Measuring performance of small and medium scale agrifood firms in developing countries: Gap between Theory and Practice

Globalization and increasing population of middle income classes in developing countries has led to increased market opportunities. These markets are associated with demand for traceability, food safety and quality standards (Webber and Labaste, 2010). This requires the chains to be competitive and ability to manage and evaluate the performance of the supply chain becomes paramount. Performance measurement is defined as the process of quantifying efficiency and effectiveness of an action. In the recent literature, performance measurement has gained attention in the agri-food chains. Different methods have been proposed in marketing and supply chain management literature to measure supply chain performance such as Activity-Based Costing (ABC), Balanced Scorecard, Economic Value Added (EVA), Multi-criteria Analysis (MCA), Life-cycle Analysis (LCA), Data envelopment analysis (DEA) and Supply Chain Council’s (SCOR model). Despite the existence of these measurement metrics, there is lack of consensus on what determines the performance of supply chains which complicates the selection of one measurement system in agrifood chains. The measures may not often be applicable for small and medium size agribusiness firms especially producer organizations in developing countries. Since they are not well structured, do not often collect information which are often needed to feed the complex models. We therefore propose a conceptual model for measuring marketing performance based upon five constructs: effectiveness, efficiency, adaptability, food quality and customer satisfaction.