promotional material about eggs. Also, there is strong evidence which suggests that the degree to which purchases were influenced declined over time and especially after the last letter was mailed. However, significant increases in consumption over an extended period of time are necessary to obtain a payoff for this type of promotion. REFERENCES Angus, R. G, R. O. Farrish and F. D. Rollins, 1965. Newspaper advertising of eggs by retail stores. Poultry Sci. 44: 337-340.
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lies in group A increased their purchases of eggs by 28.1 percent as a result of the promotional effort. This estimate assumes that purchases by group A would have changed in the same proportion and direction as the control group (B) if there had been no promotional effort. The estimated increase in group A's consumption is equivalent to .36 dozen eggs per family per week or an increase of 15.84 dozen per week for the 44 families. For the eleven-week test period this amounts to an increase in sales of 174.24 dozen eggs. In order to compare this additional quantity of sales with the costs of promotion, it is necessary to place a value on the increased sales. In this experiment, only a small percentage of the consumers in the market area received advertising. Therefore, it seems reasonable to assume that any increase in demand for these families would not have any perceptible effect on the total demand in the market and, consequently, price would not be altered. Thus, it is assumed that these families could purchase the desired number of dozen at the going weekly price, i.e., they faced a perfectly elastic supply. By assuming some expected margin per dozen, a crude estimate of the payoff of additional sales can be made. A return to labor and management of $.80 per hen is the indicated return in the production of commercial eggs during recent years.3 This amounts to approximately $.04 per dozen. Using a return of $.04 per dozen, a total of 330 additional dozens of eggs would have had to be sold to cover the promotional cost of $13.20.
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EGG PROMOTION
ness. Published address to National Peach Council, Fresno, California. Economic Research Service, U.S. Department of Agriculture, Washington. Sandage, C. H., and V. Fryburger, 1963. Advertising Theory and Practice. Richard D. Irwin, Inc., Homewood, Illinois. Schrimper, R. A., and R. J. Peeler, Jr., 196S. Commodity promotion: A controlled experiment evaluation. A. E. Information Series No. 119, Department of Agricultural Economics, N.C. State of the University of North Carolina, Raleigh. Waugh, F. W., 19S9. Effectiveness of promotion. J. Farm Economics, 4 1 : 364-376.
Variability in Microbiological Samplings of Chickens by the Swab Method A N T H O N Y W.
KOTULA
Market Quality Research Division, Agricultural Research Service, United States of Agriculture, Beltsville, Maryland
Department
(Received for publication August 20, 1965)
INTRODUCTION
T
HE bacterial population on the surface of ready-to-cook chicken is a good index of its shelf life. Procedures for microbiological sampling of birds fall into 3 general categories: 1) using a prescribed weight of excised tissue, 2) washing the entire bird or piece, and 3) removing the organisms from a definite surface area. Lockhead and Landerkin (1935) and May et al. (1961) among others, estimated bacterial numbers on poultry by washing a piece of excised tissue in diluent. Gunderson et al. (1954) ground the sample in a blender prior to making the serial dilutions. Yacowitz et al. (1957) and Goresline and Haugh (1959) dipped chicken parts into the diluent whereas Drewniak et al. (1954) and Corey and Barnes (1963) submerged the whole bird. Removal of bacteria from a prescribed area of the bird's surface has been accomplished using pressed or poured
agar, contact with millipore filter pads or by flushing with diluent by Gunderson and Gunderson (1954); Silliker et al. (1957) and Wells (1959) respectively. The use of swabs to wipe bacteria from a known area was reported by Walker and Ayres (1956, 1959), Morris and Ayres (1956), May (1961, 1962), Kraft and Ayres (1961), Kotula et al. (1962), and Williams et al. (1962) to mention just a few. Mallmann et al. (1958), Seekins et al. (1958) and Ayres (1959) compared several sampling methods and found the wash method to be superior to the other methods studied, including the swab method. Removal of bacteria from a prescribed surface area with swabs continues to be used, however, because of the ease of sampling by this method. The present study was undertaken to determine the variation in numbers of total aerobic microorganisms when the swab method was used to sample six different po-
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Brandow, G. E., 1961. Interrelations among demands for farm products and implications for control of market supply. Pennsylvania State University Experiment Station Bulletin No. 680, University Park. Coutu, A. J., and F. A. Mangum, 1960. Farm management manual. A. E. Miscellaneous Publication No. 1, Department of Agricultural Economics, N.C. State College, Raleigh. Frye, R. E., W. B. Harper and R. Westfall, 1962. Advertising procedures and practices of agricultural commodity promotion groups. Marketing Research Report No. 567, U. S. Department of Agriculture, Washington. Hoofnagle, W. S., 1964. Measurement tools for examining advertising and promotion effective-