Price information channel preferences: A case study of composite feed companies

Abstract

Master of AgribusinessDepartment of Agricultural EconomicsVincent R Amanor-BoaduThis research focused on composite feed companies’ price communication preferences. It sought to determine the extent to which the timeliness, accessibility, and relevancy of the channel influenced preferences. Also, it sought to assess if the type of business operated by feed companies also influenced their channel preference. The study used primary data collected from feed companies across the United States using an electronic survey instrument served on Qualtrics®. Of the 978 who were invited to anonymously participate, 646 or 66% opened the email and 156 clicked on the survey link. Of those who clicked on the survey link, 71.4% completed the survey. These 140 respondents were used in the analysis using STATA 17 S.E. A major contribution of the study was its definition of channel preference in a multichannel system. Channel preference was estimated as the product of the importance of a channel to companies and their current satisfaction with the channel. Two channels emerged as the most preferred among the 10 that were evaluated: the printed catalog and the digital catalog. Their average preference scores were, respectively, 23.82% (S.D. = 38.02%) and 22.81% (38.40%). The interquartile range (25th to 75th percentile) was 30.0 and 31.3 percent, respectively. The feed companies fell into the following categories: regional feed mill, local feed mill, feed store/retailer, manufacturer, and a combination of these. A channel’s timeliness was defined as the product of the importance of timeliness to the firm (scale 1 = unimportant to 5 = extremely important) and their assessment of how timely the price information was delivered information to them ( -1 = below average; 0 = average; and 1 = above average). Accessibility was characterized as a binary: accessible (1) or not accessible (0). Finally, relevance was a categorical variable that took on a value of zero (not relevant), 1 (relevant), and 3 (extremely relevant). The regression results show that a percentage point increase in timeliness increases preference for the printed catalog by about 0.24 percentage points (t = 2.11; p < 0.037). Choosing relevant and extremely relevant instead of not relevant increased preference for the printed catalog by 65.73 percentage points (t = 11.41; p < 0.000) and 56.15 percentage points (t = 9.35; p < 0.000). The effect of accessibility on the preference for the printed catalog was not statistically significant. For the digital version, the results show that the effect of timeliness on preferences was not statistically significant. This may be because its delivery was already considered timely. However, accessibility reduced preference for the digital catalog by about 12.32 percentage points compared to not accessible (p < 0.041). This might be attributed to the effect of those who receive both digital and print because when this group is excluded and only those who receive digital are analyzed, accessibility is not statistically significant. In both cases, business type did not influence preferences. Although printed and digital catalogs were the top two preferred available channels, responses were favorable for a new web-based platform over their current channel mix. About 84.21% of respondents indicated they would slightly prefer or much prefer a web-based delivery of their price information. A lower proportion of respondents (65.14%) indicated they would slightly prefer or much prefer an app-based delivery of their price information. It is obvious from the foregoing that feed companies are content with their current communication channels and prefer multiple channels almost equally. This is confirmed by the difference between the average preference score for printed and digital being about 1.26 percent, and it was not statistically significant. That means we are unable to reject the null hypothesis that the top two channels are equally preferred by those who prefer them. This is true for those receiving both forms of communication. Based on the results, it is recommended that a web-based channel be added to the options available. Given the proportion of companies who indicated a preference for it, it is projected that the multifunctionality of the web-based channel could reduce the preference for the print channel, and in so doing increase timeliness and accessibility without sacrificing company preferences. After a few years of presenting multichannel information delivery to the feed companies, this hypothesis may be tested