Market orientation for milk farmers: how to deal with information asynmetry

Abstract

The aim of the paper was to analyze the information flow in the milk supply chain and discuss whether, and how dairy farmers can benefit from market orientation in their performance. The methodology consisted in secondary data analysis on milk production chain in Brazil, market orientation in the agricultural sector and the information flow of the supply chain. It was noticed that the use of strategies to approach the producers to the consumer, such as Geographical Indication and own dairy products, is very small. The producers in the dairy chain is are small and spatially dispersed, being difficult the access to the information flow and the market orientation. The private dairy and the cooperatives concentrate most of the production which also converges to maximum information volume. The article proposes an approach to rural producers on how to direct efforts in searching information to compensate the problems caused by the distance from the end consumer. The study presents a new market model orientation based on Narver and Slater (1990) for homogeneous products, especially adapted to the peculiarities of the milk chain in Brazil. The behavioral components suggested are: orientation for the information technical-economic and business, orientation for union and collaboration between “competitors” and the interfunctional coordination, maintaining focus on long-term profitability.