Marketing management, strategic management and strategic groups in agriculture

Abstract

Agricultural marketing is frequently distinguished from marketing as it is described in the business literature because agricultural marketing theory focuses on policy, distribution channel, and efficiency issues, and has not evolved with a marketing management orientation. Business marketers have developed an interdisciplinary and strategic approach to research while agricultural marketing researchers continue to rely on economic principles. In this thesis the extent of the apparent gap between the disciplines is reviewed. The role that marketing management and strategic management have in agriculture is investigated, first within a general theoretical context, than more specifically at the farm business level.

It is suggested that the marketing strategies of farmers are not adequately described within either the business or agricultural marketing literature. Business marketing researchers focus attention on large businesses, and even in the small business marketing literature few studies investigate or describe the marketing management activities of farmers. In the agricultural marketing literature the farm business marketing process is not described as part of an integrated strategic operation with interfunctional relationships between many business activities. It is often implicitly assumed that farmers follow relatively homogenous patterns of strategic behaviour. In a similar way the farm management discipline tends not to include the marketing behaviour of farmers within it domain. This contrasts with the business management literature which suggests that marketing and strategic management are complex processes and that a business may utilise a variety of strategic approaches in its attempt to gain competitive advantage.

Strategic group studies empirically identify groups of firms within an industry which follow similar strategies. Although the investigation of strategic groups within the agribusiness sector has been identified as an important area for future research, there appears to have been little research which has examined strategic groups at the farm business level. In the empirical component of this thesis farm business marketing and strategic management processes are investigated. The results show that strategic groups of Canterbury crop fanners exist, and describe the marketing, business and management characteristics associated with each strategic focus.

The range and complexity of marketing activity identified in this study suggest that traditional agricultural marketing and farm management approaches to analysing fanners' management and marketing behaviour can benefit from insights gained from the business marketing and strategic management literature. Marketing behaviour may involve more than sales decisions, and an undue focus on this behaviour leads to the exclusion of other activities such as production planning and product differentiation. Similarly, a view of farm management which excludes marketing management and integrated strategic behaviour is restrictive. The disciplines of agricultural marketing and farm management will be enriched by viewing farm management with this strategic perspective.