Distribution channels of vegetable industry in Indonesia: impact on business performance
International Journal of Productivity and Performance Management
ISSN: 1741-0401
Article publication date: 11 October 2019
Issue publication date: 27 May 2020
Abstract
Purpose
The purpose of this paper is to analyse the distribution channels of vegetable sectors in Indonesia, its economic impact on the performance of vegetable sales and the factors affecting marketing channels selected by producers.
Design/methodology/approach
The study employed qualitative and quantitative methods. A market survey was qualitatively conducted at producer, intermediary, wholesaler, hotel and food processing company as well as retailer levels. Producer survey was quantitatively conducted at the farm level, by interviewing 556 randomly selected farm households. Structural equation modelling was employed to accomplish the objectives of the study.
Findings
Marketing channels for vegetables in Indonesia was complex and relatively long. Farmers decided to select particular channels because of business circumstance and their knowledge. Distance and gentleman’s agreement with traders limited farmers to choose the desirable marketing channel. Marketing channels affect business performance in terms of high sales and profit.
Research limitations/implications
This study only pays attention to the supply side of vegetables. The effect of marketing channels also encumbers the consumers, which are beyond this study. Other studies are expected to highlight the consumer side.
Originality/value
This study focused on smallholder agribusiness players. This study uses two surveys as data sources: market survey and producer survey. The market survey serves as vital information to design producer surveys.
Keywords
Acknowledgements
The data used in this study are parts of consolidated three surveys. A survey self-financed, and two other surveys were financed by the collaborative research. The authors would like to thank the farmers who kindly provided their time to give information on crop production practices, and research assistants as well as enumerators who collected and complied the data. This is also to acknowledge that the Indonesia Project of Crawford School – The Australian National University in collaboration with SMERU research institute provided a research grant to support to this research project in Indonesia; and “Vegetables for Indonesia” project funded by United States Agency for International Development (USAID) – Indonesia, in collaboration with Indonesian Vegetables Research Institute, Assessment Institute for Agricultural Technology (AIAT) East Java and Bali, Agricultural Extension Service of East Java and Bali, Udayana and Padjadjaran Universities, and FIELD Foundation Indonesia.
Citation
Mariyono, J., Waskito, J., Kuntariningsih, A., Gunistiyo, G. and Sumarno, S. (2020), "Distribution channels of vegetable industry in Indonesia: impact on business performance", International Journal of Productivity and Performance Management, Vol. 69 No. 5, pp. 963-987. https://doi.org/10.1108/IJPPM-11-2018-0382
Publisher
:Emerald Publishing Limited
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