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International Journal of Management (IJM)
Volume 7, Issue 4, May–June 2016, pp.17–42, Article ID: IJM_07_04_002
Available online at
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Journal Impact Factor (2016): 8.1920 (Calculated by GISI) www.jifactor.com
ISSN Print: 0976-6502 and ISSN Online: 0976-6510
© IAEME Publication
VALUE CHAIN ANALYSIS OF GUAVA:
PRODUCER, RETAILER AND CONSUMER
PERSPECTIVES
Hena Imtiyaz
Research Scholar
School of Environment, Resource and Development,
Asian Institute of Technology, P.O. Box 4, Klong Luang,
Pathumthani 12120, Bangkok, Thailand
Peeyush Soni
Associate Professor
School of Environment, Resource and Development,
Asian Institute of Technology, P.O. Box 4, Klong Luang,
Pathumthani 12120, Bangkok, Thailand
ABSTRACT
The present study was conducted in Kaushambi district (25° 20’ N and 81°
23’ E, 98m above mean sea level), India during October, 2014 to February,
2015 to perform value chain analysis for guava. A comprehensive survey was
conducted in relation to market infrastructure, transportation services,
storage facilities, processing industry, export market, information flow,
material flow, transparency, linkage, relationship, collaboration, commitment
& trust, cutting edge technology and consumer insights. The value chain
analysis of fresh guava on producer and retailers’ perspective / feedback
revealed that procurement and application of agricultural inputs, availability
and adaptation of technology, market infrastructure, material and information
flow, status of food processing industry, transportation services, cutting edge
technology and consumer insight are efficient and effective, whereas
transparency, collaboration, commitment and trust are not satisfactory. The
value chain analysis for guava on consumers’ perspective / feedback revealed
that market infrastructure, information flow, materials flow, linkage,
commitment and trust in exiting value chain of guava are satisfactory.
However, transparency and relationship in existing value chain of guava are
weak. The consumer gives more emphasis / importance to quality, nutritive
value, safety and price as compared with packaging and service rendered by
retailer for purchasing of fresh / processed guava products.
Hena Imtiyaz and Peeyush Soni
http://www.iaeme.com/IJM/index.asp 18 [email protected]
Key words: Value Chain, Consumer Insights, Information Flow, Materials
Flow, Relationship, Collaboration, Commitment and Trust, Transparency,
Guava.
Cite this Article: Hena Imtiyaz and Peeyush Soni. Value Chain Analysis of
Guava: Producer, Retailer and Consumer Perspectives. International Journal
of Management, 7(4), 2016, pp. 17–42.
http://www.iaeme.com/ijm/issues.asp?JType=IJM&VType=7&IType=4
1. INTRODUCTION
Value chain management system represents a set of value added activities in
designing, producing, marketing, delivering and supporting products and services
providing a competitive advantage to the product. Unlike supply chain management,
the emphasis in value chain is given to consumers. The focus in value chain is to
understand the desired consumer value by moving downstream in the chain and
delivering it efficiently and effectively to consumer (Fearne et al. 2009).
Value chain analysis is defined as the multi-dimensional assessment of the
performance of value chains including the analysis of material flow, information flow,
management and control of the value chain (Taylor, 2005). Value chain management
involves the collaborative allocation of resources within and between the respective
business in the chain to deliver more value addition at lower cost and at a faster rate.
Value chain approach provides a framework to analyse the nature and
competitiveness in which small farmers can participate in potential market (Rich et al.
2011). Value chain analysis gives profound knowledge on the markets, relationships
across the chain, participation of different actors, critical constraints and
competitiveness of the farmers (Soosey et al. 2012). The basic components of value
chains are information flow, material flow, transparency, linkage, relationships,
collaboration, trust and commitment, cutting edge technology and consumer insights.
Material and Information flow are the two key factors which are important for value
chain integration (Lee et al. 2000; Vickery et al. 2003; Zhou and Bentn, 2007;
Lindquist et al. 2008; Pereira, 2009; Projago and Olhager, 2012).
The transparency in food supply chains is still in a primitive stage in context to
food quality and safety (Florini 2007; Mol 2008; Mol 2014). In order to manage and
find solution to complexities existing in food supply chain transparency, the supply
chain partners should coordinate as well as create an atmosphere to share the data and
information among each other (Hvolby et al. 2010; Verdouw et al. 2011). The present
day consumers are having keen interest regarding the transparency in quality, safety
and storage at each stage of food supply chain (Beulens et al. 2005; Wognum et al.
2011; Mol, 2014). The strong and cordial relationship amongst the various players is
one of the most important aspects for effective and efficient food value chain (Batt
and Rexha, 2000; Gary et al. 2005; Gyau and Spiller, 2009; Musa et al. 2014).
Collaboration, trust, commitment and satisfaction are important attributes of food
supply chain relationship (Fischer et al. 2009). Supply chain collaboration reduces
procurement hazards and transaction costs (Handfield et al. 2002; Sheu et al. 2006).
Hudnurkar et al. (2014) reviewed sixty nine papers which revealed that information
sharing is the most important factor in food supply chain collaboration.
Trust and commitment are the most important components for strong and cordial
relationship amongst food supply chain partners. Mutual benefits and sharing risks
and rewards, monitoring and enforcement cost strengthen the trust and commitment
amongst the chain partners (Abdullah and Musa, 2014). Trust between the chain
Value Chain Analysis of Guava: Producer, Retailer and Consumer Perspectives
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partners and sharing of information lead to effective supply chain planning and
integration (Kwon and Suh, 2005; Luque et al. 2015). It is imperative to collect
maximum information pertaining to consumers’ tastes and preferences in order to
increase the level of consumer satisfaction (Murugavel, 2010). The understanding of
consumer needs and buying behavior is critical for effective retail decision making as
well the subsequent development and implementation of a retail strategy (Levy and
Weitz, 2007).
Developing an appropriate value chain management system for fruit crops in India
would considerably improve the sustainability, competitiveness and profitability of
the agricultural marketing system, which would in turn provide better consumer
value. Development of a value chain management system is a major issue in
developing policies and strategies in order to improve the profitability and living
standards of small and marginal farmers. In spite of economic importance of guava in
Kaushambi district, India, research on value chain management determinants such as
information and material flow, cutting edge technology, linkage, relationship,
collaboration, trust, commitment, transparency and consumer insights has not been
conducted. Therefore, the objectives of the present study were to analyse and propose
a conceptual framework and strategies to improve the existing value chain
management system of guava in Kaushambhi district of India. In order to achieve the
objectives of the present study, following research questions were developed.
What are the issues in procurement of the production inputs and adoption of
technology for production of guava for local consumption and export?
What is the status of market infrastructure, transportation, storage, processing
industry and export market?
How does information flow, material flow, governance and integration between stake
holders influence the performance of guava value chains?
What are the opportunities and challenges in adapting innovative thinking in value
chain management of guava?
2. MATERIALS AND METHODS
Sustainable value chain management will facilitate and enhance understanding of
competitive challenges, help in the identification of relationships and coordination
mechanisms and assists in understanding how the innovative thinking components
should be combined with the existing supply chain management for fresh guava. This
will inevitably including wide range of activities of guava value chain analysis in
terms of production and marketing system (Fig.1).
Kaushambi is one the newly created district of Uttar Pradesh, India. The total
geographical area of the district is 2012.8 sq.km. The latitude and longitude of the
Kaushambi district are 25° 20’ N and 81° 23’ E. It lies 98 meters above the mean sea
level. It is hot in summer in which highest day temperature lies in between 250C to
480C. The district receives approximately 960mm annual rainfall. The rainy season
begins normally in the end of June/First week of July and ends in the last week of
September. The winter season lasts from November to February with temperature
ranging from 150C to 25
0C.
The survey and data collection for value chain analysis of guava in Kaushambi
district were done during October, 2014 to February, 2015. The survey was conducted
to examine the current status of value chain management of guava in Kaushambi
district, India in order to develop a conceptual framework for sustainable,
collaborative and competitive value chain. A cross sectional multi method design
Hena Imtiyaz and Peeyush Soni
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using both qualitative and quantitative methods were used for data collection from
producers, retailers and consumers.
Figure 1 Conceptual model of guava value chain
The theoretical construct of the research for value chain analysis of guava include
consumer insight, material flow, information flow, cutting edge technology, linkage,
relationship, collaboration, trust and commitment and transparency (Fig. 1). The main
purpose of the survey was to assess the perception of producers / farmers, retailers
and consumers on procurements and application of the agricultural inputs, availability
and adaption of technology, market infrastructure, transportation facilities, storage
facilities, status of the food processing industry, export market, consumer insight,
material flow, information flow, cross cutting technology, linkage, relationships,
collaboration, trust and commitment and transparency. In order to assess these
variables, several items were measured under each variable using five point likert
scale “(strongly disagree = 1, disagree = 2, don’t know = 3, agree = 4, strongly agree
= 5)”.
The descriptive statistics, analysis of variance and post hoc tests for multiple
comparisons of means were used to analyse the data. The analysis was performed
with SPSS version 20.
Value Chain Analysis of Guava: Producer, Retailer and Consumer Perspectives
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3. RESULTS AND DISCUSSION
3.1. Producer / Farmer Perspectives
The value chain analysis from producer perspectives revealed that agricultural inputs
such as seeds, fertilizers, chemicals, water, farm machinery and electricity / fuel are
easily available for production of guava. The government and NGO’s provide
information regarding amount and time for application of agricultural inputs to the
farmers. However credit facilities as well as subsidy to purchase agricultural inputs
are not available to the producers / farmers. Furthermore, the majority of guava
farmers are not aware about the national / international food laws and regulations for
agricultural inputs mainly due to lack of coordination between farmers, chain partners
and government agencies. The analysis revealed that technology for production of
export quality guava is available, but small and marginal guava producing farmers are
not aware about production and marketing system to export fresh guava. The analysis
of market infrastructure revealed that proper road facilities and connectivity to
transport fresh guava to the market as well as appropriate storage, grading, packaging
and banking facilities are available in the market premises. The marketing activities
for sale of fresh guava is transparent, but commission charges by commission agent is
high. The analysis further revealed that facilities for marketing of fresh guava to
export market, cooperative market and supermarket are not available to farmers
(Table 1).
The analysis revealed that transport agencies and proper road facilities are
available to transport fresh guava to market timely. However, cold chain, subsidized
transport and cooperative transport facilities are not available to farmers. The analysis
revealed that cold storage and normal storage facilities are available at the market
premises. The food processing industries are available in the district. However,
farmers do not have contract farming with food processing industry and have no
access for selling guava to food processing industry directly. The food processing
industry does not provide loans information to producer in relation to quality and
safety requirements for national and international consumers. The information
regarding export market, export policies, quality and safety standards of importing
countries and logistic support for export of guava are not available to the farmers. The
analysis further revealed that small and marginal farmers do not have access to export
market (Table 1).
The analysis in context of information flow revealed that farmers / producers
receive timely information on appropriate technology for guava production,
marketing, safety and quality requirements by chain partners and government
agencies. However, farmers do not receive information regarding profit sharing
amongst chain partners. The analysis in context of material flow revealed that supply
of agricultural inputs for guava production is efficient and harvested guava is timely
delivered to market, chain partners and consumers. Producers agreed that efficient
material flow improves consumer satisfaction, chain efficiency and relationship
amongst the chain partners. The producers feedback regarding transparency revealed
that information provided by the input suppliers is accurate, genuine and reliable as
well as the quality and safety standards for production process of guava are
transparent. However, farmers clearly mentioned that marketing activities, profit
sharing and risk sharing amongst the chain partners are not transparent (Table 1).
The analysis in context of linkage revealed that producers have direct linkage with
markets. The direct linkage between producer and supermarket, cooperative market,
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food processing industry, export market and consumer is extremely poor. The analysis
revealed that producers have long term relationship with input suppliers, wholesalers
and retailers. Long term relationship between producers and financial institutions,
government agencies, food processing industries, export markets, supermarkets and
consumers is weak. Joint investment between producers and input suppliers, food
processing industries and chain partners does not exist. Producers have strong
collaboration with input suppliers to get agricultural inputs timely. They have strong
collaboration with chain partners for exchange of information regarding production
and marketing of guava. The collaboration between producers and banks for financial
assistance is weak. Furthermore, producers and chain partners do not share risks and
benefits associated with the production and marketing of guava. The analysis revealed
that commitment and trust between producers and chain partners, financial institutions
and government agencies in terms of financial assistance, information sharing, joint
venture, logistic support, profit and risk sharing, etc. are poor (Table 1).
The analysis in context of cutting edge technology revealed that guava producers
use appropriate technology for production and marketing of guava because it reduces
cultivation cost, transaction cost and losses during transportation and storage. Further,
producers are using information and communication technology because it reduces
time and cost of marketing. The analysis in context of consumer insight revealed that
producers use recommended agricultural inputs and follow the national laws and
regulations for production of guava to minimize the health risk for the consumers. The
producers are aware about quality and safety preferences of the consumers and follow
appropriate storage, packaging and transportation methods. Further, producers apply
appropriate production, storage and packaging techniques to ensure pleasant taste,
appearance and competitive price for consumers (Table 1).
Table 1 Value chain analysis of guava on producer perspective, Kaushambi district, India
(Likert Scale: Strongly disagree = 1, disagree = 2, don’t know = 3, agree = 4, strongly agree =
5)
Variables
Respondent Likert
Score
Mean
Standard
devia
tion
Agricultural inputs
Agricultural inputs are easily available (Seed, fertilizers, chemicals, electricity/fuel, man power,
farm machinery, etc.) 4.45
a 0.51
Maintenance of farm equipment and machines facility is easily available 4.30
a 0.57
Agricultural inputs are available at subsidized rates. 2.15bcd
0.67
Credit facilities are available to purchase agricultural inputs 1.85
bc 0.67
Application of chemicals and fertilizers is as per the national and international regulations 2.50
bd 0.61
Information on time and amount of the agricultural
inputs is available 3.65e 0.49
Value Chain Analysis of Guava: Producer, Retailer and Consumer Perspectives
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Variables
Respondent Likert
Score
Mean
Standard
devia
tion
Availability and adoption of technology
Appropriate and modern technology for guava
production is available 4.35a 0.49
We are aware of appropriate and modern technology 4.55a 0.51
We are trained to use appropriate and modern technology for guava production 4.30
a 0.57
Appropriate and modern technology available for
export quality guava production 2.10b 0.72
I am aware of international/national standards, regulations and laws of agricultural technology 1.75
b 0.64
Market infrastructure
Proper road connectivity is available between farm
and market 4.40a 0.50
Storage, display, grading, packaging and banking facilities available within the market premises 4.30
a 0.47
The commission charged by the commission agent is reasonable 1.85
b 0.67
Facilities for export is available in the market premises 1.50
b 0.61
Business activities related to marketing process is transparent and satisfactory 4.05
a 0.60
Cooperative marketing and super market facilities are
available 1.65b 0.67
Transportation facilities
Transport agencies are readily available at reasonable rates
4.50a
0.51
Roads are available for efficient transportation of fresh guava 4.40
a 0.50
Cold chain transportation facilities are available 1.80b 0.70
Subsidized transportation facilities are available 1.45b 0.51
Cooperative transportation system is available 1.75b 0.64
Storage facilities
Normal storage facilities are available at farm / nearby area 2.25
acd 0.55
Cold storage facilities are available at farm / nearby area 4.30
b 0.47
Adequate storage facilities are available at the market
place 4.45b 0.51
Cold storage facilities are available at market place 2.00ace
0.65
Storage facilities are in line with specified govt. regulations 2.45
ad 0.69
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Variables
Respondent Likert
Score
Mean
Standard
devia
tion
Subsidized storage facilities are available 1.80ce
0.77
Food processing industry
Food processing industries are available in district / city / farm 3.80
a 0.52
Producer have contract farming with food processing industry / unit 1.45
b 0.51
Selling guava to food processing industry is more
profitable 1.75b 0.72
Food processing industry provide loan for production of guava 1.50
b 0.51
Food processing industry provides information and guidance regarding international laws and regulations
for production, storage, quality and safety
requirements of guava
1.80b 0.70
Export market
Export market for fresh guava is available in the district / city 1.45
a 0.51
Selling fresh guava for export is more profitable 2.20b 0.77
Information regarding the export policies and
technical knowledge for production of export quality
guava are provided by govt. / NGOs / chain Partners 1.60
a 0.60
Information regarding quality and safety requirements
/ standards for fresh guava of importing countries is
provided by Govt. /NGO’s/ Chain partners/exporters 2.00
b 0.73
Govt. /NGO’s/ Chain partners provides logistic support to move fresh guava to export market 1.50
a 0.51
Small and marginal producers of guava have access to export market 1.60
a 0.50
Information flow
I receive information regarding new technology related to production of guava from Govt./chain
partners 4.05
a 0.39
I receive the information on market demand and market price of fresh guava from Chain partners 4.25
a 0.44
I receive the quality and safety requirements of fresh guava for local market from Chain partners 4.20
a 0.41
Information sharing between chain partners is good 2.00b 0.56
I receive the information regarding profit sharing amongst the chain partners 1.80
b 0.62
I receive the information regarding transportation, storage and packaging of fresh guava from chain 1.60
b 0.50
Value Chain Analysis of Guava: Producer, Retailer and Consumer Perspectives
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Variables
Respondent Likert
Score
Mean
Standard
devia
tion
partners
Material flow
Agricultural inputs are timely available for land preparation and production of guava (farm machinery,
irrigation, seed, fertilizers, chemicals, etc.) 4.70
a 0.39
Proper storage facility is available for storing harvested guava 2.25
b 0.44
Harvested guava is delivered to market timely 4.40a 0.41
Harvested guava is delivered to chain partners and consumers timely 4.40
a 0.56
Efficient material flow improves the overall consumer satisfaction, chain efficiency and relationships
amongst chain partners 4.45
a 0.62
Transparency
Information provided by input supplier are accurate, genuine and reliable 4.10
a 0.55
Information regarding production, marketing and profit is shared amongst the chain partners 1.55
bc 0.51
Input application, cultivation methods and production
process are traceable and verifiable 2.15c 0.49
Supply chain activities, profit sharing and risk sharing
of the chain partners are transparent 1.80bc
0.62
Quality and safety standards for production of fresh guava are transparent 4.10
a 0.64
Linkage
I supply fresh guava directly to the supermarket,
cooperative market, food processing industry and
export market 1.65
a 0.49
I supply fresh guava directly to consumer 2.35b 0.49
Direct linkage with potential market reduces transaction cost and improves profitability
considerably 4.30
b 0.47
Direct linkage with potential markets helps to offer
competitive price to consumer. 3.95c 0.39
Consumers receive considerably fresh guavas due to
my direct linkage to potential market 4.45b 0.51
Relationship
I am committed for long term relationship with
financial institutions 1.65a 0.49
I am committed for long term relationship with
government agencies 1.70a 0.47
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Variables
Respondent Likert
Score
Mean
Standard
devia
tion
I am committed for long term relationship with input supplier 4.50
c 0.51
I am committed for long term relationship with wholesaler / retailer 4.30
c 0.47
I am committed for long term relationship with food
processing industry, exporters and supermarket 1.75a 0.55
I am committed for long term relationship with consumers 2.45
c 0.51
I have joint investments with input suppliers/ food processing industry /chain partners 1.60
a 0.50
Collaboration
I have agreement with bank to provide loan to purchase agricultural inputs and machines 2.00
a 0.56
Input supplier have agreement with me to supply adequate agricultural inputs timely for production of
guava 4.45
b 0.51
Chain partners exchange relevant and accurate information related to production and marketing of
fresh guava timely 4.30
b 0.57
Chain partners share risks and benefits associated with the production and marketing of guava 1.75
a 0.72
Chain partners share the knowledge and information
regarding the forecast of supply and demand of fresh
guava 3.90
c 0.31
Chain partners coordinate to find new and potential market for fresh guava 2.30
a 0.47
Commitment and trust
The financial institutions provide financial assistance
timely to purchase agricultural inputs 1.90abc
0.64
Government agencies update me with the national and
international laws & regulations and provide subsidy
on production and marketing of fresh guava 2.25
ab 0.64
Chain partners provide appropriate and economic logistics for the timely delivery of fresh guava 1.75
ac 0.44
Chain partners have joint ventures / contract farming for the production of fresh guava 1.70
ac 0.47
Chain partners have agreement for open communication in production and marketing of fresh
guava 1.70
ac 0.57
Cutting edge technology
I use advanced technology for production of guava because it reduce the cost of cultivation 4.40
abc 0.50
Value Chain Analysis of Guava: Producer, Retailer and Consumer Perspectives
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Variables
Respondent Likert
Score
Mean
Standard
devia
tion
I use the advanced technology because it improves the quality of the guava and increases the marketing yield
of guava 4.50
ab 0.51
I use the advanced technologies as it reduces the transaction cost 4.45
ab 0.51
I use the advanced technology for packaging of fresh
guava as it reduces the losses during transportation
and storage 4.10
ac 0.55
I use information and communication technology for marketing of fresh guava as it reduces the time and
cost of marketing 4.50
ab 0.51
I use information and communication technology in order to improve quality and safety and understand
consumer needs and preferences for fresh guava 4.20
abc 0.52
Consumer insight
I use the recommended rate of fertilizers, insecticides, herbicides and growth promoters in production
process for guava in order to minimize health risk of
consumers
4.50ac
0.51
I follow national laws & regulations for production of guava in order to minimize health risk of consumers 4.00
b 0.56
I am aware of the quality and safety preferences of consumer for fresh guava 4.45
ac 0.51
I follow the appropriate storage, packaging and transportation for fresh guava 4.35
ac 0.49
I follow appropriate production techniques, storage
and packaging methods to ensure pleasant taste and
appearance and competitive price of fresh guava to
the consumers
4.40ac
0.50
I coordinate with various stakeholders of the supply chain of fresh guava for overall satisfaction of the
consumers 4.40
ac 0.68
Within the construct, the values followed by same letter in superscript have no significant
difference (p < 0.05)
The variables which are weak in the present value chain of guava in context of
producer perspective include food processing industry, export market, transparency,
collaboration, commitment and trust. The analysis on producers perspective revealed
that improving the status of the variables which are weak shall result in higher
producer profit, improve quality and safety, improve risk sharing among the chain
partners, provide competitive price to consumers as well as improve the overall
efficiency and sustainability of the existing value chain of guava (Kognt, 1988; Esty,
2004; Park et al., 2004; Mol, 2006; Zhao et al., 2007).
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3.2. Retailer Perspectives
The analysis of market infrastructure in context to retailer feedback revealed that
proper road connectivity, storage, cleaning, grading & packaging and banking
facilities are available in district and market premises for efficient marketing of
guava. However, credit facilities are not available and commission charges by
commission agent is unreasonable and high. The cooperative market do not exist in
the district and retailers have no access to supply fresh guava to supermarket. The
retailer feedback in context of transportation facilities revealed that transport agencies
are available in the district as well as in market premises and transportation charges
for fresh guava are reasonable. The governments, NGO’s and chain partners do not
provide transport facilities to retailers. Further, the cold chain facilities to transport
fresh guava to neighboring district / cities / states are not available (Table 2).
The results revealed that adequate normal and cold storage facilities for guava are
available in district / market premises. Government / chain partners does not provide
storage facilities to retailers. The retailers are not aware about national / international
norms and standards for storing guava. Food processing industries for processing of
fresh guava are available in district, but retailers have no access to supply fresh guava
to food processing industry. The analysis on export market revealed that retailers have
no access to export market, neither are they aware about the availability of export
facilities in the country / city / district. The analysis further revealed that retailers do
not receive information regarding export policies, storage, packaging and
transportation as well as quality and safety requirements of guava from government
agencies, NGO’s and chain partners. However, the retailers’ are aware about quality
and safety requirements of guava because they collect regular feedback from
consumers regarding their needs and preferences (Table 2).
The retailers’ feedback for material flow revealed that efficient road system,
loading and unloading facilities and cost effective transportation system are available
to transport fresh guava from farm to market and market to retail shop. However, cold
chain transportation system is not available to transport guava to retail shops. The
retailers’ feedback in context of transparency revealed that information provided by
chain partners regarding the marketing of guava is reliable and transparent. The
information regarding application of fertilizers, chemicals, pesticides, insecticides and
growth regulators for production of guava are not provided by the producers / chain
partners. Production process, profit sharing and risk sharing amongst the chain
partners are not transparent. The analysis in context to linkage revealed that retailers
do not provide agricultural inputs, production technology, transportation, storage and
financial loan to the producers for production and marketing of guava, but retailers
have access to purchase fresh guava directly from producer. Further, retailers do not
have access to supply fresh guava directly to supermarkets and food processing
industries, neither do they have direct linkage with producer. However, they have
direct and strong linkage with consumers (Table 2).
The retailer feedback in context to relationship revealed that retailers have cordial
and long term relationship with chain partners and consumers, but have poor relationship with government agencies, NGO’s, supermarkets and exporters for
transportation, storage and marketing of guava. The retailers did not have joint
business investment with producers, chain partners and processors. Moreover, the
collaborative activities such as supply of agricultural inputs to producer and sharing
information related to production process, jointly organizing promotional events and
sharing risk and benefits between retailers, producers, wholesalers, government
Value Chain Analysis of Guava: Producer, Retailer and Consumer Perspectives
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agencies and NGO’s are extremely weak. Financial institutions / banks have strong
commitment with retailers to provide financial loan to operate their business. Retailers
and chain partners have strong commitment and trust for open communication in
marketing of fresh guava. However, government agencies, NGO’s and chain partners
have no commitment and trust to provide information on national / international laws
and regulation related to production and marketing of guava. The chain partners have
no commitment with retailers to provide logistics to deliver guava to consumers
timely. The joint venture / contract farming between retailers and producers do not
exist in the current value chain of guava (Table 2).
The analysis revealed that retailers are utilizing available technologies for
transportation, packaging, storage and marketing of guava. The retailers are using
information and communication technologies such as mobile phone, internet,
electronic media etc. in order to understand consumers’ needs and preferences for
sensory, quality and safety attributes. Furthermore, government agencies and NGO’s
are not providing training to retailers for packaging, storage, transportation and
marketing of guava. The retailers are aware about regulation for storage, packaging
and transportation of guava in order to maintain nutritive value, appearance and taste
for overall satisfaction of the consumers. The analysis further revealed that retailers
coordinate with other chain partners to provide competitive price to the consumers
(Table 2).
Table 2 Value chain analysis of guava on retailer’s perspective, Kaushambi district, India
(Likert Scale: Strongly disagree = 1, disagree = 2, don’t know = 3, agree = 4, strongly agree
= 5)
Variables
Respondent Likert
Score
Mean
Standard
devia
tion
Market infrastructure
Proper road connectivity to transport fresh guava is available
4.60a 0.50
Storage, cleaning, grading and packaging facilities
are available 4.15
b 0.49
Market regulations imposed by the government are functional
2.70c 0.66
The commission charges by the commission agent is reasonable
2.40c 0.68
Proper banking facilities for financial transaction is available
4.55a 0.51
Credit, Cooperative marketing and super market facilities are available
1.65d 0.49
Transportation facilities
Transport agencies are available in district/city/farm 4.45a 0.51
Transportation charges are reasonable 4.20a 0.52
Hena Imtiyaz and Peeyush Soni
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Variables
Respondent Likert
Score
Mean
Standard
devia
tion
Adequate road facilities are available for efficient
transportation of the fresh guava 4.35
a 0.49
Cold chain transport facilities are available in
district/city/farm 1.85
b 0.67
Road tax for the transportation of fresh guava is reasonable
3.50c 0.61
Transportation facilities is provided by the government / NGOs / chain partners
1.55b 0.51
Pollution control certified vehicles used for transportation of fresh guava
2.50d 0.51
Storage facilities
Normal storage facilities are available 4.05a 0.51
Cold storage facilities are available 4.55b 0.51
Storage facilities are provide by Government / NGO’s
1.55c 0.51
Storage facilities are provide by chain partners 2.30d 0.80
Storage facilities are as per the national and
international norms and standards 2.80
e 0.41
I have my own storage facilities 3.90a 0.91
Processing industry
Guava processing industry / unit exist in my town / city / district / area
3.70a 0.47
The price paid by the guava processing industry / unit is good
2.55b 0.51
Order placed by the Industry / unit for fresh guava is honoured
2.75b 0.44
Proper storage and transport facilities are provided by
the guava processing industry / unit 2.75
b 0.44
Selling fresh guava to food processing industry / unit is more profitable
2.55b 0.51
Wastage of fresh guava is minimized due to the existence of food processing industry / units
2.50b 0.51
Export market
Export market for fresh guava is available in the
country 2.45
b
0.55
Export market for fresh guava is available in the district / city
2.65a
0.51
Selling fresh guava for export is more profitable 2.40b
0.77
Information regarding the export policies and 2.64a
0.60
Value Chain Analysis of Guava: Producer, Retailer and Consumer Perspectives
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Variables
Respondent Likert
Score
Mean
Standard
devia
tion
technical knowledge for production of export quality
guava are provided by govt. / NGOs / chain Partners
Information regarding quality and safety requirements / standards for fresh guava of importing countries is
provided by Govt. /NGO’s/ Chain partners/exporters
1.64b
0.73
Govt. /NGO’s/ Chain partners provides logistic support to move fresh guava to export market
1.55a
0.51
Small and marginal producers of guava have access to export market
1.45a
0.50
Information flow
Information related to marketing, supply and demand of guava is provided by Govt. / NGOs / Chain
partners / food processing industry
2.25a 0.64
Information on market price is provided by Govt. / NGOs / Chain partners / food processing industry
1.70b 0.47
Information on quality and safety requirements of
fresh guava is provided by Govt. / NGOs / Chain
partners / food processing industry / consumers
3.75c 0.44
Information regarding profit sharing among the chain
partners including producers is available 1.55
b 0.51
Information regarding transportation, storage and packaging of fresh guava is provided by Govt. /
NGOs / Chain partners / food processing industry
1.50b 0.51
Material flow
I am satisfied with quantity of fresh guava moved for
marketing 4.45
a 0.51
Road transportation system for transporting guava from farm / Mandi Samiti to market place is efficient
and cost effective
4.60a 0.50
Cold chain facilities for transportation of fresh guava from Farm / Mandi Samiti / market are available
1.65b 0.59
Loading and unloading facilities for fresh guava are available
3.80c 0.89
Proper road transportation system for transporting
fresh guava from Farm / Mandi Samiti to food
processing industry is available
4.45a 0.51
Transportation of fresh guava through rail transport
system is available 4.65
a 0.49
Transparency
Information provided by producer/chain partners is adequate, genuine, reliable and transparent
4.30a 0.57
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Variables
Respondent Likert
Score
Mean
Standard
devia
tion
Information regarding the application of fertilizers,
pesticides, insecticides and growth promoters is
available and transparent
1.85b 0.49
Information regarding the production process and
marketing of guava is available and transparent 1.90
b 0.55
Production process, transportation, packaging and marketing are traceable and verifiable
2.40c 0.50
Supply chain activities, profit sharing and risk sharing of chain partners are transparent
1.60b 0.50
Business activities of the chain partners are transparent
3.65d 0.49
Linkage
I provide agriculture inputs, new production technology, transportation facility and financial loan
to the producer
1.50a 0.51
I provide storage facilities to the producer 1.85a 0.67
I purchase guava directly from the producer 3.55b 0.76
I supply guava directly to supermarket/processing industries
1.60a 0.60
I supply guava directly consumers 4.55c 0.51
My strong linkage with producer helps me to offer competitive price of guava to the consumers and
reduces marketing cost considerably
1.65a 0.59
My direct linkage with producers and chain partners provide good quality guava to consumers
1.70a 0.47
Relationship
I am committed for long term relationship with producer Government
agencies/NGOs/processer/supermarket/exporters
1.60a 0.50
I am committed for long term relationship with financial institutions
1.70a 0.57
I am committed for long term relationship with chain partners
4.50b 0.51
I am committed for long term relationship with
consumers 4.70
b 0.47
I have joint investments with producers/chain
partners/processor 1.60
a 0.50
Mutual respect prevails in the chain starting from the producer to consumer
3.75c 0.55
Contractual agreements are flexible and informal rather than rigid
2.60d 0.50
Value Chain Analysis of Guava: Producer, Retailer and Consumer Perspectives
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Variables
Respondent Likert
Score
Mean
Standard
devia
tion
Collaboration
I have agreement with bank to provide loan for my business
4.50a 0.51
I have agreement with producer to supply agricultural inputs timely for production of guava
1.50b 0.51
I and producer/government agencies/NGO’s exchange relevant and accurate information related to
production process and marketing of guava
1.70b 0.47
I and producer/government agencies/NGO’s jointly
conduct the promotional events and search potential
markets for gauva
1.55b 0.51
I and producer/chain partners share risk and benefits associated with the production and marketing of
guava
1.65b 0.58
I and producer/chain partners share the knowledge and information regarding the forecast of supply &
demand and new technologies in production and
marketing of guava
2.15c 0.58
Commitment and trust
The financial institutions have commitment with me
to provide financial assistance timely in order to purchase guava
3.95a 0.60
Government agencies / NGO’s have commitment with me to update national and international laws &
regulations related to production and marketing of
guava
1.55bc
0.51
Wholesalers have commitment with me to provide appropriate and economic logistics for the timely
delivery of guava to consumer
1.65bc
0.59
I have commitment with producer for joint venture /contract farming for production and marketing of
guava
2.00c 0.65
I and supply chain partners have commitments for
open communication in marketing of guava 3.65
a 0.49
I have agreement to purchase guava from producer at actual wholesaler price
1.80bc
0.52
Cutting edge technology
I am using the advanced transportation and storage
system for fresh guava 4.50
a 0.51
Govt. agencies / NGO’s provide the training for
advanced technologies related to marketing of fresh
guava
1.65b 0.49
Hena Imtiyaz and Peeyush Soni
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Variables
Respondent Likert
Score
Mean
Standard
devia
tion
I am using the advanced packaging technologies for
fresh guava as it reduces the losses during
transportation and storage
4.30a 0.66
I am using information and communication
technology for marketing of fresh guava as it reduces
the time and cost of marketing
4.60a 0.50
I am using the advanced technologies for marketing in order to increase the quality and safety of fresh
guava
4.55a 0.51
I am using information and communication technology in order to understand consumer needs
and preferences for fresh guava
4.30a 0.47
Consumer insights
I am aware about the consumer preferences regarding production process of the guava
4.15a 0.67
I am aware about the recommended rate of fertilizers, insecticides, herbicides and growth promoters in
production process of guava in order to minimize
health risk of consumers
3.60b 0.50
I am following national and international laws & regulations for marketing and storage of guava in
order to minimize health risk of consumers
4.25a 0.72
I am following the appropriate storage and packaging
techniques transportation and maintaining the
nutritive value, appearance and taste of guava
4.45c 0.60
I coordinate with various stakeholders of the supply
chain of guava for overall satisfaction of the
consumers
4.35c 0.59
I always try provide competitive price to consumers for guava
4.40c 0.50
Within the construct, the values followed by same letter in superscript have no significant
difference (p < 0.05).
The variables which are weak in the current value chain of guava in context of
retailers’ perspective include food processing industry, export market, transparency,
linkage, relationship, collaboration and commitment and trust. The above mentioned
variables which have low significance / weak are important components of value
chain of guava.
Therefore, improving the status of above mentioned variables may improve the
existing value chain of fresh guava in Kaushambi district considerably as well as
provide high quality and guavas at a safe and competitive price to consumers (Kongt,
1988, Esty, 2004; Park et al., 2004; Mol, 2006 and Zhao et al., 2007).
Value Chain Analysis of Guava: Producer, Retailer and Consumer Perspectives
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3.3. Consumer Perspectives
The analysis in context to market infrastructure revealed that consumers are satisfied
with the availability of supermarkets, retail markets, local markets and street vendors
for purchasing guava and guava products. The consumer’s feedback on market
infrastructure revealed that good road connectivity to different markets as well as
public transport facilities are available. The analysis further revealed that consumers
are fully satisfied with availability of wide variety of fresh produce, promotional
offers and atmosphere at the market place. However, cooperative markets are not
available in the district. The consumers’ feedback in context of information and
material flow revealed that information on production process, application of
fertilizers, pesticides, insecticides and herbicides as well as information on quality,
safety and nutritive attributes of guava is not available to consumers. However,
information on price, promotional offers and shelf-life of guava and guava products is
readily available to consumers. The analysis revealed that consumers are fully
satisfied with supply and availability of fresh and processed guava products in the
market (Table 3).
The consumers’ feedback on transparency revealed that production process
including the application of fertilizers and chemicals, quality, safety and nutritive
value of guava and guava products are not transparent. The analysis further revealed
that processing techniques including the use of chemicals, colour and preservatives
and packaging quality are not transparent. However, price and shelf life of fresh
guava and guava products are highly transparent. The linkage / relationship between
consumers and producers, wholesalers and food processing industries is weak in the
current value chain of guava. However, consumers and retailers, as well as consumers
and supermarkets have strong direct linkage and relationship. This is due to the fact
that majority of retailers and supermarket officials conduct market surveys regarding
consumers’ needs and preferences in relation to price, quality, safety, packaging and
sensory attributes of fresh and processed guava products (Table 3).
The consumer feedback on commitment and trust revealed that retailers and
supermarkets have strong commitment to provide high quality and competitive price
to consumers for guava and guava products. The consumers have trust on retailers and
supermarkets to provide high quality, safe, nutritive and competitive pricing for
guava. However, producer and food processing industry have no commitment with
consumers to use appropriate technology for production, storage, transportation,
processing and packaging of guava and guava products. The analysis on consumers’
perception regarding the quality attributes of fresh and processed guava products
revealed that the most important determinants for purchasing fresh and processed
guava products are freshness / taste, followed by colour, nutritive value, appearance,
product information on packaging and texture. Further, the analysis revealed that
consumers gave least preference to aroma, packaging and brand name (Table 3).
The analysis on consumers’ perception regarding the safety attributes revealed
that guava and guava products should be free of pesticides, insecticides and
hormones. The analysis revealed that packaging was an important determinant for purchasing fresh and processed guava products. Consumers gave least importance to
the place of origin, way of production, environmental sustainability and storage while
purchasing fresh and processed guava products. The consumers perception regarding
the service rendered by supplier revealed that price, followed by behaviour of
supplier, promotion / discount, consumer attention, consumer support, store
atmosphere, brand availability, presentation and convenient packaging are important
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determinants to purchase fresh guava and processed guava products. The analysis
further revealed that consumers gave least importance / preference to credit facilities,
store timing, transaction time and recreation facilities. The overall results revealed
that amongst the determinants related to service rendered by supplier, the price of
fresh guava / processed guava products is the most important factor influencing the
purchasing decision of consumers (Table 3).
Table 3 Value chain analysis of guava on consumer perspective, Kaushambi district, India
(Likert Scale: Strongly disagree = 1, disagree = 2, don’t know = 3, agree = 4, strongly agree
= 5)
Variables
Respondent Likert
Score
Mean
Standard
devia
tion
Market infrastructure
Availability of supermarket 3.90ad
0.64
Availability of retail market 4.70b 0.47
Availability of cooperative market 1.50c 0.51
Availability of Local market 4.45b 0.51
Availability of street vender 4.60b 0.50
Good road connectivity to market 4.05ad
0.51
Availability of public transport to market 4.00ad
0.65
Availability of parking facilities at the market 2.75e 0.85
Availability of credit facilities at the market 1.55c 0.60
Availability of wide variety of fresh produce at the market
4.40bd
0.50
Promotional offers at the market 3.95ad
0.60
Atmosphere at the market 3.80ad
0.70
Information and material flow
Information on production process 1.55a 0.51
Information on fertilizers, pesticides, insecticides, herbicide and growth regulator
1.50a 0.51
Information on quality, safety and nutritive value 1.80a 0.62
Information on price 4.05b 0.51
Information on discount and promotional offers 4.10b 0.55
Information on shelf –life 4.10b 0.45
Regular supply to the market 4.45b 0.51
Availability of adequate quantity at the market 4.15b 0.67
Value Chain Analysis of Guava: Producer, Retailer and Consumer Perspectives
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Variables
Respondent Likert
Score
Mean
Standard
devia
tion
Transparency
Transparency in production process of guava 1.70a 0.57
Transparency in quality 2.35b 0.67
Transparency in safety 1.70a 0.66
Transparency in nutritive value of guava 2.15b 0.67
Transparency in price 4.00c 0.56
Transparency in processing technique 2.05ab
0.60
Transparency in packaging technology 2.00ab
0.73
Transparency in shelf life 3.65c 1.04
Linkage
Linkage between consumer and producer 1.75a 0.55
Linkage between consumer and wholesaler 1.75a 0.55
Linkage between consumer and retailer 4.55c 0.51
Linkage between consumer and processing industry 1.60a 0.50
Linkage between consumer and supermarket 4.30c 0.47
Relationship
Relationship between consumer and producer 1.70a 0.47
Relationship between consumer and wholesaler 1.75a 0.44
Relationship between consumer and retailer 4.40b 0.50
Relationship between consumer and processing industry
1.50a 0.51
Relationship between consumer and supermarket 4.30b 0.57
Commitment and trust
Commitment to provide high quality guava and guava products
3.60a 0.75
Commitment to provide safe guava and guava
products 3.50
a 0.69
Commitment to provide competitive price for guava
and guava products 3.45
b 0.69
Commitment to supply guava and guava products regularly
4.15c 0.59
Commitment to use appropriate and advanced technology for production, processing, transportation,
storage and packaging
1.85d 0.67
Hena Imtiyaz and Peeyush Soni
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Variables
Respondent Likert
Score
Mean
Standard
devia
tion
Consumer have trust on retailer and supermarket in
relation to quality, safety, nutritive value and price of
guava and guava products
3.95a 0.83
Consumer perception on quality of fresh guava /
processed guava products
Freshness 4.75a 0.44
Texture 3.40b 0.68
Appearance 4.10c 0.85
Taste 4.75a 0.44
Color 4.40ac
0.50
Aroma 2.55d 0.69
Nutritional value 4.40ac
0.50
Packaging 2.35d 0.67
Brand name 2.55d 0.69
Product information on packaging 3.85c 0.67
Consumer perception on safety of fresh
guava/processed guava products
Place of origin 2.05a 0.76
Way of production 2.20a 0.62
Free of hormones 4.65b 0.49
Free of insecticides 4.65b 0.49
Free of pesticides 4.70b 0.47
Environmentally sustainable 1.90a 0.64
Packaging 3.40c 0.73
Storage 2.50a 0.61
Consumer perception on services rendered by supplier
of fresh guava / processed guava products
Price 4.75a 0.44
Presentation 3.40b 0.60
Promotions / discount 4.25cf
0.64
Credit 2.60d 0.60
Behavior 4.45cf
0.51
Consumer support 3.85ef
0.49
Value Chain Analysis of Guava: Producer, Retailer and Consumer Perspectives
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Variables
Respondent Likert
Score
Mean
Standard
devia
tion
Store timing 2.85d 0.67
Transaction time 2.65d 0.67
Consumer attention 4.15cf
0.49
Store atmosphere 3.80ef
0.62
Recreation 2.45d 0.60
Convenient packaging 3.25b 0.79
Brand availability 3.60be
0.75
Within the construct, the values followed by same letter in superscript have no significant
difference (p < 0.05)
The overall analysis on consumer feedback revealed that market infrastructure,
information flow, material flow, linkage, commitment and trust are strong
components in the existing value chain of guava in Kaushambi / Allahabad District.
The analysis further revealed that transparency and relationship between consumers
and chain partners are weak in the existing value chain of guava. The analysis on
consumer perception revealed that consumer gives more emphasis / importance to
quality, nutritive value, safety, price and availability for purchasing fresh guava /
processed guava products in Kaushambi / Allahabad district (Table 3). Furthermore,
chain partners should evolve strategies to satisfy the consumers in terms of
transparency, relationship, linkage, commitment, trust, quality, safety, packaging,
price, services / convenience, etc. (Kongt, 1988, Esty, 2004; Park et al., 2004; Mol,
2006, Zhao et al., 200; Marugavel, 2010; Ariyawardana et al., 2012 and Hena and
Peeyush, 2014).
CONCLUSION
In order to accomplish the objectives of the present study, a comprehensive survey
was conducted during October, 2014 – February, 2015 in Kaushambhi district, India
to perform the value chain analysis to develop a sustainable value chain management
system for guava. The following conclusions are drawn from the present study.
The value chain analysis of guava on producers perspective revealed that
procurement and application of agricultural inputs, availability and adaptation of
technology, marketing infrastructure, material and information flow, linkage, cutting
edge technology and consumer insight are strong and efficient, whereas transparency,
collaboration, commitment and trust between producer, chain partner and government
agencies are weak / unsatisfactory.
The value chain analysis of guava on retailers’ perspective revealed that market
infrastructure, transportation services, material flow, information flow, cutting edge
technology, consumer insights, etc., are strong and efficient. However, food
processing industries, export market, transparency, linkage, etc. are not satisfactory in
the current value chain of guava.
The value chain analysis for guava in context of on consumers’ perspective /
feedback revealed that market infrastructure, information flow, materials flow,
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linkage, commitment and trust in existing value chain of guava are satisfactory.
However, transparency and relationship in existing value chain of guava are weak /
unsatisfactory. The consumer gives more emphasis / importance to quality, nutritive
value, safety and price as compared with packaging and service rendered for
purchasing fresh / processed guava products.
Finally, it may be concluded that variables which are weak in the existing value
chain of guava in Kaushambi district, India should be improved which shall result in
higher return to producer / farmer, improve quality and safety, improve risk sharing
among the chain partners, as well as improve overall efficiency and sustainability.
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