Relationship between brand and dealer loyalty in the agricultural equipment market

Abstract

Agricultural equipment companies intend to understand agriculture producers’ buying behavior by answering questions such as how loyal producers are to brands and dealers, which have an important impact on their profitability. This paper addresses the problem of how loyal agricultural producers are to equipment brands and dealers. Using a combination of cluster analysis and probit models, we identified producers’ behavioral and attitudinal loyalty to brands and dealers and analyzed the factors that explain such loyalty. We also found a strong interdependence between brand and dealer loyalty and the significant value that dealer loyalty adds to the brands. Additionally, we present some management implications of developing brand recognition, understanding producers purchasing behavior, and segmenting producers. This paper’s contributions are the establishment and measurement of an ‘empirical’ definition of brand and dealer loyalty, the identification and quantification of the impact of the explanatory factors of brand and dealer loyalty, and the determination of a dual loyalty relationship between brand and dealer loyalty.