Producer relationships segmentation in Malaysia's milk supply chains

Abstract

PURPOSE – Research on buyer-seller relationships in the agricultural sector receives little attention. A growing body of evidence suggests that strengthening buyer-seller relationships fosters more efficient supply chains. Much of the long-term relationship literature tends to treat suppliers as a homogeneous group when identifying motivations, strategies and incentives to enhance the quality of buyer-seller relationships. This article aims to explore the role of long-term relationships between buyers and sellers in Malaysia's dairy industry, taking into consideration the heterogeneous nature of producers. DESIGN/METHODOLOGY/APPROACH – The study examines variation in relationship quality (trust, satisfaction, and commitment), loyalty and price satisfaction dimensions, using data from a survey of 133 dairy producers. FINDINGS – Cluster analysis suggests two well-defined groups differing in terms of demographic characteristics and relationship perceptions about their buyers. PRACTICAL IMPLICATIONS – The study results highlight ways milk buyers can develop and promote more appropriate and efficient marketing strategies with milk producers. ORIGINALITY/VALUE – This study provides evidence of producer relationship segmentation in an agricultural industry of an emerging economy.