The creation and management of customer value within New Zealand agribusinesses : A dissertation submitted in partial fulfillment of the requirements for the degree of Master of Professional Studies at Lincoln University

Abstract

New Zealand agriculture has evolved for many years to levels where the industry now embraces the most modern means of producing food and fibre products and services to meet customer needs. It is one of the key industries that generate income for many families and the country at large. The importance of managing agribusinesses effectively therefore, should be highly endorsed. In order to manage effectively, agricultural entrepreneurs first need to understand that the continued operation and success of their businesses is determined by their ability to recognise, create and manage customer value.

An assertion has been stated in this dissertation that an organisation should only pronounce value after it has confirmed that its customers have derived benefit(s) from consuming the firm's product. The findings of this dissertation suggest that this assertion is incorrect.

Literature defines customer value in many ways, some of which are commonly shared by New Zealand agribusinesses interviewed for this dissertation. The subjective nature of what customer value is as reported by many authors is also markedly understood.

The shared understanding among agri-based entrepreneurs of what customer value is has driven them to effectively harness their ingenuity of creativity and adopt modern technology and information sharing to successfully meet their customer requirements and compete in the agri-based global market. Although businesses have shown an understanding that value is defined from the customer's point of view, the disparities in objectives, backgrounds, resources and capabilities among them have significantly influenced the strategies and tactics adopted by individual firms in their quest to create customer value.

It is well acknowledged that the industry produces perishable products that are subject to the ever-increasing requirements of health, safety and quality management if they are to win shelf space in retail outlets. Such requirements are also accepted as major drivers of superior customer value.

The use of fragmented methods which do not aid intensified agri-businesses to generate customer value are encouragingly diminishing in New Zealand agribusiness. The understanding of the crucial relationship between customer value creation, profitability and sustainability of a business is significantly reflected.

It is mainly supermarket groups that provide a conduit between producers of agricultural products and the final consumers. Relationships between these chains and producers have been, and continue to be, a major driver of customer value creation. The supermarket groups wield chain captaincy which is viewed by some producers as unsupportive of their sustainable profitability and this is an ongoing challenge yet to be overcome by growers. A practical alternative has been suggested in this dissertation.

Some organisations creating customer value beyond New Zealand borders have considered adopting inter-organisational relationships; a strategy that has become widely accepted beyond the agribusiness industry against the backdrop of highly competitive global markets.

Most agribusinesses have encouragingly embraced the marketing concept; an approach which in part emphasises putting customers first. In doing so, they have selectively adopted the tools of marketing to suit their type of business, products, resources and capabilities.

The route to the creation of customer value has been described by firms as interesting, especially those that have experienced encouraging performance and growth. The same businesses however, have also highlighted that the quest has been, and still is, not without challenges.