The Effects of Spatial and Temporal Decisions on Orange Marketing in Babol County

مجله اقتصاد و توسعه کشاورزی

Article 5, Volume 30, Issue 1, April 2016, Pages 50-57   

Document Type: Research Article

DOI: 10.22067/jead2.v30i1.46211

Authors

H. Najafi Alamdarlo^* ; S. Babania

Tarbiat Mosdares University

Abstract

Introduction: Due to the fact that farmers are in the surrounding factors such as cultural, social and economic environment, these factors can influence the attitudes and decisions to accept or reject the innovation. Farmer`s opinion over time, also, have a significant role in making new decisions. Therefore, absent a model which would assess the temporal and spatial factors in the decision - making process by growing citrus is strongly needed. This study aims to identify and measure the factors affecting the sales channel chosen by farmers and considers the impact of neighboring on farmers’ decisions using the spatial probit model and finally provides some strategies to improve and increase the efficiency of distribution channels in the product market. One of the aims of this research is to assess the effects of accumulated decisions in the minds of farmers on the choosing of marketing channel. Another innovation of this study is evaluating the spatial factors on orange marketing which examines the effects of diffusive decisions in adjacent villages.
Materials and Methods: The data used in this study were collected by questionnaire form 99 gardeners in 9 villages in Babol in 1391-92. In this paper, three distribution channels including retail, sales to middle man and sales to whole sale are evaluated at Babol County. For testing these three channels, probit panel data and spatial approach were used. Therefore, in this model the effects of age, experience, education, amount of sales, price, spatial and temporal effects variables have been modeled. To get the spatial effects, the weighted contiguity matrix was used.
Results and Discussion: Age has a positive effect on wholesale approach. In sales to middleman approach, age has also positive effect, but its effect is more than wholesale and retail, because as the age increased, risk acceptance decreased. In retail, this variable (age) has a negative effect. In this way, due to higher marketing costs, the more sales time and the higher risks, with increasing of age, the less the tendency of farmers to sell to retail. With higher education, the probability of broker method increased, however, the wholesale and retail approaches will decrease. As the variable increases, the probability of choosing a wholesale than retail method increased as well. Orchardist age increases the probability of deselect a wholesale and not retail method. If the orchards have more citrus to sell, the change of choosing wholesale and retail methods will reduce. With increasing of the power market, choosing the path of the broker will be increased too. Price is one of the most important parameters that affect farmer`s decisions. Increasing in price reduces the power of brokers in imposing their views, therefore, the probability of choosing other paths increased. One of the important factors that have played a significant role in farmers' decisions is the kind of decisions in his mind. In wholesale path, the farmers were most affected by last year decisions. On this path which is an optimization approach in sales, the grower seems to be more satisfied with his previous decision. However, in retail approach, the value of this coefficient is lower. This variable has a negative coefficient in the broker approach. In fact, as far as possible, the grower does not desire to repeat last year's decision to sell his product to the middleman and prefers to sell it with another method. Spatial lag variable in the model is the one that represents the influence of the farmers on each village from the farmer`s decisions in adjacent villages. The amount of this variable in retail sales was higher than other methods. Hence, neighbors’ decision, has been the biggest influence on the choice of this path. Proximity also exists in wholesale method. So in this case, the choice of marketing channel was affected by the choice of others. The broker method has the lowest interaction of farmers from decisions in adjacent villages, since it has the lowest income for farmers per unit of sales.
Conclusion: In wholesale, decision of the previous year is more effective than the spatial lag. Hence, in this type of selling, past tendencies which have been accumulated in the grower`s mind, are more important than others’ decisions to sell their product. Therefore, changing this type of marketing is more difficult than the two other methods. In broker methods, gardener always disobeys his last year decisions and tries to sell his product in a different way. In this method, he is also affected by decisions made by others. In general, this method is less desirable for orchardist and usually will be selected as the last option. In retail method, neighbors’ decisions have had more impact on the choice of marketing system rather than the farmers’ past decisions. In the retail channel, the neighbors’ decisions have the most influence on the gardeners’ decisions. According to the highest orchardist configuration has occurred in retail marketing, creating a successful marketing model based on this method can effectively contribute to the changing in the marketing of this product and can lead to reduce the marketing margin.

Keywords

Distribution Channel Selection; Orange; Spatial and Temporal Effects; Panel Probit

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