Which factors influence the extensiveness of the buying process of farmers?

Date of publication: June 15, 1992

Author: Maarten Kool

Abstract:

The extensiveness of the buying process refers to the amount of information acquisition and alternative evaluation with respect to the purchase of a mean of production. Knowledge about the determinants of the extensiveness of the buying process is essential for the Agricultural Supply Industry, because their marketing strategy has to be adapted to this. A model of the extensiveness of the buying process of farmers is developed, based on comprehensive models of organizational buying behavior and consumer behavior. Based on this model some hypotheses are derived, which are tested in this study. The hypotheses refer to the influence of product characteristics (complexity of the purchase situation, importance and market penetration of the pro- duct), farm enterprise characteristics (size of farm and type of farming), farmer characteristics (purchase experience, quality-consciousness and specific interest with respect to products, market orientation, general information acquisition level, age, and education level), and the long-term relationship with the supplier. The analytic model consists of a set of recursive equations. This model is parameterized by ordinary least square regression analysis. The market penetration of the product is by far the most important determinant of the extensiveness of the buying process of farmers. The extensiveness of the buying process is also positively affected by the complexity of the purchase situation, the importance of the product in relation to the structure of the enterprise, and the financial importance. A long-term relationship with the supplier is negatively related to the extensiveness of the buying process. This result indicates that the Agricultural Supply Industry can bind a farmer by investments into the relationship with the farmer. From the farmer characteristics the specific interest (enduring involvement) of the farmer with respect to a particular product (positively related) and the purchase experience (negatively related) are the most important determinants of the extensiveness of the buying process of farmers. Finally crop and dairy farmers tend to decide more carefully about the purchase of a mean of production than hog farmers and greenhouse gardeners.

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