Identifying factors that predict business-tobusiness customer loyalty towards suppliers of crop protection solutions
Abstract
Crop protection refers to the science and practice of managing pests, plant diseases, weeds and other pest organisms that damage agricultural crops. Crop protection solutions will play an ever-increasing role in the attempt to feed a growing population with limited land resources. The competition between the suppliers of crop protection products is fierce and they are dependent on the loyalty of the distributor’s independent sales agents (ISAs) to recommend and subscribe their products to the farming community. Although, the crop protection industry recognises that strong relationships between the ISA and his preferred supplier is important, the discipline of relationship marketing and customer loyalty is not well defined in this regard. The primary objective of the study is to investigate factors predicting business-to-business (B2B) customer loyalty towards suppliers of crop protection solutions. A literature review revealed that B2B customer loyalty is the holy grail pursued by every supplier and attainable through the disciplines and practices of relationship marketing. B2B customer loyalty depends also on the quality of the relationship as well as the value attached to the relationship. Relationship quality and relationship value factors were therefore further explored to determine their impact on the loyalty of the ISAs working for the distributors of crop protection products. A structured questionnaire was administered to measure eight constructs of that may impact B2B customer loyalty. The eight constructs include trust and commitment as relationship quality factors as well as product quality, service support, delivery performance, personal interaction, supplier know-how and time-to-market (as relationship value factors). The data of 121 ISAs, including their demographic information, were collected through a non-probability purposive (judgement) sampling process. The data analysis strategy included calculating frequencies and descriptive statistics, evaluating the reliability and validity of the measures, performing correlation analysis and lastly conducting a standard multiple regression modelling to test the theoretical model of the study. From the empirical results attained in the study it became clear that the vast majority of participants who took part in this research can be characterised as a 47½ year old Afrikaans speaking married male, with more than 10 years’ sales experience and annual sales of more than R3 m. All the measurement scales measuring the constructs of customer loyalty, trust, commitment, product quality, service support, delivery performance, personal interaction, supplier know-how and time-to-market can be considered as highly reliable as they all exhibit very good internal consistency, face validity and content validity. The correlation analysis indicated that there is a statistically significant and relative strong positive relationship between the relationship quality and relationship value independent variables investigated with the exception of commitment that tested weak positive in regard with all the relationship value constructs. All the independent variables considered in this research also correlate statistically significant with B2B customer loyalty, suggesting a relative moderate-strong positive effect in all instances. Following the preliminary analysis of the research results, it was decided to exclude the supplier know-how construct from further investigation, regarding multi-collinearity concerns. Ultimately, the results obtained from the multiple regression analysis suggests that only the independent variables trust, commitment and personal interaction are the predictor variables that demonstrate a significant statistical relationship with B2B customer loyalty. The multiple regression model furthermore significantly improves the prediction of B2B customer loyalty and explains 42.7% of the variation in B2B customer loyalty.
The recommendations of this research study mainly explore marketing strategies to improve B2B customer loyalty of ISAs towards their preferred suppliers of crop protection products. More specifically, strategies are recommended that have the potential to advance customer loyalty and gain a competitive advantage in a highly competitive market. Budget, time, and geographical challenges were the main limitations faced by the researcher. Hence, the study ends with a number of strategic recommendations for further research. Ultimately, the results of this study is important and can be viewed as a move to fill a gap in marketing research of B2B customer loyalty in the South African crop protection industry. The study offers the foundation for future research in the field of B2B customer loyalty in the crop protection industry.