Balancing the people, profit and planet dimensions in international marketing channels : a study on coordinating mechanisms in the Nile perch channel from Lake Victoria

Keywords: people, profit, planet, marketing channels, contracts, sustainability, quality,LakeVictoria, conjointanalysis.Sustainable development hinges on a combined focus of its impact on society (people), the environment (planet) and to its economic value (profit). Increasingly, it is being recognized that these people, profit and planet dimensions are interlinked and an important challenge for public and private policy is to take them jointly into account. This inter-linkage is particularly evident in international channels that build on scarce natural resources from developing countries, which is the focus of this thesis. Specifically, we focus on how international marketing channels can be organized in order to enhance the balance between the people, profit and planet dimensions of the sustainable development such that small-scale primary producers from developing economies are integrated into the international marketing channels in a way that adds to the profitability of the channel and the welfare of the local communities, without compromising the sustainability of natural resources. We focus on contracts as mechanism to stimulate welfare, sustainability and quality at primary stages of the channel. We apply a number of theoretical approaches namely transaction costs economics, social - and network theory, and property rights theory to develop and test arguments for contracts to stimulate sustainable and quality-enhancing practices. We undertook both case study and conjoint analysis to develop and test our arguments.A situational analysis of the context in which primary producers operate lead to a conclusion that primary producers (i.e., fishermen) fail to implement sustainable and quality-enhancing practices because of major bottlenecks that they face such as the degradation of natural resources (i.e., fisheries), limited access to production facilities, information asymmetries and ineffective enforcement. An empirical analysis at fishermen and middlemen levels shows that they are open to contracts as mechanisms to stimulate sustainable and quality-enhancing practices. This is true especially if such contracts provide production facilities, price information, bring fishermen closer to international channels and allow private policy enforcement of sustainable practices. However, both fishermen and middlemen have idiosyncratic preferences for the particular types of contracts. This implies that they should be offered a choice among different contracts. An analysis of channel members in the downstream part of the channel show that in order to create a situation in which fishermen and middlemen are engaged in sustainability and quality-enhancing contracts, downstream channel members and other stakeholders should be engaged in and/or support micro-projects that may enable fishermen to solve the market failures that they face. The channel members farther downstream however may need stakeholder pressure, e.g. from special interest groups to be involved in addressing the market failures in the upstream.