Market Structure Analysis and Marketing Methods of Cornelian Cherry Product with Emphasis on the Role of Brokers in Kaleybar County

مجله اقتصاد و توسعه کشاورزی

Article 6, Volume 34, Issue 3 - Serial Number 49, October 2020, Pages 325-339   

Document Type: Research Article

DOI: 10.22067/jead.2020.17789.0

Authors

M. Sookhtanlou^* ; S. Dehghanpour; A. Bagheri

Department of Water Engineering and Agricultural Management, Faculty of Agriculture and Natural Resources, University of Mohaghegh Ardabili, Ardabil, Iran

Abstract

Introduction: Cornelian Cherry (Cornus mas L.) is one of the most important medicinal and organic products in East Azerbaijan Province which is recognized as the most cultivated area of this crop in Kaleybar county (More than 135 ha of gardens). While due to lack of proper marketing management and lack of complementary industries, it has failed to find its true place in improving the productivity of its producers and economic boom of the region. Influence of brokers in different dimensions of the market and especially the possible future product prices, financial needs and low knowledge of producers in relation to the correct marketing principles and conditions of rapid product corruption are considered in order to maximize profits. What is certain is that brokers, if the right conditions arise, are considered as one of the determining and influential factors in creating a selling price bubble. The influence of brokers on marketing can be explained via 4Ps marketing, which is the most common and at the same time the most widely used type of marketing mix in the field of marketing of agricultural products. Therefore, the aim of the study was to analyze the market structure and marketing methods of this product (4Ps components, marketing routes and marketing methods) with emphasis on the role of brokers in marketing producers in Kaleybar county (in 2018) to create optimal knowledge of the dimensions of brokers' influence in the market.
Materials and Methods: The statistical population included all active producers of Cornelian Cherry in Kaleybar county (N=1010), which sample size was determined by multistage sampling method with the help of Bartlett's et al. (2001) table. First, five major production areas (Cornelian Cherry gardens) were selected from the research areas. Then, in each region, a number of gardens-villages (7 gardens-villages) were determined randomly and among them, 280 producers (n=280) were selected and interviewed by appropriate proportion. In calculating the reliability of the study instrument, Cronbach's alpha method was used, which confirmed the use of study variables (coefficients above 0.7). For content and appearance validity of the study instrument, suggestions and corrections of a panel of faculty members in economics and agricultural management of Mohaghegh Ardabili University, experts of agricultural jihad organization of the province and executive experts of Kaleybar County were considered. To determine the dominant market direction, the producers were asked to state or outline the available paths in Cornelian Cherry market from the producer to the end customer. Then, by examining the frequency of responses, the dominant path was determined.
Results and Discussion: The findings showed that the preferred method of marketing among producers was to sell in farm to brokers. Also, the first priority of the influence of 4Ps components from brokers was related to the price component. According to the findings, dominant direction of market was achieved as "producer→ brokers→ wholesalers→ factories and workshops→ retailers→ consumer". Also, the most important distinguishing variables of producers based on the amount of transactions with brokers were the variables of the history of training courses (0.735), The amount of income from other economic activities (-0.640), and the garden distance from the sales market (0.605). Therefore, while emphasizing on educational programs, with the prosperity of Cornelian Cherry production cooperatives in the region, it is possible to organize the warehousing and transportation management of the produced crop to the market. Also, planning for government supporting purchases and creating a support office for Cornelian Cherry marketing in the region could diminish the role of brokers in the dominant market direction.
Conclusion: The predominant path of Cornelian Cherry marketing in the region often begins with brokers (sometimes up to a few brokers) and reaches at the end to the consumer in a few steps, and brokers are effective in determining the price of the product. The brokers appear to have full control of the Cornelian Cherry market in the studied region and they always have the upper hand in economic bargaining with producers and buyers; and control the pricing in the market. Also, the lack of knowledge of producers of Cornelian Cherry in various fields of marketing, including customer acquisition, advertising, storage, the right sales routes and new marketing methods, are major obstacle to the prosperity of Cornelian Cherry marketing in the region. The special characteristics of production and sale of Cornelian Cherry (such as seasonality, corruption, lack of insurance and government facilities in the region and problems related to proper storage and maintenance facilities and knowledge and lack of industrial and semi-industrial processing and conversion workshops in the region) seem to lead producers to trade with brokers. Meanwhile, the existence of many intermediaries between the producer and the consumer also increase the basic marketing problems of this product. Rising prices, through the number of brokers and intermediaries in the marketing paths, will also have a negative impact on the marketing boom of the region and improve the productivity of Cornelian Cherry production. It is obvious that laying the government financial and executive support for the construction of processing industries and production of Cornelian Cherry in the region can reduce the negative and active presence of brokers in the dominant marketing paths, and increase the profitability of Cornelian Cherry producers in the region. Therefore, in order to improve Cornelian Cherry marketing in the region, the study findings introduce a clear path for the gradual elimination of the position of brokers.

Keywords

Brokers; Cornelian Cherry; Marketing; Medicinal herbs

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