Graduate Thesis Or Dissertation
 

Production costs of fryers and effectiveness of in-store promotional techniques on increasing fryer sales

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  • The broiler industry in the United States has undergone tremendous change since the end of World War II. Several structural changes in the industry facilitated the widespread adoption of new technology. Improvements in feeding, breeding, and managing made production more efficient. Extensive use of contract growing and production financing accompanied the increase in broiler production. The largest expansion of production took place in the South Atlantic States and the South Central States. Rapid transportation, combined with lower production costs, enabled southern fryers to compete favorably with Oregon-grown fryers. To meet competition from broiler growers in other states, the Oregon Fryer Commission has undertaken a modest promotion program. It would be desirable for the Oregon Fryer Commission to know the most advantageous uses for its limited amount of promotion dollars. This study was undertaken to determine production costs of a few selected broiler enterprises in Oregon, and the effectiveness of four types of in-store promotional material in increasing fryer sales. The growers selected for the cost of production study appeared to operate three of the better broiler enterprises in Oregon. Average costs for each grower were calculated from data of the last four broods marketed in 1963. Total cost per pound of broiler marketed by these growers was 17.94 cents, 18.64 cents, and 16.90 cents. Assuming each grower received the average Oregon price of 17 cents per pound in 1963, the first two growers would have lost $830 and $4,110 per brood, while the third grower would have made a profit of $100 per brood. In the promotion study, two posters, a banner, and a gondola were employed as in-store promotional material. The sample stores were selected from two food chains in the Portland metropolitan area and one food chain in the Salem area. The sample size of Chain A was 1Z stores, while the sample size of both Chain B and Chain C was six stores. Store selections were based on large volume of fryer sales and the location of stores with respect to different socioeconomic groups. The study was divided into three periods: two weeks of prepromotion, four weeks of promotion, and two weeks of postpromotion. The purpose was to determine the number of pounds of fryers sold weekly in each store during the three periods. Increases or decreases of fryer sales for each store were determined by comparing fryer sales during the promotion and postpromotion periods to fryer sales during the prepromotion period. To determine promotion effectiveness, changes of fryer sales in stores with promotional material were compared to changes of fryer sales in check stores with no promotional material. It appeared that promotion by Fryer Commission poster and revised Fryer Commission poster during one, two, and four-week intervals was similarly effective. At the same time, promotion effectiveness of banners was considerably less. An elaborate, colored, pictorial poster appeared more effective in promotion than a simple, low-cost banner. Emphasizing the word “Oregon” seemed to have little effect in increasing fryer sales. Enlarging fryer display space by the use of gondolas increased fryer sales during short time periods. Carry-over effects of promotion seemed to be slight. Featuring fryers at reduced prices during a week increased sales volume significantly. Sales volume following a week of small price reductions returned to its approximate prepromotion level. However, sales volume following weeks of large price reductions was slightly below its prepromotion level. This presents a question of the effect of price specials on total volume of fryer sales and on profits over a longer period of time for retailers, processors, and broiler growers.
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