Company environmental and societal positions as sources of competitive advantage: Consumer- and retailer-level effects
Agricultural producers have typically operated in commoditized markets involving relatively undifferentiated product offerings. Unfortunately for smaller producers, these “low prices/ high volume” conditions favor larger conglomerates that possess greater capabilities for developing economies of scale. Nonetheless, recent shifts in the marketplace suggest opportunities for smaller agricultural entities to differentiate their offerings on dimensions that are independent of the physical products. Accordingly, the current research examines the potential of companies to employ environmental positioning strategies to create competitive advantages in parity marketplaces where little or no product differentiation exists. Also investigated is how the success of an environmental approach may be affected by a company’s general reputation as well as whether the company is a small local producer or a large national conglomerate.
We explored this issue in Study 1 (Leopold Grant #2004-MO5) in terms of end-user (i.e., consumer) perceptions associated with sustainable agriculture products. Such perceptions are clearly important, given the ability of consumer demand to “pull” products through the channel, as when consumers prompt retailers to obtain the desired assortment of offerings from producers. In contrast, Study 2 (Leopold Grant #2005-MO7) considers the effects of producer size, environmental positioning, and social positioning on perceptions held by the retailers who interact directly with agricultural producers. Decisions made by retailers (restaurants and grocers) play a fundamental role in determining the assortment of products to which end-users are exposed. Collectively, the findings from these two studies provide a comprehensive, complementary look at the effects of agricultural sustainability in the supply chain for food products.
Thomas E. DeCarlo
Marketing Department – Iowa State University
Phone: 515.294.9409
Email: decarlo@iastate.edu
Michael J. Barone
Marketing Department – Iowa State University
Phone: 515.294.6941
Email: mbarone@iastate.edu |