Customer Value Drivers of South African Dairy Farmers
Date
2012-01-20
Authors
Thathiah, Denesh
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Abstract
The formal animal feed market in South Africa is estimated at R15 billion rands
per annum (Hemme and Ndambi 2009). There therefore exists a sizeable
market that animal feed producers are targeting. This research seeks to provide
information to animal feed producers so that they may better structure
marketing efforts and new service or product offerings.
The research problem is to determine the relative importance of the key
customer value drivers of dairy farmers in South Africa when purchasing animal
feed.
A qualitative study of a convenience sample of five farmers was used to
construct a quantitative questionnaire to assess the farmer’s perceptions of the
various proposed customer value driver’s constituents. These questionnaires
were completed telephonically by a sample of 254 famers. Quantitative
analysis techniques like a response frequency analysis and factor analysis were
used to provide information to respond to the research problem.
The most important customer value driver used by South African dairy farmers
when purchasing animal feed is a balance between the core functional element
of animal feed, namely nutritional value and the economic cost of acquiring it.
Once the purchase offering has satisfied the above value assessment then
farmers rate the second most important factor to be the time and effort required
to acquire and use the product.
The third most important factor was found to be the service provided by the feed
supplier. Farmers seek technical advice on the use of the animal feed and
general feed mix formulations as well as access to technical information and
laboratory test facilities. This view of the service element is aimed at allowing
the farmer to achieve his primary goal of acquiring the required nutritional
elements at least cost.
Feed costs are the major cost in producing beef or milk for farmers (Hemme
ii
and Ndambi 2009) and thus applying the correct feed is of prime importance in
determining cattle farming profits.
Farmers are searching for the best value product by balancing nutritional value
and price. The services of nutritionalists and supplier advice are employed to
develop optimal total mix rations. Feed suppliers must therefore develop and
position products that cater to this core requirement.
Description
MBA thesis - WBS
Keywords
Dairy farming, Value drivers