Marketing’s contribution to the sustainability of pastoralism: Evidence from Ethiopia Workneh Kassa Tessema Thesis committee Thesis supervisor Prof. dr. ir.J.C.M. van Trijp Professor of Marketing and Consumer Behaviour Wageningen University Thesis co-supervisor Dr. P.T.M. Ingenbleek Assistant professor, Marketing and Consumer Behaviour Group Wageningen University Other members Prof. dr. S.W.F. Omta, Wageningen University, the Netherlands Prof. dr. ir.E.H. Bulte, Wageningen University, the Netherlands Prof. dr. R. Ruben, Radboud University, Nijmegen, the Netherlands Prof. K. Belay, Haramaya University, Ethiopia This research was conducted under the auspices of the Wageningen School of Social Sciences (WASS) Marketing’s contribution to the sustainability of pastoralism: Evidence from Ethiopia Workneh Kassa Tessema Thesis submitted in fulfilment of the requirements for the degree of doctor at Wageningen University by the authority of the Rector Magnificus Prof. dr. M.J. Kropff, in the presence of the Thesis Committee appointed by the Academic Board to be defended in public on Monday 1 October 2012 at 1.30 p.m. in the Aula. Marketing’s contribution to the sustainability of pastoralism: Evidence from Ethiopia Tessema, W.K. PhD. Thesis, Wageningen University, Wageningen, the Netherlands (2012) With references and summaries in English and Dutch ISBN: 978-94-6173-314-6 To Amy, Abraham and Abel Abstract Sustainability of pastoralist production is important for the livelihood of pastoralists as well as to the supply of animal-based protein to the consumer market. However, there have been concerns on the sustainability of pastoralist production system, particularly on the ecological impact of the system. To this respect, the issue of whether pastoralists adjust their herd size through stocking and destocking decisions to the available pasture and water is still a central question in the debate to the sustainability of pastoralists. The stocking and destocking (management) decisions of pastoralists on their herd are considered essential for appropriate use of pasture and water (planet), for improved livelihood of pastoralists (people), and their economic contribution (profit). The stocking/destocking decision in anticipation of changing external conditions is increasingly considered as a marketing challenge. However, the role of marketing in the pastoralist literature has largely been limited to short-term exercise to minimize the livestock losses due to droughts (by selling in times of the drought and buying after the drought). There was no much emphasis to the unique potential contributions of marketing to the sustainability of pastoralist production. This thesis therefore investigates whether and how marketing can contribute to the sustainability of pastoralists. It consists of a literature review and three empirical studies. The literature review on the sustainability of pastoralism indicates that the sustainability of the pastoral system depends on how the system is managed. The role of marketing for the sustainability of pastoralism is also indicated along the literature review. In the first empirical study the market integration of pastoralists is examined using the inductive case study, and the concept of market orientation of pastoralists, as an adaptation of market integration, is developed. In the second empirical study, the relationship between market orientation and livelihood performance is empirically tested in a quantitative survey in two pastoral regions of Ethiopia. The study is based on cross-sectional data, with performance data collected in one region at a second time period. The results show that customer orientation and interfunctional coordination components of market orientation positively contribute to the livelihood performance of pastoralists. The competitor orientation component of market orientation, however, doesn’t influence livelihood performance. The third empirical study examines in a semi-experiment the role of market orientation in the resource dilemma that pastoralists face 7 when a climate forecast demands a change in their herd size. The results show that customer orientation and interfunctional coordination components positively contribute to the sustainable utilization of pasture and water by pastoralists; whereas competitor orientation weakens the sustainable utilization of natural resources. These relationships are stronger if the climate forecast is uncertain because the predictions of formal and informal forecasts are inconsistent. Overall, this thesis contributes to the understanding how marketing can help to solve sustainability problems in pastoral areas, in particular the Horn of Africa. It also contributes to the extension of marketing theories from high income countries to informal economies in emerging markets. This research therefore informs marketing researchers that marketing theory is generalizable to the informal economies such as pastoralists in emerging markets. The research also suggests to policy makers that creation of customer value can help to strengthen sustainability. 8 Acknowledgements Many people and organizations have contributed to the completion of this study. I express my sincere gratitude to all of them. I would like take the pleasure of the completion of my thesis as an opportunity to thank those people and organizations that made a significant contribution to the fruitful completion of my PhD study. Foremost, I would like to thank my promoter Prof. Hans van Trijp and my co-promoter Dr. Paul Ingenbleek, for their continuous guidance, support and interest in this research. Dear Hans and Paul, it is so obvious that without your dedicated support this PhD research could have not been at the present status. I really thank you all a lot! Hans, I am grateful to you for the stimulating discussions, and incisive comments I received through out my study years. You always start our discussion with one all inclusive question; i.e., ‘Workneh, how is life?’ By this question I presume that you mainly mean my academic life (how I am struggling with it). It also surely encompasses my social life in Wageningen. I nevertheless answered almost always ‘It is ok’, while the reality sometimes may not be. I really liked your ‘pen and paper’ approach where during each of our discussions you took a pen and paper to simplify what we discussed and then ask me further to check whether I am still on board. Paul, I thank you for day to day guidance, insights, comments, criticisms, suggestions, and follow-ups. You patiently guided me to the end where in the process you treated me as a good colleague. I really appreciate the way you followed to make me a better researcher. You have always a way to recommend whenever I am in a state of uncertainty. I also appreciate the way you demonstrated during your field trip to Ethiopia. You just took all the challenges that you encountered during the field trip as an opportunity to make the foresighted guidance throughout the study. You liked more the topic of my research particularly once you paid the field trip to the pastoralists of Borana and Kereyu. During the field trip we also had several wonderful memories particularly in Wondogenet and Lake Hawassa. I would like to thank the members of the defence committee Prof. Onno Omta, Prof. Erwin Bulte, Prof. Ruerd Ruben and Prof. Kassa Belay for reviewing my thesis and coming to Wageningen for my public defence. I am indeed honoured to have you in my PhD committee. This study would have never come true if it were not the financial support from the Netherlands Organization for International Cooperation in Higher Education and Research 9 (NUFFIC), and the study leave grant from Haramaya University of Ethiopia. I thank the management of the two institutions most profoundly. My gratitude is also due to the administrative offices of Yabello, Jijiga, Meiso, and Fentale Kereyu districts for granting me research permission. I am thankful for all pastoralists who were willing to participate in this research. I am also indebted to the brokers, traders, fattening operators, and exporters that are involved in livestock marketing for their willingness to participate in the case study. In particular I thank export abattoirs (ELFORA, Hashim, Modern export and Luna), and live animal exporters (Tewodros Teshome and Adugna). My special thanks also goes to Dr. Tebeje, Ato Awraris, Obbo Mohammed (clan elder), and Ibrahim Tuna. I really appreciate the skills of Obbo Mohammed and Ibrahim that they used to introduce and familiarize me with the pastoralists in remote areas of Borana. They were so responsible to safely guide me from Negelle Borana to Moyale through Wachille all the way to Shashemene. My dedicated enumerators in Fentale (Eshetu, Gizaw, Abdella, Seladine, and Sultan) and Yabello (Brook, Workaferahu, Tadesse, Abiy, Abraham, Muktar, and Sake) deserve special thanks. I also thank my field driver Ato Kassu for his determination that he demonstrated during data collection. I also thank staff members of International Livestock Research Institute (ILRI) Addis Ababa office and Pastoralist Forum Ethiopia (PFE) for allowing me to access and use their resource centres for internet access and different publications. In particular, some individuals in Pastoralist Forum Ethiopia need special thanks. I thank Tezera, Ms. Hani, Dr. Daniel, Mebratu, and Wondwossen for their kind cooperation and support during my study. My appreciation and thanks to Ms. Hani is also invaluable for her excellent work in translating