Citrus Marketing Channel Strategy and Its Determinants in Mazandaran Province of Iran: An Application of Nested Logit Model

Authors
S. M. Mojaverian 1
F. Rasouli 2
S. A. Hosseini-Yekani 2
1 Department of Economics, Sari University of Agriculture, Islamic Republic of Iran.
2 Department of Agricultural Economics, Sari University of Agricultural Sciences and Natural Resources, Sari, Islamic Republic of Iran.
Abstract
One of the really important challenges facing agricultural producers is the choice of their product distribution channels. The present study is aimed at investigating the citrus marketing channel strategy and its determinants among citrus orchardists of Mazandaran using a Nested Logit model. Some two hundred and fifty two orchardists from 15 cities of Mazandaran were taken as the study samples. Four distribution channels and three nests were considered in determining the factors influencing the choice of marketing channel. Since the estimated structural parameter did satisfy the condition of lying between 0 and 1, the nested logit model was proved as appropriate for the intended application. The results indicated that the orchard distance from the nearest city, orchardist’s experience, sale time, marketing costs, the kind of product and the dominant marketing channel constitute the most important factors of distribution channel selection as regards the citrus producers in Mazandaran. According to the obtained results, by increase in the orchards’ distance from the nearest city, the producers' tendency to sell their products through channels of shorter distances from buyers also increases. Also, results revealed that the older the orchardist, the higher his/her degree of risk aversion. An estimation of binomial Logit Model for the second and third nests had consistent results regarding the marketing costs. As the marketing costs increases, the orchardist’s tendency to sell his/her products through other channels of a lower marketing cost will increase. Furthermore, results revealed that as the citrus price rises, the producers get further intended to sell their products in the market rather than selecting either the pre-sale method or selling their produce to the local dealers.

Keywords

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Journal of Agricultural Science and Technology
Volume 16, Issue 7
November and December 2014
Pages 1469-1479