Citrus Marketing Channel Strategy and Its Determina nts in Mazandaran Province of Iran: An Application of Nest ed Logit Model

Abstract

One of the really important challenges facing agric ultural producers is the choice of their product distribution channels. The present st udy is aimed at investigating the citrus marketing channel strategy and its determinants amo ng citrus orchardists of Mazandaran using a Nested Logit model. Some two hun dred and fifty two orchardists from 15 cities of Mazandaran were taken as the stud y samples. Four distribution channels and three nests were considered in determining the factors influencing the choice of marketing channel. Since the estimated structural p arameter did satisfy the condition of lying between 0 and 1, the nested logit model was proved as appropriate for the inten ded application. The results indicated that the orchard distance from the nearest city, orchardist’s experience, sale time, marketing costs , the kind of product and the dominant marketing channel constitute the most important fac tors of distribution channel selection as regards the citrus producers in Mazandaran. Acco rding to the obtained results, by increase in the orchards’ distance from the nearest city, the producers' tend ency to sell their products through channels of shorter distance s from buyers also increases. Also, results revealed that the older the orchardist, the higher his/her degree of risk aversion. An estimation of binomial Logit Model for the second and third nests had cons istent results regarding the marketing costs. As the marke ting costs increases, the orchardist’s tendency to sell his/her products through other cha nnels of a lower marketing cost will increase. Furthermore, results revealed that as the citrus price rises, the producers get further intended to sell their products in the mark et rather than selecting either the pre- sale method or selling their produce to the local d ealers. Keywords: Citrus, Iran, Marketing channel strategy, Mazandara n, Nested logit model.