Heliyon (Sep 2022)
Innovative price-setting approaches to high-value products: A pricing method for agribusiness farmers
Abstract
Despite being determined by global market prices, the majority of Thai farmers have never become innovative price setters. Not many Thai farmers considered a pricing approach that would maximize the value of their agricultural products. To this end, this study provides empirical evidence regarding the impact of marketing-based variables on pricing. This study aims to identify marketing-based determinants involved in innovative, dynamic price settings for value-added agricultural products. We consider two approaches to innovative pricing – segmented (tiered) pricing and peak-load pricing – to see if there is a possibility for such pricing. A sample of 840 agribusiness farmers was collected from different regions of Thailand. Using multigroup structural invariance analysis, the sample was grouped into four types of farmers: rice, sugarcane, maize, and cassava, to see if there were any differences between them in each of the proposed pricing propensities. Our study finds that cassava farmers tend to pay significant attention to market focus, customer and product differentiation, brand orientation, and segment-based mass customization. Other groups of farmers, like rice and sugarcane, tend to set segmented (tiered) pricing as a result of brand orientation and mass customization. As for peak load pricing, market demand and seasonality are significant factors that can be found among four crops. No matter how prices are set on the global market, this study suggests that agribusiness farmers should think about marketing-related factors to stand out from their competitors.
