ABSTRACT
Previous academic research has examined how demographics of farmers and farm characteristics are associated with the adoption of digital tools; however, the transition of small agricultural businesses and farms into online grocery markets represents a critical adaptation in the evolving digital economy. This study investigates the role of specific marketing capabilities, product development, pricing, promotion, marketing channels, and marketing information systems (MIS), and dynamic capability in influencing small agricultural businesses' decisions to enter and expand their participation in online markets.
The study found that small agricultural businesses and farms with gross cash farm income below $250,000 already operating in online markets exhibit significantly higher levels of marketing capabilities compared to those restricted to traditional markets. The results of the analysis revealed that they assess their marketing capabilities when deciding whether or not they enter online markets and participate only when they perceive they possess the necessary capabilities—product development and distribution capabilities. Meanwhile, among the marketing capabilities, pricing, promotion, and MIS capabilities are the main drivers of the willingness to expand online participation, with dynamic capability amplifying the effects of pricing and MIS capabilities. The findings suggest that policymakers and/or agricultural extension programs develop tools to assess the marketing and dynamic capabilities of small agricultural businesses and farms to identify strengths and weaknesses and provide tailored education and training, enhancing their competitiveness and sustainability in the online markets.
Keywords
Online Grocery Market Entry Decision-Making, Marketing Capabilities, Dynamic Capabilities, Small Agricultural Businesses and Farms