IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Agricultural financial market segments

Listed author(s):
  • Maud Roucan-Kane

Purpose - For agricultural bankers, agribusiness managers, and salespeople, understanding customers and their preferences and behaviors is crucial to success. The two goals of this paper are first to identify today's distinct market segments for financial products for US crop and livestock commercial producers, and second to predict segment membership based on observable characteristics. Design/methodology/approach - Cluster analysis was used to identify four distinct buyer segments for the purchase of financial products and services by US crop and livestock commercial producers. A multinomial logit model was used to predict segment membership based on demographic, behavioral, and business management factors. Findings - Although, traditionally, the financial services industry has segmented the market for commercial producers based primarily on sales/size categories; this research shows that this factor is not a significant predictor of behavior. Instead, this paper proposes a segmentation based on buying behaviors and identify four distinct market segments for financial products and services for US crop and livestock commercial producers: balance, price, convenience, and service. The balance segment being by far the largest segment. Research limitations/implications - Although the sample size means is representative of the US ag population, it may or may not be representative of the customers of a regional lender. Readers who are lenders are therefore advised to apply this methodology to their customer database and use the results of the paper as a quality check or benchmarking exercise. The findings also raise a number of issues, which require further research, such as how to implement a targeted marketing plan when there is one dominant segment and two other distinct segments. Practical implications - Lenders need to reconsider their market segmentation methodology. Originality/value - While there has been some research on market segments for retail financial markets, apparently there has been no work on market segments for agricultural financial products. This study exploits a unique dataset of 2,575 responses to Purdue's Large Commercial Producer Survey and the 2008 survey is the first time the survey included a series of detailed questions on how producers choose a financial service provider. This paper's findings will benefit agricultural bankers and agribusinesses that offer financing to their customers.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: Access to full text is restricted to subscribers

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Emerald Group Publishing in its journal Agricultural Finance Review.

Volume (Year): 70 (2010)
Issue (Month): 2 (August)
Pages: 231-244

in new window

Handle: RePEc:eme:afrpps:v:70:y:2010:i:2:p:231-244
Contact details of provider: Web page:

Order Information: Postal: Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK
Web: Email:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

in new window

  1. Gloy, Brent A. & Akridge, Jay T., 1999. "Segmenting The Commercial Producer Marketplace For Agricultural Inputs," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IFAMA), vol. 2(02).
  2. repec:oup:revage:v:26:y:2004:i:4:p:505-520. is not listed on IDEAS
  3. Jason Henderson & Frank Dooley & Jay Akridge, 2004. "Internet and E-Commerce Adoption by Agricultural Input Firms," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 26(4), pages 505-520.
  4. Glenn Milligan & Martha Cooper, 1985. "An examination of procedures for determining the number of clusters in a data set," Psychometrika, Springer;The Psychometric Society, vol. 50(2), pages 159-179, June.
  5. Alexander, Corinne E. & Wilson, Christine A. & Foley, Daniel H., 2005. "Agricultural Input Market Segments: Who Is Buying What?," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 23(2).
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:eme:afrpps:v:70:y:2010:i:2:p:231-244. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Virginia Chapman)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.