TY - JOUR
T1 - The rise of fringe competitors in the wake of an emerging middle class
T2 - An empirical analysis
AU - Eizenberg, Alon
AU - Salvo, Alberto
PY - 2015
Y1 - 2015
N2 - The "emerging middle class" is a force of economic importance in many consumer markets around the globe. A striking phenomenon in some of these markets is the growth of "generic," low-price brands. This paper examines these phenomena in Brazil's large soft drink market. Our study draws on data sources that capture both social mobility and market outcomes. Our analysis suggests that the emergence of a price-sensitive, new middle class aided the staggering growth of a fringe of generic producers. Our estimated demand model rationalizes a drastic price cut, led by Coca-Cola, that allowed it to contain the fringe's growth.
AB - The "emerging middle class" is a force of economic importance in many consumer markets around the globe. A striking phenomenon in some of these markets is the growth of "generic," low-price brands. This paper examines these phenomena in Brazil's large soft drink market. Our study draws on data sources that capture both social mobility and market outcomes. Our analysis suggests that the emergence of a price-sensitive, new middle class aided the staggering growth of a fringe of generic producers. Our estimated demand model rationalizes a drastic price cut, led by Coca-Cola, that allowed it to contain the fringe's growth.
UR - http://www.scopus.com/inward/record.url?scp=84933509715&partnerID=8YFLogxK
U2 - 10.1257/app.20130104
DO - 10.1257/app.20130104
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AN - SCOPUS:84933509715
SN - 1945-7782
VL - 7
SP - 85
EP - 122
JO - American Economic Journal: Applied Economics
JF - American Economic Journal: Applied Economics
IS - 3
ER -
