Exploring the most effective distribution channel for genetically modified corn hybrids in South Africa

Abstract

The distribution of genetically modified (GM) corn hybrids is a key element of the marketing mix for seed companies and a crucial element toward ensuring that demands and requirements of farmer customers are met. Distributions channels serve as direct or indirect pathways to allow farmers access to such GM corn hybrids. This qualitative study employed an interpretivist phenomenological approach to identify the most effective distribution channel for GM corn seed in South Africa’s irrigation market segment. Other contributing factors that influence customer preference and the role that brand loyalty plays in the choice of GM seed distribution was also explored. Semi-structured interviews were conducted with seven irrigation corn farmers located in the Northern Cape Province of South Africa. Findings indicate that farmers in the geographic sampled area have no specific preference for either a direct or indirect distribution channel, but that they rather prefer the shortest route to market. These farmers also value personal relationships with their distribution channel partners but tend to be more loyal towards the brand of GM corn hybrids than towards the person selling it. Brand performance (yield) was also determined to be a key driver of distribution channel relationships. Recommendations include the implementation of an alternative distribution channel strategy that will allow seed companies to not only focus on the human interaction and the existing relationship, but also provide technologically advanced product support that could further promote a sense of trust and brand loyalty. The concept of key account managers is introduced that could serve as intermediaries in a business-to-business strategy linking large irrigation farmers to seed companies. This study further contributes to the field of GM corn hybrid distribution by proposing a model for an alternative distribution channel structure. Given the expanding value brought about by GM corn hybrids to South Africa’s irrigated corn seed market, the findings of this study contribute to an understanding of the most effective distribution channel.