Tizita Endeshaw Final Thesis
Tizita Endeshaw Final Thesis
Tizita Endeshaw Final Thesis
MARY’S UNIVERSITY
SCHOOL OF GRADUSTE STUDIES
By
TIZITA ENDESHAW DESTA
JULY, 2017
ADDIS ABABA, ETHIOPIA
ASSESSMENT OF COFFEE EXPORT MARKETING STRATEGY
AND PRACTICE IN ETHIOPIAN TRADING BUSINESS
CORPORATION
By
TIZITA ENDESHAW: ID SGS/0199/2008A
JULY, 2017
ADDIS ABABA, ETHIOPIA
BY
TIZITA ENDESHAW
________________________ _________________
Dean, Graduate Studies Signature &Date
________________________ ________________
Advisor Signature &Date
________________________ ________________
External Examiner Signature &Date
________________________ ________________
I confirm that the thesis entitled “Assessment of Coffee Export Marketing strategy and Practice in
Ethiopian Trading Business Corporations” has been supervised by me and forwarded for a defense
examination.
I, the undersigned declare that this thesis entitled “Assessment of Coffee Marketing Strategy and
Practice in Ethiopian Trading Business Corporation, is my original work prepared under the guidance
of Alula Tessemma (PhD) .All sources of materials used for the thesis have been acknowledged. I
further confirm that this study has not been submitted in part or full for any degree completion to any
University or Collage.
First I would like to thank my almighty GOD, who helped me in every facts of my life.
Next I would like to forward my special thanks to my advisor, Dr Alula Tessema, for his unreserved
support in giving constructive comments, scholarly guidance throughout the study. I would like to
express my appreciation for all the employees who voluntary to survey questionnaires and interview
.Finally, special thanks to all my family my close friends who where around and supported me in any
way during my study.
LIST OF ABBREVIATIONS
The study has been designed to Coffee Export Marketing Strategy and Practice in Ethiopia
Trading Business Corporation. Both primary and secondary data collection instruments were
used to collect data. Closed ended and open ended questionnaires along with interviews were
used for the purpose of data collection. The selection of the respondents were carried out by
using census sampling research method because no other departments were concerned about
marketing strategies and the researcher took all the respondents of marketing staffs and planning
as a total population of the study, The collected data were analyzed and interpreted using SPSS
analytical software.
Ethiopia Trading Business Corporation provides quality export coffee with affordable prices by
promoting its products by using high and effective advertising mechanisms with the
determination of the buyers' accessibility to the products. Even though the marketing strategies
of the company are somewhat effectively practiced, there are some problems that the company
faced with implementing it. These are the capability of the company to compete in the export
international market is becoming difficult due to the structure of the company it have high
member of the employee not enable the company to have cost advantage, and complex
marketing challenge, limited access to market information, communication problem and poor
planning.
Segments market
Target market
Marketing
Strategy
Key
Positioning
PPPP = product
Price
Promotion p P
Place p P
The current government of Ethiopia encourages private investment in the coffee industry to
promote a market economy including liberalization of the coffee sector, lifting price ceiling of any
kind, streamlining of export licensing procedures, removal of price control, currency devaluation,
foreign exchange auctioning, creation of relatively better investment environment through new
investment code and regulations , launching of new export promotion strategy, suspending all the
export taxes, the recent establishment of the Ethiopian Commodities Marketing Authority and the
Ethiopian Commodity Exchange (ECX). This was undertaken as a means of increasing producer
prices, Thereby encouraging production, reducing smuggling and maximizing export earnings.
(Gebreyesus, 2014)
Coffee was added as one of the crops under the umbrella of the ECX in late 2008, replacing the old
“auction system” in Ethiopia. The auction system had been often criticized for being unfair and for
leading to misrepresentation and price manipulation of various coffees.
All coffee that enters the ECX is given a grade and a geographical designation. Grades are based on
physical inspection of lots and on cupping. 1 is the highest grade, and 9 is the lowest. Geographical
designations are given at the “sub-regional” level, more specific than large regions like Harrar or
Sidama, but less specific than the particular farm, village or woreda level. Once coffee is graded, it
is stored at an ECX warehouse to prevent tampering, and coffee is bid on and sold to exporters.
Starting in 2010, under the purview of the ECX, there is also an auction called the Direct Specialty
Trade auction, or DST. This auction sells top-quality coffees through a special DST auction
platform, but while maintaining the traceability of the lots. So far, very little coffee is sold this way,
but it is an option which may grow more influential in the future.
Cooperative Unions
Most farmers in Ethiopia hold and work very small parcels of land. Over the years, farmers (with
the help of the government) have formed local cooperatives and pool their coffee to create lots large
enough for export. Usually these primary cooperatives have their own washing or drying station,
though sometimes they use that of someone else. Coffees produced at the cooperative level are not
required to pass through ECX. The co-ops, representing the hands that farmed the coffee, are
considered owners of their own product, unlike commercial exporters who buy and sell coffee.
However, cooperatives generally work through a cooperative union, which functions as an
intermediary.
The instabilities in export supply are usually defined in terms of short run deviation around a trend.
Since export earning is a product of export supply, instability in export earnings is taken as a
function of instability in export supply. Rise and fall in earnings from the export of primary
commodities, partly due to instability in export supply, has long been a major cause of concern for
primary producing countries. It has been argued that a high degree of instability in export supply
would imply large fluctuations in export income of the country in question. Such fluctuations can
have a negative effect on the economy of a primary commodity exporting countries. Behrman
(1982) has been justified that if there is a large fall in export income, then there could be a shortage
of foreign exchange, which limits the capacity to import. It follows that a decline in the imports of
capital goods which have an adverse effect on the rate of growth of investment, which in turn will
reduce the overall economic growth. That is, as we know, many developing countries are
technologically backward and have poor capacity to produce capital goods which are crucial for
their economic development. As the result it makes developing countries to depend on the
importation of these goods from the industrialized countries. At times of shortfalls in their foreign
exchange earnings as a result of primary commodity export supply fluctuations, their capacity to
import will be limited, which in turn means lower investment and there by affects various sectors of
the economy through the multiplier.
The Ethiopian export supply of agricultural products has subject to large fluctuations mainly
because of the price and non price factors. And the economic growth of the country is too weak to
absorb the effect of these exogenous shocks; it is less flexible to deal with both internal and external
disturbances. Therefore the instabilities and decline in export of agricultural commodity has led the
country to an adverse economic growth and macroeconomic imbalances, such as, budget deficits,
balance of payments and debt problems. And there is a need for large foreign exchange reserve in
the short run while trade and exchange rate policies reforms would be the long run instruments to
reduce the instabilities in the export earnings (Amin, 2001).
Coffee is the major source of foreign currency in Ethiopia and it contributes more than 35% of the
total export earnings of the country (MoARD, 2009). However coffee export of the country is
instable for instance between the year of 1997 and 2001 export of coffee from the country declines
by 9.11% but in contrast from the year of 2007 to 2011 the export supply grows by 4.3% (ICO,
2011). In addition to its fluctuation the growth of coffee export supply in the last two decades
(1991-2010) is too low; it grows on average only by 0.041 percent per annum (ICO, 2010).
The empirical result obtained from study of (Tadese Gebreyesus, 2015 ) indicates that among the
price factors, export price and world price of coffee are found to be statistically significant with
their respective expected sign that is the supply of coffee export responds positively to the change
in real export price of coffee and negatively to world supply of coffee. However, the short run as
well as long run effect of both variables to the total export of coffee are inelastic. The other price
factor which is included in the model is real exchange rate and its impact to the coffee export of the
country is found statistically insignificant.
Regarding the non price factors domestic production of coffee and road network which is proxy for
infrastructure, positively and significantly affects the coffee export supply of the country. This is in
line with the expectation of the study that is expansion in domestic production of coffee and road
sector will have positive effects on coffee export of the country. The short run impact of both
variables on coffee export is inelastic where as their long run effect is elastic.
Finally openness to trade which is captured by the percentage share of export and import to GDP is
statistically different from zero to explain the variation in supply of coffee exports in the long run.
While the short run the effect of openness to trade is statistically insignificant.
The granger causality test is employed to find the direction of causality between the dependent
variable of coffee export supply and some of the independent variables. And the empirical result
indicated bidirectional causality of coffee exports with domestic coffee production while
unidirectional causality of coffee exports supply with real export price as well as world production
of coffee.
(Tadese Gebreyesus, 2015 )on his study of determinants of Coffee Export Performance in Ethiopia,
indicated that domestic coffee production provides a base for the development of coffee exports
supply of the country as the result government of Ethiopia should have to increase the quantity of
national production of coffee through new plantings and/or intensification (higher productivity).
Development in road sector has a significant and positive impact on coffee export supply of
Ethiopia and it is suggested to make the road sector better through Construction of roads to each
coffee growing rural area in collaboration with farmers & cooperatives so as to increase export
performance of coffee.
The research results highlight several important considerations to developing the coffee market in
Ethiopia. An emphasis on stimulating increased washing of coffee by creating the right investment
incentives is important, as it leads to significantly higher export prices and, thus, higher foreign ex-
change earnings for the country. With only a small proportion of the coffee exported sold as washed
coffee, there is still room for growth in this area. However, profitability for the setting up of wet
mills needs to be carefully assessed, along with the environmental implications of more widespread
washing. Improved processing methods, such as ecological pullers which reduce water demand
significantly, should be more widely adopted. The growth of washing coffee in Ethiopia may have
been impeded because of regulations and difficulties of access to the foreign exchange needed to
import wet milling machines. Due to climatic and quality constraints, coffee cherries produced in
some areas of Ethiopia are also not suitable for washing, thus limiting the opportunities for spatial
growth in wet milling services to coffee producers.
Another aspect to consider is specialty coffee. It has been estimated that between 20 and 30 percent
of Ethiopian coffee could qualify as specialty coffee. Therefore, making efforts to increase access
by Ethiopian producers to global specialty coffee markets could open export opportunities. Ethiopia
could also benefit from increasing its branding of coffee, extending participation in certification
schemes, and emphasizing trade in traceable coffee products. This is especially important given the
growing emphasis in international markets on certification of sustainable coffee production
practices. However, as certification is often a costly process that might also limit benefits for
producers, setting up cheaper and internationally credible local certification schemes that are
advantageous to local producers should be considered. Furthermore, as many of these international
certification schemes require collaboration with farmer cooperatives, further capacity building of
these cooperatives will be required.
Finally, coffee yields are very low in Ethiopia compared to other countries, and this study highlights
some significant opportunities for productivity growth. By increasing support at farm level and
training coffee farmers towards higher adoption of improved technologies, such as mulching,
pruning, rejuvenation of trees, planting of improved varieties, and modern input use, higher
productivity can be achieved. These practices could lead to higher local supply and, therefore, to
increased quantities of coffee ex-ported. In addition, efforts should be made with the agricultural
research and agricultural extension services to address widespread concerns related to coffee
diseases and to support adaptation to and mitigation of climate change as it affects coffee production.
These efforts are likely to have major impacts on the coffee sector in Ethiopia.
2.4 Empirical Literature
Coffee is the major source of foreign currency in Ethiopia and it contributes more than 35% of the
total export earnings of the country (MoARD, 2009). However coffee export of the country is
instable for instance between the year of 1997 and 2001 export of coffee from the country declines
by 9.11% but in contrast from the year of 2007 to 2011 the export supply grows by 4.3% (ICO,
2011). In addition to its fluctuation the growth of coffee export supply in the last two decades
(1991-2010) is too low; it grows on average only by 0.041 percent per annum (ICO, 2010).
As the result the researcher seeks to examine and analyze the effect of those possible major
determinant factors that hinder the growth and the overall performance of coffee export sector and
tries to addresses issues that enhance the export growth and to make that growth sustainable,
competitive in the international markets and eventually maximize the benefit that could be earned
from the coffee sector. The overall success of any strategy to increase coffee export supply will
depend on the knowledge of what factors constrain coffee export growth and the responsiveness of
exporters to changes in both price and non-price conditions. Accordingly, a better understanding of
the determinants of past performance, and the direction and magnitude of the relevant elasticity is
desirable. So far some studies have been undertaken in Ethiopia related to the export performance
of coffee.
Teshome (2009) study determinants of coffee export supply equation by taking coffee arrival as
dependent variable sing a time series data. The major finding of his study indicates that world price
and producer price of coffee affects coffee export negatively. The impact of rainfall is significant in
both short run and long run. However credit access and extension service are insignificant in the
long run but significant in the short run. The study also indicates gross domestic product and real
exchange rate does not have any impact on the export supply of coffee.
Yoseph (2009) investigated export supply response of coffee in Ethiopia for the years of 1975-2008
by employing Autoregressive Distributive Lag (ARDL) model. world price of coffee affects coffee
export positively its export price elasticity was 2.48, while the impact of producer and export price
is insignificant in the long run as well as in the short run. The estimated elasticity for domestic
supply of coffee, exchange rate and GDP were 1.07, .891 and 1.35 respectively.
Xiang Li (2015) on her study uses company A as an example to analyze the impacts of business
strategy on coffee production and the environment. Farmer loan support, as an environmental
engagement strategy of company A, is found to impact the decision-making processes of farmers,
inducing the production shade-grown Arabica coffee. Integrating environmental sustainability into
business strategies links to the stable supply of high-quality Arabica coffee. The strategy benefits
both the company and the environment. This study demonstrates that the establishment of a win-
win relationship between the corporation and the environment is possible. The business model
developed by company A could help to reduce deforestation, CO2 emissions, and climate change
impacts. If all corporations that engage in coffee business integrate environmental sustainability
into their business strategies, more farmers would be induced to produce shade-grown Arabica
coffee that is healthier to the environment. In doing so, the overall social benefit would increase.
Coffee is one of three major beverage crops. Sustainable farming practices link to the health of the
environment and the livelihood of people who depend on coffee production to support their
families.
To reduce the production of Sun-grown Robusta coffee and to increase the production of
environmental friendly shade-grown Arabica coffee, supports by consumers, farmers, corporations,
and governments are essential. Besides corporate efforts, further research and policies that are more
effective to induce the production of shade-grown Arabica coffee should be designed and analyzed.
Samuel (2012) on his study identified some of the main determinants of agricultural export in
Ethiopia for the period 1980-2010. To test empirically the relationship between agricultural ex-port
performance and its major selected determinants such as terms of trade, gross domestic product,
domestic price, world price, kilometers paved roads and fertilizer input import over a period; co
integration and error correction approaches in the regression analysis were used. The results from
the co integration and error correction models revealed that all the above listed ex-planatory
variables significantly affected agricultural export performance in the long run except domestic
price. In the short run, gross domestic product (GDP) became insignificant and negatives in sign
which was unexpected. Domestic price was also insignificant like in the case of long run. However,
except these two variables other variables were found to significantly affect the agricultural export
performance of the country. On the other hand, out of the variables significantly affected
agricultural export both in the long run and short run; terms of trade, world price, fertilizer input
import over a period and kilometers of paved roads affected agricultural export positively.
CHAPTER THREE
RESEARCH DESIGN AND METHODLOGY
3.1 Research Approach and Design
The study has adopted descriptive research design by using both qualitative and quantitative to
obtain the desired results of the company and to explore detailed description about the coffee
marketing strategy and practice of company. In the course of analyzing the problems, both
primary and secondary data collection procedures were employed. To achieve this goal,
questionnaires, interviews and document reviews were going to be the main tools
Descriptive Research sets out to describe and to interpret what is. It looks at individuals, groups,
institutions, methods and materials in order to describe, compare, contrast, classify, analyze and
interpret the entities and the events that constitute the various fields of inquiry. It aims to describe
the state of affairs as it exists. The methods that come under descriptive research are: survey,
Correlation studies, Observation studies and Case studies. The study is a descriptive type of
survey method which is concerned with the present situation and attempts to determine the status
of the phenomena under investigation. Since this study is intended to critically assess the
organization‟s coffee marketing strategy and practices, data will collect across a population.
3.2 Population and Sampling Design
The target populations of the study are the higher managers and staff of the marketing department
in grain/coffee trading unit and planning department. The total number of employees who are
working in headquarter marketing department are 48, who are participant that will conduct in the
interview. So the questionnaires distribute to all marketing staff in headquarter. The interview
forwarded to top management of the company.
The selections of the respondents are carried out by using purposive sampling research method
because no other department are concerned about marketing strategies and the sampling
procedure is census and the researcher take all the respondents of marketing and planning staffs
as a total population of the study. In addition to this, and the data will be collected using
qualitative approaches by employing in depth interview with top management
Reliability Statistics
Cronbach‟s Alpha N of Items
0.809 22
There are different methods of reliability test, for this study cronbah‟s alpha is considered to be
suitable. According to reliability statistics, Coronbach‟s Alpha coefficient is 0.809,which is
acceptable based on different literatures. As described by Andy (2006) the value of Cronbach‟s
Alpha around 0.8 is good. The alpha value in this study is around 0.809 and therefore it is good.
3.6 Ethical Consideration
In this study all participant and data collected remain confidential and identities of respondents
remain anonymous. Moreover, the privacy of the respondent‟s s will be respected in reporting of
this research. no details of individual involved in this research. Informed consent is a written
statements that explained aspects of a study to participant and asks for their voluntary agreements
to participate before the study begins Neuman, (2006)In this study, each participant will provides
with an information sheet at the beginning of the research questions explaining the purpose of the
research prior to each questionnaires and interview. And the research got consent from the
participants before the surveys and interview was made.
CHAPTER FOUR: RESULT AND DISUSSIONS
4.1 Introduction
This chapter present the data collected from self-administered questionnaires self- interview
questionnaires from marketing staff both, interview with chief officer, managers and data from
strategic marketing documents and provided a detailed analysis of the data collected using both
qualitative and quantitative approaches. The chapters begin with the analysis of qualitative data
collected from marketing staff followed by the analysis of qualitative data gathered from depth
interviews together with the findings
The focus of this study mainly on the marketing strategy practice of the company with respect target
marketing, marketing segmentation, positioning and marketing mixes (product strategy, price
strategy, place strategy and promotion strategy) that constitutes for marketing strategy application.
4.2 Result of Demographic Question
In the study 45 questionnaires were distributed to the respondent and 43 questionnaires were return
which consist 96% from the total, two of the respondents 4% failed to return the questionnaires.
Table 4.1 Frequency Distributions of Respondent with respect to their Gender
Table 4.1 indicate that the gender allocation of the sample of respondent from the marketing
department employees which the research was conducted. As depicted on Table 4.1, 8.4%were male,
while the remaining 11.6% comprised of female respondents. This implies that, there is gender
disparity sowed in the company.
Table 4.2 Frequency Distributions of Respondent with respect to their Age
Age of the respondent
Frequency Percent Valid Cumulative
Percent Percent
21-35 19 44.2 44.2 44.2
36-50 14 32.6 32.6 76.7
Valid
51-65 10 23.3 23.3 100.0
Total 43 100.0 100.0
According to Table 4.2 the age of majority employees were between 21and 35 years old that account
44.2%.epmloyees who were between 36 to 50 years are 32.6% and from 51 to 65 years olds were
23.3%.this indicate that there is potential advantage for working by young employees especially to
achieve future objectives of the company‟s marketing strategy.
Table 4.3 Frequency Distributions of Respondent with respect to their Educational
Background
Educational level of the respondent
Frequency Percent Valid Cumulative
Percent Percent
certificate
4 9.3 9.3 9.3
Diplomas
Valid BA/Bsc 33 76.7 76.7 86.0
MA/Msc 6 14.0 14.0 100.0
Total 43 100.0 100.0
As shown the table 4.3 the respondent education level divided in to three groups i.e. 9.3% were
certificate diploma, 76.7%`were first degree holders and the remaining 14% were second degree
holders. Here we can say that respondent are educated ,this implies that the respondent the company
has take advantage of utilizing its human resource for marketing strategy application and they can
gives the company competitive advantage were the competition will exist in the future.
Table 4.4 Distributions of Respondent with respect to their Work Experience
As can be seen in the table 4.4 most of the respondent have been working in the company for five and
above longer years experience show that there is a relatively lower employee turnover as a result
company reduce cost of hiring new employee and saves time .as a result the company can achieves its
objective and can maximize its profit.
Marketing Mix deals with the way in which a business product, price, distribution to market and sell
its product and service. As indicate from the above table 4.6 majority of the respondent which is
41.9% of the commented that the company uses all 4Ps of marketing mix element.11.6% of the
replies the company use product and remaining 27.9% the company uses price and distribution.
The above response implies that the company use 4ps marketing mix element for the purpose of
marketing strategy implementation. And it shows that company using for achieving marketing. Target
in terms of sales, profit and customer satisfaction. Additionally these market mix represent the
company‟s view of the marketing tools for influencing the buyer.
Table 4.7 Employee response on Customer Primary reason for Buying the
Export Coffee
Frequency Percent Valid Cumulative
Percent Percent
Quality of Product 15 34.9 34.9 34.9
Proximity of Supply 10 23.3 23.3 58.1
Lower Price than
4 9.3 9.3 67.4
others
Valid
Effective promotion 2 4.7 4.7 72.1
Customer
12 27.9 27.9 100.0
Preferences
Total 43 100.0 100.0
As indicate on table 4.7 majority of the respondent which account 34.9% implies that the primary
reason for buying Ethiopia trading business corporation export coffee are because of the quality of the
product ,the least number of the respondent which account 4.7%answer that the customer primary
reason for buying company coffee are through promotion. Coffee business have strong competition
on this environment, the result indicate that the company preferred by its customer by is coffee
quality and proximity of supply.
As illustrate on table 4.9, 64.3%of the respondent replies that price of the export coffee of a company
are expensive and 31% and 4.8% of the respondent replies affordable and cheap respectively.
From the above result it implies that the company pricing strategy is reasonable and affordable so that
most customers can handle the pricing set up of the company. On contemporary a company
marketing strategy document doesn‟t show how to set the pricing method and what factors considered
in setting pricing strategy of the company.
Table4.10 Employees response on Factors Considering in Setting Pricing
Strategy of Business Unit
Frequency Percent Valid Cumulative
Percent Percent
product value 12 27.9 27.9 27.9
Cost 12 27.9 27.9 55.8
Perceived Value 6 14.0 14.0 69.8
Economic
2 4.7 4.7 74.4
Valid Condition
Marketing
8 18.6 18.6 93.0
Objective
Competitor price 3 7.0 7.0 100.0
Total 43 100.0 100.0
As indicate on table 4.10 the respondent replies that the key factor considered in setting pricing
strategy is cost and product value both are take 27.9 % of the respondent. Marketing objective
account 18.6%.Percive value and economic condition are considered 14% and 4.7% respectively. The
above analysis implies that the cost and product value the major factor considering setting price.
As shown on table 4.13 the majority of the respondent which account 41.9% replies that Bazaar &
exhibition next to that free sample take 30.2%.
From the above point we can conclude that best advertising strategy practices way of this implies that
the company way of advertising means is limited on the above strategy .More over the company does
focus much attention to attract customers to find out more about their product on free sample and
Bazaar & exhibition.
Table 4.13 Employees response on Promotion Tool
Responses Percent of
N Percent Cases
Internet 14 28.0% 45.2%
effective promotion Billboard 6 12.0% 19.4%
tools Bazaar &
30 60.0% 96.8%
Exhibition
Total 50 100.0% 161.3%
a. Dichotomy group tabulated at value 3.
As illustrated on the table 4.14 the majority of respondents notes that Bazaar & exhibition, billboard
and internet which account 30%, 14% & 6% respectively.
The above analysis indicate that the company promotional mix strategies are vital for the marketing
product its create good image for the company in order to present information about the product that
they need to understand what the product is and how it benefit them. it addition it increase demand to
increase sales.
Table 4.15 Area of the Company give Direction about Export Coffee
Requirements
As shown in the table 4.17, 44.2 % of the respondent said that they have received the direction about
export coffee requirement from customer satisfaction area to be covered and 32.6% of respondent
received sale target .11.6% of the respondent both received directing from the customer service and
advertisement planning. The response implies that the company‟s much more focused on customer
satisfaction area which is good to be competent in the business.
Table 4.16 The Major Challenges in the Implementing of Export Coffee
Marketing
Frequency Percent Valid Cumulative
Percent Percent
communication
19 44.2 44.2 44.2
problem
ineffective promotion 9 20.9 20.9 65.1
Valid poor planning 8 18.6 18.6 83.7
Lack of integrity 2 4.7 4.7 88.4
Lack of commitment 5 11.6 11.6 100.0
Total 43 100.0 100.0
From the above table 4.20 majority of the respondent which account 44.2% responded that
communication problem and 20.9% of the respondents responded that ineffective promotion .Poor
planning for marketing strategy of marketing strategy of export coffee, lack of integrity and lack of
commitment are which account 18.6%,4.7% and 11.6% respectively.
The above analysis implies that the company has got major problem in the implementation of
marketing strategy. These challenges hinder not to achieve the stated goals are objective of the
company.
4.4 Analysis of Interview Data
To gather more information about marketing strategy practice of Ethiopia trading business unit
,interview question were forwarded to the top management of the company such as chief Manger of
Grain & coffee business unit, marketing officer ,planning manger and manger of marketing
department .and this interview response are presented and analyzed as supportive of employee
questions, and these interview responses were organized in one analysis.
The business unit, Grain and coffee business unit is under government owned corporation that dealing
with export of coffee, pulses and oilseeds and also provide grains locally. And Supply of agricultural
product and export of coffee, pulses and oilseeds and also provide grain locally. There are a wide
range of product exports different types of coffee for international market. The major coffee type was
classified as washed and unwashed type (dry coffee).Another classification of coffee was based on
the rank that coffee has based on their quality. These are yirgacheffe-2, sidama2, 4, 5, limmu2, jimma
4, 5, Harer 4, 5, and Nekemte 4, 5. Accordingly, these types of coffee were exported for the last five
years. These coffees again grouped under washed and dry coffee type during export time and other
than coffee.
Coffee export business affected the overall sales volume and value the of the company, In addition it
also affects foreign currency of earning of the country. According to the interview responded that
the business unit target market is the country who direct import Ethiopian coffee, trade house and
brokers and the major customer of the business unit in exporting coffee Volcafe, Bernhard
Rothfos,InterAmerican coffee, Almustaneer Trading , Hinrich Christen.They stated that the main
competitors of the business unit are Aba hawa trading, Hora trading, Mullge plc,Esea Bagersh and
Oromiya union.
Regarding the competitor and the marketing strategies designs to win the competitor ,competitor
analysis help the company understand its competitive advantage relative to competitors .it also
generate competitor past, present and most importantly future strategy. More over it provides an
informed basis to develop strategies to achieve competitive advantage in the future. Despite the fact
there are to be quality oriented company, experienced in the export business, by diversified business
providing better quality and increasing market share increase volume of sale by offering competitive
price as per customer demands and will effectively accomplished by improving the type, quality and
quantity of the products, by discarding all out dated machines and substituted them with modern and
state of the art for the preparation of the export coffee, the study indicate that the existing market
segmentation of the company is geographical and behavioral
As they replies the company is participating in international exhibition and trade air with the aim to
expand our market destinations and thereby increase our markets share and the company believed that
this should be followed in supported by giving priority to improve service quality depending on
customer feedback by providing quality product, consistently work on quality delivery and focus on
cost reduction to compete with others. They respond that regarding the pricing strategy of the
company never indulge in negative attract as far as the aim given “creating market opportunities to
producer “is concerned, uses as include all pricing element for its cost-build up, compare with the free
market and then analyze the competing environments, specially consider the factor include cost of the
product, customer demand .on the product, profit of the product, and distribution objective and
strategies are quality distributor, reduce costs, increase speed and cover more market. And they
believed that their customers understand their pricing strategy, it is a signal for competition to think
what is there behind when our company is out of the market for some reasonable time.
The informant responded as depending on the existing working environment the marketing
department, is expected to conduct market researches which will serves a backbone to the company,
but currently the department has been evaluated for not accomplishing the key task.
From the current undertaking of the marketing department, it is inferred that the department is highly
occupied with routine works. As per the interviewee replied, modern marketing is a complex practice
that involves the Production of quality and standard products, the establishment of various and
efficient distribution networks, popularizing the product with fair prices and delivering continuous
services after distribution. In this connection the capability of company to compete in the export
international market is becoming difficult due to the structure of the company it have high member of
the employee not enable the company to have cost advantage ,and complex marketing challenge and
limited access to market information.
Evaluation and review are vital components of performance improvement. It helps to understand how
we are performing where we are reaching our goals and inform our decision about what to do next.
According to the interviewees, the company has set 5 years marketing strategy starting. Internally
there is continuous evaluation and review on the strategic document. However answer that strategic
document was evaluated and reviewed at the end of the budget year. Additionally the company had
experienced in participation of external evaluator and reviewer it provide reliable and accountable
information to different stakeholders.
As per the interviewee replied, so far it‟s going well but our company is on the way to introduce
marketing challenges which enable it to absorb and make it cost effective. And also it need intensive
marketing research and market development to cop up with the existing challenge and reviewing the
structure of the company and salary scale to get more integrated staff. Finally the interviewee has
replied that the question of how evaluate the company current marketing strategy is that the company
plan to do a well-organized and competitive marketing strategies than now what we have practiced
.But overall the marketing strategy of the business unit is now satisfactory.
CHAPTER FIVE
SUMMARY OF FINDING, CONCLUSION AND RECOMMENDATION
These chapters begin with summary of the finding for each questionnaire survey and depth interview
questions. Then conclusions were presented respectively.
5.1 Summary of Major Finding
The main objective of the study was to assess the marketing strategy practice of Grain &coffee
business unit under Ethiopian trading business corporation. The study was designed mainly to deal
with how marketing mixes, marketing segmentation and target marketing are used in order to
enhance, maintains and attract customers and to identify how these tools are assigned with marketing
strategy of the business unit.
The study uses descriptive research as and finding from the quantitative data collective from self
administered questionnaires. Finding from the qualitative data gather from depth interview question
.The sampling procedure is census sampling research method from 45 questioners 43 are usable
questionnaires were collected and interview question forwarded to 3 chief officers of the business
unit and used to analysis of the paper
The customer primary reason of buying the business unit coffee are because of customer
preference based on quality of the coffee and also the price of the export coffee were
affordable.
Segmenting a market is essential in marketing strategy by dividing a board target market in to
homogenous groups, the study indicate that the existing market segmentation of the company
is geographical and behavioral
The key factor considered in setting pricing strategy is product value and cost
The business unit promotional strategy were emphasize through on both free sample ,Bazaar
& Exhibition ,they were best and effective promotional strategy practice for the company
The business unit target markets for export coffee are all importer and agents who buy
Ethiopian coffee and the product availability and accessibility are good
Regarding the competition, there are many coffee exporter in the industry .but the business
unit didn‟t have designed strategy to win the competitors just doing business in pervious
goodwill of the company.
The quality of the export coffee of the business unit is satisfying its customers. The pricing
strategy of the business unit very complex because of the business nature but it‟s
understandable by the customer. The unit considered cost, perceived value and product value
as benchmark in setting price strategy. While strategic marketing document show that the
company didn‟t properly state what factor considered in setting pricing strategy.
The capability of the company to compete in the export international market is becoming
difficult due to the structure of the company it have high member of the employee not enable
the company to have cost advantage ,and complex marketing challenge, limited access to
market information, communication problem and poor planning.
The company has set 5 years marketing strategy starting. Internally there is continuous
evaluation and review on the strategic document. However that strategic document was
evaluated and reviewed at the end of the budget year. Additionally the company had
experienced in participation of external evaluator and reviewer it provide reliable and
accountable information to different stakeholders.
The company export market strategy so far it‟s going well but our company is on the way to
introduce marketing challenges which enable it to absorb and make it cost effective but it
need intensive marketing research and market development.
5.2 Conclusion of the Study
Based on the finding of the study variety of outcomes were drawn considering the research question.
Marketing strategies are the means by which the marketing objective will be achieved. The
employees and higher officials in the marketing department are genuinely performing their duties to
achieve the company goals. But the communication problem between department and other
department is main hindrances in the implementation of the strategy
Market segmentation is process of dividing the total market for a particular product and service in to
relatively homogonous segments .it is also classify based on customer characteristics‟ such as
demographic , geographically ,psychological and behavioral segmentations .however the business
unit has segmented geographically and behavioral
The business unit use 4ps of marketing mix elements to achieve its target. These marketing mix
elements are product, price, promotion and distribution. This is vital to implement the marketing
strategy effectively inseparable because each miss affect the other. Therefore all mixes are essential
for the business unit to achieve its customer requirement based on these concepts the company offer
to the customers commercial coffee only but to be competent, the company also start to export
specialty coffee this is important in the use of effectively of 4p of marketing mix. And also the coffee
accessibility and availability are good it‟s have good warehouses and processing unit which have a
good potential to reach export coffee at available time.
In terms of pricing strategy the company set affordable price and easily understandable by its
customer the price of the coffee are setting depends on some factor such as perceived value of the
customer and cost and benchmarking of some exporter price. Hence it couldn‟t consider the
competitors analysis in order to set the pricing strategy.
Promotional tools are also essential to practicing marketing strategy of the company. The business
unit promotional tools are free sample and Bazaar & Exhibition.
Distributions strategies are concerned with the channel of the firm that employs to make its good and
service available concerned with the channel of a firm that employee to make its good service
available to customer. The distribution systems of the company are good and determine the product
marketing presence and the buyer‟s accessibility of the coffee. The selling process of the business
unit is by direct to importer and by agent. And its play vital role in maximizing the accessibility of the
company coffee
In the formulation of marketing strategy for export coffee of the business unit manager of marketing
department up to top management. But the final draft of the strategy is decided by top management.
In the implementation of the export coffee strategy, all employees of the business unit participating.
But mainly marketing department intimately performed the strategy.
Even though the export marketing strategy ties of the company somehow effective, there are some
problems that the business unit faced. These are ineffective communication lack of coordination,
structure problem n the marketing division is the major challenge in the implementation of the
marketing strategy.
Evaluations and review of the strategic marketing document of the business unit strategic document
was evaluated and reviewed at the end of the budget year. Additionally the company had experienced
in participation of external evaluator and reviewer it provide reliable and accountable information to
different stakeholders.
5.3 Recommendation
In order to alleviate the problems that were identified by the study, the following recommendation are
forwarded.
A business to be successful, should not only good product with attractive price to generate
sale and profit but should also be able to effectively communicate the detail of the product to
the customer from the result the business unit promotional suffer from lack product diversity
like specialty coffee .therefore the business unit should create specialist coffee that ‟specialty
coffee‟ has become a generic label covering a range of different coffees, which either
command a premium price over other coffees or are perceived by consumers as being
different from the widely available mainstream brands of coffee..
The company should focus to analyze further factor to be considered in formulating the
marketing strategy by doing a market research on situational analysis in order to retain
customer for a long period of time and also to attract new customer with new coffee variety.
The studies indicate that there were some challenges in implementation of the strategy such as
ineffective communication, lack of integrations in the marketing division. Therefore the
business unit should revisit their current performance against the aforementioned problem by
evaluating on regular basis of their strategy so that improved quality of network, well
structure effective communication and integrations can provide the power needed to gain new
customer and increase profits.
In the research study, the research has assessed the marketing strategy practiced of the
Ethiopian grain coffee trade business unit in company perspective only. Therefore, it‟s better
for any forthcoming researcher who wants to investigate similar issue by involving the
customer, competitor and other stakeholders. Additionally it‟s better if comparative study will
be conducted with other coffee exporters.
References
Abu Tefera,(2016) assessment of Commodity and trade, Global Agricultural Information
Network
Amin, A.(2001).Export instability and Economic growth in Ethiopia. Master‟s thesis,
Addis Ababa University
Ansoff H.I De.Clarck and R.Hayes (2004) .from Strategy planning to Strategic management.
NY: Jhon Willey $ sons Inc.
Behrman, J., R. (1982). Commodity Exports and Economic Development, Lexington
Books, D.C. Heathand Company, U.S.A.
Bernatonyte. D.(2004) Background of international trade (in lithuanian) Kaunas:Technlogija
Czinkota R.M.,Ronkainen A (2005) international business USA.
Drouglas, F. & Craig. (1989). Evolution of Global Marketing Strategy. Columbia Journal
Of World Business. Fall: 47-59
Federal Democratic Republic of Ethiopia. (2011). Plan for Accelerated and Sustained
Development of Coffee export. Addis Ababa: Draft report. I
Ferell,O.CMichael,D.,&Hartline.(2011) Marketing Strategy (5th ed.):USA, south
Western Cengage learning.
Griffin R,Pustay M. (2005) international business N.J; prentice Hall
Gotera(2016/17). Ethiopia Grain/Coffee trade enterprise annual report. Retrived from:
http://www.egte-ethiopia.com
RajenaSaxena.(2002)Marketing Management (2nded).Mumbai, Published by Tata Mc
Graw- Hill.
Kotler , P(2007)Marketing Management (12thed). Prentice hall Inc.
Philip Kotler, Gary Armstrong. 2012, Principles of marketing (14th ed).
Punch,K.F(2003).Survey Research:The basic stage, Thousand oask,Califorina.
Katsikeas, Constantine S.,Leonidas C. Leonidou and Neil A. Morgan (2000),“Firm-
LevelExportPerformanceAssessment:Review,Evaluation,and Development,”
Journal of The Academy of Marketing Science, 28(4),493-511
N.B
Writing your name is not necessary
Put “√ ” for your choice in the box provide
Part one: Demographic Characteristics
1. Gender
1. Male 2. Female
2. Age(in years)
1. Under 20 2.21-35 3.36-50 4.51-65
5. Over 65
3. Educational level
1.1-12Complete 2.Certificate Diplomas 3.BA/BSC
4. MA/MSC/MBA5.PhD
4. Position
1. Senior Manager 2. Managers 3.Staff
5. How long have you been employee in the company?
1. Less than one year 2.Two to five years
3. Five to ten years 4.Ten to fifteen years
5. More than fifteen years
Part Two: Marketing Mix
6. What marketing mix strategies does the company use?
1. Product 4. Distribution
2. Price 5.All the above mixes
3. Promotion
7. What are the customer primary reasons for buying the company product?
1 Quality of product 4. Effective promotion
2. Proximity of supply 5. Customers‟ preferences
3. Lower price than other 6. The customer has no option
8. What is your opinion about the current coffee quality
1. Very good 4. Poor
2. Good 5. Very Poor
9. What is your opinion concerning the price of the export coffee
1. Very cheap 2. Cheap 3. Affordable
4. Expensive 5. Very expensive
10. What are the key factors considering in setting pricing strategy?
1 .product Value
2. Cost
3. Perceived Value
4. Economic Condition
5. Marketing Objectives
6. Competitor cost, price, offer
If other please specify-------------------------------------------------------------------------------------------
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11. The Company export coffee availability and accessibility?
1. Very good 2. Good 3. Fair 4.poor
12. What would you suggests as the best strategy of advertising the company’s product
1. Free sampling 2. Internet
3. Billboard 4.Bazaar & exhibition
13. on the rate of 1 to 3, where1 represent ‘least effective’ and 3 represent ‘most effective’ how
do would rate the appropriateness of the following mix to the company
Please put a tick mark for each provide box)
Promotional tool 1 2 3
Free sampling
Internet
Billboard
Bazaar & Exhibition
14. How do you rate the communication effectiveness between corporate sales and 0marketing
department and other department?
1. Strongly agree 4.Poor
2.Good 5. Very Poor
3. Somewhat good
15. In which of the following area do you receive direction about export coffee requirement
from the companies
1. Sale target 3. Customer satisfaction area to be covered
2. Customer service 4.Adiviertisment Planning
5. Discount /schemes
6. Any other please specify –-----------------------------------------------------------------------------------
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16. Who are the Major implementers of the coffee export marketing Strategy?
1 .Marketing department
2. Product and service department
3.Customer service department
4. planning department
5. Top Management
6. All employees
7. any other please Specify-------------------------------------------------------------------------------------
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17. What are the major challenges in the implementing of export coffee marketing strategy of
the company?
1. Communication problem 2.ineffective promotion
3. Poor planning 4.Lack of integrity
5. Lack of commitment 6. All of the Above
7. any other please Specify -----------------------------------------------------------------------------------------
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18. Who are the major formulators of the export coffee marketing strategies?
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19. How do you comment export coffee market in respect to other export commodity of the
company?
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20. If you have further comment about export coffee please indicate on space provided below
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St. Mary‟s University
Dear Respondents
The purpose of this research is to assess the coffee export marketing strategy and practice in Ethiopia
Trading Business Corporation in partial fulfillment of Master‟s Degree in Business Administration
(MBA).Your accurate information is valuable to the success of this study. All information you
present will be kept confidential and will be used only for academic purpose. Your corporation and
prompt response will be highly appreciated.
Thank You in advance!
Tizita Endeshaw
Tel:-0911313886
N.B
Writing your name is not necessary
Part: Interview Question
1. In what business are your current workings and what do you offer to your client?
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2. How does your export coffee marketing strategy impact your company overall business?
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3. Who are your target customers of export coffee and which organizations are your main direct
competitors?
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4. What are the bases of segmentation the market?
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5. What is your future plan to expand your product or to increase your market share? And what
improvement can you make to you make to you offering to better to meet customer needs?
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6. What factor do you consider in setting pricing strategy? What distribution objective and strategies
are the company perused?
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7. What are the roles of marketing department? Do you think that the marketing tasks of the company
have performed well?
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8 . What are the problems encountered in implementing the export coffee marketing strategies?
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9. How evaluate and review the strategic marketing document?
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10. Over all how do you evaluate the company‟s current export coffee marketing strategies?
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