RIFT VALLEY UNIVERSITY

FACULTY OF BUSINESS AND

ECONOMICS
DEPARTMENT OF ACCOUNTING SND
FINANCE

The Floriculture Business in Ethiopia and the practice of

Societal Marketing
(The case of Holeta town)
By:Getachew Geletu
Advisor: DR,Teklu Kasu(PhD)
Research Proposal submitted to the fulfillment of MSC.in Accounting and
Finance

January 2016
Addis Ababa Ethiopia

Refit Valley University

Department of Accounting and
Finance

The Floriculture Business in Ethiopia and the

practice of
Societal Marketing
(The case of Holeta town)
By: Getachew Geletu
Advisor:DR, Tekelu kesu (PhD)

Research paper submitted to the fulfillment of

MSC Accounting and Finance

January, 2016
Addis Ababa, Ethiopia
Abstract
Marketing receives much criticism, among these societal criticism claim that
certain marketing practices hurt individual consumers, business firms and
society as a whole. Therefore, the principal focus of this project paper is to
describe the practice of societal marketing and expound the societal criticisms
by floriculture companies.
The study was conducted among households, managers of the companies and
employees situated in Addis Ababa city particularly around Holeta Town. To
achieve the purpose of the study five research questions were developed
based on the practice of societal marketing by floriculture companies, societal
criticisms of the business, environmental sustainability and strategic options of
the business. Questions for both employees and households are developed by
using liker scale to rate their response. and scales are starting from the very
negative(strongly disagree) to the very positive(strongly agree). Data was
gathered from a survey among 80 employees, 100 households through both
open ended and close ended questionnaire and through structured interview
from five floriculture company managers.
During the analysis interrelated procedures are performed in order to sum up
and rearrange the data. Amalgamation of the qualitative and quantitative
approaches is adopted. Triangulation in data collection is pursued. Moreover
Care is taken to promote the validity and reliability of the data and the results
are presented using tabulation, bar-chart, and pie-chart. To analyze the data
Descriptive statistics such as percentage and frequency are applied.
Based on the research results the data analysis indicates that:
Even though, the contribution is not yet satisfactory, few companies held
responsible for societal issues. On the other hand there is less concern by
management for societal benefit and some of the societal claim on the
business is; less concern for environmental safety by that corporation, what is
shown in growth rate by corporations is not justified for both the community
and employees. As a result, the foremost recommendations are; corporations
should have to justify their existence with their overall contributions,
responding immediately towards the claim of the community and employees

are vital for corporations and providing due attention for environmental safety
are the prime once.

Acknowledgement
Undoubtedly, this success has been made possible only through the will of
God; hence this is the help of God I do not have words for God, but I would
like to take this opportunity to show my sincere gratitude and appreciation to
all people in this proposal work.
First and foremost I would like to express my deeper gratitude to my advisor
DR teklu kasu PhD for his excellent suggestions to accomplish this thesis,
Next, I would like to acknowledge my families, who walked this long road with
me every step of the way.
My special, thanks goes to my friend ato Ybeletal ayilew, for his unwavering
support during this studys questionnaire translation and data collection.
Finally I would like to express my heartfelt deeper gratitude for managers of
Holeta town floriculture company managers, employees and households for
their cooperation and for being devoted in providing current information and
filling the questionnaire which are paramount important to finalize this study.

II
TABLE OF CONTENTS
Abstract----------------------------------------------------------------------------------------I
Acknowledgements-------------------------------------------------------------------- ------II
1.
INTRODUCTION..................................................................................................3
1.1
Background
of
Study ..................................................................................4

the

1.2
Statement
of
Problem.................................................................................7

the

1.3 Objective of the Study----------------------------------------------------------------------9

1.4 .1.General Objective(Purpose)-----------------------------------------------------------.9
1.4.2. Specific Objective-------------------------------------------------------------------------9
1.5
Significance
of
Study....................................................................................10

the

1.6 Delimitation of the Study------------------------------------------------------------------11

1.7
Organization
of
Paper-----------------..............................................................12
1.8
Methodology----------------------------------------------------------------------.12

the

Research

1.8.1The Research
14
1.8.2 Data
14

Method----------------------------------------------------------------------

Sources---------------------------------------------------------------------------------

1.8.3
Sample
and
Techniques--------------------------------------------------------15

Sampling

1.8.4 Data Gathering Tools-----------------------------------------------------------------------17

1.8.5.Procedures of Data Collection-----------------------------------------------------------17
1.8.6.Methods
of
Analysis-------------------------------------------------------------------18
1.9.Activities
of
be
done
plan------------------------------------------19

(physical

Data

plan)Action

1.10
plan---------------------------------------------------------------------------------------20

Budget

1. Introduction
Marketing is social and managerial process by which individuals and
organizations obtain what they need and what they want through creating and
exchanging value with others. And also it involves building profitability and
value- laden exchange relationships with customers (Kotler, 2008).
Marketing starts with the concept of production that holds the needs that
prefer products that are widely available and inexpensive, and with the 21 st
century, it has come to adopt with the philosophy of societal marketing.
Societal marketing concept questions whether the pure marketing concept
overlooks possible conflicts between consumers short-run wants and long-run
welfare. The societal marketing concept holds that marketing strategy should
deliver value to customers in a way that maintains or improves both the
consumers and societies well being (Kotler, 2008).
In recent years, the emergence of world issues, such as environmental
deterioration, resource shortages, explosive population growth, world hunger,

poverty, and several social causes have challenged whether the current
marketing concept is an appropriate philosophy for todays businesses,
http://www.lib.umi.com/dissertations/fullcit/9948531, [Accessed on Nov,o3
2011]. Therefore, there has been increased pressure on many companies and
managers to recognize their responsibilities to society and act in a way that
benefits the overall community.
If so, Organizations in the twenty-first century are increasingly concerned
about managing societal issues in marketing to benefit key stakeholder
interests. Concerning with industries in Ethiopian, one successful business that
shows increasing contribution to GDP is Floriculture business. Source: (national
bank of Ethiopia).

1.1. Back ground of the study

It is apparent that agriculture is the back bone for economies of developing
countries, even if it affected by different obstacles
which dwarf its
development, thus, many developing countries are trying to peruse policies
that aim at increasing the productivity of the sector policy in order to Ethiopia
has also adopted agricultural led Development Industrialization to insure the
benefit since the sector accounts for about half of Growth Domestic Product
(GDP), that is 84% exports and more than 80% of total employment,
(Ethiopian Horticulture Development Agemcy,2004).
The majority of profit comes from Floriculture which is part of agriculture.
Floriculture can be defined as the segment of horticulture concerned with
commercial production, marketing, and sale of bedding plants, cut flowers,
potted flowering plants, foliage plants, flower arrangements, and
noncommercial home gardening. It is one of the booming sectors in Ethiopia.
The first private floriculture companies, Meskel flower and Ethioflora, started
activities around 1997 on a few hectares of land. However, now days, the
Ethiopian Investment Agency has given permit to 251 investors in the
floriculture sector until 2008. Out of these, 61 are operational, 21 are at
implementation stage, 134 are at pre-implementation stage and 36 permits
have been cancelled (Ethiopian Horticulture and Development Agency, 2005
E.C).
New incentives have been offered to investors since Ethiopias Investment
Code was revised in May 2006. The floricultural sector in particular has strong
backing from the Government. Incentives such as a five-year tax holiday, dutyfree imports of machinery and easy access to bank loans and land have

attracted investors. As a result of these and other incentives, Ethiopia's flower

business is booming and could potentially overtake coffee as the countrys
main export commodity, (www.ethiopian embassy.org), accessed, 04/11/2014
@ 10:42:07.
Ethiopias vast land, favorable climate, water, availability of cheap labor and
land resources combine to make it an incredible hub for investment. This
favorable condition has attracted many foreign investors access to the
Ethiopian floricultural business. On the other hand, even though this sector
creates great job opportunities, which increases the contribution to the growth
of GDP, there is no particular mystery associated with the need of raising the
concept of societal marketing that benefits the wellbeing among the society.
The societal marketing holds that the organizations task is to determine the
needs, wants, and interests of a target market and to deliver the desired
satisfactions more effectively and efficiently than competitors in a way that
preserves or enhances the consumers and the societys well-being (Kotler
2000). Therefore, marketers must endeavor to satisfy the needs and wants of
their target markets in ways that preserve and enhance the well-being of
consumers and society as a whole.
Moreover, as the societal marketing concept is a forerunner of sustainable
marketing in integrating issues of social responsibility into commercial
marketing strategies, the society needs not only the creation of job
opportunities, but also the business to promote a more socially responsible,
moral and ethical model of marketing, countering the consumerism way of
thinking to be promoted by the firm. Most of the companies work only towards
what they are primarily established for, but the society at large expects the
companies to produce environmentally sustainable products by considering
the marketing activities from the consumers point of view while also making
profit.
The absence of societal responsibility in business needs to be upturned, and
this requires a study on the extent of the problem. However, most of the
research conducted so far has focused only on positive impact of the
floriculture sector, Alazar Ahmed (2007), Horticultural Marketing in Ethiopia.
There are only a few studies that have included the negative impact of the
sector on the environment, (Mizan Law Rev, Ethiopian Floriculture and its
impact on the environment). However, there is no any study that focused on
the practice of societal marketing in the horticultural marketing in Ethiopia. So
this is what motivated the student researcher to conduct a study on the area

with the aim to document the practice of societal marketing in the Holeta town
Floriculture business.
Holeta was established in 1894 when Emperor Minilik II of Ethiopia built a
Palace in the current Arada / the then Birbirsa Siba kebele and it town has
gotten municipality in 1948. Recently the town has four kebeles (Holeta Town
finance and economy bureau, 2004).

1.2. Statement of the problem

With the transition of commercial marketing to societal marketing,
organizations task is to determine the needs, wants, and interests of target
markets and to deliver the desired satisfaction more effectively and efficiently
than competitors in a way that preserves/enhances the consumers and the
societys well-being ( Kotler and Keller ,2006).
Moreover, Corporations are not only economic entities, but they are also
social institutions that must justify their existence by their overall contribution
to society (Mintzberg et al, 2002).
However, based the researcher's pilot study this is not always the case for the
floriculture business in Holeta town.
Furthermore, Societal marketing is a principle of enlightened marketing that
holds a company should make marketing decisions by considering consumers
wants, the companys requirement, consumers long-run interests, and
societys long- run interests with having the objectives that oblique a business
decision maker to take actions that protect and enhance societies interest,
(Kotler and Keller,2006).
Nevertheless, as a result of exploratory survey of the student researcher with
Holeta town finance and economy bureau, most of companys decisions are
toil towards the primary concern for profit making rather than considering the
long- term benefit of the society. In addition the societal marketing concept
introduces corporate social responsibility into marketing practices, which is the
voluntary adoption by companies of responsibilities beyond purely economic
or legal responsibilities (Piacentini, et al, 2000). Conversely, the practice of
this concept is not familiar with those companies to implement it practically.
Above all, the Floriculture business creates great job opportunity for 5759
numbers of the society for both professionals and non professionals (Holeta
town finance and economy bureau, 2004). Even though, the opening of

Floriculture business provides some of us with job opportunity, it has its own
disadvantage for our society (Holeta Town Households).
Even if marketers are apparently unwilling (or unable) to acknowledge or
embrace moral sensibilities and, moreover, are largely unaware of the
terminology and theory (such as it is) of societal marketing, this does not
mean that marketing decisions do not have societal outcomes, or even that
many firms have not sought to incorporate aspects of societal marketing into
their decision process (Abratt and Sacks, 1989).
Therefore, review of the society about the companys concern for societal
wellbeing, affects the floriculture business negatively. And this statement can
be supported by suggestions provided by Marwick & Fill, (1998) that
everything an organization does, and does not do, has a direct impact on its
corporate image. This means whatever companies do or do not do due to the
absence awareness on the terminology and speculation of the societal
marketing speculation, can affect their businesses corporate image.

Research question

To what extent the company held responsible for societal issues?

(Building schools, hospital and arranging educational as well training
programs)
What are the most societal criticisms /views on flower business and
companies? Including associated risks
Are companys owners, managers and employees familiar with the
concept of societal marketing and elucidate it to the society?
What are the strategies used by companies to enhance corporate image
of the business in the minds of households?
What is expected from companies as crucial part of their business
operation?

1.3. Objectives of the Study

This study has raised from the student researcher concern that the practice of
societal marketing on this floriculture business is at an incredibly low level
with regard to how to apply the societal marketing concept. As a result the
upper most objective of the study was to assess the practice of societal
marketing in Holeta Town floriculture business.

1.3.1. Specific objectives

To find out:

The impact of societal marketing on public perceptions of the business,

What is required from the company besides selling and getting profit,
Whether there is familiarity of the societal marking concept within the
company and households or not,
The societys perception of the floriculture business and its impact for
the people,
The practices of societal marketing used by the company and to
elucidate those practices in relation with the extant theoretical literature
included in this project as an evidence,
Perception of households within the company and outside the
company(employees and the remaining part of the population),
Mechanisms/ strategies used by the floriculture company to reduce the
societal impact on the corporate image of the business,
The societal criticisms of the business,
Finally, to recommend measures for improvement based on the upshot
of the findings on the companies practice of societal marketing and
perception of the research participants toward companies.

1.4. Significance
For all concerned bodies): It provides insight into the companys societal
perspective and contributions to the society and as well to take necessary
measures.
For companies: the upshot of this study will provide fact based information
to implement measures.
Moreover, the end result of this project will provide better information to
ensure companies to apply societal marketing in order to differentiate
themselves from competitors.
For Households: The finding of this project paper is expected to reduce the
gap created by the absence of sufficient attention to societal marketing in
floriculture business.
For the Researcher: The finding of this study is expected to enable to
become rich with the concept of societal marketing in a practical world and to
update her with current information in the topic area.

Future research: The study is predicted to arose more interest and motivate
for future research on the impact of floriculture and other businesses on local
economic development and wellbeing of the society. Moreover, it has l serve
as a bench mark to study on other variables on the topic area.

1.5. Delimitation
Related terms
Social marketing: is the application of commercial marketing technologies to
the analysis, planning, execution and evaluation of programs designed to
influence the voluntary behavior of target audiences in order to improve their
personal welfare and that of their society (Andreasen 1995).
Cause-related marketing: is the process by which a firm creates a
marketing strategy that is characterized by contributions to specific causes
through customer interaction, which also serves to generate revenue for the
firm itself (Varadarajan and Menon ,1988).
Corporate social responsibility: focuses on the concept that a corporation
should be held accountable for any of its actions that affect people, their
community, and the environment surrounding those people and community
(Piacentini, et al ,2000).
Even though, all the above listed related terms are part of societal marketing
scope of the study is confined to analyzing the practice of societal marketing
within floriculture business in case of Holeta Town and societal perception of
the business by using the concept of societal marketing and corporate social
responsibility. But it does not look at the other related terms such as Causerelated marketing and Social marketing.
Furthermore, this study didnt look at the other activities of flower business
beyond the practice of societal marketing.

1.6. Structure of the paper

This projected is categorized into five parts which includes the introduction,
problems statement, significance of the study, limitation and delimitation of
the cram under chapter one. Under chapter two the theoretical part/literature,
is incorporated, moreover the methodology part is built-in under chapter
three, while the remaining data presentation, analysis and interpretation,

major findings , conclusion and recommendation are followed respectively

under chapter four and five.

1.7

Research methodology

Since research methods are the practical techniques used to carry out
research, this section of the study focuses on discussion of methodology and
the methods to be employed in this research. The section consists of General
research methodology, specific research method, sampling techniques and
sample size determination sample design and, data collection techniques,
data preparation, analysis and interpretation. To provide the detail of each sub
methodology application, the student researcher discusses each separately as
follows.

1.7.1. General research methodology

Before the proposal was developed the student researcher will used
exploratory research, because exploratory research helps to collect first hand
information where the researcher fails to get secondary data. An exploratory
study is a valuable means of finding out what is happening; to seek new
insights; to ask questions and to assess phenomena in a new light. It is
particularly useful if the student researcher wishes to clarify her/his
understanding of a problem, such as if she/he is unsure of the precise nature
of the problem, Robson, (2002), cited in (Nicholas. W. 2011). Thus, this is the
reality of the researcher to use exploratory research at the beginning of the
study. Moreover, as the topic (research area) is new, at the absence of
conducting exploratory study it is difficult to the student researcher to develop
important ideas.
Therefore, the researcher has gathered first hand information in the topic area
through face to face interview with concerned bodies particularly the Towns
finance and economy bureau and households. After doing so, the type of the
research that has been applied for this study was descriptive statistics. This
has been done through in-depth interview method and questionnaire.
Rationale for using descriptive type of research is that it can provide crucial
information regarding the average member of a group, Specifically, by
gathering data on a large enough groups of people, a researcher can describe

the average member, or the average performance of a member, of the

particular group being studied (Mark.S, Philip.L . and Adrian).
The objective of descriptive research is to portray an accurate profile of
persons, events or situations (Robson, 2002).
To collect data and describe the practice of societal marketing, the researcher
has used Surveys based on her/his objectives of what is being studied.

Research frame work

O X R, where
O
refer to Observation
X
refer to Expose
R
refer to Response
O- Observation: - where it represents the researchers observation of the
problem at the place to get first hand information. It is what is done by the
researcher as an exploratory part of the study before the proposal was
developed.
X-Expose: -depicts the research participants those who were exposed to
participate or to answer the questions.

Floriculture companies found in Holeta town: interview

Holeta town households: Through likert scale and some open-ended

questionnaire.

R- Response: - this frame of reference deals with the respondents

answer/response for the questions forwarded or distributed by the student
researcher through interview and questionnaire.

Table 1. Research participants

Participants
Holeta town households

Their concern for the study

To examine the impact flower business on the
society as well as societal benefit of the

business.
Floriculture companies

To portray the practice of societal marketing

Employees of the
company

To examine their opinion on the business and

their aware of societal marketing

1.7. 2. SPECIFIC RESEARCH METHDOLOGY

Source of data: for this study the researcher will use both primary and
secondary
data hence, books and business journals will be wed as
secondary data source and the lead survey and original , where books and
business journals shall used as secondary data source and the lead survey and
original data collected from the research participants will be used as primary
source of data.
From the primary data the researcher shall use Surveys particularly in-depth
interview with the managers of Floriculture Companies. Moreover, first hand
data will been collected through questionnaires from employees of the
company and households of Holeta town. Thus, to make the finding more
reliable, the researcher need to use research assistance to collect data from
households; The research assistance will be selected from the local area
particularly from the selected kebele.
Rationale for using survey: survey enables the researcher to gather data
at a particular point of time with the intention of describing the nature of
existing conditions. It involves identifying standards against which existing
conditions coughed be compared, As well, determining the relationships that
exist between specific events. Typically survey method is uses to scan a wide
field of issues, populations, programs etc. in order to measure or describe any
generalized features.
Gathering data on one shot base is one of the benefits and more over, rowans
that made the researcher chase this technique.
Whereas for secondary data, literature review and previous finding has use to
strengthen the finding. since Secondary data can be gathered from multiple
sources such as documentaries ,books, articles, journals survey .and soon,
There are a number of clues to whether the secondary data the researcher
require are likely to be available. Thus, part of the literature review that

researcher reviewed different books, journals, articles and other materials

related to the chosen topic/problem area.
Type of data: - The data which will be used in this research looks for a simple
descriptions on the independent and dependent variables.
Nature of data: - The nature of the data will be cross-sectional.

1.7.3.Sampling
size

techniques
determination

and

Sample

The sampling technique that will be used in this study is multi-stage clustering
to for classify the kebele probability sampling technique for the households
and systematic simple random sampling technique will be applied for the
floriculture companies.
Rationale for choosing cluster: - In cluster sampling we need to have a
number of clusters which are characterized by heterogeneity in between and
within homogeneity within. It is convenient with respect to time and money
allocated for a particular study, John.A , Haftz.T .A, Robert.R and David.N.
From the twenty flower companies found in Holeta town, the student
researcher has only chosen five companies which are expected to represent
the remaining. This was done by using systematic random sampling technique
and selected the five company mangers by using one fifth of the door.
Regarding the households there are four Gebere kebele mehaber with total
number of 37,000 population, according to Holeta town finance and economy
bureau (2004), from the four Sademo gebere mehaber kebele is which has
specifically 1000 number ofpopulation is the one which is greatly affected the
resettlement of the investment plan (Holeta town kebele gebere mehaber).
Thus, after clustering kebele into four by using purposive sampling only one
kebele, namely Sademo will be taken as a sample representative of the
remaining kebele. Moreover, employees will be selected by using convenience
sampling from five flower companies.

1.7.4. Respondent Selection

Among the stated participants of floriculture companies found in Holeta town,
employees of the companies and households of the town will be included as
participants of this study.

For floriculture companies, the selection was made by systematic random

sampling, technique and the managers of the company are going to be
respondents of the interview. When we come to up with employee selection,
convenient simple random sampling was applied to collect cross-sectional
data through questionnaire.
With respect to households first clustering will be used to select one kebele
among the four kebele found in the town named as kebele k1, K2, k3 and k4.
One cluster (Sademo kebele) was taken as a representative of the remaining
cluster.from the selected kebele which has 1000 population, sample of 100%
populations which were 100 were of the population selected by using simple
random sampling, Rationale for simple random sampling: - selection is
made from a specified and defined population (the frame is known). Each unit
is selected with known and non-zero probability, so that every unit in the
population has an equal chance of being selected.
Moreover, simple random sampling technique provides protection against
selection bias and enables the scope for non-response bias, John.A,Haftz.T.A,
Robert.R and David.N.
therefore the student researcher has requested respondents to participate in
the survey by giving insights that the result of this study will benefit the
society at large companies as will.

1.7.5. Non response rate and rate of return

To reduce the non-response rate with the help of research assistance I
personally contact and assist each respondent to fill the questionnaire with
acknowledged explanation about the benefit of the study to their interest

1.7.6 Data collection techniques

The empirical data for this study will be collected through questionnaires from
Holeta town sademo kebele Households and employees of the floriculture
companies. The questionnaire will be distributed by the student researcher for
employees of the company and for Households with the help of the research
assistance.
The more over in this study Nan in-depth interview will be applied with the
managers of floriculture business company managers of Holeta town.

1.7.7. Data collection instruments

In this study the main instrument that will be data gathering were interview
and questionnaire before designing questionnaire, interview (as a preliminary
survey) will be conducted to investigate the opinion of the households and
their view point on corporations societal marketing practices.
Guidance on filling in the questionnaire and on the handing over will be given
likert scale is going to be used
for answering the questions based on the
opinion that the respondents have about the societal marketing practice and
aspects of the floriculture companies, where their response is based on the
rating scales to measure their positive or negative response.
Table 2: likert scale ratings
Selective
Strongly
Disagre Neutral
item
disagree
e
1
2
3
Source: questionnaire 2014

Agree
4

Strongly
agree
5

Then respondents were requested to tick on among the given alternatives.

1.7.8. Data presentation, Analysis and

Interpretation
A mixed method approach is one in which the researcher tends to base
knowledge claims on practical grounds (e.g., problem-centered, and
pluralistic). It involves collecting data either simultaneously or sequentially
for the best understand of the research problem. The data collection also
involves gathering both numeric information as well as text information
(e.g., on interviews) so the final data represents both quantitative and
qualitative information, John w. Creswell.
The data collected through interview and questionnaire from Holeta town
Floriculture Company, household and employees respectively will be coded
based on the respective consistency of the responses, and then will be
analyzed both quantitatively and qualitatively. To analyze the data gathered
through questionnaire, the student researcher will be tabulation, pie-chart
and bar-chart to present data numerically and analyze by using SPSS software
package.
After doing so, the analyzed data will be interpreted both
qualitatively and quantitatively.

Time and Cost Budgeting

Time Budgeting
MONTHS OF THE YEARS 2014/15
Oct.

Nov.

Dec.

Jan.

Feb.
1-15

Scheduled
activities

Feb
Mar. 5
16Mar 5 Mar.20

Review Of Related
Literature
Questionnaire
preparation
3

Questionnaire
distribution

Data processing

5 Data Analysis

Interpretation

7. Draft check and

submission

Cost Budgeting
The study is expected to cost an n estimated cost not less than the following.
Cost Elements

Cost (in birr)

Stationary

1000.00

Transportation

3000.00

Secretary
and
Printing
4. Contingency

TOTAL

2500.00
1500.00
8000.00

Mar.
2130

May

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Thank You!!