Abstract

The aim of the paper was the quantitative analysis of the determinants of demand and the level of consumption of milk and dairy products in relation to consumer prices of dairy products and disposable income in terms of consumer segment of households with dependent children. The results of the analysis. Current economic conditions in Slovakia contribute to the differentiation of the behavior of individual households on consumer market. It is noticeable mainly in families with several dependent children, where in 2012 the real money income of households with three or more dependent children was amounted to only 54.65% of the real income compared with incomes of families without dependent children and 66.21% of the income of families with one dependent child. In Slovak households the consumption of milk decreases in general and since 1998 has decreased overall by 13.3 liters and in 2012 reached the level 50.61 liters per person in families without dependent children and 45.58 liters in families with three or more dependent children. The demand for milk did not develop according to theoretical assumptions.  Increase in price did not cause decrease in demand excluding the families with one dependent child. Based on indirect (cross) price elasticity can be expressed that demand was elastic and was substituted in the families without children (Eqi, P2 = 1.062) and in the households with three or more dependent children (Eqi, P2 = 2.373) by other milk products. Consumer demand for cheese and yoghurt fulfilled complementary (additional) function of nutrition (Eqi, P3= -2.468 to -0.249). Noticeable complementarity showed demand for yogurt in families with three or more dependent children (Eqi, p4 = -3.644), and families without dependent children (Eqi, p4 = -2.27). Conclusions and directions of further researches. Based on the results presented in the paper it is to be noted that in the reporting period  was observed upward trend in demand for other dairy products, curd, cheese and yoghurts. This positive trend in consumption of dairy products with greater added value was accompanied by the annual descent of demand for milk. Overall, based on the average growth rate k’ can be concluded  there was increase in consumption of dairy products by an average annual rate of 0.4% (k ‘= 1.004).In the households without dependent children the consumer demand for milk did not take place according to the law of supply and demand. The demand for milk, cheese and yoghurt was income and price inelastic while the demand for other dairy products was price-elastic (EPDi = -1.346). Consumer demand for dairy products in the households with one dependent child was conducted according to the law of demand. Income elasticity of demand for milk had a negative value (EIdi = -0.060) and milk appears in this household segment as inferior when increasing of income by one percentage point reduced demand for milk by 0.060%. Demand for cheese and yogurt was priced inelastic and was conducted according to the law of supply and demand. Demand for milk in the households with two dependent children was as with the inferior, when increasing income by one percent resulted in decreasing demand for milk by -0.656% and growth the milk prices did not cause a decrease in milk consumption  (EPdi = 0.115). Households with two dependent children reacted quite sensitive to increasing prices of yoghurts and coefficient of price elasticity (EPdi = -0.856) was approaching the limit of elasticity. One percent increase in prices of yogurt resulted in a reduction in demand for yoghurts by -0.856%, sour milk products by -0.691% and cheese by -0.421%. In the households with three or more dependent children, the demand for milk was conducted according to the law of supply and demand. One percent increase in milk prices was leading to an increase in consumption demand by 0.249%. In the consumption of cheese, yoghurt and sour milk products, increasing consumer prices resulted in declining of demand by more than one percent (EPDi = -1.148 to -1.245), demand was elastic. Demand for milk based on indirect (cross) price elasticity was elastic and substituted by other dairy products in the households without children (Eqi, P2 = 1.062) and in the households with three or more dependent children (Eqi, P2 = 2.373), while the demand for cheese was fulfilling complementary (additional) function of nutrition (Eqi, P3 = -2.468 to -0.249). Yoghurt consumption in the households without dependent children and in the households with three or more dependent children was representing a complementary food. In the households with one dependent child, yogurt consumption substituted the consumption of milk (EqiP4= 1.357).

Keywords: income, consumption, price and income elasticity, substitution, complementarity

JEL Classification: Q12, M39.

Cite as: Kubicová, Ľ., Kádeková, Z., Nagyová Ľ. & Rovný, P. (2017). Slovak customers demand for dairy products and milk: analysis of price and income relations. Marketing and Management of Innovations, 3, 165-176. https://doi.org/10.21272/mmi.2017.3-16

This work is licensed under a Creative Commons Attribution 4.0 International License

References

1. Berčík, J., Paluchová, & J. Horská, E. (2016). Neuroeconomics: An Innovative View on Consumer´s Decision Process. Journal of Business Management & Economics, 4 (8), 22-28. 
2. Bielik, P., Smutka, L., & Horská, E. (2013). Visegrad countries´agricultural production. In: BIELIK, P. Sustainable development and agribusiness (pp. 35-45). Warszawa : Wieś Jutra.
3. Bowen, J., Noakes, M., Trenerry,C., & Clifton, P. (2006). Energy intake, ghrelin and cholecystokinin after different carbohydrate and protein preloads in overweight men. J Clin Endocrinol Metab, 91, 1477–1483.
4. Bujko, J., Kocman, R., Žitný, J., Trakovická, A., & Hrnčár, C. (2011). Analyse of traits of milk production in dairy cows. Potravinarstvo, 1 (1), 5-9.
5. De Smet, S. et al. (2015). The influence of dairy consumption and physical activity on ultrasound bone measurements in Flemish children. Journal of Bone and Mineral Metabolism, 33 (2), 192-200.
6. Diepvens, K., Haberer, D., Westerter, P., & Plantenga, M. (2008). Different proteins and biopeptides differently affect satiety and anorexigenic/orexigenic hormones in healthy humans. Int J Obes (Lond), 32, 510–518. 
7. Dougkas, A., Reynolds, C.K., Givens, I.D., Elwood, P.C., & Minihane, A.M. (2011). Associations between dairy consumption and body weight: a review of the evidence and underlying mechanisms. Nutr Res Rev 1–24.
8. Fox, P.F., Uniacke-Lowe, T., Mcsweeney, P. L. H., & O’Mahony, J.A. (2015). Biologically Active Compounds in Milk. Dairy Chemistry and Biochemistry, 415-497.
9. Habánová, M., Lorková, M & Kopčeková, J. (2010). The consumption of acydophylus drinks and Yogurts in selekted population of pupils in years 2004 and 2008. Potravinárstvo, vol. 3, no. 3, p. 19-23.
10. Hayden S., Diansheng D., & Andreas C. (2012). Is Gerenational Change Contributing to the Deckline in Fluid Milk Consumption? Journal of Agricultural and Resorsce Economics, 37 (3), 435-454.
11. Elmandfa, I., et al. (2009). Ôsterreichischer Ernährungsbericht. Auflage : Wien. 
12. Holota T., Hrubec, J., Kotus, M., Holienčinová M., & Čapošová E. (2016). The management of quality costs analysis model. Serbian journal of management, 11 (1), 119-127. 
13. Jůzl, M. (2015). Mléko a mléčné výrobky, význam mléka a mýty o jeho konzumaci [Milk and dairy products, meaning of milk and myths about its consumption]. Výživa a potravin – Nutrition and food, 3 (3), 43-45 [in Czech]. 
14. Košičiarová, I. (2012). Cenová politika obchodných reťazcov predávajúcich biopotraviny [Pricing policy of chain stores selling organic food]. Brno: Mendel University in Brno [in Czech].
15. Kubicová, Ľ., & Kádeková, Z. (2011). Comparison of the income development and the food demand elasticities of the private households in Slovakia. Agricultural economics, 57 (8), 404-411. 
16. Lovayová, V., Dudriková, E., Nemcová, R., & Rimárová, K. (2010): Influence of the ripening onto the growth of selekted probiotic cultures in low-cooked cheese. Potravinárstvo, 3 (3), 40-45.
17. Lengyelová,L., Kozelová, D., Trstenovičová, Ľ., & Pinterová, S. (2010). Comparison of occurence lactic acid bakrteria in chosen yogurts. Potravinárstvo, 4 (4), 38-43.
18. Mehrabani, S. et al. (2015). Effects of low-fat milk consumption at breakfast on satiety and short-term energy intake in 10- to 12-year-old obese boys. European Journal of Nutrition, 1-8. 
19. Nagyová, Ľ. et al. (2014 a). Výskum trhu. [Market Research]. Nitra : SUA [in Slovak].
20. Nagyová, Ľ. et al. (2014 b). Marketing. Nitra : SUA [in Slovak].
21. Nagyová, Ľ., Holienčinová, M., Košičiarová, I., & Holota, T. (2016). Corporate social responsibility in food manufacturing companies – environmental dimensions. Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 64 (3), 1037-1043.
22. Nagyová, Ľ., Košičiarová, I., & Holienčinová, M. (2016). Sustainable consumption of food: a case study of Slovak consumers. Economic science for rural development. Jelgava: Latvijas Lauksaimnieci bas universita te. Ekonomikas fakulta te.
23. Natsuki, S., Syusuke, T., Katsutoshi, Y., & Tomomichi, S. (2014). Evaluation of price elasticity and brand loyalty in milk products. Procedia Computer Science, 35, 1482-1487.
24. Niclas, T.A., O´Neil, C.E., & Fulkoni, V.I. (2009). The role of dairy in meeting the recommendations for shortfall nutriens diet. J. Am. Coll. Nutr., 28, 73 -81.
25. Rozenberg, S. et al. (2016). Effects of Dairy Products Consumption on Health: Benefits and Beliefs—a Commentary from the Belgian Bone Club and the European Society for Clinical and Economic Aspects of Osteoporosis, Osteoarthritis and Musculoskeletal Diseases. Calcified Tissue International, 98 (1), 1-17.
26. Šugrová, M., Šedík, P., & Svetlíková, V. (2016). Brand influence of young generations´s decisions in purchasing yogurts in the Slovak Republic. Future scientists for sustainable development. Gödöllő: Szent István University, 482–495. 
27. Šnirc, J., Golian, J. et al. (2015). Mlieko, mliečné výrobky. 1.diel. Štruktúra, bioaktívne zložky a spracovanie mlieka [Milk, dairy products. 1.edition. Structure, bioactive ingredients and milk processing]. Nitra : SUA [in Slovak].
28. Štatistický úrad SR. (2015). Príjmy, výdavky a spotreba súkromných domácností SR. [Revenue, expenditure and consumption of private households in the SR.]. Bratislava. [in Slovak].
29. Valík, Ľ. (2006). Prospešnosť konzumácie mlieka [Utility consumption of milk]. Výživa a zdravie –Nutrition and health, 50 (3-4), 15 [in Slovak].