Buyer and seller relationships in Malaysia’s dairy industry.

Abstract

This thesis examines buyer and seller relationships between dairy producers and milk buyers in Malaysia. The study investigates the determinants of long-term relationships. While relationship marketing has received considerable attention in many other industry sectors, few studies have addressed the food industry. The existing agri-food studies emphasize long-term relationships, investigating variables such as trust, relationship quality and guanxi networks. This thesis addresses how buyers and sellers interact and what influences them to engage in longer-term relationships to improve their business performance. The specific research objectives are to investigate: (i) the determinants of relationship quality and its influence towards long-term relationships; (ii) the determinants of trust and its influence towards supplier loyalty; (iii) the influence of price satisfaction dimensions towards loyalty and business performance; (iv) segmentation of producer perceptions of the relationships; and (v) consumers’ preferences and consumption of dairy products. The study develops and tests a long-term relationship measure of loyalty and relationship commitment. The thesis identifies commitment and loyalty as the essential measures of long-term relationships. Data was collected from 133 dairy producers through face-to-face interviews in Malaysia in June and July 2009. The random sample of producers came from the Department of Veterinary Services database. The data are representative of dairy farm operations throughout Malaysia, providing representative examples of the marketing channels, contracting methods and memorandum of understanding used between producers and buyers. The various scales of operation in Malaysia are also represented.