Markets, Marketing and Developing Countries: Where We Stand and Where We Are Heading PDF
Preview Markets, Marketing and Developing Countries: Where We Stand and Where We Are Heading
M arkets, marketing and developing countries Where we stand and where we are heading edited by: Hans van Trijp and Paul Ingenbleek Markets, marketing and developing countries Markets, marketing and developing countries Where we stand and where we are heading edited by: Hans van Trijp and Paul Ingenbleek Wageningen Academic P u b l i s h e r s This work is subject to copyright. All rights are reserved, whether the whole or part of the material is concerned. Nothing from this publication may be translated, reproduced, stored in a computerised system or published in any form or in any manner, including electronic, mechanical, reprographic or photographic, without prior written permission from the publisher: Wageningen Academic Publishers P.O. Box 220 6700 AE Wageningen ISBN: 978-90-8686-145-3 the Netherlands e-ISBN: 978-90-8686-699-1 www.WageningenAcademic.com DOI: 10.3921/978-90-8686-699-1 The individual contributions in this publication and any liabilities arising from them remain the First published, 2010 responsibility of the authors. The publisher is not responsible for possible damages, © Wageningen Academic Publishers which could be a result of content derived from this The Netherlands, 2010 publication. Table of contents • Preface 7 • Markets, marketing and developing countries: an introduction 9 Hans van Trijp and Paul Ingenbleek Part 1. Macro perspectives on markets, marketing and developing countries 17 Track record on the macro level 17 • From ‘marketing systems’ to ‘value chains’: what have we learnt since the post- colonial era and where do we go? 18 Nigel Poole • The neglect of food marketing in developing countries revisited 23 Eric Tollens • Income, happiness and socio-economic bench marking across countries 32 Wim Heijman and Johan van Ophem Systems thinking in development 43 • Linking market and knowledge based development: the why and how of agricultural innovation systems 44 Willem Janssen, Andy Hall, Eija Pehu and Riikka Rajalathi • Connecting developing economies to the third era of marketing 54 Berend Wierenga Part 2. Agriculture and agricultural markets as engines for development 61 The ineffectiveness of a one-size-fits-all approach 61 • Barriers to economic growth in Malawi: reflections on smallholders 62 Emma Kambewa and Joseph Nagoli • Agro-markets and pro-poor development in Sub-Saharan Africa: the quest for ‘golden fishes’ 69 Clemens Lutz Land reform and land markets 75 • Impact of Zimbabwe’s fast track land reform programme on the production and marketing of maize in the smallholder sector 76 Ajuruchukwu Obi • Property rights, land markets and the efficiency of land use: an analysis in rural China 84 Franz Heidhues and Stephan Piotrowski Markets, marketing and developing countries 5 Part 3. Market access, value chains and institutions 91 Institutions and institutional arrangements 91 • Understanding institutional arrangements for improved market access in Africa: how to explain seemingly irrational causes of success and failure 92 Guido Van Huylenbroeck, Marijke D’Haese, Divine Foundjem-Tita and Jacques Viaene • Value chain participant councils: a tool for improved market coordination and broad-based growth 97 John Staatz and Donald Ricks Certification and standards 103 • The future of Fair Trade 104 Ruerd Ruben • Value adding through certification? Insights from the coffee sector in Nicaragua 115 Tina Beuchelt, Anna Kiemen and Manfred Zeller Technological impact on chains and markets 121 • The impact of telecommunications on agricultural incomes in developing countries 122 Hans Jansen, Grahame Dixie and Máximo Torero • Food technology and marketing in the developing world: two of a kind 130 Martinus van Boekel Financial institutions 137 • The financial crisis and microfinance 138 Sascha Huijsman, Robert Lensink and Erwin Bulte • Commodity futures markets as drivers of agriculture and agribusinesses in developing countries: what needs to be done? 146 Joost Pennings Part 4. The role of marketing research: past, present and future 155 • Marketing’s promise to development 156 Paul Ingenbleek • Linkages between theory and practice of marketing in developing countries 164 Aad van Tilburg About the authors 185 Index of the keywords 191 6 Markets, marketing and developing countries Preface The book in front of you consists of 20 essays in which the authors discuss a proposition in the domain of markets, marketing and developing countries. At a time in which high hopes exist pertaining to the role of markets in development, these essays may help to create an understanding of where we are, where we are coming from and where we are heading. The authors are established scientists in the field of marketing in developing countries, or related disciplines, and occupy senior positions within their research institutions. We have deliberately asked them to write short essays (rather than full scientific papers) to allow them to express their views and current concerns with this important field. This book marks the celebration of Aad van Tilburg’s retirement, after a career of more than three decades in the field of marketing and developing countries. All authors have in common that, in one way or another, they have a professional relationship with Aad van Tilburg. Aad has been able to develop strong networks in the field, working closely with a wide variety of colleague academics. Given Aad’s experience and expertise combined with his very pleasant personality this should not come as a surprise. The present book brings together the view of Aad and several of his intimate co-workers on where this field could and should be developing after Aad’s retirement. Aad van Tilburg (June 11, 1945) joined the Marketing and Consumer behavior Group of Wageningen University in 1974, after an MSc in Economics and Econometrics at Erasmus University Rotterdam (1966-1971) and several years of business experience at Philips in the Netherlands. Although initially focusing on agricultural marketing in the Western World (in 1984 he successfully defended a PhD thesis on `Consumer choice of cut flowers and pot plants’), Aad was very early in recognizing the potential for and the challenges in the application of marketing theory for problems related to developing countries. The demand for this expertise was also recognized by professors from Development Economics and Rural Sociology and in response to their calls, a position was created in the Marketing and Consumer Behavior group that was entirely dedicated to marketing and developing countries. Aad seized the new opportunity offered to him in 1978. To familiarize himself in this field he gained field experience in Indonesia, followed by longer periods of field work in Malaysia (1982), Sierra Leone (1985), and Benin (1987). In the 1990s and 2000s, he visited research sites in among others Senegal, South Africa, Costa Rica and Bhutan. In his work on marketing in developing countries, Aad van Tilburg has always focused on the balance between market integration and market efficiency on the one hand and to what extent this can improve the livelihood of primary producers in developing countries on the other. He has specifically focused on the role that marketing institutions can play in finding this right balance. Central to his approach was the value chain analysis, as Aad recognized early on that poverty alleviation is not purely a production problem but mainly a problem of functioning of markets. Understanding the behavioral forces that influence success and failure in these markets and chains is crucial in finding solutions for better integration and market access. As Aad’s empathy was also largely with the small scale producers, he has been able to combine marketing and value chain analysis, with a livelihood approach to understand the dilemmas and restrictions that primary producers see themselves faced with. Aad’s approach was timely and full of foresight. With the increased attention for broader scope of sustainable development, the type of research questions that Aad has been focusing on have also gained considerably in social and academic relevance. This is highly visible in Aad’s successes in attracting PhD students for this type of research. PhD students Clemens Lutz, Lineke van Bruggen, Xiaoyong Zhang, Markets, marketing and developing countries 7 Chairo Castano, Emma Kambewa, and Suresh Bhagavatula have benefited from Aad’s rich experience and insight in conducting their research across the globe as a first step into their own careers. Aad was involved in the initiation of many of the current PhD projects within, or co-supervised by the Marketing and Consumer Behaviour group, i.e. those of Cathelijne van Melle, Workneh Tessema, Bukelwa Grwambi, Mênouwesso Hounhouigan, Mayra Esseboom and Suleimani Adekambi. It is fair to say that in the field of marketing for developing countries, Aad has left a footprint that will be recognizable long after his retirement. This is a good moment to thank Aad for all his work in this important field. The essays in this book testify that Aad was right in his approach to strive for a balance between local livelihoods and global trade. The contributing authors look back with some degree of satisfaction as well as some concern. From the essays it is clear that a lot has been achieved, but with greater success in some parts of the world than in others. There is hope and we trust that future generations of academic scientists will continue the work from where Aad’s contributions have brought us. Aad, thank you very much for all of your fruitful work. Not only academically, but also as a coach to many of us. You have been a very valuable colleague to many of us, a strong leader that has stood at the start of many peoples’ careers. We would like to also include in our thanks your wife Augustine, for her patience and support to the group. Hans van Trijp and Paul Ingenbleek 8 Markets, marketing and developing countries Markets, marketing and developing countries: an introduction Hans van Trijp and Paul Ingenbleek Many of the products that consumers routinely purchase in today’s supermarkets originate from long and complex supply chains, often rooted in primary production in developing countries such as for tropical fruits, coffee, tea, and cocoa. It is in this context of international chains that markets in developing countries are receiving substantial attention these days. Issues like poverty reduction at the level of smallholders and the design and coordination of international value chains that favor smallholders’ livelihoods, are currently high on the agenda’s of policy makers and nongovernmental organizations (NGOs). The growing attention for sustainable development has further nurtured interest at all levels. At the macro- level, reducing poverty worldwide and increasing trade with developing countries have become part of the United Nations’ Millennium Development Goals to which 189 national governments have committed themselves. Also, many (international) food companies show increased focus on the developing countries and primary producers. First, they have started to recognize the collective purchasing power of consumers at ‘the bottom of the pyramid’, which as led to the design of products specifically for low income groups. But also, many of these companies have embraced sustainable development as the leading principle of their Corporate Social Responsibility (CSR) policies. Ensuring adequate livelihoods, through fair distribution of revenues across all parties involved in the value chain, is increasingly part of these policies. Importantly, consumers also express an increased interest for sustainability issues related to the products that they buy thereby generating a market pull for sustainable products, including Fair Trade products. Together these emerging trends bring new opportunities for development and make the role of marketing in development more salient. This positive message of hope for the future is far from implying that the enhanced integration of smallholders into value chains against conditions that would improve their livelihood is a straightforward or simple process. As many contributors to this book argue, the track record is not particularly strong and substantial system innovations are needed to bring this desirable situation into reality. Many smallholders still lack adequate access to international value chains. Those that have access may earn incomes that fail to meet the expectations. Many primary producers are therefore still struggling to build a good livelihood from their agricultural production. This is particularly (but not exclusively) true for the situation in Sub-Saharan Africa, where despite considerable efforts, poverty among smallholders is still highly prevalent. Likewise, malfunctioning markets are a problem for food security, in particular to feed the growing urban populations, and for environmental sustainability of common pool resources like water and grazing lands. 1. Where we are and where we are heading For this book, at the occasion of Aad van Tilburg’s retirement, we have invited a number of leading academics in the field to write short essays on the state of affairs in markets, marketing and developing countries. Such short essays should allow for succinct position statements of what individual academics see as the accomplishments of the past and the challenges ahead. Each of the academics has summarized this into a short proposition at the beginning of the essay. The different contributors have not been constrained in the choice of their topics, other than that it should relate to the domain of markets, marketing and developing countries. Together these propositions and essays have sketched out a number of key themes. Markets, marketing and developing countries 9
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