Mekdela Amba University

College of Agricultural and Natural Resource

Department of Rural Development and Agriculture Extension
Senior Seminar on the Role of Market Information System in Improving Rural
Livelihood and Status of Service in Ethiopia

Prepared By:

Names Id
1) Abebech Zewudu …..…………………………1200044
2) Abebu Addis ……….…………………………1200051
3) Almaz Afewerk………………………………..1200133
4) Getachew workie….. …………………………1200611

Advisor: Tadsual. A

January, 2023
Tulu Awulia, Ethiopia
 TABLE OF CONTENTS
ACKNOWLEDGEMENT..............................................................................................................................i
ABSTRACT...................................................................................................................................................ii
ABBREVIATIONSAND ACRONYM.....................................................................................................iii
1. INTRODUCTION.....................................................................................................................................1
1.1. Background.........................................................................................................................................1
1.2. Statement of the Problem....................................................................................................................3
1.3. OBJECTIVE.......................................................................................................................................4
1.3.1. General Objective.........................................................................................................................4
1.3.2. Specific Objectives.......................................................................................................................4
2. LITRATURE REVIEW.........................................................................................................................5
2.1 Definition of Key Term........................................................................................................................5
2.2 Theoretical Literature...........................................................................................................................6
2.2.1. The current statuses of market information system in Ethiopia........................................................6
2.2.3. The role of market information system.............................................................................................7
2.3 empirical literature...............................................................................................................................8
3. CONCLUSION AND RECOMMENDETION.....................................................................................9
3.1. Conclusion..........................................................................................................................................9
4. RECOMMENDETION..........................................................................................................................9
5. REFERENCE.......................................................................................................................................10
 ACKNOWLEDGEMENT

First above all, I would like to thank the almighty God. Secondly, I would like to express my
deepest gratitude and thanks to my advisor Tadesual for his unlimited support, advice, give
constructive comments and offering me useful hints throughout my work in writing this seminar
paper. Finally, I would like to thank mekdela Amba University to provide such an interesting
courses that makes students to revise a lot of literature to develop their potential for future
research work.

i
 ABSTRACT

This review paper point out of the establishment of public market information systems used as a
means of increasing the efficiency of marketing systems and promoting improved price
formation in many developing countries especially in Ethiopia, which has been undergoing
structural adjustment. Thus, this paper reviews the role of market information system (MIS) in
improving the rural livelihood and the status of service in Ethiopia.

Marketing information systems are decision support systems focused on specific marketing
decisions, providing a more efficient and effective framework for analyzing and identifying
changes in the market environment. The literature review reveals that there are gaps in
theoretical and empirical review about which specific steps and best practices should be
considered in market information system implementation efforts. Is it intended to synthesize the
knowledge and perceptions generated by existing market information system research and
identify the generic and particular guidelines that can be derived from the existing body of
market information system researc

Improved information enables farmers to plan their production more in line with market
demand, schedule their harvests at the most profitable times, decide which markets to send their
produce to and negotiate on a more even footing with traders. Improved information enables
traders to move produce profitably from a surplus to a deficit market and to make decisions
about the economics of storage, where technically possible. The market information system in
Ethiopia can generally be described as very weak. The market information generated is
dominantly historical; it is not broadly available to and therefore not used by the farmers and
traders. The major way of acquiring market information for both farmers and traders is through
direct observation on market days.

ii
 LISTS OF ABBREVIATIONSAND ACRONYM

CARE Coordinated Accelerator Research in Europe

CSA Central Statistical Authority
DPPC Disaster Prevention and Protection Commission
EEPA Ethiopian Expert Promotion Agency
EGTE Ethiopian Grain Trade Enterprise/ European Grain Trade Enterprise
IFPRI International Food Policy Research Institute
MEDC Ministry of Economic Development and Cooperation
MI Market Information
MIS Market Information System

MOA Ministry of Agriculture

MTID Markets, Trade and Institutions Division

RL Rural livelihood

iii
 1. INTRODUCTION

1.1. Background
This paper shows that because of poor access to market information, among other factors, the
margins smallholder farmers make are limited (Kassie et al., 2019). Also, these farmers seldom
venture past small local rural markets to sell their produce or buy their daily necessities (Kocho
et al. 2011). Increased access to market information reduces the costs, hidden and observable, of
exchange. As a result, the markets will offer better prices for smallholders’ produce. Although
there have been efforts to establish market information systems in Ethiopia, farmers have not
benefited from these efforts.

The main organized marketing information system for the livestock sector in Ethiopia is the
National Livestock Market Information System, a government initiative launched in 2019. The
system works via mobile text messaging from a central server where price and volume
information are aggregated by livestock, breed, age, sex and grade for 47 markets spread across
the country. The database is updated regularly.

The national livestock market information system has reduced duplication of effort at different
levels of government, improved digitizing, analysis and packaging of livestock market
information for dissemination, reduced delay in market data transmission, and set standard for
generating comparable data. However, awareness about the national livestock market
information system itself and the technological difficulties to access its services remain limiting
factors to its widespread use (Kebebe, 2019). Empirical evidence is required to inform decision
makers on why market information is needed and how systems providing it can be established.

In developing countries, information failures prevail in agricultural markets, leading to high

transaction costs related to the search for products, to negotiation and to transport
(fafchamps&gabre-madhin, 2006). These high transaction costs depreciate farm prices,
producers being penalized by information asymmetries, particularly in the case of remote
production areas.

1
The market information systems are seen as market tools that can contribute to a better insertion
of producers in markets (Arias et al., 2013). They are designed to improve market performance,
reducing asymmetries by the disseminating of information to market players, and providing
monitoring tools for policy makers (shepherd, 2007). The rise of mobile phone brought-up a
wind of modernization in rural areas and a renewal of MIS. Several case researches highlight the
positive impact of mobile phones on market performances (Jensen, 2007; aker, 2010). Market
information systems have increasingly integrated mobile phone as their main dissemination tool,
since the beginning of the 2000’s.

However, market information system efficiency remain limited and controversial (fafchamps &
minten, 2012; goyal, 2010). One of the factors limiting their efficiency appears to be the
inadequate consideration in their design of the practices and strategies of market actors as well as
the real constraints to access to market, particularly those of smallholders’ (garuku et al., 2009;
galtier et al., 2014). In the context of structural changes in food markets in developing countries,
due to trade liberalization and to the growing demand of expanding urban centers, the role of
information in improving access of small producers to the market is questioned.

The market information system concept has, thus, attracted a wide spectrum of definitions and
conceptualizations in the available body of scholarly literature. However, all conceptualizations
appear to converge upon the common definitional consensus that market information system are
management information systems formulated specifically to support a firm’s marketing strategy
and decision-making (Mandal, 2018; Wahyuni & Lestari, 2020).

The overarching and fundamental benefit derived from the implementation of market
information system derives, therefore, from the fact that they facilitate the acquisition of
knowledge, agility, and flexibility in modern firms’ responses to changes in the external business
and marketing environments. Despite the existence of a robust body of pertinent literature, a
preliminary review of the available research reveals that very few theoretical and empirical
studies attempt to provide comprehensive guidelines on the implementation of market
information system. There appears to be a significant gap in the current body of knowledge
concerning the question of what specific steps and best practices contemporary firms should
consider in their efforts to implement market information system (Perreault, 2018). The current
paper’s core objective, in this regard, is to synthesize the knowledge and insights generated by
2
extant studies. We have compiled the most cited peer-reviewed literature on the topic,
summarizing the current approach.

1.2. Statement of the Problem

Ethiopia has a large domestic market with a total population of about 110 million people (2020),
making it the second most populous country in Africa after Nigeria. After an intense period
of COVID-19 pandemic and a prolonged and devastating civil conflict,  the Ethiopian macro
economy is finding itself in a difficult war-time footing, facing immense humanitarian and
security costs, as well as a heavy toll in terms of lost social and physical infrastructure. Heading
into 2023, however, conditions appear to be emerging for the economy to possibly move away
from a conflict mode and towards recovery and reconstruction. 

There for this paper aim reviews puts of marketing information system is a management
information system designed to support marketing decision making. This reviews show that
because of poor access to market information, among other factors, the margins smallholder
farmers make are limited (Kassie et al. 2019). Also, these farmers seldom venture past small
local rural markets to sell their produce or buy their daily necessities (Kocho et al. 2011).
Increased access to market information reduces the costs, hidden and observable, of exchange.
As a result, the markets will offer better prices for smallholders’ produce. Although there have
been efforts to establish market information systems in Ethiopia, farmers have not benefited from
these efforts.

Over the past many years many developing countries including Ethiopia suffered from market
information system problems. These problems include: Farmers in taking decision concerning
the crop and the quantity to produce and the best time to produce and maximize returns. There
are also many problems facing rival people due to lack of market information. Accordingly, price
specification, information cost and change of market organizations. As a result, small scale
farmers and traders cannot perform their activity efficiently and effectively and also they cannot
be profitable. Therefore, this paper aims to review the role of market information system in
improving rural livelihood and forward possible solution.

3
 1.3. Objective

1.3.1. General Objective

The general objective of this paper is to review the major role of market information system in
improving rural livelihood and status of service in Ethiopia.

1.3.2. Specific Objectives

 To review current status of the market information system in Ethiopia
 To review the role of market information on rural livelihood in Ethiopia

4
 2. LITRATURE REVIEW

2.1 Definition of Key Terms

Marketing is embracing all of the activities involved in anticipating. Managing and satisfying
demand through the exchange process. Such activities include environmental (Situation) analysis
and marketing research, consumer analysis, product planning, marketing programming, and
marketing management. Philip Kotler defines marketing as satisfying needs and wants through
and exchange process. Customer will only undertake the exchange, if they feel that their needs
are being satisfied, clearly the transactional value cannot be more than the amount customers are
prepare to pay to satisfy their need.

Marketing Information Systems (MIS) are systems that involve the collection, analysis, and
presentation of data related to marketing. It is primarily used by marketing decision-makers to
improve their planning, implementation, and monitoring. A marketing information system is a
way to manage the vast amount of information firms has on hand information marketing
professionals and managers need to make good decisions. Marketing information systems range
from paper-based systems to very sophisticated computer systems. Marketing Information
Systems Goni (2008) reported an empirical study on the marketing information systems and
strategy levels.

Therefore, considering the previous studies on marketing information systems as the independent
variable, Goni (2008) concluded that the use of marketing information systems is related to
market trends to provide data and information to strategic levels in the organization.
Additionally, Hakhwa and Goyala (2013) explained the impact of the marketing information
system in analyzing and presenting data and information in a timely manner and its importance
in decision making and support. Unethical business practices have the likelihood of totally
undermining the tourism development work of a destination country. This is why SMEs need to
develop strategies to manage ethics within the tourism marketing drive (Nicolaides, 2019).

The study concluded that the use of marketing information systems provided marketing data,
sales forecasts and information to different strategic levels related to market trends domestically

5
and internationally. In other word, Hakhua and Goyala (2013) investigated the success of
marketing information system model for SMEs of Punjab using the validation of survey based
results and a case study analysis. The aim of this study was to verify and audit the marketing
information system for SMEs in Punjab after achieving success in large companies.

Livelihood refers to their "means of securing the basic necessities (food, water, shelter and
clothing) of life". Livelihood is defined as a set of activities essential to everyday life that are
conducted over one's life span.Therefore all activities involved in finding food, searching for
water, shelter, clothing and all necessities required for human survival at individual and
household level are referred to as a livelihood. Approximately 90 % of rural households are
involved in farming activities (Davis et al. 2010). In Africa , 70 % of the household income in
rural areas is from farming activities, while in Asia and Latin America , 50 % of the income is
from farming activities (Davis et al. 2010). 

Rural livelihoods are intrinsically linked to agriculture. This can mean farming directly,
providing wage labor, processing, trading, marketing or working in one of the many small
businesses and sectors along the agricultural value chain that support and drive the development
of rural communities. Thus, the agriculture is primary economic activity in rural regions;
however, manufacturing and service account for a significant portion of economic activity in
metropolitan areas.

2.2 Theoretical Literature

2.2.1. The current statuses of market information system in Ethiopia

The current market information formally generated in Ethiopia is mainly for the purpose of
policy making and for famine early warning. They are not as such meant to influence the
decision making process of producers, traders and consumers. Currently there is no any
institution responsible to generate and disseminate market information. Those institutions that
generate market information usually do not disseminate as they generate the information for their
own purpose. It is common that the same information is generate by different institutions even
though there may be information quality differences emanating from the differences in physical
and manpower capacity among institutions. The National Grains Market, especially the cereal
market, functions based on the traditional information exchanges among the formal and informal

6
traders and brokers all over the country. In this regard, Eleni G-Medhin, (2001) has reported the
importance of traders and brokers in improving the functioning of the grain market in the
country.

2.2.3. The role of market information system

The marketing information system plays an important role in raising the efficiency of economic
performance to the companies in highly competitive markets, through providing the necessary
information for the various administrative levels. The success of the marketing process depends
to a large extent on the marketing information system and the success in each elements of this
system.

Marketing information system consists of people and procedures for assessing informational
needs, developing the needed information and helping decision managers to use the information
to generate and validate actionable customer and market insights. (Philip Kotler & Gary
Armstrong 2010) Thus, a marketing information system involves "an organized system of
direction, collection, analysis, and dissemination of intelligence to operating units of a business
enterprise" (Pinkerton 1969a, p. 51).It is also defined as an interacting structure of people,
equipment, methods, and controls, which is designed to create an information flow that is
capable of providing an acceptable base for management decisions in marketing.

A marketing information system (MIS) is a management information system designed to support

marketing decision making consisting of people, equipment, and procedures to gather decisions,
sort analyze and evaluate which helps an organization to make fruitful decisions.

2.2.4. The role of market information system in improving rural livelihood in Ethiopia

Market Information System has many roles in improving rural livelihood and status of service in
Ethiopia. These include accurate and timely information should reduce the cost of food
marketing, access to timely information on price and quantity play crucial role in reducing the
risk of losing money on market transaction. It also helps the farmers, traders, and policy makers
in deciding check on prices they receive mainly the prevailing market price and change farmers
marketing strategies, spatial arbitrage possibility, and early warning of food shortages and the
management of food security reserves respectively. Accordingly, it is possible to say that

7
studying market information will improve the rural livelihood and status of services and tackle
the associated problem.
Market information system are particularly necessary for contemporary organizations because
these systems provide the most effective frameworks for monitoring changes within the external
market environment, such as shifting factors of consumer behavior, industry competition,
government policies, technology, and economic conditions (Perreault, 2018).

2.3. Empirical Literature

Marketing Information Systems

Laudon (2016) reported that information system is interconnected in a unified format to store,
retrieve, collect, process and deliver information for the development of operations in the
organization and to support decision makers. Similarly, marketing information systems are
methods and procedures for collecting, storing, organizing and indexing information for use in
marketing decision making.

Jobber (2007) defined an administrative information system designed to support marketing

decision making as a system by which marketing information is collected, stored, analyzed and
provided to managers according to their information needs on a regular basis. In other word,
Proctor (2005) reported that marketing information systems are a systematic tool for gathering
marketing information while providing constant information to the beneficiary and decision-
makers in the organization on time.

The actions are taken by those who are concerned in developing and accessing the marketing
information in order to support the decision-making process and use it to accurately identify
customers and the market (Armstrong & Kotler, 2015).

In addition to ensuring continuous organization and flow of marketing managers for the purpose
of creating effective marketing plans, the analysis of customers, competitors, environmental
variables, strengths, weaknesses, trends and expectations are the parameters used for marketing
decisions (Hollensen, 2010).

8
 Marketing information systems are the integration of the need of managers and what is
economically feasible for them to make decisions in relation to the challenges faced and to invest
opportunities that are supported by these systems (Kotler & Keller, 2009).

According to McDaniel, Carl, and Roger Gates (2005), the most prominent environmental
developments that have led to the formation of advanced marketing information systems includes
the spread of systems theory and the overriding of traditional patterns in marketing research, the
spread of advanced communication technologies and information networks, especially the
internet with the acquisition of international transient dimension which have been identified.

Also, marketing information systems revealed that it is the possibility of these systems to provide
a smooth flow of integration and a lower cost for the preparation of detailed periodic reports to
monitor the performance of markets and sales efforts and other areas of marketing (Francois,
2006).

The following are marketing information in addition to the preservation of internal and external
data and information related to distortion and loss(Kotni, 2011):

1. Achieving a comprehensive and timely view of the work of the organization and the
possibility of correction and rapid adjustment

2. Making the organization more informed about vital marketing information.

3. Providing information for the purpose of quickly handling customer complaints and problems
and building excellent relationships with them.

4. Enabling the marketing managers with the information necessary to deal with customer
complaints and inquiries and responding to their needs on time, while supporting followup of
marketing activities.

5. Supporting marketing decisions with high quality information to take advantage of market
opportunities and addressing the marketing threats. In other word, they are internal records,
marketing intelligence, and marketing research (Kotler et al., 2009; Salvador & Ikeda, 2014).

The following three dimensions can be adopted by the researchers as they are the most
important:
9
1. Internal records system

2. Marketing Research System

3. The marketing intelligence system As large organizations build a large internal database to be
a digital repository for customers and the market, the internal records system is the data extracted
from the internal environment of the organization.

Several researcher over the past years covered effects of marketing information system on
pricing decisions of marketing managers. To formulate the problem scientifically, and to point
out the importance of undertaking this review, it is essential to mention researches undertaken in
this area. All of these descriptions envisioned the Marketing information system as an
information processor, gathering data and information from the marketing environment,
processing those data and information, and providing the results to marketing managers in the
form of management information.

10
 3. CONCLUSION AND RECOMMENDETION

3.1. Conclusion
Market Information Systems are designed to collect process and disseminate information on the
situation and dynamics of agricultural markets. This review has documented the importance of
market information system in a free market to improve the performance of the agricultural
sector. However, there are conditions that need to be fulfilled in order for the market to play its
role. One of the most important conditions is the availability of reliable and timely market
information to all market participants.

In Ethiopia there is no any formal public market information system. However, different
governmental and non-governmental organizations generate market information, usually prices
of grain that are of historical nature. In general, most farmers and traders do not use the MI
generated as the information lack relevance to these stakeholders.

The most important role of market information is for policy making and early warning purpose.
This is achieved if the available historical market information is properly analyzed and is
immediately available to relevant policymakers. Therefore, it is crucial to create a public market
information system in Ethiopia that will assist the existing free market to function properly and
thereby facilitate the efficient flow of products from surplus to deficit areas.

3.2. Recommendations
Based on the above conclusion, we put a set of recommendations that can be summarized as
follows:
 The market information system for improving the rural livelihoods in Ethiopia is very low.
Thus, the government and non- governmental organizations should be design participatory
marketing information system particularly for addressing the rural household.
 In rural area, there was not access to market information system. Therefore, the government
should be give detail marketing information system from the society
 Market information system should be improved on regular basis so that it could meet
technological revolution.
11
 5. REFERENCE
Arias et al., (2013).The market information systems are seen as market tools that can contribute
to a better insertion of producers in markets.
David-Benz et al., (2014) OdR aims at both informing policy makers and ensuring a better
access to information to market players. But the audience of the OdR, which mainly
relies on emails to disseminate its bulletins, has so far remained largely institutional.
Davis et al. (2010). Approximately 90 % of rural households are involved in farming activitie. In
Africa, 70 % of the household income in rural areas is from farming activities, while in
Asia and Latin America, 50 % of the income is from farming activities. 
Eleni G-Medhin, 2001 has reported the importance of traders and brokers in improving the
functioning of the grain market in the country.
Fafchamps & minten, 2012; goyal, 2010, However, market information system efficiency remain
limited and controversial.
Jobber (2007) defined an administrative information system designed to support marketing
decision making as a system by which marketing information is collected, stored,
analyzed and provided to managers according to their information needs on a regular
basis.
Proctor (2005) reported that marketing information systems are a systematic tool for gathering
marketing information while providing constant information to the beneficiary and decision-
makers in the organization on time.

Fafchamps&gabre-madhin, (2006).In developing countries, information failures prevail in

agricultural markets, leading to high transaction costs related to the search for products,
to negotiation and to transport
Kotler & Keller, (2009).thus,Marketing information systems are the integration of the need of
managers and what is economically feasible for them to make decisions in relation to the
challenges faced and to invest opportunities that are supported by these systems.
garuku et al., 2009; galtier et al., 2014, One of the factors limiting their efficiency appears to be
the inadequate consideration in their design of the practices and strategies of market
actors as well as the real constraints to access to market, particularly those of
smallholders’.

12
Laudon (2016) reported that information system is interconnected in a unified format to store,
retrieve, collect, process and deliver information for the development of operations in the
organization and to support decision makers
Goni (2008) concluded that the use of marketing information systems is related to market trends
to provide data and information to strategic levels in the organization.
Hakhua and Goyala (2013) investigated the success of marketing information system model for
SMEs of Punjab using the validation of survey based results and a case study analysis.
The aim of this study was to verify and audit the marketing information system for SMEs
in Punjab after achieving success in large companies.
Hakhwa and Goyala (2013) explained the impact of the marketing information system in
analyzing and presenting data and information in a timely manner and its importance in
decision making and support.
Jensen, 2007; aker, 2010.Several case researches highlight the positive impact of mobile phones
on market performances.
Hollensen, (2010). to ensuring continuous organization and flow of marketing managers for the
purpose of creating effective marketing plans, the analysis of customers, competitors,
environmental variables, strengths, weaknesses, trends and expectations are the
parameters used for marketing decisions.
Kassie et al. (2019) this reviews show that because of poor access to market information, among
other factors, the margins smallholder farmers make are limited. thus, the poor access to
market information, among other factors, the margins smallholder farmers make are
limited.
Kebebe (2019).However, awareness about the national livestock market information system
itself and the technological difficulties to access its services remain limiting factors to its
widespread use.
Armstrong & Kotler, (2015)The actions are taken by those who are concerned in developing and
accessing the marketing information in order to support the decision-making process and
use it to accurately identify customers and the market
Kocho et al. (2011) Also, these farmers seldom venture past small local rural markets to sell their
produce or buy their daily necessities. Also, these farmers seldom venture past small
local rural markets to sell their produce or buy their daily necessities.
13
Launched in 2019, the main organized marketing information system for the livestock sector in
Ethiopia is the National Livestock Market Information System, a government initiative.
Mandal, (2018); Wahyuni & Lestari, (2020).However, all conceptualizations appear to converge
upon the common definitional consensus that market information system are management
information systems formulated specifically to support a firm’s marketing strategy and
decision-making.
Nicol aides, (2019).This are why SMEs need to develop strategies to manage ethics within the
tourism marketing drive.
Perreault, (2018). Market information system are particularly necessary for contemporary
organizations because these systems provide the most effective frameworks for
monitoring changes within the external market environment, such as shifting factors of
consumer behavior, industry competition, government policies, technology, and
economic conditions.There appears to be a significant gap in the current body of
knowledge concerning the question of what specific steps and best practices
contemporary firms should consider in their efforts to implement market information
system.
Philip Kotler & Gary Armstrong 2010) Thus, a marketing information system involves "an
organized system of direction, collection, analysis, and dissemination of intelligence to
operating units of a business enterprise" (Pinkerton 1969a, p. 51)
shepherd, (2007).They are designed to improve market performance, reducing asymmetries by
the disseminating of information to market players, and providing monitoring tools for
policy makers.

14