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Market orientation of the Swedish pork sector

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  • Lind, Lena Westerlund
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    Abstract

    In 2007, the largest slaughterhouse in Sweden, the farmer cooperative Swedish Meats, demutualized. That was the end of cooperative dominance in the Swedish meat industry. Paper VI claims that Swedish Meats demutualized because members no longer perceived the benefits from dealing with the cooperative to exceed the costs. This was possibly due to decreased market transaction costs (external transaction costs) and increased internal transaction costs, e.g. agency costs, caused by the problems of Vaguely Defined Property Rights (VDPR). This thesis explores why the demutualization came about following the hypothesis that lack of market orientation caused lower profitability and poorer member benefits. Market orientation is analyzed using one external and one internal perspective. The external perspective reflects that market orientation requires correct market intelligence regarding consumer needs and correct market signals to the upstream actors. This perspective is discussed using the results from Paper I, II and III in this thesis. Paper I shows that even though pork is an overall low involvement product, branded pork has more involved consumers enabling producers to apply a differentiating strategy. It is indicated that Swedish Meats was successful in communicating that consumers should buy Swedish meat. The potential of differentiating the supply of pork with the help of branding also enabled suppliers to overcome difficulties associated with situational factors, which influence consumer choice. Paper II provides a comparison between results regarding consumers' purchasing decisions studied at the Point-of-Purchase versus in other settings. As the supermarket category manager is the gate-keeper to the pork consumer, the supplier market orientation is dependent on the category manager's decision-making. This is discussed in Paper III. The market intelligence collected from the consumer and retailer has to be considered when the cooperative members make strategic decisions regarding product development and marketing. This internal perspective of market orientation is discussed using the results from paper IV, which indicates that the problems of VDPR aggravated the cooperative's ability to respond to the market conditions.

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    Bibliographic Info

    Paper provided by Swedish University of Agricultural Sciences, Department of Economics in its series Department of Economics publications with number 8119.

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    Date of creation: 2011
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    Handle: RePEc:sua:ekonwp:8119

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