Price satisfaction and producer loyalty: the role of mediators in business to business relationships in Kenyan mango supply chain – University of Copenhagen

29 April 2016

Price satisfaction and producer loyalty: the role of mediators in business to business relationships in Kenyan mango supply chain

This news is redirected by The Secretariat for Development Cooperation at SCIENCE from the Department of Food and Resource Economics, University of Copenhagen.

Sarah Mutonyi ; Karin Beukel ; Amos Gyau ; Carsten Nico Portefée Hjortsø

Purpose
The purpose of this paper is to investigate which dimensions of price satisfaction influence producers’ trust in buyers and assess the mediating role of such trust in the relationship between price satisfaction and producer loyalty in fresh fruit supply chains. Design/methodology/approach A cross-sectional study design using both semi-structured interviews and structured questionnaires was used. The study was conducted in the Eastern part of Kenya and included 600 smallholders. Data were analysed using structural equation modelling. Findings The results show that price fairness, price reliability, and relative price are dimensions of price satisfaction that affect producers’ trust in the buyer. Moreover, trust between the producer and the buyer is found to be a strong mediator between price satisfaction and producer loyalty. The findings support recent studies about trust and its mediating role. Research limitations/implications The paper is based on a cross-sectional study design, limiting the causal inferences which can be drawn. Producers’ preferences change with time and future studies should be based on longitudinal designs. Originality/value This paper shows the relationship between the multi-dimensional nature of price satisfaction and producer loyalty with trust as a mediating variable in the business-to-business (B2B) context. Although B2B relationships have been shown to be of great importance for smallholders in enhancing business performance with their buyers, little attention has been given to the role of trust as a mediator. This study offers interesting insights into the how trust plays a mediating role between price satisfaction and loyalty in a developing country context.
Original language English
Journal British Food Journal
Volume 118
Issue number 5
Pages (from-to) 1067-1084
Number of pages 13
ISSN 0007-070X
DOIs
State Published - 2016