Producer relationships segmentation in Malaysia's milk supply chains

Abstract

Purpose Research on buyer‐seller relationships in the agricultural sector receives little attention. A growing body of evidence suggests that strengthening buyer‐seller relationships fosters more efficient supply chains. Much of the long‐term relationship literature tends to treat suppliers as a homogeneous group when identifying motivations, strategies and incentives to enhance the quality of buyer‐seller relationships. This article aims to explore the role of long‐term relationships between buyers and sellers in Malaysia's dairy industry, taking into consideration the heterogeneous nature of producers. Design/methodology/approach The study examines variation in relationship quality (trust, satisfaction, and commitment), loyalty and price satisfaction dimensions, using data from a survey of 133 dairy producers. Findings Cluster analysis suggests two well‐defined groups differing in terms of demographic characteristics and relationship perceptions about their buyers. Practical implications The study results highlight ways milk buyers can develop and promote more appropriate and efficient marketing strategies with milk producers. Originality/value This study provides evidence of producer relationship segmentation in an agricultural industry of an emerging economy.