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International Flower Networks: Transparency and Risks in Marketing Channel Choice

Author

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  • Wijnands, Jo H.M.
  • van der Lans, Karin
  • Hobbs, Jill E.

Abstract

Two thirds of Kenyan cut flowers are marketed through Dutch flower auctions, while the remainder is marketed directly to retailers. Auctions do not restrict the volumes marketed; however price determination is based on a spot market. A Transaction Cost approach is used to investigate the differences in marketing costs between the channels. The results suggest that there are no differences between the channels in terms of uncertainty about prices, finding buyers or transparency of quality standards. Auction growers pay a higher marketing fee but they have significantly fewer office employees and flower varieties compared to growers who market directly.

Suggested Citation

  • Wijnands, Jo H.M. & van der Lans, Karin & Hobbs, Jill E., 2006. "International Flower Networks: Transparency and Risks in Marketing Channel Choice," 99th Seminar, February 8-10, 2006, Bonn, Germany 7759, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaae99:7759
    DOI: 10.22004/ag.econ.7759
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    References listed on IDEAS

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    1. Jill E. Hobbs, 1996. "Transaction costs and slaughter cattle procurement: Processors' selection of supply channels," Agribusiness, John Wiley & Sons, Ltd., vol. 12(6), pages 509-523.
    2. Robert J. David & Shin‐Kap Han, 2004. "A systematic assessment of the empirical support for transaction cost economics," Strategic Management Journal, Wiley Blackwell, vol. 25(1), pages 39-58, January.
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    Cited by:

    1. Mulu Gebreeyesus & Tetsushi Sonobe, 2012. "Global Value Chains and Market Formation Process in Emerging Export Activity: Evidence from Ethiopian Flower Industry," Journal of Development Studies, Taylor & Francis Journals, vol. 48(3), pages 335-348, September.
    2. Rifin, Amzul & Suprehatin & Suryana, Rita Nurmalina & Akbar, Indra Dilana, 2015. "Marketing Channel Choice of Cocoa Farmers in Madiun Regency, East Java, Indonesia," 2015 Conference, August 9-14, 2015, Milan, Italy 212290, International Association of Agricultural Economists.

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