Journal of Distribution Science (유통과학연구)

Korea Distribution Science Association (한국유통과학회)
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Impact of Marketer Capabilities and Marketer Persistence on Marketer Performance and Distribution of Agricultural Product Equipment: Evidence from East Java, Indonesia

  • Herry KRISTANTO (Faculty of Economics and Business, Brawijaya University) ;
  • Margono SETIAWAN (Faculty of Economics and Business, Brawijaya University) ;
  • Sunaryo (Faculty of Economics and Business, Brawijaya University) ;
  • Dodi Wirawan IRAWANTO (Faculty of Economics and Business, Brawijaya University)
  • Received : 2023.07.21
  • Accepted : 2023.09.05
  • Published : 2023.09.30
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Abstract

Purpose: The research aims at examining the impact of marketer capabilities and persistence on marketer performance and distribution of agricultural product facilities. Research design, data, and methodology: The research employs quantitative methods using a cross-sectional design survey by analyzing the marketer of agricultural production facilities. Sampling was done using the purposive sampling technique and data were taken from 235 respondents. The data were then processed using SEM-PLS. Results: The findings reveal that both marketer capabilities and marketer persistence significantly impact the performance of agricultural product facility marketers. Notably, marketer persistence exerts a more dominant influence on marketer performance than marketer capabilities. Effective communication and coordination between the sales team and the distribution center emerge as crucial factors determining the success of distributing agricultural equipment to reach farmers' land at the optimal time. Conclusions: The findings offer valuable managerial insights for agricultural product facility companies seeking to enhance marketer performance. To achieve this, companies should focus on increasing marketer persistence, with an emphasis on nurture-focused persistence rather than closure-focused persistence. Additionally, improving marketer capabilities is crucial, starting with relationship development, followed by trust building, customer retention, responsiveness, and acquisition. These strategies can collectively contribute to boosting marketer performance within the organization.

Keywords

1. Introduction

Current important challenges in the agricultural sector are extreme weather, pandemics, conflicts, the conversion of agricultural land into housing that is not in line with the demand for nutritious, fair, functional, and sustainable food needs (Fischer & Connor, 2018). To address the pace of population growth and consumption patterns in 2050, there is a need to increase 70% food stock. Actions directly related to the agricultural sector are one of the goals of the 17 Sustainable Development Goals (SDGs) launched by the United Nations (UN) (FAO, 2010).

To address the above issues, Romani et al. (2023) propose an AgroAPI platform and four Application Programming Interfaces (APIs) which aim to provide benefits to farmers, scientists, technicians from cooperatives, technical assistants, and rural extension institutions, and also the banking and insurance sectors. The AgroAPI platform can be a facility for companies engaged in the field of agricultural equipment and farmers to achieve better results. In addition to supporting farmers, ensuring access to modern agricultural equipment is vital for enhancing crop productivity and enabling farmers to manage their land effectively. The role of agricultural equipment marketers is vital for farmers in supporting their activities. Hence, this research seeks to examine how the performance of agriequipment marketers is influenced by capability and persistence in marketing agricultural equipment.

Indonesia's vast population of over 27 million farmer households necessitates an increased number of field workers or extension agents. These professionals play a crucial role in introducing agricultural tools, delivering training, offering counseling, and providing guidance to empower farmers to adopt modern agricultural techniques, ultimately boosting production and farmers' income. The marketer ability to influence farmers to use agricultural products and modern agricultural technology will boost agriculture effectiveness and efficiency, hence, it is expected to be able to encourage food self-sufficiency. However, the phenomenon shows that the level of adoption of modern agricultural technology by farmers has not been maximized resulting in low agricultural productivity. Sales and profitability growth has not been significant in the last five years.

Baldauf et al. (2002) define the marketer performance as an evaluation of the person's contribution in achieving specified organizational goals. However, the phenomenon shows that agricultural product marketers still use traditional business management and have limited capital. Their capacities in managing supply chains, warehousing, product introduction, and market creations are rudimentary. Consequently, the adoption of advanced production methods among farmers remains notably low. This can be seen from the average of agricultural production of leading commodities such as rice, corn and soybeans which is still low compared to the production results for the same commodities from developed countries.

The performance of a marketer is determined by the capabilities and in-depth knowledge of the products being marketed. As research from Barker (1999) reveals that the performance of salespeople can be measured based on the internal factors of the sales force and total sales and achievement of sales targets. The various efforts made by salespeople will have an impact on their individual performance (Piercy et al., 1998). As for the company, every salesperson has an obligation to implement a predetermined marketing strategy. Therefore, it is important for salespeople to have individual capabilities and persistence to achieve the set targets.

The results of research by Aqmala and Ardyan (2019), Rodriguez and Martins (2020), and Ahmad and Akbar (2020) show that the marketer capability can improve employee performance. In addition, Osibanjo et al. (2015) and Madhani (2014) show that employee performance is influenced by persistence. Based on the findings from Hoegl and Gemuenden (2001), there are six important aspects establishing teamwork quality, namely: communication, coordination, balance of member contribution; mutual support, effort, and cohesion. Based on this abovementioned issues and previous studies, this research seeks to examine the influence of marketer capabilities on the marketer performance of agricultural product facilities in East Java Indonesia and to investigate the influence of marketer persistence on the marketer performance of agricultural product facilities in East Java Indonesia. In addition, this research also explores key aspects of the success of agricultural equipment distribution to reach farmers' land at the right time when they are needed.

2. Literature Review

2.1. Marketer Capabilities

Employee capability is a pivotal factor significantly impacting company performance and has been shown to reflect employees' perceptions of knowledge, skills, experience, network, ability to achieve results, and potential for growth (Bontis & Serenko, 2007). Yi et al. (2021) measure individual sales capability with two indicators, namely: sales force management capabilities and personal selling capabilities. Cron et al. (2014) identify five marketer capabilities, namely new customer acquisition, customer trust building, responsiveness to customer needs, customer relationship development, and customer retention. These five constructs are complex knowledge-based processes. Maley (2018) summarizes that employee capabilities, on the other hand, are conceptualized not only as measurable patterns of knowledge and skills, but also abilities, behaviors, and other characteristics that distinguish high performance from average performance (Rodriguez et al., 2002). In this research, the marketer capability dimension refers to Cron et al. (2014) namely acquisition, trust building, responsiveness, responsiveness, relationship development, and customer retention.

2.2. Marketer Persistence

Research of Bommaraju and Sebastian (2018) portrays a conceptualization that persistence includes behavior and goal-directed behavior. From the behavioral perspective, persistence consists of behaviors associated with continued action over time that capture behavioral outcomes that develop over time. According to Allcott and Todd (2014), several conceptualizations of persistence from previous studies in several contexts, namely: self-employment persistence (Patel & Thatcher, 2014), entrepreneurial persistence (Holland & Shepherd, 2013), organizational employee persistence (Kovjanic et al., 2013), entrepreneur persistence (De Tienne et al., 2008), organizational employee persistence (Grant, 2008), organizational employee persistence (Illies et al., 2006), organizational employee persistence (Seo et al., 2004). In accordance, Allcott and Todd (2014) describe two types of persistence behavior and related tactics in the Sales Persistence Approach, namely:

1. Nurture-focused persistence; consists of three different types of tactics, which include: maintain contact, value-adding follow-up, and give them space.

2. Closure-focused persistence; which focuses on: probe, reframe offer, attempt close, and threaten break-up.

The above two dimensions by proposed by Allcott and Todd (2014) become a reference in measuring the marketer persistence.

2.3. Marketer Performance

Research from Baldauf et al. (2002) suggest that the marketer performance is an evaluation of the person's contribution in achieving stated organizational goals. According to Barker (1999) in Aqmala and Ardyan (2019), the performance of the salesperson can be evaluated using factors that can be controlled by the salesperson himself, and can be measured through the total sales volume and the achievement of sales targets. Empirically, there is an influence of orientation on performance, including the performance of salespeople Singh and Das (2013).

To measure employee performance based on Pradhan and Jena (2017): task performance, adaptive performance, contextual performance. Correspondingly, employee performance is also measured by firm/environment-related factors, job-related factors, employee-related factors (Diamantidis & Chatzoglou, 2019). Barker (1999) in Aqmala and Ardyan (2019) measures the performance of the sales force with the following measures: total sales volume and sales force achievement. Meanwhile, Ahmad and Akbar (2020) measured the performance of salespeople with the criteria: exceeding sales targets, generating high levels of sales, selling a wide variety of products, selling comparable to the best-performing salespeople in the group, and selling according to sales targets. Based on this research, the marketer performance is measured by dimensions referring to Ahmad and Akbar (2020).

2.4. Research Model and Hypothesis Development

Previous study from Aqmala and Ardyan (2019) report that customer intelligent response capabilities can improve sales staff performance. Rodriguez and Martins (2020) discover that personal capabilities and managerial capabilities resulted in different performance. Capability control has an influence on the marketer commitment (Lee et al., 2020). Moreover. Cheng (2014) shows sales training can boost sales performance. Lastly, a Ahmad and Akbar’s (2020) research finds out that that the creativity of sales people has a positive and significant effect on adaptive behavior and salesperson performance. Based on the findings of these studies, hypothesis 1 is formulated as follows:

H1: marketer capabilities affect the marketer performance.

The effect of persistence on salesperson depends more on the type of tactics the salesperson uses as well as on their level of political skill (Chaker et al., 2018). Previous study from Sangtani and Murshed (2017) signify that sales knowledge about the product affects the increase in salesperson performance. Based on the research findings, hypothesis 2 is formulated as follows:

H2: marketer persistence affects the marketer performance.

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Figure 1: Research Model

3. Research Methods and Materials

The research employs quantitative methods by carrying out cross sectional design survey. Cross sectional design survey is a survey in which the research sample is taken at one time (not continuous). By using marketers of agricultural production facilities as the unit of analysis, the population of this research was marketers of agricultural production facilities in East Java, with the unit of observation was marketer of agricultural production facilities in East Java Indonesia. The selected samples were marketer for agricultural production facilities in East Java Indonesia who have worked for at least two years in an agricultural production facility shop, who were selected using purposive sampling technique. The Likert scale was used to measure attitudes, opinions, and perceptions of people or groups of people about social phenomena to explain a construct, then the answers are added up (Ferdinand, 2014). Data were taken from 235 respondents. The marketers of agricultural production inputs in East Java were dominated by men. Out of a total of 235 marketers, 76.60% were male and the remaining 23.40% were female. Based on education level of most of the marketers is high school (76.17%). Only 34 marketers (14.47%) had undergraduate education background. In addition, there were still 22 marketing staff having background in junior high school education (9.36%). Most of the marketers (40.85%, n= 96 people) for agricultural product facilities in East Java were aged between 31-40 years. The remaining 68 people (28.94%) were aged 41-50 years, 44 people (18.72%) were between 21-30 years old, and there were 27 people aged over 50 years (11.49%). The demographic of respondents is presented in Table 1 below.

Table 1: Demographic of Respondent

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4. Results and Discussion

Partial least squares structural equation modeling (PLS-SEM) was selected to analyze the data because it minimizes sample size limitations and does not require normally distributed data, effectively handles models that include both formative and reflective measures, and makes no distributional assumptions (Hanseler et al., 2009). Moreover, a bootstrapping procedure with 5,000 samples was used to estimate the t-statistics (significance: t > 1.96) and the p values (significance: p <0.05) of the estimated loadings.

4.1. Evaluation Model

4.1.1. Outer Model

The measurement model (outer model) was assessed using reliability and validity. Second order confirmatory factor analysis (CFA) has been used to relationship between the manifest and latent variable. There are two types of validity in PLS-SEM, namely convergent validity and discriminant validity. Convergent validity means that a set of indicators represents one latent variable and that underlies the latent variable. This representation can be demonstrated through unidimensionality that can be expressed using the average variance extracted (AVE), in which the AVE value is at least 0.5. This value describes adequate convergent validity, which means that one latent variable is able to explain more than half of the variance of its indicators on average. The measurement of discriminant validity uses the criteria presented by Fornell-Larcker and “crossloadings”. The Fornell-Larcker postulate states that a latent variable shares more variance with the underlying indicator than with other latent variables. If this is interpreted statistically, then the AVE value of each latent variable must be greater than the highest R2 value with the other latent variable values.

Item have factor loadings exceeded 0.6 and latent variables presented CR values exceeding 0.70. The AVE of all factors exceeded 0.50 indicating an adequate convergent validity. All values exceeded those recommended by Hair et al. (2016) demonstrating adequate reliability. Figure 2 is the estimation result processed with SmartPLS v3.0 application.

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Figure 2: The Path Coefficient

Table 2: Validity and Reliability of Constructs

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Source: primary data from SmartPLS

Table 3 presents the square root of correlations among constructs for discriminant validity. The heterotrait-monotrait (HTMT) ratio of correlations and the Fornell-Larcker criterion were used to test discriminant validity (Hair et al., 2016; Henseler et al., 2009). The constructs' AVE exceeded the square correlations (i.e., Fornell-Larcker criterion), confirming an adequate discriminant validity.

Table 3: Discriminant Validity with Fornell-Larcker Criterion – Square Root of Average Variance Extracted

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Source: Primary data from SmartPLS

4.1.2. Inner Model

In the inner model, predictive relevance (Stone-Geisse's Q2 > 0.15) following Henseler et al. (2009) recommendations. The marketer performance as endogenous variable presented satisfactory R2 (0.468), Q2 (0.619) and GOF (0.640) in large criteria. Thus, the confirming model is an adequate fit.

4.2. Hypothesis Testing

In this research, to verify hypothesis H1, a structural equation model analysis was performed. Marketer capability has a significant positive effect on marketer performance with a t-statistic 3.932 more than 1.96 and a p-value less than 0.05 so that the hypothesis is accepted. For hypothesis H2 the results show that persistent marketers have a significant positive effect on marketer performance with a t-statistic value 7.090 more than 1.96 and a p-value of less than 0.005 so that the hypothesis is accepted. The results of hypothesis testing are presented in Table 4.

Table 4: Validity and Reliability of Constructs

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Based on Table 3, it is known that the R2 value is in the moderate category. R2 value = 0.468 (Hair et al., 2016; Henseler et al., 2009) indicate that the research model has an adequate fit. Based on these results it can be concluded that marketer performance is directly influenced by marketer capability and marketer persistence and marketer persistence has a greater influence.

The test results in Table 4 show the support hypotheses 1 and 2, which means that marketer capabilities and marketer persistence influence marketer performance. Based on the test results, the findings model is obtained as follows:

OTGHB7_2023_v21n9_35_f0003.png 이미지

Figure 3: Research Findings

Marketer persistence has a greater influence than marketer capabilities on marketer performance. Marketer performance is more dominantly built by marketer persistence than by marketer capabilities.

Marketer persistence is built on two dimensions, namely: nurture-focused persistence and closure-focused persistence (Chaker, 2016). Nurture-focused persistence refers to the ongoing pursuit of sales opportunities in the face of prospect rejection characterized by behavior aimed at establishing the basis for future exchanges with prospects. Closure-focused persistence refers to the continuous pursuit of sales opportunities in the face of prospect rejection characterized by behavior aimed at bringing the sales process to a conclusion. The critical point here is that sellers should persevere to gain a clear understanding of the prospect's genuine level of interest.

From the two dimensions of marketer persistence, closure-focused persistence is more dominant in influencing marketers’ performance than nurture-focused persistence. Closure-focused persistence is carried out using the following tactics: probe, reframe offer, attempt close, and threaten break-up. Based on the test results, it was revealed that the persistence focus was more profitable for agricultural product marketers in East Java compared to nurture-focused persistence which can be carried out by: maintaining contact, value-adding follow-up, and giving them space.

The marketer capabilities also affect the marketer performance. This proves that acquisition, trust building, responsiveness, relationship development, and customer retention (Cron et al., 2014) are able to shape the marketer performance. Of the five dimensions, the test results show that relationship development has a more dominant influence, followed by trust building, customer retention, responsiveness, and acquisition. According to Cron et al. (2014), relationship development is a process to expand economic relations between suppliers-customers by building personal relationships and networks within the customer organization; trust building is a process to earn, increase and maintain customer trust based on promise, honesty and expertise of sales personnel; customer retention is the process of maintaining highly durable customer relationships by providing priority customer retention, frequent customer contact, and an advanced CRM system; responsiveness to customer needs is the process of identifying the unique needs of individual customers and developing and implementing unique and effective options and solutions; and new customer acquisition is a process to find new customers effectively, including systems and processes to support prospecting.

The findings of this research are in line with the findings of Aqmala and Ardyan (2019), Rodriguez and Martins (2020), and Ahmad and Akbar (2020) which show the effect of capability on performance. Meanwhile, the phenomenon shows that there are problems related to the marketer capability. Marketer are limited in terms of capital and knowledge of modern agricultural technology. Marketer also have limitations in promotional abilities, and organizational capabilities.

Based on the results of observations and interviews, the delay in the delivery of agricultural production facilities was caused by a lack of communication and coordination between the sales team and the distribution center. The results of this research are in agreement with the findings of Křečková et al. (2017) that delays in the distribution of agricultural equipment are caused by a lack of communication between marketers and distribution centers. The absence of communication on delivery deadlines causes the equipment to arrive late at the farmer's land. Other issues arising were poor infrastructure of agricultural land, internal aspects of marketers, and low quality of road and bridge infrastructure, which led to delays in receiving agricultural equipment in farmers' fields.

5. Conclusions

Marketer capabilities and marketer persistence affect the performance of agricultural product marketers in East Java Indonesia. Marketer performance is more dominantly built by marketer persistence than marketer capabilities.

The findings of this research offer valuable managerial implications for agricultural product facilities. To enhance marketer performance, companies should prioritize building marketer persistence, particularly by fostering closure-focused persistence alongside nurture-focused persistence. Simultaneously, marketer capabilities can be enhanced through focusing on relationship development, trust building, customer retention, responsiveness, and acquisition.

To foster the efficiency of agricultural equipment distribution, particularly in East Java, there is a need to reinforce communication and coordination between marketers and distribution center. Additionally, precise delivery time should be a priority, taking into account the remote locations of agricultural land. Government attention to infrastructure, particularly improving roadways and bridges leading to agricultural fields, is essential. This investment can stimulate the agricultural sector, ultimately benefiting farmer welfare and promoting food self-sufficiency.

Future researchers can explore other variables driving marketer performance, including incentives and marketer satisfaction. By incorporating these variables, a more comprehensive understanding of factors influencing marketer performance in agricultural equipment can be obtained. It is also advisable to assess marketer performance in other sector beyond agriculture to generalize the findings and draw broader conclusions.

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