A comparative analysis of the pre-1996 marketing control board system and the post-1996 free market system, with reference to the South African fruit and vegetable industry

Norman, Grant (2009-03)

Thesis (MBA (Business Management))--University of Stellenbosch, 2009.

Thesis

ENGLISH ABSTRACT: This research report is a comparative analysis of the pre-1996 marketing control board system and the post-1996 free market system in the fruit and vegetable industry in South Africa. The report investigates and discusses the advantages and disadvantages of both systems and their effect on the stakeholders of the industry. The control boards had both positive and negative effects on the producer within the fruit and vegetable industry. The free market system is currently also having an effect, both positive and negative, on the producer. In this research report these divergent effects are explored, the objective being to obtain a better understanding of their impact on the industry stakeholders. On reaching a clearer understanding, strategy recommendations have been designed and are presented for all producers operating within the fruit and vegetable industry. The fresh produce industry is large, with many stakeholders. The information potentially available is vast, but, given the fact that time was too limited to do a complete research study on the entire industry, it was decided to focus on four sectors of the industry, namely bananas, deciduous fruit, citrus and potatoes. To give the report more credibility in terms of the data acquired, a number of interviews were conducted with producers and producer organisation leaders, from whom first-hand, ground level information was obtained. In this research it was found, among other things, that in general there was an imbalance in both the producer and consumer surplus in South Africa. Despite regulation, the marketing control boards had, through the pooling of prices, provided benefits only to certain producers. This, in effect, meant that quality improvement was largely negated, as the return to the producer did not provide an incentive to produce a better quality product. Contrary to the control board system, the free market system provides industry stakeholders with many opportunities, while the role of producers is also evolving to incorporate aspects of marketing. Producers consider service excellence, and culture and diversity to be important. Furthermore, in terms of available channels for marketing, many producers view the fresh produce markets as a desirable means of marketing their produce, as these outlets are still considered to be the price-determining mechanism for the fresh produce industry.

AFRIKAANSE OPSOMMING: Hierdie navorsingsverslag is 'n vergelykende studie van die bemarkingsbeheerraadstelsel voor 1996 en die vryemarkstelsel ná 1996 in die vrugte- en groentebedryf in Suid-Afrika. Die verslag ondersoek en bespreek die voor- en nadele van albei stelsels en hul uitwerking op die bedryf se belangegroepe. Die beheerrade het ’n positiewe sowel as negatiewe uitwerking op die produsent in die vrugte- en groentebedryf gehad. Die vryemarkstelsel het tans ook ’n positiewe sowel as negatiewe uitwerking op die produsent. Hierdie uiteenlopende gevolge word in hierdie navorsingsverslag verken om só ’n beter begrip van die impak daarvan op die bedryf se belanghebbers te verkry. Strategie-aanbevelings is op grond van groter begrip ontwerp en aan produsente in die vrugte- en groentebedryf voorgelê. Varsprodukte is die grootste bedryf in vrugte- en groentebedryf, en daar is talle belangegroepe. Die inligtingsmoontlikhede is enorm, maar gegewe die feit dat tyd te beperk was om ’n volledige navorsingstudie van die hele bedryf te onderneem, is daar besluit om vier sektore te beklemtoon, naamlik piesangs, sagtevrugte, sitrus en aartappels. Om die verslag meer geloofwaardigheid te gee ten opsigte van die data wat verkry is, is ’n aantal onderhoude met produsente en die leiers van produsentorganisasies gevoer om eerstehandse, voetsoolvlakinligting te bekom. Die verslag het onder meer bevind dat daar oor die algemeen ’n wanbalans in die produsente- sowel as verbruikersurplus in Suid-Afrika is. Die bemarkingsbeheerrade het ondanks regulasie voordele slegs aan sekere produsente gebied deur die saampot van pryse. Dit het in werklikheid beteken dat gehalteverbetering grootliks ontken is omdat die opbrengs nie die produsent aangespoor het om die gehalte van hul produkte te verbeter nie. Die vryemarkstelsel bied, in teenstelling met die beheerraadstelsel, talle geleenthede aan die bedryf se belangegroepe terwyl die rol van produsente ook ontwikkel word om aspekte van bemarking te inkorporeer. Produsente beskou voortreflike diens, en kultuur en diversiteit as belangrik. Daarby beskou produsente die varsproduktemark, wat een van die beskikbare bemarkingskanale is, as ’n wenslike manier om hul produkte te bemark omdat dié afsetpunt steeds as die prysbepalende meganisme vir die varsproduktebedryf gesien word.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/4579
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