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Building producer loyalty in Malaysia's fresh milk supply chain

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Author Info

  • Boniface, Bonaventure
  • Gyau, Amos
  • Stringer, Randy
  • Umberger, Wendy J.
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    Abstract

    The paper presents results from a survey of 133 dairy producers in Malaysia, and identifies how Malaysian milk buyers can build a loyal customer base with their suppliers as a means to secure uninterrupted milk supplies. A structural equation model was conducted to test the conceptual model using AMOS 17.0 software. The results show that whereas timely and collaborative communication, price satisfaction and cultural fit influence positively suppliers’ contractual and competence trust in their buyers, power dependency negatively influences competence trust. Furthermore, suppliers’ trust in their buyers will eventually lead to loyalty. The principal implication is that milk processors and other buyers need to engage in collaborative communication with the dairy farmers to ensure continuous and uninterrupted supply.

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    File URL: http://purl.umn.edu/114423
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    Bibliographic Info

    Article provided by University of Melbourne, Melbourne School of Land and Environment in its journal Australasian Agribusiness Review.

    Volume (Year): 18 (2010)
    Issue (Month): ()
    Pages:

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    Handle: RePEc:ags:auagre:114423

    Contact details of provider:
    Web page: http://www.agrifood.info/review/

    Related research

    Keywords: dairy; Malaysia; customer base; competence trust; suppliers trust; collaborative communication; Agribusiness; Agricultural and Food Policy; Farm Management; Industrial Organization; Institutional and Behavioral Economics; Marketing; Research and Development/Tech Change/Emerging Technologies; Research Methods/ Statistical Methods; Teaching/Communication/Extension/Profession;

    References

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    1. Munter, Mary, 1993. "Cross-Cultural Communication for Managers," Business Horizons, Elsevier, vol. 36(3), pages 69-78.
    2. Sartorius, Kurt & Kirsten, Johann, 2007. "A framework to facilitate institutional arrangements for smallholder supply in developing countries: An agribusiness perspective," Food Policy, Elsevier, vol. 32(5-6), pages 640-655.
    3. Rauyruen, Papassapa & Miller, Kenneth E., 2007. "Relationship quality as a predictor of B2B customer loyalty," Journal of Business Research, Elsevier, vol. 60(1), pages 21-31, January.
    4. Gow, Hamish R. & Streeter, Deborah H. & Swinnen, Johan F. M., 2000. "How private contract enforcement mechanisms can succeed where public institutions fail: the case of Juhocukor a.s," Agricultural Economics, Blackwell, vol. 23(3), pages 253-265, September.
    5. Williamson, Oliver E, 1979. "Transaction-Cost Economics: The Governance of Contractural Relations," Journal of Law and Economics, University of Chicago Press, vol. 22(2), pages 233-61, October.
    6. Gow, Hamish R. & Streeter, Deborah H. & Swinnen, Johan F.M., 2000. "How private contract enforcement mechanisms can succeed where public institutions fail: the case of Juhocukor a.s," Agricultural Economics: The Journal of the International Association of Agricultural Economists, International Association of Agricultural Economists, vol. 23(3), September.
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    Cited by:
    1. Boniface, Bonaventure & Umberger, Wendy J., 2012. "Factors influencing Malaysian consumers’ consumption of dairy products," 2012 Conference (56th), February 7-10, 2012, Freemantle, Australia 124243, Australian Agricultural and Resource Economics Society.

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