Conventional Hypotheses A useful beginning may be the identification of hypotheses formed by our experience and thought.

Perhaps the most durable of these are the notions within the old quote, "If you build a better mousetrap, people will beat a path to your door." (A similar statement is attributed to Ralph Waldo Emerson. While it is not very useful in economics, it may be judged as quite delightful poetry.) There are two implicit maxims in this quote embraced by econo-mists. The first is that new technology drives product evolution and new product introduc-tion. If the technical advance is significant, product introduction is trivial. A corollary is the maximizing notion that the larger the ad-vance, the greater the welfare increase and faster the uptake of the new technology. The second maxim is that the other ele-ments of the marketing mix (communications, distribution channels, and pricing) are not in-tegral to the process but merely sales lubri-cants. Tacitly, the greater advance requires less lubricant. This implies that the measurement D. I. Padberg is a professor and R. E.
Westgren is an assistant professor in the Department of Agricultural Economics, Univer-sity of Illinois, Urbana.

Padberg and Westgren Product Competition and Consumer Behavior 621 of

the economic value of advertising, for example, evaluates its lubricative capacity. Ef-fects of advertising on the product characteris-tics purchased by consumers are disregarded. To what extent does advertising provide psychic characteristics (e.g., information, se-curity, status) to the buyer? The naive view of advertising offers no insights into the relation-ships between product technology and adver-tising in defining product characteristics. Another conventional hypothesis is the efficacy of small business held by economists and the public. A great effort is expended to persuade the superiority of small business in new product development. (See, for example, works by Jewkes, Sawers, Stillerman, and Mansfield. Topics are chosen seemingly to avoid consumer products. Most of the innova-tions are of significance to industrial markets.) The argument centers on the proposition that innovation occurs more frequently in an envi-ronment unfettered by bureaucracy. Sig-nificantly, this argument is generally used in describing the discovery of a new product or process rather than its introduction to the pub-lic. The nexus of this hypothesis with the pre-vious one is the perceived centrality of the technological advance. It has been argued by Galbraith that product competition between firms occurs across all elements of the market-ing mix in the introduction of new products, and larger firms have significant competitive advantages in this larger process. A third conventional postulate that has guided economic analysis is consumer sovereignty in the marketplace. The con-sumer is characterized by an ability to ra-tionally and completely order consumption bundles. This means the consumer must be able to recognize, evaluate, and rank the characteristics of market goods to achieve maximum satisfaction. This consumer seeks information and makes autonomous and analytical choices. Style or keeping up with the Joneses must be insignificant. This con-sumer is willing to give sufficient time to this search and comparison process. Some Hypotheses for Future Research The following discussion is an effort to extend the accumulation of conventional wisdom into current conditions of consumer affluence, in-dustrial structure, and typical behavior pat-terns of firms and individuals. Some conven-tional hypotheses are enhanced, others appear discounted. The following are offered as a ten-tative outline of significant hypotheses. (a) Product evolution is a broad marketing process spanning changes in product physical characteristics (technology), communications policy, and marketing channels. This process is supported by market research and produc-tion methods research. (i) Physical product characteristics and the potential for changing them are often the least significant, least expensive, and least limiting factors in product evolution. (ii) Large organizations may or may not have scale economies in product technol-ogy but have advantages in introducing new or differentiated products to consumers-particularly in promotions to the distributive trade and in advertising. (iii) New knowledge about physical product alternatives may con-tribute little to product evolution because there is no certainty the new product will be introduced. At any point in time there is a stock of product characteristic bundles which does not stimulate the huge investment re-quired for introduction (Skinner). This may be called "redundant technology." (b) Consumers are incrementalists. They want new products similar to familiar goods. They have no scientific or comprehensive standards for evaluating changes in products or judging new products. Big changes are risky and have less value than small changes. (i) Consumers cannot articulate their wants because of the complexity of their choices. They may be able to express the directions of their preferences but no more. Their wants are often only determinate in groups. (ii) Con-sumers see themselves in a symbiotic relation-ship with food manufacturersa nd advertisers. Advertising promotes confidence in purchases by reducing the risk of making choices deemed unsuitable by their reference groups. (c) Public interest in product evolution con-cerns integrity in communication, sensitivity to collective as well as individual values, waste, conservation, and product safety. (i) Product evolution is an integral part of a soci-ety with highly developed scientific capability. Policy should not attempt to minimize or maximize it but try to improve its balance of social and individual effects. (ii) Unregulated product evolution appears sensitive only to individual values. Collective values of conser-vation, public health, nutrition education, etc., should be encouraged. (iii) Some public interest must be directed toward the enormous

622 November 1979 Amer. J. Agr. Econ. economic

power vested in the broad market-ing process. The scope of the organizations involved, the vast sums of money spent, the effect on firm growth and decline, and the impacts on consumers are symptoms of this power. There are three prominent implications to be drawn from the new hypotheses. (a) The role of technology-induced product develop-ment is muted in the new scenario. (b) The role and determinance of consumer behavior are significantly different from conventional analysis. (c) The identification and nature of public interest are departures from tradition. These implications merit careful considera-tion. This paper will not consider these issues empirically but present evidence from other research and recent experience which s
HYPOTHESES

The hypothesesc oncerningl ength of residencea nd socials tatusa re separatelyf ormulated.

I76 GEOFFREY C. SMITH The spatiali nformatiofnie lds of urbanc onsumers

FIGURE I.

The study area and the distribution of grocery stores in Hamilton

Length of residence Horton and Reynolds postulate that a cognitive image of urban spatial structure is primarily .developedt hrougha complex learningp rocess.17T his propositioni s consistentw ith cognitive learningt heoriesw hich conceptualizec ognitives tructurea s the outcomeo f a dynamicl earning process.18O vertb ehaviouri s viewed as a functiono f such a learnedc ognitives tructure.H orton and Reynolds explicitly conceptualize the learning process within three stages. During the 'distance bias stage', the cognitive images of relative newcomers to the city are spatially constrained: 'Nodes near the residence are "learned" first, then those at increasing distances.'19 During the 'communitys ocializations tage', the distanceb ias decreasesa s the individuall earns of other potentiallys atisfactorye lementsw ithin the city, particularlyth roughi ndirectc ontacts. Many of these elements may be located at considerable distances from the domicile. At the 'spatiale quilibriums tage', the cognitivei mage is relativelys table.E quilibriumi, n this context, alludes to a stable pattern of urban spatial behaviour produced by an individual's satisfaction with his current set of cognitive information. It is unlikely, however, that a true equilibrium solution will occur. The spatial layout of the environment is subject to continuous change. Although 'perceptual lags' may occur, the individual will eventually recognize such environmentalc hangea nd consequentlym odifyh is spatialb ehaviourp atterns.E nvironmentalle arning, therefore, does continue during this final stage. In the light of these propositionsi,t is postulatedt hat individualsw ho havel ivedi n Hamilton
I77

for a considerablet ime-periodw ill, over the years,h aveb uilt up largers patiali nformationf ields than relativen ewcomersT. he fields are developedt hrougha continuouse nvironmentalle arning process.O n this basis,i t is desirablet o formulate: Hypothesis (I): there is a positive relationship between number of reported points and length of residence in Hamilton; and Hypothesis( II): there is a positiver elationshipb etweenm ean distancea nd length of residence in Hamilton. Social status Marble,20a nd Rushton21p rovidee vidences upportingt he notion that consumerso f a relatively high social status travel greater distances to stores, and purchase convenience goods more
frequently. The spatial behaviour of lower-status consumers, however, is largely tied to the place of residence. Consequently, higher-status consumers are more likely to be exposed to a greater number of stores than lower-status consumers. Furthermore, the probability of a higherstatus consumer directly encountering a given store location within the city is less likely to be

constrainedb y the distanceo f the store fromt he placeo f residence.

In accordancew ith these propositionst, wo hypothesesa re formulated: Hypothesis( III): there is a positive relationshipb etween numbero f reportedp oints and social status; Hypothesis( IV): therei s a positiver elationshipb etweenm eand istancea nd socials tatus. Social status is measured by employing two surrogates: (i) Hollingshead's Three Factor Index of Social Position;22 and (ii) a set of scaled socio-economic attributes. The Index of Social
Position is comprised of three weighted and scaled variables: education level; occupation level; and residence type. In this study, the Index scores are expressed according to an ascending

magnitude of status, ranging from a theoretical low of 20 points to a theoretical high of I34 points. On the other hand, the set of scaled socio-economic attributes are direct measures of various discrete elements of social status and include five unweighted variables: car ownership; educationl evel; incomel evel of the heado f the household;o ccupationl evel; and residencet ype. Car ownershipi s a dichotomousv ariablew hile each of the other variablesa re scored on seven point scales. In summary, Hollinghead's Three Factor Index of Social Position provides a composite measure of estimated social status, while the socio-economic attributes are discrete measures of selected elements of social status.