Assessing agricultural input brand loyalty among United States mid-size and commercial producers

Anetra LaShea Harbor, Purdue University

Abstract

U.S. agricultural input suppliers face unique marketing challenges. Far many suppliers, large commercial farm enterprises have replaced traditional smaller farms as their primary customers and represent the majority of their sales revenues. The resultant marketing challenges can be overcome through the development of a strong brand or preference for sale locations (dealers). The problem is thus to understand the determinants of brand loyalty, the role of dealer loyalty, and to identify effective strategies for reaching loyal customers. This research assists agribusiness managers in addressing these important issues. Data were obtained from the 2003 Commercial Producer Survey conducted by the Center for Food and Agricultural Business (CAB) at Purdue University. Over 2,100 surveys were obtained from the questionnaire, which was delivered by mail or e-mail to, or conducted over the phone with, 14,301 mid-size and commercial producers across the U.S. The survey collected information on producers' attitudes and preferences for branded expendable and capital input products. Information was also compiled on respondents' loyalty to dealers and farm and farmer characteristics. The data were primarily analyzed with logit regression techniques. Empirical evidence suggests that dealer, loyalty is an important predictor of brand loyalty for capital inputs. Results also imply that factors that directly impact dealer loyalty may indirectly impact brand loyalty. This is consistent with results found in the literature for the automobile market, which is similar to that for capital agricultural inputs because of the presence of an established dealer system. For both capital and expendable items, activities that associate the supplier with the brand are helpful for capturing dual loyalty, that is loyalty to the brand as well as to the dealer. Also, because dealer loyalty is found to be a determinant of brand loyalty, any positive changes made by dealers can ultimately impact brand loyalty. Strategies for loyalty should focus less on price and more on the value that can be obtained through product quality, service, and providing relevant information. Demographics are less important for determining loyalty. Marketers should first assess what other factors are important to loyalty and subsequently determine if there is a link with demographics.

Degree

Ph.D.

Advisors

Martin, Purdue University.

Subject Area

Agricultural economics|Marketing

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