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MASTER OF MANAGEMENT PROGRAM GADJAH MADA UNIVERSITY

2005

Series Number: ______ (please leave it blank)

Dear Sir / Madam.

I am a Master student at Master of Management Program of Gadjah Mada University. My master thesis is concerned with the current marketing channels of PT Pupuk Sriwidjaja. In order to collect the data required to complete my thesis requirements, I am surveying the performance of the current marketing and distribution channels of PT Pupuk Sriwidjaja.

I need your time and participation to fill in and answer to this questionnaire. Be assured that anonymity is guaranteed. Your statement and data will only be used for research purposes, and will be treated in strictly confidential manner.

Furthermore, please take a few minutes to complete the enclosed questionnaire by following the guidance provided in each section. Your cooperation is vital to this research effort and is highly appreciated

Thank you for your time and coordination.

Sincerely Yours,

Pinanditho Danuhadiningrat

SECTION I: RESPONDENT DATA (Only for research purposes)

Date : ………

Interviewer : ………

Gender:

Male Female Age:

Below 25 40 to 60

25 to 40 over 60

Highest Level of Education:

Diploma Elementary School

Bachelor Degree Junior High School

Master Degree or more

High School

(2)

Monthly Expenses:

IDR 3.000.001 – IDR 5.000.000 Below IDR 500.000

IDR 5.000.001 – IDR 10.000.000 IDR 500.001 – IDR 1.000.000

IDR 10.000.001 or more IDR 1.000.001 – IDR 3.000.000

SECTION II

FULFILLMENT GUIDANCE

Please choose one value from 1 to 7 (by using a checkmark Ο, √ or X) as the answer toward each following statements.

Scale Description : 1 = Strongly Disagree 2 = Disagree

3 = Somewhat Disagree 4 = Undecided

5 = Somewhat Agree 6 = Agree

7 = Strongly Agree SECTION II.1. PT PUSRI (PRODUCER)

No. Questions SD SA 1 2 3 4 5 6 7 A. Physical Possession

X1 PT PUSRI has sufficient storage facilities (e.g. warehouses).

The transportation and delivery system of PT PUSRI able to reach all distributors and end customers.

X2

PT PUSRI uses a sophisticated inventory management system (e.g.

FIFO system, standardized inventory management, computerized and online system).

X3

B. Ownership

Inventory carrying cost inside the current distribution channel is clear and standardized.

X4

PT PUSRI has the authority to control the product ownership of all members inside its distribution channel.

X5

The ownership mechanism inside the current distribution system is able to prevent product accumulation and / or product scarcity.

X6

C. Promotion

Publicities and promotional activities of PT PUSRI are able to increase awareness of the products being sold.

X7

Promotional activities of PT PUSRI are able to educate potential buyers about the products’ features and benefits.

X8

Promotional activities of PT PUSRI are able to persuade potential buyers to make purchases.

X9

All channel members are allowed to do the personal selling, advertising, and sales promotion according to their own needs &

conditions.

X10

(3)

No. Questions SD SA D. Negotiation

PT PUSRI has its own standard procedure in controlling the cost of personnel time (time cost).

X11

X12 PT PUSRI has the power to control other channel members.

The retailers and customers have the ability to buy from another supplier.

X13

E. Financing

Credit terms for all distribution channel members are fixed and standardized.

X14

There are certain terms and conditions of sale prevailed in the current distribution channel.

X15

The current distribution channel put the provision of credit in to effect to its customers.

X16

PT PUSRI has the ability to control the discount rate in its distribution lines from province distributors to end customers.

X17 F. Risking

To minimize the risk of price instability, the current distribution channel uses the price guarantee system for all channel members.

X18

The specified price guarantees lock in the producer and the distributors to a certain price.

X19

All products were packed in appropriate protective containers and distributed using proper transportation facilities.

X20

All fertilizer products are guaranteed for its quality, amount and content.

X21

During delivery and handling from the producer (PT PUSRI) to its end customer, all fertilizer products were protected by insurance.

X22

There is a replacement warranty and procedure for the defective or substandard products.

X23 G. Ordering

PT PUSRI uses an electronic data processor in handling its selling and ordering activities.

X24

X25 PT PUSRI has a standardized order processing procedures & costs.

The current ordering system is able to meet the needs of all channel members.

X26

There is certain rule of minimum order size and mix of products ordered for the distributor inside the distribution channel.

X27

(4)

No. Questions SD SA H. Payment

The term of payment is fixed for all members inside the distribution channel.

X28

The current payment system is suitable for all members inside the distribution channel.

X29

There is a valid debt collection system at the current distribution channel.

X30

There is a clear and standardized system for bad debt costs inside the distribution channel.

X31

SECTION II.2. PT PUSRI MARKETING UNIT (PROVINCE DISTRIBUTOR)

No. Questions SD SA 1 2 3 4 5 6 7 A. Physical Possession

The province distributor has sufficient storage facilities (e.g.

warehouses).

X32

The transportation and delivery system of province distributor able to reach all lower distributors and end customers.

X33

The province distributor uses a sophisticated inventory management system (e.g. FIFO system, standardized inventory management, computerized and online system).

X34

B. Ownership

Inventory carrying cost inside the current distribution channel is clear and standardized.

X35

The province distributor has the authority to control the product ownership of all members inside its distribution channel.

X36

The ownership mechanism inside the current distribution system is able to prevent product accumulation and / or product scarcity.

X37

C. Promotion

Publicities and promotional activities of the current distribution channel are able to increase awareness of the products being sold.

X38

Promotional activities of the current distribution channel are able to educate potential buyers about the products’ features and benefits.

X39

Promotional activities of the current distribution channel are able to persuade potential buyers to make purchases.

X40

All channel members are allowed to do the personal selling, advertising, and sales promotion according to their own needs &

conditions.

X41

(5)

No. Questions SD SA D. Negotiation

The province distributor has its own standard procedure in controlling the cost of personnel time (time cost).

X42

The province distributor has the power to control other channel members.

X43

The retailers and customers have the ability to buy from another supplier.

X44

E. Financing

Credit terms for all distribution channel members are fixed and standardized.

X45

There are certain terms and conditions of sale prevailed in the current distribution channel.

X46

The current distribution channel put the provision of credit in to effect to its customers.

X47

The province distributor has the ability to control the discount rate in its distribution lines from province distributors to end customers.

X48 F. Risking

To minimize the risk of price instability, the current distribution channel uses the price guarantee system for all channel members.

X49

All products were packed in appropriate protective containers and distributed using proper transportation facilities.

X50

All fertilizer products are guaranteed for its quality, amount and content.

X51

There are certain warranties in product handling and transportations from the distributor’s warehouses to the customers.

X52

During delivery and handling from the province distributor to its end customer, all fertilizer products were protected by insurance.

X53

There is a replacement warranty and procedure for the defective or substandard products.

X54 G. Ordering

The province distributor uses an electronic data processor in handling its selling and ordering activities.

X55

The province distributor has a standardized order processing procedures & costs.

X56

The current ordering system is able to meet the needs of all channel members.

X57

There is certain rule of minimum order size and mix of products ordered for the distributor inside the distribution channel.

X58

(6)

No. Questions SD SA H. Payment

The term of payment is fixed for all members inside the distribution channel.

X59

The current payment system is suitable for all members inside the distribution channel.

X60

There is a valid debt collection system at the current distribution channel.

X61

There is a clear and standardized system for bad debt costs inside the distribution channel.

X62

SECTION II.3. DISTRICT DISTRIBUTOR

No. Questions SD SA 1 2 3 4 5 6 7 A. Physical Possession

The district distributor has sufficient storage facilities (e.g.

warehouses).

X63

The transportation and delivery system of the district distributor able to reach all lower distributors and end customers.

X64

The district distributor uses a sophisticated inventory management system (e.g. FIFO system, standardized inventory management, computerized and online system).

X65

B. Ownership

Inventory carrying cost inside the current distribution channel is clear and standardized.

X66

The district distributor has the authority to control the product ownership of all members inside its distribution channel.

X67

The ownership mechanism inside the current distribution system is able to prevent product accumulation and / or product scarcity.

X68

C. Promotion

Publicities and promotional activities of the district distributor are able to increase awareness of the products being sold.

X69

Promotional activities of the district distributor are able to educate potential buyers about the products’ features and benefits.

X70

Promotional activities of the district distributor are able to persuade potential buyers to make purchases.

X71

All channel members are allowed to do the personal selling, advertising, and sales promotion according to their own needs &

conditions.

X72

(7)

No. Questions SD SA D. Negotiation

The district distributor has its own standard procedure in controlling the cost of personnel time (time cost).

X73

The district distributor has the power to control other channel members.

X74

The retailers and customers have the ability to buy from another supplier.

X75

E. Financing

Credit terms for all distribution channel members are fixed and standardized.

X76

There are certain terms and conditions of sale prevailed in the current distribution channel.

X77

The current distribution channel put the provision of credit in to effect to its customers.

X78

The district distributor has the ability to control the discount rate in its distribution lines from province distributors to end customers.

X79 F. Risking

To minimize the risk of price instability, the current distribution channel uses the price guarantee system for all channel members.

X80

All products were packed in appropriate protective containers and distributed using proper transportation facilities.

X81

All fertilizer products are guaranteed for its quality, amount and content.

X82

There are certain warranties in product handling and transportations from the distributor’s warehouses to the customers.

X83

During delivery and handling from the district distributor to its end customer, all fertilizer products were protected by insurance.

X84

There is a replacement warranty and procedure for the defective or substandard products.

X85 G. Ordering

The district distributor uses an electronic data processor in handling its selling and ordering activities.

X86

The district distributor has a standardized order processing procedures

& costs.

X87

The current ordering system is able to meet the needs of all channel members.

X88

There is certain rule of minimum order size and mix of products ordered for the distributor inside the distribution channel.

X89

(8)

No. Questions SD SA H. Payment

The term of payment is fixed for all members inside the distribution channel.

X90

The current payment system is suitable for all members inside the distribution channel.

X91

There is a valid debt collection system at the current distribution channel.

X92

There is a clear and standardized system for bad debt costs inside the distribution channel.

X93

SECTION II.4. VILLAGE AGENT

No. Questions SD SA 1 2 3 4 5 6 7 A. Physical Possession

X94 The village agent has sufficient storage facilities (e.g. warehouses).

The transportation and delivery system of the village agent able to reach its end customers.

X95

The village agent uses a sufficient inventory management system (e.g.

FIFO system, standardized inventory management, computerized and online system).

X96

B. Ownership

Inventory carrying cost inside the current distribution channel is clear and standardized.

X97

The village agent has the authority to control the product ownership of all lower members inside its distribution channel.

X98

The ownership mechanism inside the current distribution system is able to prevent product accumulation and / or product scarcity.

X99

C. Promotion

Publicities and promotional activities of the village agent are able to increase awareness of the products being sold.

X100

Promotional activities of the village agent are able to educate potential buyers about the products’ features and benefits.

X101

Promotional activities of the village agent are able to persuade potential buyers to make purchases.

X102

All channel members are allowed to do the personal selling, advertising, and sales promotion according to their own needs &

conditions.

X103

(9)

No. Questions SD SA D. Negotiation

The village agent has its own standard procedure in controlling the cost of personnel time (time cost).

X104

X105 The village agent has the power to control other channel members.

The village agent and customers have the ability to buy from another supplier.

X106 E. Financing

Credit terms for all distribution channel members are fixed and standardized.

X107

There are certain terms and conditions of sale prevailed in the current distribution channel.

X108

The current distribution channel put the provision of credit in to effect to its customers.

X109

The village agent has the ability to control the discount rate in its distribution lines from province distributors to end customers.

X110 F. Risking

To minimize the risk of price instability, the current distribution channel uses the price guarantee system for all channel members.

X111

All products were packed in appropriate protective containers and distributed using proper transportation facilities.

X112

All fertilizer products are guaranteed for its quality, amount and content.

X113

There are certain warranties in product handling and transportations from the distributor’s warehouses to the customers.

X114

During delivery and handling from the village agent to its end customer, all fertilizer products were protected by insurance.

X115

There is a replacement warranty and procedure for the defective or substandard products.

X116 G. Ordering

The village agent uses an electronic data processor in handling its selling and ordering activities.

X117

The village agent has a standardized order processing procedures &

costs.

X118

The current ordering system is able to meet the needs of all channel members.

X119

There is certain rule of minimum order size and mix of products ordered for the distributor inside the distribution channel.

X120

(10)

No. Questions SD SA H. Payment

The term of payment is fixed for all members inside the distribution channel.

X121

The current payment system is suitable for all members inside the distribution channel.

X122

There is a valid debt collection system at the current distribution channel.

X123

There is a clear and standardized system for bad debt costs inside the distribution channel.

X124

SECTION II.5. FARMERS

No. Questions SD SA 1 2 3 4 5 6 7 A. Product Availability

X125 Fertilizer products are available at all time for the farmers.

X126 The scarcity of fertilizers is rarely happen.

X127 There has never been oversupply for fertilizer products.

B. Product Range

Farmers are always able to get a complete range of fertilizer products they need.

X128

For every unavailable product, there is always a substitution provided for the farmers.

X129 C. Pricing

Fertilizer products are available at the affordable prices for the farmers.

X130

X131 There is no price discrimination between certain fertilizer products.

X132 There is no price discrimination between one location to another.

The government subsidies on fertilizers’ prices are able to reach the farmers.

X133 D. Delivery

X134 Fertilizer products are distributed to the farmers on time.

The transportation system is sufficient to distribute the fertilizer products to the end user (farmers).

X135

E. Satisfaction

The current fertilizers’ distribution channel is able to meet the end users’ (farmers) needs.

X136

The current fertilizer distribution system delivers value for the money paid by the customers (farmers).

X137

Customers (farmers) are satisfied with the current fertilizer distribution system.

X138

(11)

No. Questions SD SA F. Trust

The current fertilizer distribution system is open and accessible for its channel members and customers (farmers).

X139

The channel members inside the current fertilizer distribution system are knowledgeable about the products.

X140

In difficult times, the channel members inside the current fertilizer distribution system will support the customers (farmers).

X141

X142 The current fertilizer distribution system is reliable.

F. Commitment

Customers (farmers) are constantly looking for another distributor to buy fertilizer materials from (R)

X143

Customers (farmers) have a good relationship with this distributor and want to keep buying from them.

X144

Customers (farmers) will continue buying fertilizers from the current distributor.

X145

The quantity of fertilizer bought from this distributor will grow in the coming years.

X146

SECTION II.6. GOVERNMENT POLICIES

No. Questions SD SA 1 2 3 4 5 6 7 A. Market Coverage Policies

PT PUSRI is responsible for the subsidized fertilizer supply inside its distribution channel, from Line 1 to Line 4 in its territory.

X147

If PT PUSRI failed to supply an adequate amount of fertilizer to its territory, it is possible for PT PUSRI to conduct an operational cooperation with other producer to fulfill the needs.

X148

The government determined the responsible supplier that responsible for its area of distribution and also the distribution channel system for all regions.

X149

There government applies territorial restrictions to limit the number of distributor inside the distribution channel.

X150

The channel members are free to sell outside its area of primary responsibility, and other wholesalers or retailers may sell in its territory.

X151

(12)

No. Questions SD SA B. Customer Coverage Policies

The government controlled supply and distribution mechanisms of subsidized fertilizers.

X152

The current distribution channel system is able to meet the customers’

needs.

X153

The current distribution channel system allows its channel members to distribute fertilizers to other regions, as long as they have enough capacity.

X154

The government regulations about current distribution channel system are able to keep all of its channel members and customers in control.

X155

The current distribution channel system allows the distributors to sell fertilizer products to other distribution lines outside its own level.

X156

C. Pricing Policies

The government has the authority to do the price maintenance and control over fertilizer products (especially for subsidized fertilizers).

X157

The government put several price discriminations into effect inside the current distribution channel.

X158

The government has the authority to control the subsidized fertilizer prices by establishing the ceiling price for certain products.

X159

D. Product Line Policies

The distribution channel members are subjected to exclusive dealing, which means they only allowed to sell certain fertilizer products.

X160

The current distribution channel intermediaries conduct tying policies to lock in the purchase of the supplier-specific brand and lock out the purchase of directly competing product or brands.

X161

To obtain one or several items, the distributors and customers must buy the entire line of fertilizer items (full-line forcing).

X162

Only limited channel members allowed to sell certain vital and major fertilizer products, whereas less important products can be sold through all distribution channel members (designated product policies).

X163

E. Selection and Termination Policies

All channel members can select their own distributors according to their own criteria and judgment.

X164

The selection and termination policies of channel members had influenced the overall performance of the distribution channel.

X165

Failure to meet performance targets may result in termination of the channel membership.

X166

Distributors’ refusal to deal with certain channel member is allowable under strictly controlled conditions.

X167

(13)

No. Questions SD SA F. Ownership Policies

Vertical integration by merger between the current distribution channel members will foreclose competitors by limiting their access to sources of supply or to customers.

X168

In order to prevent monopoly or attempts to monopolize, vertical integration by internal expansion inside the distribution channel is limited by laws.

X169

The distribution channel is free to set up its own supply, distribution, or retailing system unless this would overconcentrate the market for its product.

X170

Vertical integration, whether by merger or internal expansion, may result in the lowering of costs and make possible more effective interorganizational management of the distribution channel.

X171

The current distribution channel is integrated and free to control prices and allocate products to its integrated distributors or outlets, without conflict with the laws governing restrictive distribution policies.

X172

The current distribution channel reaches its final markets by employing two or more different types of channels for the same basic product.

X173

The manufacturer (PT PUSRI) sells similar products under different brand names for distribution through different channels (for different market segments and sales to distributors under private labels).

X174

Thank you for your time and cooperation in fulfilling the above questionnaire.

(14)

Table A.1.

Measurement Results of Anti-Image Correlation Matrices and Construct Variable Validity

“Performance of PT PUSRI”

Variable Indicator MSA Factor

Loading

Result PT PUSRI has sufficient storage facilities (e.g. warehouses). 0.727 0.885 Valid

The transportation and delivery system of PT PUSRI able to reach all distributors and end customers.

0.708 0.895 Valid Physical

Possession (KMO-MSA

= 0.732) PT PUSRI uses a sophisticated inventory management system (e.g. FIFO system, standardized inventory management, computerized and online system).

0.765 0.868 Valid Inventory carrying cost inside the current distribution channel is clear and standardized. 0.631 0.727 Valid PT PUSRI has the authority to control the product ownership of all members inside its

distribution channel.

0.596 0.787 Valid Ownership

(KMO-MSA

= 0.622)

The ownership mechanism inside the current distribution system is able to prevent product accumulation and / or product scarcity.

0.650 0.705 Valid Publicities and promotional activities of PT PUSRI are able to increase awareness of the

products being sold.

0.766 0.993 Valid Promotion

Promotional activities of PT PUSRI are able to educate potential buyers about the products’ features and benefits.

0.946 0.991 Valid (KMO-MSA

= 0.840 )

Promotional activities of PT PUSRI are able to persuade potential buyers to make purchases.

0.997 0.929 Valid All channel members are allowed to do the personal selling, advertising, and sales

promotion according to their own needs & conditions.

0.733 0.993 Valid PT PUSRI has its own standard procedure in controlling the cost of personnel time (time

cost).

0.992 0.875 Valid Negotiation

PT PUSRI has the power to control other channel members. 0.609 0.976 Valid (KMO-MSA

= 0.678)

The retailers and customers have the ability to buy from another supplier. 0.609 0.976 Valid Credit terms for all distribution channel members are fixed and standardized. 0.832 0.897 Valid There are certain terms and conditions of sale prevailed in the current distribution

channel.

0.845 0.886 Valid Financing

The current distribution channel put the provision of credit in to effect to its customers. 0.864 0.873 Valid (KMO-MSA

= 0.850)

PT PUSRI has the ability to control the discount rate in its distribution lines from province distributors to end customers.

0.859 0.880 Valid To minimize the risk of price instability, the current distribution channel uses the price

guarantee system for all channel members.

0.876 0.893 Valid Risking

The specified price guarantees lock in the producer and the distributors to a certain price. 0.884 0.848 Valid All products were packed in appropriate protective containers and distributed using

proper transportation facilities.

0.898 0.883 Valid (KMO-MSA

= 0.879)

All fertilizer products are guaranteed for its quality, amount and content. 0.912 0.742 Valid During delivery and handling from the producer (PT PUSRI) to its end customer, all

fertilizer products were protected by insurance.

0.900 0.797 Valid There is a replacement warranty and procedure for the defective or substandard products. 0.828 0.905 Valid PT PUSRI uses an electronic data processor in handling its selling and ordering

activities.

0.842 0.821 Valid Ordering

PT PUSRI has a standardized order processing procedures & costs. 0.850 0.807 Valid The current ordering system is able to meet the needs of all channel members. 0.828 0.841 Valid (KMO-MSA

= 0.800)

There is certain rule of minimum order size and mix of products ordered for the distributor inside the distribution channel.

0.724 0.921 Valid The term of payment is fixed for all members inside the distribution channel. 0.840 0.855 Valid The current payment system is suitable for all members inside the distribution channel. 0.848 0.908 Valid Payment

There is a valid debt collection system at the current distribution channel. 0.834 0.855 Valid (KMO-MSA

= 0.822)

There is a clear and standardized system for bad debt costs inside the distribution channel.

0.778 0.934 Valid

(15)

Table A.2.

Measurement Results of Anti-Image Correlation Matrices and Construct Variable Validity

“Performance of Province Distributor”

Variable Indicator MSA Factor

Loading

Result

The province distributor has sufficient storage facilities (e.g. warehouses). 0.706 0.853 Valid The transportation and delivery system of province distributor able to reach all lower

distributors and end customers.

0.737 0.835 Valid Physical

Possession (KMO-MSA

= 0.712) The province distributor uses a sophisticated inventory management system (e.g. FIFO system, standardized inventory management, computerized and online system).

0.695 0.860 Valid Inventory carrying cost inside the current distribution channel is clear and standardized. 0.595 0.960 Valid The province distributor has the authority to control the product ownership of all

members inside its distribution channel.

0.692 0.887 Valid Ownership

(KMO-MSA

= 0.652)

The ownership mechanism inside the current distribution system is able to prevent product accumulation and / or product scarcity.

0.696 0.885 Valid Publicities and promotional activities of the current distribution channel are able to

increase awareness of the products being sold.

0.858 0.755 Valid Promotion

Promotional activities of the current distribution channel are able to educate potential buyers about the products’ features and benefits.

0.805 0.875 Valid (KMO-MSA

= 0.809)

Promotional activities of the current distribution channel are able to persuade potential buyers to make purchases.

0.826 0.866 Valid All channel members are allowed to do the personal selling, advertising, and sales

promotion according to their own needs & conditions.

0.770 0.910 Valid The province distributor has its own standard procedure in controlling the cost of

personnel time (time cost).

0.839 0.922 Valid Negotiation

The province distributor has the power to control other channel members. 0.724 0.949 Valid (KMO-MSA

= 0.757)

The retailers and customers have the ability to buy from another supplier. 0.723 0.949 Valid Credit terms for all distribution channel members are fixed and standardized. 0.903 0.937 Valid There are certain terms and conditions of sale prevailed in the current distribution

channel.

0.873 0.959 Valid Financing

The current distribution channel put the provision of credit in to effect to its customers. 0.885 0.962 Valid (KMO-MSA

= 0.866)

The province distributor has the ability to control the discount rate in its distribution lines from province distributors to end customers.

0.813 0.977 Valid To minimize the risk of price instability, the current distribution channel uses the price

guarantee system for all channel members.

0.762 0.914 Valid Risking

All products were packed in appropriate protective containers and distributed using proper transportation facilities.

0.759 0.914 Valid (KMO-MSA

= 0.830)

All fertilizer products are guaranteed for its quality, amount and content. 0.901 0.858 Valid There are certain warranties in product handling and transportations from the

distributor’s warehouses to the customers.

0.824 0.905 During delivery and handling from the province distributor to its end customer, all

fertilizer products were protected by insurance.

0.848 0.929 Valid There is a replacement warranty and procedure for the defective or substandard

products.

0.929 0.883 Valid The province distributor uses an electronic data processor in handling its selling and

ordering activities.

0.545 0.786 Valid Ordering

The province distributor has a standardized order processing procedures & costs. 0.559 0.822 Valid The current ordering system is able to meet the needs of all channel members. 0.567 0.719 Valid (KMO-MSA

= 0.562)

There is certain rule of minimum order size and mix of products ordered for the distributor inside the distribution channel.

0.584 0.733 Valid The term of payment is fixed for all members inside the distribution channel. 0.758 0.916 Valid The current payment system is suitable for all members inside the distribution channel. 0.806 0.736 Valid Payment

(KMO-MSA

= 0.786)

(16)

Table A.3.

Measurement Results of Anti-Image Correlation Matrices and Construct Variable Validity

“Performance of District Distributor”

Variable Indicator MSA Factor

Loading

Result The district distributor has sufficient storage facilities (e.g. warehouses). 0.664 0.866 Valid The transportation and delivery system of the district distributor able to reach all lower

distributors and end customers.

0.774 0.798 Valid Physical

Possession (KMO-MSA

= 0.693) The district distributor uses a sophisticated inventory management system (e.g. FIFO system, standardized inventory management, computerized and online system).

0.668 0.863 Valid Inventory carrying cost inside the current distribution channel is clear and standardized. 0.712 0.846 Valid The district distributor has the authority to control the product ownership of all members

inside its distribution channel.

0.680 0.868 Valid Ownership

(KMO-MSA

= 0.708)

The ownership mechanism inside the current distribution system is able to prevent product accumulation and / or product scarcity.

0.738 0.831 Valid Publicities and promotional activities of the district distributor are able to increase

awareness of the products being sold.

0.794 0.944 Valid Promotion

Promotional activities of the district distributor are able to educate potential buyers about the products’ features and benefits.

0.836 0.928 Valid (KMO-MSA

= 0.822)

Promotional activities of the district distributor are able to persuade potential buyers to make purchases.

0.817 0.897 Valid All channel members are allowed to do the personal selling, advertising, and sales

promotion according to their own needs & conditions.

0.851 0.836 Valid The district distributor has its own standard procedure in controlling the cost of

personnel time (time cost).

0.621 0.971 Valid Negotiation

The district distributor has the power to control other channel members. 0.728 0.925 Valid (KMO-MSA

= 0.689)

The retailers and customers have the ability to buy from another supplier. 0.744 0.920 Valid Credit terms for all distribution channel members are fixed and standardized. 0.817 0.763 Valid There are certain terms and conditions of sale prevailed in the current distribution

channel.

0.815 0.821 Valid Financing

The current distribution channel put the provision of credit in to effect to its customers. 0.830 0.819 Valid (KMO-MSA

= 0.788)

The district distributor has the ability to control the discount rate in its distribution lines from province distributors to end customers.

0.725 0.903 Valid To minimize the risk of price instability, the current distribution channel uses the price

guarantee system for all channel members.

0.942 0.741 Valid Risking

All products were packed in appropriate protective containers and distributed using proper transportation facilities.

0.900 0.883 Valid (KMO-MSA

= 0.908)

All fertilizer products are guaranteed for its quality, amount and content. 0.921 0.799 Valid There are certain warranties in product handling and transportations from the

distributor’s warehouses to the customers.

0.885 0.893 During delivery and handling from the district distributor to its end customer, all

fertilizer products were protected by insurance.

0.896 0.881 Valid There is a replacement warranty and procedure for the defective or substandard

products.

0.924 0.773 Valid The district distributor uses an electronic data processor in handling its selling and

ordering activities.

0.747 0.898 Valid Ordering

The district distributor has a standardized order processing procedures & costs. 0.744 0.876 Valid The current ordering system is able to meet the needs of all channel members. 0.787 0.877 Valid (KMO-MSA

= 0.763)

There is certain rule of minimum order size and mix of products ordered for the distributor inside the distribution channel.

0.776 0.860 Valid The term of payment is fixed for all members inside the distribution channel. 0.777 0.943 Valid The current payment system is suitable for all members inside the distribution channel. 0.836 0.872 Valid Payment

There is a valid debt collection system at the current distribution channel. 0.856 0.917 Valid (KMO-MSA

= 0.824)

There is a clear and standardized system for bad debt costs inside the distribution channel. 0.837 0.863 Valid

(17)

Table A.4.

Measurement Results of Anti-Image Correlation Matrices and Construct Variable Validity

“Performance of Village Agent”

Variable Indicator MSA Factor

Loading

Result The village agent has sufficient storage facilities (e.g. warehouses). 0.803 0.877 Valid The transportation and delivery system of the village agent able to reach all lower

distributors and end customers.

0.724 0.906 Valid Physical

Possession (KMO-MSA

= 0.727) The village agent uses a sophisticated inventory management system (e.g. FIFO system, standardized inventory management, computerized and online system).

0.675 0.930 Valid Inventory carrying cost inside the current distribution channel is clear and standardized. 0.860 0.798 Valid The village agent has the authority to control the product ownership of all members

inside its distribution channel.

0.639 0.909 Valid Ownership

(KMO-MSA

= 0.680)

The ownership mechanism inside the current distribution system is able to prevent product accumulation and / or product scarcity.

0.632 0.916 Valid Publicities and promotional activities of the village agent are able to increase awareness

of the products being sold.

0.830 0.896 Valid Promotion

Promotional activities of the village agent are able to educate potential buyers about the products’ features and benefits.

0.843 0.884 Valid (KMO-MSA

= 0.848)

Promotional activities of the village agent are able to persuade potential buyers to make purchases.

0.862 0.872 Valid All channel members are allowed to do the personal selling, advertising, and sales

promotion according to their own needs & conditions.

0.857 0.880 Valid The village agent has its own standard procedure in controlling the cost of personnel time

(time cost).

0.724 0.903 Valid Negotiation

The village agent has the power to control other channel members. 0.767 0.885 Valid (KMO-MSA

= 0.741)

The village agent and customers have the ability to buy from another supplier. 0.736 0.898 Valid Credit terms for all distribution channel members are fixed and standardized. 0.817 0.760 Valid There are certain terms and conditions of sale prevailed in the current distribution

channel.

0.725 0.903 Valid Financing

The current distribution channel put the provision of credit in to effect to its customers. 0.840 0.831 Valid (KMO-MSA

= 0.784)

The village agent has the ability to control the discount rate in its distribution lines from province distributors to end customers.

0.789 0.814 Valid To minimize the risk of price instability, the current distribution channel uses the price

guarantee system for all channel members.

0.755 0.734 Valid Risking

All products were packed in appropriate protective containers and distributed using proper transportation facilities.

0.771 0.779 Valid (KMO-MSA

= 0.824)

All fertilizer products are guaranteed for its quality, amount and content. 0.862 0.830 Valid There are certain warranties in product handling and transportations from the

distributor’s warehouses to the customers.

0.849 0.859 During delivery and handling from the village agent to its end customer, all fertilizer

products were protected by insurance.

0.846 0.855 Valid There is a replacement warranty and procedure for the defective or substandard products. 0.856 0.753 Valid The village agent uses an electronic data processor in handling its selling and ordering

activities.

0.789 0.807 Valid Ordering

The village agent has a standardized order processing procedures & costs. 0.765 0.864 Valid The current ordering system is able to meet the needs of all channel members. 0.820 0.779 Valid (KMO-MSA

= 0.794)

There is certain rule of minimum order size and mix of products ordered for the distributor inside the distribution channel.

0.810 0.836 Valid The term of payment is fixed for all members inside the distribution channel. 0.749 0.924 Valid The current payment system is suitable for all members inside the distribution channel. 0.812 0.808 Valid Payment

There is a valid debt collection system at the current distribution channel. 0.838 0.885 Valid (KMO-MSA

= 0.800)

(18)

Table A.5.

Measurement Results of Anti-Image Correlation Matrices and Construct Variable Validity

“Evaluation of Farmers”

Variable Indicator MSA Factor

Loading

Result Fertilizer products are available at all time for the farmers. 0.743 0.905 Valid The scarcity of fertilizers is rarely happen. 0.767 0.896 Valid Product

Availability (KMO-MSA = 0.747)

There has never been oversupply for fertilizer products. 0.733 0.909 Valid Farmers are always able to get a complete range of fertilizer

products they need.

0.500 0.949 Valid

Ptoduct Range (KMO-MSA =

0.500) For every unavailable product, there is always a substitution provided for the farmers.

0.500 0.949 Valid

Fertilizer products are available at the affordable prices for the farmers.

0.900 0.800 Valid

There is no price discrimination between certain fertilizer products.

0.852 0.941 Valid

Pricing (KMO- MSA = 0.817 )

There is no price discrimination between one location to another.

0.786 0.939 Valid

The government subsidies on fertilizers’ prices are able to reach the farmers.

0.771 0.942 Valid

Fertilizer products are distributed to the farmers on time. 0.500 0.955 Valid Delivery

(KMO-MSA = 0.500)

The transportation system is sufficient to distribute the fertilizer products to the end user (farmers).

0.500 0.955 Valid

The current fertilizers’ distribution channel is able to meet the end users’ (farmers) needs.

0.608 0.966 Valid

The current fertilizer distribution system delivers value for the money paid by the customers (farmers).

0.721 0.905 Valid

Satisfaction (KMO-MSA = 0.672)

Customers (farmers) are satisfied with the current fertilizer distribution system.

0.713 0.908 Valid

The current fertilizer distribution system is open and accessible for its channel members and customers (farmers).

0.782 0.886 Valid

The channel members inside the current fertilizer distribution system are knowledgeable about the products.

0.793 0.872 Valid

Trust (KMO- MSA = 0.758)

In difficult times, the channel members inside the current fertilizer distribution system will support the customers (farmers).

0.727 0.912 Valid

The current fertilizer distribution system is reliable. 0.737 0.904 Valid Customers (farmers) are constantly looking for another

distributor to buy fertilizer materials from (R)

0.825 0.849 Valid

Customers (farmers) have a good relationship with this distributor and want to keep buying from them.

0.806 0.871 Valid

Commitment (KMO-MSA = 0.826)

Customers (farmers) will continue buying fertilizers from the current distributor.

0.835 0.838 Valid

The quantity of fertilizer bought from this distributor will grow in the coming years.

0.839 0.847 Valid

(19)

Table A.6.

Measurement Results of Anti-Image Correlation Matrices and Construct Variable Validity

“Government Policies”

Variable Indicator MSA Factor

Loading

Result PT PUSRI is responsible for the subsidized fertilizer supply inside its distribution

channel, from Line 1 to Line 4 in its territory.

0.756 0.867 Valid If PT PUSRI failed to supply an adequate amount of fertilizer to its territory, it is

possible for PT PUSRI to conduct an operational cooperation with other producer to fulfill the needs.

0.824 0.876 Valid Market

Coverage Policy

The government determined the responsible supplier that responsible for its area of distribution and also the distribution channel system for all regions.

0.808 0.836 Valid (KMO-MSA

= 0.806)

The government applies territorial restrictions to limit the number of distributor inside the distribution channel.

0.885 0.797 Valid The channel members are free to sell outside its area of primary responsibility, and

other wholesalers or retailers may sell in its territory.

0.775 0.779 Valid The government controlled supply and distribution mechanisms of subsidized

fertilizers.

0.858 0.782 Valid The current distribution channel system is able to meet the customers’ needs. 0.885 0.843 Valid The current distribution channel system allows its channel members to distribute

fertilizers to other regions, as long as they have enough capacity.

0.884 0.831 Valid Customer

Coverage Policy (KMO-MSA

= 0.861)

The government regulations about current distribution channel system are able to keep all of its channel members and customers in control.

0.860 0.822 Valid The current distribution channel system allows the distributors to sell fertilizer

products to other distribution lines outside its own level.

0.828 0.906 Valid The government has the authority to do the price maintenance and control over

fertilizer products (especially for subsidized fertilizers).

0.790 0.817 Valid The government put several price discriminations into effect inside the current

distribution channel..

0.656 0.895 Valid Pricing

Policy (KMO-MSA

= 0.699)

The government has the authority to control the subsidized fertilizer prices by establishing the ceiling price for certain products.

0.682 0.874 Valid The distribution channel members are subjected to exclusive dealing, which means

they only allowed to sell certain fertilizer products.

0.695 0.855 Valid The current distribution channel intermediaries conduct tying policies to lock in the

purchase of the supplier-specific brand and lock out the purchase of directly competing product or brands.

0.700 0.871 Valid Product

Line Policy (KMO-MSA

= 0.741)

To obtain one or several items, the distributors and customers must buy the entire line of fertilizer items (full-line forcing).

0.803 0.728 Valid Only limited channel members allowed to sell certain vital and major fertilizer

products, whereas less important products can be sold through all distribution channel members (designated product policies).

0.825 0.780 Valid

All channel members can select their own distributors according to their own criteria and judgment.

0.703 0.906 Valid The selection and termination policies of channel members had influenced the

overall performance of the distribution channel.

0.795 0.770 Valid Selection &

Termination Policy

Failure to meet performance targets may result in termination of the channel membership.

0.827 0.790 Valid (KMO-MSA

= 0.774)

Distributors’ refusal to deal with certain channel member is allowable under strictly controlled conditions.

0.816 0.809 Valid

(20)

Table A.6.

Measurement Results of Anti-Image Correlation Matrices and Construct Variable Validity

“Government Policies” (cont’d.)

Variable Indicator MSA Factor

Loading

Result Vertical integration by merger between the current distribution channel members

will foreclose competitors by limiting their access to sources of supply or to customers

0.924 0.745 Valid Ownership

Policy

In order to prevent monopoly or attempts to monopolize, vertical integration by internal expansion inside the distribution channel is limited by laws.

0.899 0.854 Valid (KMO-MSA

= 0.897)

The distribution channel is free to set up its own supply, distribution, or retailing system unless this would overconcentrate the market for its product.

0.875 0.878 Valid Vertical integration, whether by merger or internal expansion, may result in the

lowering of costs and make possible more effective interorganizational management of the distribution channel.

0.889 0.849 Valid

The current distribution channel is integrated and free to control prices and allocate products to its integrated distributors or outlets, without conflict with the laws governing restrictive distribution policies.

0.899 0.889 Valid

The current distribution channel reaches its final markets by employing two or more different types of channels for the same basic product.

0.869 0.880 Valid The manufacturer (PT PUSRI) sells similar products under different brand names for

distribution through different channels (for different market segments and sales to distributors under private labels).

0.944 0.813 Valid

The complete outputs of the statistical analysis from SPSS 13.0 for Windows are

available on request from the author at this e-mail address: pinanditho@yahoo.com.

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