IDEAS home Printed from https://ideas.repec.org/a/eme/afrpps/v70y2010i2p231-244.html
   My bibliography  Save this article

Agricultural financial market segments

Author

Listed:
  • Maud Roucan‐Kane
  • Corinne Alexander
  • Michael D. Boehlje
  • Scott W. Downey
  • Allan W. Gray

Abstract

Purpose - For agricultural bankers, agribusiness managers, and salespeople, understanding customers and their preferences and behaviors is crucial to success. The two goals of this paper are first to identify today's distinct market segments for financial products for US crop and livestock commercial producers, and second to predict segment membership based on observable characteristics. Design/methodology/approach - Cluster analysis was used to identify four distinct buyer segments for the purchase of financial products and services by US crop and livestock commercial producers. A multinomial logit model was used to predict segment membership based on demographic, behavioral, and business management factors. Findings - Although, traditionally, the financial services industry has segmented the market for commercial producers based primarily on sales/size categories; this research shows that this factor is not a significant predictor of behavior. Instead, this paper proposes a segmentation based on buying behaviors and identify four distinct market segments for financial products and services for US crop and livestock commercial producers: balance, price, convenience, and service. The balance segment being by far the largest segment. Research limitations/implications - Although the sample size means is representative of the US ag population, it may or may not be representative of the customers of a regional lender. Readers who are lenders are therefore advised to apply this methodology to their customer database and use the results of the paper as a quality check or benchmarking exercise. The findings also raise a number of issues, which require further research, such as how to implement a targeted marketing plan when there is one dominant segment and two other distinct segments. Practical implications - Lenders need to reconsider their market segmentation methodology. Originality/value - While there has been some research on market segments for retail financial markets, apparently there has been no work on market segments for agricultural financial products. This study exploits a unique dataset of 2,575 responses to Purdue's Large Commercial Producer Survey and the 2008 survey is the first time the survey included a series of detailed questions on how producers choose a financial service provider. This paper's findings will benefit agricultural bankers and agribusinesses that offer financing to their customers.

Suggested Citation

  • Maud Roucan‐Kane & Corinne Alexander & Michael D. Boehlje & Scott W. Downey & Allan W. Gray, 2010. "Agricultural financial market segments," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 70(2), pages 231-244, August.
    • Handle: RePEc:eme:afrpps:v:70:y:2010:i:2:p:231-244
    DOI: 10.1108/00021461011065265
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/00021461011065265/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://www.emerald.com/insight/content/doi/10.1108/00021461011065265/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1108/00021461011065265?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Gloy, Brent A. & Akridge, Jay T., 1999. "Segmenting The Commercial Producer Marketplace For Agricultural Inputs," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 2(2), pages 1-19.
    2. Jason Henderson & Frank Dooley & Jay Akridge, 2004. "Internet and E-Commerce Adoption by Agricultural Input Firms," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 26(4), pages 505-520.
    3. Alejandro Rosenberg & Calum G. Turvey, 1991. "Identifying Management Profiles of Ontario Swine Producers through Cluster Analysis," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 13(2), pages 201-213.
    4. Glenn Milligan & Martha Cooper, 1985. "An examination of procedures for determining the number of clusters in a data set," Psychometrika, Springer;The Psychometric Society, vol. 50(2), pages 159-179, June.
    5. Alexander, Corinne E. & Wilson, Christine A. & Foley, Daniel H., 2005. "Agricultural Input Market Segments: Who Is Buying What?," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 23(2), pages 1-20.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lyubomir Lyubenov & Anelia Lyubenova, 2023. "Bulgaria’s Financial Markets In Agribusiness - Size, Structure And Development Trends," Economic Archive, D. A. Tsenov Academy of Economics, Svishtov, Bulgaria, issue 2 Year 20, pages 48-61.
    2. Calum Turvey & Xiaolan Xu & Rong Kong & Ying Cao, 2014. "Attitudinal Asymmetries and the Lender-Borrower Relationship: Survey Results on Farm Lending in Shandong, China," Journal of Financial Services Research, Springer;Western Finance Association, vol. 46(2), pages 115-135, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Reimer, Aaron & Downey, W. Scott & Akridge, Jay T., 2009. "Market Segmentation Practices of Retail Crop Input Firms," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 12(1), pages 1-34, February.
    2. Maria José Palma Lampreia DOS SANTOS, 2013. "Segmenting farms in European Union," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 59(2), pages 49-57.
    3. Florian Diekmann & Cäzilia Loibl & Marvin T. Batte, 2009. "The Economics of Agricultural Information: Factors Affecting Commercial Farmers' Information Strategies in Ohio," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 31(4), pages 853-872, December.
    4. Alexander, Corinne E. & Wilson, Christine A. & Foley, Daniel H., 2004. "Agricultural Input Market Segments: Who Is Buying?," 2004 Annual meeting, August 1-4, Denver, CO 19997, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Gloy, Brent A. & Akridge, Jay T., 1999. "Segmenting The Commercial Producer Marketplace For Agricultural Inputs," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 2(2), pages 1-19.
    6. Schwering, Dorothee Schulze & Hollenbeck, Anna & Krone, Saskia & Spiller, Achim & Lemken, Dominic, 2022. "Crop protection market segmentation: relationship between buyer segments and the use of digital sales channels," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 25(4), September.
    7. Murekezi, Abdoul & Oparinde, Adewale & Birol, Ekin, 2017. "Consumer market segments for biofortified iron beans in Rwanda: Evidence from a hedonic testing study," Food Policy, Elsevier, vol. 66(C), pages 35-49.
    8. Roucan-Kane, Maud & Alexander, Corinne E. & Boehlje, Michael & Downey, W. Scott & Gray, Allan W., 2011. "Large Commercial Producer Market Segments for Agricultural Capital Equipment," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 14(4), pages 1-18, November.
    9. Feeney, Roberto & Berardi, Valeria, 2013. "Seed Market Segmentation: How Do Argentine Farmers Buy Their Expendable Inputs?," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 16(1), pages 1-24, February.
    10. Borchers, Bryce & Roucan-Kane, Maud & Alexander, Corinne E. & Boehlje, Michael & Downey, W. Scott & Gray, Allan W., 2012. "How Large Commercial Producers Choose Input Suppliers: Expendable Products from Seed to Animal Health," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 15(2), pages 1-20, May.
    11. Iraizoz, Belen & Gorton, Matthew & Davidova, Sophia, 2007. "Segmenting farms for analysing agricultural trajectories: A case study of the Navarra region in Spain," Agricultural Systems, Elsevier, vol. 93(1-3), pages 143-169, March.
    12. Liu, Pei-chen Barry & Hansen, Mark & Mukherjee, Avijit, 2008. "Scenario-based air traffic flow management: From theory to practice," Transportation Research Part B: Methodological, Elsevier, vol. 42(7-8), pages 685-702, August.
    13. LoPiccalo, Katherine, 2022. "Impact of broadband penetration on U.S. Farm productivity: A panel approach," Telecommunications Policy, Elsevier, vol. 46(9).
    14. Li, Pai-Ling & Chiou, Jeng-Min, 2011. "Identifying cluster number for subspace projected functional data clustering," Computational Statistics & Data Analysis, Elsevier, vol. 55(6), pages 2090-2103, June.
    15. Alessandra Cepparulo & Antonello Zanfei, 2019. "The diffusion of public eServices in European cities," Working Papers 1904, University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini, revised 2019.
    16. Noelia Caceres & Luis M. Romero & Francisco J. Morales & Antonio Reyes & Francisco G. Benitez, 2018. "Estimating traffic volumes on intercity road locations using roadway attributes, socioeconomic features and other work-related activity characteristics," Transportation, Springer, vol. 45(5), pages 1449-1473, September.
    17. Michele Cincera, 2005. "Firms' productivity growth and R&D spillovers: An analysis of alternative technological proximity measures," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 14(8), pages 657-682.
    18. Douglas L. Steinley & M. J. Brusco, 2019. "Using an Iterative Reallocation Partitioning Algorithm to Verify Test Multidimensionality," Journal of Classification, Springer;The Classification Society, vol. 36(3), pages 397-413, October.
    19. Javier Sevil-Serrano & Alberto Aibar-Solana & Ángel Abós & José Antonio Julián & Luis García-González, 2019. "Healthy or Unhealthy? The Cocktail of Health-Related Behavior Profiles in Spanish Adolescents," IJERPH, MDPI, vol. 16(17), pages 1-14, August.
    20. Jacques-Antoine Gauthier & Eric D. Widmer & Philipp Bucher & Cédric Notredame, 2009. "How Much Does It Cost?," Sociological Methods & Research, , vol. 38(1), pages 197-231, August.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:afrpps:v:70:y:2010:i:2:p:231-244. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Emerald Support (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.