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Analysis of demand and pricing policies in Turkey beer market

Özgüven, Cemhan
The purpose of this work is to study the beer market in Turkey in respect of demand analysis and with a view to assess whether the marketing and in particular pricing policies adopted by industry players in the period 1997-2002 have been efficient. Of specific interest is the near duopolistic structure of the market and the question whether pricing policies followed during the period 1997-2002 have been determinant in the observed sales volumes. The investigation focuses first on the analysis of the determinants of demand, and secondly on questioning whether pricing policies practiced in the market are optimal with respect to the objectives of the industry players. The major finding of the study is that beer prices in Turkey are below the optimal level, with respect to both revenue and profit maximizing objectives. Moreover, seasonality in beer demand can be exploited further with a high-low pricing scheme to improve the industry revenue.