Mengistu Ashinie Kebede Final Thesis

COLLEGE OF FINANCE, MANAGEMENT AND
DEVELOPMENT
DEPARTMENT OF PUBLIC PROCURMENT AND
ASSET MANGMENT
CONSUMER SATISFACTION ON PUBLIC PROCUREMENT A

CASE STUDY ON SENDAFE BAKE CITY ADMINISTRATION
SECTORS
BY: MENGISTU ASHINIE
A THESIS SUBMITTED TO COLLEGE OF FINANCE, MANAGEMENT

AND DEVELOPMENT, ETHIOPIAN CIVIL SERVICE UNIVERSITY, IN
PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD
OF A MASTER'S DEGREE IN PUBLIC PROCUREMENT AND ASSET
MANAGEMENT
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MAY, 2023
ADDIS ABABA, ETHIOPIA
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College of Finance, Management and Development
Department of Public Procurment and Asset
Mangment
Consumer Satisfaction on Public Procurement:-The Case of Sendafe

Bake City Administration Sectors
By: Mengistu Ashinie

Id.No: ECSU 2100517
Advisor: Biniam Berhie (PhD)
A Thesis Submitted to College of Finance, Management and Development,

Ethiopian Civil Service University, in Partial Fulfillment of the Requirements
for the Award of a Master's Degree in Public Procurement and Asset
Management.
May 2023
Addis Ababa, Ethiopia
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DECLARATION
I Mengistu Ashine a registration/id number ID No: - ECSU 2100517 do here by declare that this
thesis titled “Consumer satisfaction on public procurement:-the case of Sendafe bake city
Administration sectors”, is my original work and all sources of materials used for this thesis
have been duly acknowledge. This work has not been submitted partially, or in full, by any other
person for an award of a degree in any other university or institution and I carried out the study
under the guidance of Dr. Biniyam Berhe (PhD).
Name of Researcher……………………. Signature………… Date……………............
This research paper has been submitted for examination with my approval as university
supervisor.
Name of Advisor………… ……Signature………………. Date……………....................
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APPROVAL SHEET
This is to certify that Mengistu Ashinie carried out this thesis on entitled “Consumer Satisfaction
on Public Procurement the case of Sendafe bake city Administration sectorial office.” Under my
supervision. Accordingly, I here assure that his work is appropriate and standard enough to be
submitted for the Partial fulfillment of the requirement for the award of the Degree of Masters of
Art in Public Procurement and Asset Management
Approved by Board of Examiners:
Name of Supervisor
Signature
Date
Name of External Examiner
Signature
Date
Name of Internal Examiner

Signature
Date
Name of Head of Department

Signature
Date
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Acknowledgment
First and for most, I would like to thank the Almighty God, nothing would be true without
him. Next I would like to thank everybody who was either directly or indirectly involved in this
study. Firstly, i want to thank my Advisor Dr. Biniyam Berhe for guiding me throughout the
whole process of this thesis and for his constant and valuable support and motivation. Without
his support, continuous feedback, passion for research and expertise it would have been difficult
to achieve my goal. My wife and children shall also be thanked, for their motivation. Lastly, I
want to give my warm regards to everyone who helped me in completing this paper.
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TABLE OF CONTENT
Title Pages
DECLARATION..............................................................................................................................i
APPROVAL SHEET.......................................................................................................................ii
Acknowledgment............................................................................................................................iii
Table of Content.............................................................................................................................iv
List of Table..................................................................................................................................vii
List of Figures..............................................................................................................................viii
List of Acronyms............................................................................................................................ix
Abstract............................................................................................................................................x
CHAPTER ONE..............................................................................................................................1
INTRODUCTION...........................................................................................................................1
1.1. Background of the study.......................................................................................................1
1.2. Statement of the problem......................................................................................................2
1.3 Research Question..................................................................................................................4
1.4. Objective of the study...........................................................................................................4
1.4.1 General objectives...........................................................................................................4
1.4.2 Specific Objectives..........................................................................................................4
1.5. Significant of the study.........................................................................................................4
1.6. The scope of the study..........................................................................................................5
1.7. Description of the study Area...............................................................................................5
1.8. Organization of the paper......................................................................................................6
CHAPTER TWO.............................................................................................................................7
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2.REVIEW OF RELATED LITERATURE....................................................................................7
2.1 Theoretical Review................................................................................................................7
2.1.1. Public Procurement........................................................................................................7
2.1.2 Factors Affecting Public Procurement Effectiveness......................................................8
2.1.3 Consumer Satisfaction.....................................................................................................9
2.1.4 Quality of products vs. satisfaction...............................................................................11
2.1.5 Role of Product Pricing on Consumer Satisfaction.......................................................11
2.1.6 Satisfaction of Consumers and Their Buying Behavior................................................12
2.2 Review of Empirical Studies................................................................................................13
2.3 Hypothesis............................................................................................................................14
2.4 Conceptual Framework........................................................................................................14
CHAPTER THREE.......................................................................................................................16
3. RESEARCH METHDOLOGY.................................................................................................16
3.1. Description of the study area..............................................................................................16
3.2. Research Design..................................................................................................................16
3.3. Research Type and Approach.............................................................................................17
3.4. Source of Data and data collection method........................................................................17
3.5. Sample and Sampling technique.........................................................................................17
3.5.1. Population.....................................................................................................................17
3.5.2 Sample Design, sampling frame and Sampling Technique...........................................17
3.5.3. Sampling Units.............................................................................................................18
3.6. Data Analysis /Treatment of Data.......................................................................................18
3.7. Data presentation.................................................................................................................18
3.8. Limitations..........................................................................................................................18
3.9. Ethical considerations.........................................................................................................19
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CHAPTER FOUR.........................................................................................................................20
4. DATA PRESENTATION, ANALYSIS AND DISCUSION....................................................20
4.1. Response Rate.....................................................................................................................20
4.2. Demographic Profile...........................................................................................................20
4.3. Descriptive Analysis of collected Data...............................................................................22
4.3.1. Descriptive Analysis for Perceived Factors which affect consumer satisfaction related
questioners..............................................................................................................................23
4.3.2 Descriptive Analysis for Issues related with public procurement process of the
organization related questions................................................................................................27
4.4. Correlation analysis.............................................................................................................29
4.4.1. Correlation analysis between independent and dependent variables...........................30
4.5. Multiple Linear Regression Analysis..................................................................................31
4.5.1. Assumptions of Multiple Regressions..........................................................................31
4.5.2. Model Summary...........................................................................................................33
4.5.3 Beta Coefficient.............................................................................................................34
CHAPTER FIVE...........................................................................................................................35
5.SUMMARY OF FINDING, CONCLUSION AND RECOMMENDATION...........................35
5.1 Summary of Finding............................................................................................................35
5.1.1 Quality of procurement service.....................................................................................35
5.1.2 Supplier Response.........................................................................................................35
5.1.3 Participation and Decision Making...............................................................................36
5.1.4 Public Procurement Process..........................................................................................36
5.2. Conclusions.........................................................................................................................37
5.3 Recommendation.................................................................................................................38
References.....................................................................................................................................i
Appendixes.....................................................................................................................................iv
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LIST OF TABLE
Title Pages
Table 4.1: Demographic profile information distribution............................................................21

Table 4.2: Quality of procurement service related questioners....................................................23
Table 4.3: Supplier Response related questioners........................................................................25
Table 4.4: Participation and decision making related questioners...............................................26
Table 4.5: public procurement process related questioners.........................................................28
Table 4.6: Correlation between independent variables and dependent variable..........................30
Table 4.7: Tests of Normality......................................................................................................32
Table 4.8: Multicollinearity Test Table........................................................................................33
Table 4.9 (b) Model Summaryb...................................................................................................33
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List of Figures
Title Pages
Figure: 2.1 Consumer Satisfaction Elements.................................................................................15
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List of Acronyms
EU European Union
GDP Gross Domestic Product
ICT Information Communication Technology
KPI Key Performance Indicator
PPPAA Ethiopian Public Procurement and Property Administration Agency
PD Participation and decision making
SPSS statistical Package for social scientists
SR Supplier Response
SPP Sustainable Public Procurement
UN United Nations
UNDP United nation development program.
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Abstract
It’s true that consumer satisfaction is a primary goal of every organizations, also research
suggests that one of the key areas which could be a caused by public procurement. This
research, therefore, examines the current factors which affect consumer satisfaction on public
procurement in the case of Sendafe Beke City Administration. In this descriptive study,
questionnaire(survey) through physically distributed for all the six departments with a total of 41
samples by census survey which directly involve in public procurement with experts, team
leaders and chief executives and descriptive research design is adopted. Data were analysed
using descriptive statistics as well as inferential analysis method and liner regression with the
aid of SPSS programme (Version 2020). Correlation is significant at the 0.01 level (2-tailed) and
factors mentioned under this study has a significant influence on the effectiveness of green
procurement (i.e r=.997** at a significant level of 0.01). The finding of the study indicates that
the current practice of public procurement in the study areas shows a gap with respect to
satisfaction in relation to quality of procurement service, supplier response and participation
and decision making. In addition, the overall consumer satisfaction also wasn’t good. Therefore,
to solve this problem the organization has to work to fulfill the resource needed and has to
engage the employees throughout the phase starting from planning up to implementation develop
appropriate mechanisms to use end users feedback.
Keywords: Public Procurement, Supplier Response, Green procurement, Sendafa Beke city
Administration
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CHAPTER ONE
INTRODUCTION
This chapter shows background of the study, Statement of Problem, Research question,
Objectives of the study, Significance of the study, scope of the study, organization of the study
and Operational definitions of the key terms.
1.1. Background of the study
Public procurement is the process of acquiring of goods and services at the best possible total
cost of ownership, in right quantity and quality, at the right time, in the right place and from the
right source for the direct benefit or use of individuals or corporations by contract. (Breitman &
Lucas 1987).
Procurement encompasses the whole process of acquiring property and/or services. According to
Waters (2004), it begins when an agency has identified a need and decided on its procurement
requirement. Procurement continues through the processes of risk assessment, seeking and
evaluating alternative solutions, contract award, delivery of and payment for the property and/or
services and, where relevant, the ongoing management of a contract and consideration of options
related to the contract. Procurement also extends to the ultimate disposal of property at the end of
its useful life (Waters, 2004)
According to the Ethiopian Public Procurement Proclamation (No 649/2009), procurement
means “obtaining goods, works, consultancy or other services through purchasing, hiring or
obtaining by any other contractual means.” From the above definitions, the overall tasks of
procurement are to obtain goods, works, consultancy services and other services at the right
quality, in the right quantity, from the right sources, at the right time, place and price to achieve
an organizational objective.
Public procurement is the acquisition of goods and services at the best possible total cost of
ownership, in the right quantity and quality, at the right time, in the right place and from the right
source for the direct benefit or use of corporations, or individuals, generally by contract
(Breitman & Lucas, 2007).
Public procurement is a key tool to achieve maximum value for invested money in procurement
i.e. insure economy, efficiency and effectiveness, support the country’s economic development
by ensuring economy, efficiency and effectiveness in the execution of public procurement,
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ensure accountability for decisions made and measures taken in the execution of public
procurement, and encourage local producers, companies and small and micro-enterprises which
support the national economy through the application of preferential treatment granted by the
Proclamation and the directive issued on June 2010.
In Ethiopia, more than 60% percent of the total public expenditure has been spent through public
procurement in a year. It is a significant amount of money that public bodies spent via public
procurement. The expenditure on public procurement is increasing from year to year. Despite
this, many reports show that the resource spent on public procurement is not used properly and in
an economical manner and in the current Ethiopian public procurement process, the compliant on
public procurement process shows increment from year to year. Efficiently and effectively
handling this size of procurement outlay has been a policy, management concern and a challenge
for government (PPA Annual Report 2017).
Different researchers found that consumer satisfaction on public procurement is affected by
different factors. Some of them include inefficiency, nontransparent procurement processes, and
lack of knowledge of rules and regulations (Roman, 2017). In addition, according to the findings
of the study of Tariku (2017), the suppliers’ performance execution, suppliers’ capacity, public
bodies’ procurement plan & ICT utilization have also significant impact on consumer
satisfaction on procurement system in the federal government organizations.
1.2. Statement of the problem
The present day’s business environment is getting more challenging and therefore companies
have to increase their business operations to stay competitive. As a result, managers need to
embrace all those practices that will improve their performance one of the most important factors
for improving business operations is implementation of effective and efficient procurement and
supply chain management practices (Chong and Ooi, 2008).
Internal and external forces are influencing the ability to recognize the procurement goal.
Relations among different internal elements like professionalism, staffing levels, budget
resources, seplier selection and relationship, procurement plans and organizational structure
whether centralized or decentralized, procurement regulations, rules, guidelines, and internal
control policies. External factors also like market environment, political, socio economical, and
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legal environment have impact on the performance of the procurement function and needs
consideration (Kim, M.K, Lopetcharat, & M. A., Drake 2013).
An efficient public procurement system is very important to the development of countries and is
a tangible implementation of their national commitments to making the best possible use of
public scarce resources (Basheka, 2009). As per the organization for Social and Economic
Development (OECD, 2010), on the average developing countries public procurement accounts
for up to 15% of GDP and 20% of public expenditures. According to the 2014 Ethiopian Public
Procurement and Property Administration Agency report (PPPAA, 2014), as cited by Tariku
(2017), in Ethiopia more than 60% of the total public expenditure has been spent through public
procurement in a year. A huge amount of money that public bodies spent via public procurement
of course needs to manage with due care. Therefore, public procurement is vital to government
service delivery.
Despite lots of effort have been made by Ethiopian government to improve the procurement
system, there are problems of effectiveness in public procurement. Some of the problems include
a gap between what stakeholders need and what is actually performed, a lot of complaints since
the quality of goods purchased doesn't fit with the specification, big gap between purchase
request and delivery of items, quality problems and/or mismatch of items requested with
procured and delivered (wrong quality); excessively delayed purchases (wrong timing); and
incurring additional costs as result of long duration of the purchase process (Zegeye, 2015).
Moreover, different project 4 works are being affected due to the lack of effective procurement
process, which is the main cause of insufficient service delivery in all public sectors (Anteneh,
2015). Different researchers found that the effectiveness of public procurement is affected by
different factors. Some of them include inefficiency, nontransparent procurement processes, and
lack of knowledge of rules and regulations (Roman, 2017).
The above and other different researchers tried to study about the factors affecting public
procurement practices; none of them has focused on study with consumer satisfaction regarding
public procurement in Sendafe Beke City Administration. There is no study to indicate the
assessment factors affecting consumer satisfaction in public procurement practice with the case
study. This gap initiates the researcher to study the issue. Thus, this study was design to bridge
this gap by assess the practice of public procurement in Sendafe Beke city administration.
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1.3 Research Question
i. What is the status of consumer satisfaction on public procurement in Sendafe Beke city
Administration employees looks like?
ii. To what extent does Quality of procurement service affect consumer satisfaction in
Sendafe Beke city Administration?
iii. To what extent does Supplier Response affect consumer satisfaction regarding public
procurement Sendafe Beke city Administration?
iv. To what extent Participation and decision making affect consumer satisfaction regarding
public procurement Sendafe Beke city Administration?
1.4. Objective of the study
1.4.1 General objectives
The general objective of this study is “To Examine Consumer satisfaction on public Procurement
of Sendafe Beke City administration Sectors”
1.4.2 Specific Objectives
Specifically, the study was aimed to achieve the under mentioned objectives
i. To examine the overall consumer satisfaction level of sendafa Beke city Administration
on public procurement.
ii. To assess the effect of quality of procurement service public procurement in Sendafa
Beke City Administration.
iii. To examine the effect of Supplier Response on consumer satisfaction regarding public
procurement in Sendafa Beke City Administration.
iv. To assess the effect of Participation and decision making on consumer satisfaction
regarding public procurement in Sendafa Beke City Administration.
1.5. Significant of the study
The intention of this study was to contribute to the existing body of knowledge about consumer
satisfaction regarding public procurement and to maximize the contribution of the procurement
practice of Sendafa Beke city Administration to the public objective. Moreover, the research’s
recommendation may will help to improve overall public procurement practices, this can have an
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immense advantage for different stakeholders; for the managers to make corrective actions and
review the practices, for researchers to serve as a facilitator for further detail investigations, and
particularly the study will contribute a lot to enhance the city administrations performance.
1.6. The scope of the study
The focus of this research was to assess consumer satisfaction on public procurement in Sendafa
Beke city Administration. The scope of the study was limited to procurement practice in Sendafa
Beke city Administration. Though it was difficult to include all other functions of the
administration office because of infeasibility from resource and time perspectives, the focus of
this study is only an assessment of consumer satisfaction on public procurement practices on
Sendafa Beke city Administration.
In relation to geographical scope The study conducted on Sendafe beke city administration
which is located 39 km north of Addis Ababa a place commonly known as “Sendafe “ the
reason behind the researcher select this City Administration is the availability of information.
Ideally this study is delimited only on Sendafe Beke city administration satisfaction level of
public procurement consumers.
1.7. Description of the study Area
Sendafe bake city Administration is found 39km north of Addis Ababa in Oromia regional state.
The city Administration has highland type of climate condition and also have three kebeles
which is more than 100,000/ one hundred thousand /peoples are living. Sendafe Beke is a center
of business and many Government and non-government organization. Among the government
organizations are Ethiopian Police University, Ethiopian solar supply company, many
government and private banks and also huge private Factories are available. Sendafe city
administration is city of many nations and nationalities which live together and many people call
this city as city of peace and love.
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1.8. Organization of the paper
The paper was organized in five chapters i.e. the first chapter includes an introduction section
which consists of background of the study, statement of the problem, objectives, significance,
scope, description of the study area and organization of the study. Chapter Two include: present
review of related literature. Chapter Three: presents research design and methodology the
researcher employs to investigate the problem under study while data collected from respondents
are also presented, analyzed, interpreted and discuss in the fourth chapter of the study. The last
section chapter five of the thesis contain summary of results, conclusion and recommendation by
the organization.
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CHAPTER TWO
2. REVIEW OF RELATED LITERATURE
This part of the study deals with the literatures that a researcher used while doing a research.
There are several related literatures about consumer satisfaction on public procurements.
Definitions of public procurement and other related theories are presented which is the base for
the study onwards. In addition to this, procurement process is provided.
2.1 Theoretical Review
2.1.1. Public Procurement
Public procurement is the process of the acquisition, usually by means of a contractual

arrangement after public competition, of goods, services, works and other supplies by the public
entity. The public procurement process life cycle means from initial conception and definition of
the needs through to the end of the useful life of an asset or the end of a contract. The Federal
Democratic Republic of Ethiopia, Public Procurement and Property Administration Agency
(2011). Then again, Baily and et al (2005) identified proposals for the public [procurement]
sector includes; Seeking to develop world class professional procurement staff, seeking to
introduce best practice in terms of whole-life cost savings, highest standard benchmarking, Co-
operative relationship with contractors and supplies within the constraints of competition, the
promotion of continuous improvement (Kaizen).
According to Mamiro (2010), public procurement process stretches from procurement planning,
budget allocation, bid invitation, bid evaluation, contract award, and contract management. It
ranges from the purchase of routine supplies or services to formal tendering and placing
contracts for large infrastructure projects by a wide and diverse range of contracting authorities.
Public purchases are accountable to the public, whose money is spent, including disappointed
tenderers and potential suppliers. As such, they must produce practice and procedure which will
stand up to scrutiny during either government audits or challenge through the courts of any
purchasing decision that has not been made procedurally. The primary purpose of public
accountability is to prevent abuses of taxpayer’s money (Patrick, Mamati & Jonathan, 2010).
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2.1.2 Factors Affecting Public Procurement Effectiveness
Procurement plan implementation- Procurement planning is one of the primary functions of

procurement with a potential to contribute to the success of public institution’s operations and
improved service delivery (Basheka, 2008). Procurement Planning entails the identification of
what needs to be procured, how the organizations need can best be met, the scope of the goods,
works or services required, what procurement strategies or methods to be deployed, setting the
time frames, and the accountability for the full procurement process.
To accomplish the organization’s objectives, the most important tool is effective procurement
plan. Procurement plan that aligns to the objective of the organization programs and budgetary
process can expedite the accomplishment of the goals. It is one of the pre-requisites for the
effectiveness and efficiency of the procurement function, thus leading to the ultimate success of
the organization. (Namusonge et al., 2013) Effective procurement planning enables the
organization and its staff to work smoothly to achieve the organization’s goals with the right
quality and quantity of inputs in place while ineffective procurement planning may result in
failure to achieve those goals, and causing damage to the credibility of the organization (UN,
2006). ii. Employee’s competence- Saunders (1997) believed that successful functioning of
organizational structures and effective operation of planning control systems is dependent on the
quality and ability of staff employed. Multi-skilling provides employees with a variety of skills
and should be developed extensively.
Leenders and Fearon (2002) noted that the large number of items, huge monetary volume
involved, need for an audit trail, severe consequences of poor performance, and the potential
contribution to effective organizational operations associated with the procurement function are
five major reasons for developing a sound, professionally managed procurement system. They
further argue that qualifications are crucial for value-based management which requires
employees to assess and improve processes while contributing to team performance. In addition,
qualifications enhance staff ability to perform, enabling them to make better decisions, work as a
team, and adapt to change, while increasing efficiency, quality, productivity and job satisfaction.
ICT adoption- Saunders (1997) reckoned that personnel in procurement are, in a sense,
information processors. They receive, analyze, make decisions and distribute information in
order to manage the flow of goods and services in the SC. ICT is an enabler for information
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sharing which organizations in the procurement system can use for eliminating bloated inventory
levels caused by cumulative effect of poor information cascading up through a SC. ICT shortens
information processing time and tremendously improves procurement performance. Process
integration can enhance procurement performance. ICT provides new ways to store, process,
distribute and exchange key information with customers and suppliers in the entire procurement
system.
Use of ICT in procurement help in coordination of business processes, both within the
organization and between a purchaser and existing suppliers. Examples include electronic
purchase-order systems, online catalogues and online linkages with suppliers to exchange
information regarding fulfillment activities (Johnson & Leenders,2004). Managers are attracted
to the benefits of improved productivity, faster response times and an overall perception of low
risk in implementation (Flynn, 2003). Technological developments in information systems and
information technologies have the potential to facilitate coordination in transporting firms, and
this, in turn, allows the virtual integration of the entire procurement process. Technology
provides tools to enable organization operations to consistently procure the best-value materials
and services, using unified internet-based sourcing tools and streamlined support for complex
negotiations (Williams, 2005).
Operational procedures/management- Procedures are operating instructions detailing

functional duties or tasks. All steps of the procurement cycle must be properly documented with
each step being approved by the designated authority. Baily, Farmer, Jessop and Jones (2005)
argued that public procurement procedures tend to be characterized by high levels of
bureaucracy independent of order value; poor communications and focusing on unit price rather
than long-term relations. Procurement perceptions are affected by the existing organizational
structure, quality of internal communication system, past experience and resources available.
A procurement policy may define the approval process for contracts of varying cost levels and
may include role of purchasing, conduct of procurement staff, buyer-seller relationships, and
operational issues. Without elaborate and effective procurement procedures government policy
objectives would fail to meet the desired objectives.
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2.1.3 Consumer Satisfaction
As consumer released to market to gain benefit from marker it shall also solve what consumers
need from that product. Consumers make choice among the available many products based in
this value and satisfaction of their perception. A Marketing principle points out that ‘Consumer
satisfaction is a key influence on the future buying behaviors. The Satisfied consumer buys again
and tells others about their good experience. The dissatisfied one switch to competitor’s (Kotler
p and Armstrong 2004).
Need is fundamental to the maintenance of life, such as food, drink, Shelter and clothing. Need is
largely physiological in the sense that they are basic and instructive drives with which we are
born. It is clear however that a need may be satisfied by any one of a large number of alternatives
.so the availability of alternative means of satisfying a need constitutes choice or preferences
provision of which is central to the practice of the marketing. In an absence of close substitute or
alternative, goods there can be no choice and needs and wants become synonymous. Where is
more than one way of satisfying a basic need physiological drives will be modified by economic,
sociological and psychological factors? Variation is these factors will be predispose individuals
to prefer a specific alternatives and this alternative preference constitutes a want. (Baker J.M
1996). In other words wants are ranked in order of preference and satisfied to the point where
disposable income is exhausted.
From manufacturers point of view the problem is translate latent demand in to Effective demand
by increasing the consumer’s preference for his product versus all Other product offerings as will
be seen marketing is largely concerned with solving this problem. Potential demand exists where
the consumer possesses the necessary purchasing power but it is not currently buying the product
under consideration. Thus where a marketer has identified latent demand and developed a new
product to satisfy it the potential demand consists of all those who can back up their latent with
purchasing power (Baker.M.J 1996).
As a subject, economics is largely concerned with maximizing satisfaction through the optimum
use of scarce resource. Inherent in this construct is tacit acceptance of the fact that available
resources are insufficient to satisfy all conceivable demands of mankind, although it is
recognized that conditions of over supply are perfectly possible in particular. (Baker M.J 1996)
So, marketers should consumer need by producing products that satisfy consumer needs.
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Currently these may be the major problems of this company that cause shift of preference.
Generally based on these marketing and theories and other concepts.
2.1.4 Quality of products vs. satisfaction
Producing products that do not fulfill the intended consumer needs will be resulted in market
failure. As marketing literature cites, quality is feature of products and its characteristics that
bear its ability to satisfy stated or implied needs (Michael J. Baker 1998 p306) so products are
required to have quality that influence consumer preferences and also that meet also in
preferences. Marketers are expected so consider such elements to obtain maximum benefits.
Consumers prefer more products which its quality is high even though it is more difficult for
consumers to evaluate the quality of services than product. These because of those certain
distinctive characteristics that service have. To overcome the fact that consumers are unable to
compare service side by side is as they do competing with products; consumers rely on surrogate
i.e. extrinsic to evaluate service quality (L.G schiffman and L.L kunuk (1988)
Even though it is impossible to predict the life span of a given product there is an inevitable
certainty that is will eventually be replaced by the introduction of a new substitute or even made
totally absolute as a result of technological innovation. Thus minor change in a products
composition or marketing may assumed major significance in the user’s eyes and result in a
marked shift in demand for the product.
Relatively quality products from totally new companies and attention here will be focused on
the establish firm with an existing product line. (Michael J.Baker 1996) Any attempt to measure
the contribution of new products to firms is increasingly growth and profitability is believed by a
lack of consensus as to want constitutes a quality product. Firms are increasingly depending up
on quality products for the maintenance and expansion of sales. A large proposition a quality
product is failures in sense that they do not achieve the expected sales level. Whether a firm is a
leader or follower there are several district ways in which it can add to its product line which
may be bring consumer preference. Modification of existing product: this is by changing certain
features of a product which exist with a product. As far are possible products are required to have
quality that influence consumer preferences and also that meet also in preferences. Marketers are
expected to consider such element to obtain maximum benefits. Littler P. and Armstrong (2004).
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2.1.5 Role of Product Pricing on Consumer Satisfaction
Price is regarded as something that can be calculated according to several measures, such as a
reasonable price, a competitive price, a discounted price, a retailer’s price, and price suitability.
Because it is more individualistic and personal, value is a higher-level definition than quality and
price. A satisfied consumer believes that the value of goods and services is comparable with the
price, which will encourage them to repurchase the products. According to Zeithaml (1988),
“quality can be characterized as superiority or excellence in a broad sense.” From the customer’s
perspective, “The price is given up or sacrificed to get the product or service” (Zeithaml, 1988).
According to Bei and Chiao (2001), “Price is described as giving or sacrificing for the
acquisition of a service or product,” while Kotler et al. (2012) proposed that “the price is the
amount paid for a product or service and the sum of the value exchanged by consumers for the
advantages of a product or service available or being used.” The perceptions of customers of a
given price can have a direct relationship with their decision to buy a product (Zechmeister et al.,
1997). Customers will pay attention to the prices paid by their peers, and no one wants to spend
more money than their peers do. The fairness of a price can affect the perception of consumers of
the product, and ultimately their desire to become a consumer.
2.1.6 Satisfaction of Consumers and Their Buying Behavior
Customer satisfaction and customer value are considered important parameters for the
relationship between customer value and the willingness to sacrifice (Zechmeister et al., 1997).
This sacrifice is made in accordance with an exchange mechanism that includes transaction costs
and the risk of the goods of the company. According to Larsen et al. (2017), customers will be
disappointed in the future if the ratio value considered by the economic sacrifice of customers
with the goods sold by the company does not meet their expectations. Customers will be satisfied
if the ratio value is sufficient or exceeds their expectations. Another analysis of consumer value
examines the understanding of customers of the quality and benefits of toothpaste in relation to
price sacrifice. Social, emotional, and functional values are all aspects of customer value (Keller
and Kotler, 2012).
Customer satisfaction is evaluated by obtaining feedback from customers after purchasing
products or services, and then comparing it with their expectations. Customer satisfaction is
calculated using the performance requirements of products or services that are capable of
25
satisfying the needs and desires of customers. A satisfied consumer is a consumer who believes
that the products or services were worth purchasing, which would encourage them to buy the
products again. On the other hand, a frustrated consumer will persuade other consumers not to
buy the same brand, which ultimately causes switching to rival brands. According to Tu and
Chih (2013), “customer satisfaction is perceived as affecting repurchasing intentions and actions,
which, in turn, contributes to an organization’s potential sales and income.”
2.2 Review of Empirical Studies
There have been several studies which have been conducted to assess factors affect consumer
satisfaction on public procurement practice. In a study made by Roos (2012) showed that, public
procurement in the EU, for example, is governed by a set of guiding principles such as best value
for money and fairness coupled with an overall policy framework designed to open up the EU’s
public procurement market to competition within the Union. Policy discussions concerning
sustainable public procurement have a predominantly environmental character. There is a
considerable variation both in the extent to which EU member countries have developed and
implemented a national policy and in the character and focus of existing policy frameworks.
Roman(2017) in her study investigated some public procurement performances were found to be
noncompliance with the public procurement rules and regulations. The cause for this is
inefficiency, nontransparent procurement processes, and lack of knowledge of rules and
regulations. Hence, it needs commitment from responsible government authorities to improve
those specific areas of deficiencies’ in public procurement practice and resolve challenge for
sound public procurement practice. Sofoneyas (2016) in his master thesis entitled with “The
Impact of Organizational Structure on the Implementation of Public Procurements Policy: The
Case of Pubic Procurements Units in Some Selected Public Organizations of the Federal
Government” has tried to examine the impact of organizational structure on administrative
efficiency in the case of some selected public organizations of the federal government. He found
that administrative structure has significant positive correlation and impact on implementation of
policy of public procurement (administrative efficiency). But, FPPA structure has not strong
appeals mechanism for complaints and procedures to enforce the outcome of the dispute
resolution process, FPPA structure is not evaluated procurement plan performance and carry out
annual procurement audits in all entities, procurement performance audits carried out by FPPA is
26
limited, promoting a whistle blowing as an administrative culture is weak, a federal complaints
board which is not independent of the FPPA, the public procurement compliance is not enhanced
by media. These hinder administrative efficiency of the public procurement units.
A study conducted by Abdul-Aziz, (2013) with the objectives of identifying the extent to which
sustainable public procurement practices have been implemented, drivers for SPP and the
challenges facing the implementation of sustainable procurement in an effort to contribute
towards implementation of SPP practices in the public sector of Ghana. According to this
research finding, lack of budget for internal and external support, lack of matric (KPI) to
measure and monitor progress, high prices of green products, unavailability of green products
from local markets, lack of support from top management, resistances from the supplier, lack of
relevant legislation and legal enforcement, lack of internal expertise, on sustainable topics,
contradictory objectives and lack of information on supplier corporate social responsibility
practices are some of the challenges reflected in this study.
2.3 Hypothesis
 Hypothesis 1:- general public procurement process positively correlated with

consumer satisfaction.
 Hypothesis 2:-Quality of products and service are positively correlated with
consumer satisfaction
 Hypothesis 3:- Supplier Response are positively correlated with consumer
satisfaction
 Hypothesis 4:- Participation and decision making are positive correlation with
Consumer satisfaction
2.4 Conceptual Framework
Consumer satisfaction on Public procurement can be measured on different parameters. Some of

the parameters to be used in assessing the effectiveness of the procurement practice include
quality of product or service, on time delivery, response, right price, participation and
involvement. The researcher takes these for dependent variables. On the other hand, the
independent variables that affect consumer satisfaction of public procurement to be evaluated
include quality of procurement service, Supplier Response and Participation and decision making
on the public procurement. The conceptual framework is summarized as follows;
27
Independent variables
Factors affecting consumer satisfaction
Dependent variable
Quality of product or
service
Employee Turnover
Supplier Response
Participation and decision

making
Figure: 2.1 consumer satisfaction Elements

Source: from literature review
28
CHAPTER THREE
3. RESEARCH METHDOLOGY
Chapter three of the research paper deals that the way how a researcher design a research and
methods to collect data’s, source of data’s, Sampling techniques, and data Analysis method. In
general, it means that the strategic decision which was applied in designing and conducting the
research study.
3.1. Description of the study area

Sendafa is a town and separate woreda in Oromia Region, Ethiopia. Its name is taken from the
Oromo name for a kind of thick, jointed grass or reed which grows in swampy areas. Located in
the Oromia Special Zone Surrounding Finfinne of the Oromia Region, Sendafe has a latitude and
longitude of 9°09′N 39°02′ E Coordinates: 9°09′N 39°02′E with an elevation of 2514 meters
above sea level. The town lies on the paved Addis Ababa - Adigrat highway, some 38 kilometers
north of the capital.
For this study Sectorial office in Sendafe Beke city administrations is chosen as a case. In effect
it may not at any cost reflect consumer satisfaction of public procurement of other organizations.
The research has only focused on the administrations located in Sendafe city.
3.2. Research Design

This study used explanatory type of research design. The major purpose of Explanatory is to
investigate the issue of study through looking into the problem by exploring the views of
different sets of respondents, as well as by exploring different literatures related with the study
(Pallant, 2011). Hopkins (2000) suggested that quantitative research work connects independent
and dependent variables. Thus, the study conducted using quantitative type of data in the form of
correlation research design used as it appeared to be more appropriate in exploring the consumer
satisfaction on public procurement. Further, explanatory research studies try to describe
characteristics of subject opinions, attitudes and perceptions of people interest to the researcher.
To this effect, the study applied a survey strategy for it easily allowed the researcher to collect
large amount of quantitative data from a sizable population in a highly economical way and
analyse using descriptive statistics.
29
3.3. Research Type and Approach
The research approach applied was quantitative research approach since research employs more
quantitative data. Therefore this study chose quantitative research approach to describe the
consumer satisfaction on public procurement in Sendafe Beke city Administration, by collecting
quantitative data from employees of Sendafe Beke city Administration office. In addition the
impact of the independent variables on the dependent variable in quantitatively measure in this
study.
3.4. Source of Data and data collection method

Primary data obtained using questionnaires from experts, team leaders and chef executives of the
city administration. Questionnaires were distributed to various stockholders of the organization.
Secondary data source such as the organization procurement process and report, organization
internal audit report, manuals, articles, journals and other documents relevant to the study were
reviewed and observed.
3.5. Sample and Sampling technique
3.5.1. Population
A research population can be defined as the totally of a well-defined collection of individuals.
The population of the study were including the employees of Sendafe Beke City Administration
which count 123; the researcher chose Sendafe Beke City Administration office because of the
convenience to the researcher and the size of the organization. Also because of limitation on
work load, time and other resources including finance were taken as the subject of the study.
The population for this study comprised of 41 employees whom are working in different
sectorial offices in the city.
3.5.2 Sample Design, sampling frame and Sampling Technique

The target population for the research was 123 employees and the sample size was to be 41
employees of Sendafe Beke City Administration. The selection of the sample was Judgmental
method for the study. The reasons for this is especially those staff members are directly or
indirectly involved in the procurement process of the organization, and they were participate in
the study as respondents to the questionnaire. The sampling frame was 33/thirty three
governmental sectors in the city administration
30
3.5.3. Sampling Units
For this study a single employee who participates in the process of public procurement in the
organization will be used as a sample unit.
3.6. Data Analysis /Treatment of Data

Quantitative approaches were used during the data analysis. Statistical Package for Social
Sciences (SPSS) was used in data analysis in order to analyse the quantitative data obtained
through Questionnaire.
In addition the researcher was used quantitative research design using Descriptive statics such as
frequency counts , percentage charts and averages for structured item meaning are contextualized
,interpreted and organized according to their sources the collected data were analysed and
discussed .
Descriptive statics analysis was applied for the presentation, interpretation and discussion parts
of the study. Frequency, tables, charts, graphs, figures and percentages were used as appropriate
to analyse, interpret, tabulate and present the results of the study. The data that are gathered
through and questionnaire was coded, entered in to computer and are analysed and presented in
the form of charts, diagrams, and tables by using SPSS version 20. In addition, questionnaires
which was collected and checked for completeness.
3.7. Data presentation

The data presentation conducted through tables, figures, and text was used.
3.8. Limitations
The study is limited to testing the correlation between other consumer satisfaction factors beyond
mentioned under conceptual framework of the study. The other limitation imposed on the study
is that the scope of the study was confined to Sendafa Beke city Administration which may limit
the comprehensive view of findings. Furthermore, since the research was restricted on the
available time and budget, the study was limited to focus only on single case organization and
selected employees. These all have impact on the outcome of this research.
31
3.9. Ethical considerations
Concerning ethical consideration, an attempt was made to ensure all respondents to keep their
identity and respondents as confidential in order for all the information to be given with
complete confidence. The questionnaires were dispersed based on willingness of each
respondent. In addition, the purpose of the questionnaire was clearly revealed.
32
CHAPTER FOUR
4. DATA PRESENTATION, ANALYSIS AND DISCUSION
This chapter focuses on the presentation and analysis of the data, from questionnaire, collected.
The data was exported from the application and fed to SPSS and Microsoft Excel for further
analysis. The outcomes from the research are mainly presented in the form of frequency, mean,
and standard deviation table. The process of data analysis presented in the following subtopics.
4.1. Response Rate

From a total of questionnaires distributed to the experts, team leaders, and executives Sendafe
city Administration which are direct and indirect relation with the issue, all 41 responses have
been collected directly in person which results in 100% Response rate has been recorded.
Saldivar (2012) suggests that for a census survey more than 75% response rate is preferable for
validity and reliability of the research. And this research’s response rate is more above the limit.
All these respondents replied to the first part, personal information, and the second part that
incorporates the questionnaire for the research.
4.2. Demographic Profile

As understanding demographic profile of respondents is vital for the outcome of the research,
respondents are requested to fill their personal information before the questionnaires' questions.
Accordingly, the respondents' Sex, age, education background, service year and duty (role in
Sendafe city Administration have direct and indirect relation to consumer satisfaction on
procurement performance have been included.
33
Table 4.1: Demographic profile information distribution
# Description Frequency(N) Percent (%)

1 Sex Male 32 78.0%
Female 9 22.0%
2 Age Below 26 7 17.1%
27-35 13 31.7%
36-45 15 36.6%
above 45 6 14.6%
3 Education Background Below Grade 12 2 4.9%
Certificate 7 17.1%
Diploma 14 34.1%
First degree 16 39.0%
Second Degree 2 5.0 %
4 Service year ≤5 13 32.0%
6 – 10 17 41.5%
11 – 15 7 17.1%
Above 16 4 9.8%
5 Duty Expert 29 70.7%
Team leader 8 19.5%
Chief executives 4 9.8%
Source: Own survey (2023)
As per the Table 4.1 Item Number-1 the general demographic profile of the respondents five
characteristics; Sex, age, education background, service year and duty in Sendafe City
Administration, according to their relation to procurement process have been identified.
Describing the demographic characteristics of the respondents helps analysis to be more
meaningful for readers. Accordingly, from a total of forty-one respondents, 32 were male and the
rest are females which means the gender ratio is 78% male and 22% female. This is an indication
that the study involves more males. However, since both genders are represented in the sample,
the study will not suffer from gender biases.
Meanwhile, Table 4.1 Item Number-2 shows the age of respondents 7 below 26, 13 were 27-35
15 were 36-45 and the rest 6 were above 45. With the ratio of 17.1%, 31.7%, 36.6% and 14.6%
respectively. This implies that respondents of the different age categories were engaged in this
34
study and especially the majority of age group was young 20 to 36, which indicates young
respondents were targeted for the study.
The third demographic profile is educational background of the respondents according to the
respondent data 2(4.9%) were below grade 12, 7(17.1%) were certificate, 14(34.1%) were
diploma, 16(39.0%) respondents were with Bachelor degree (BSc/BA) and the remaining 2 (5.0
%) were with second degree. This indicates that the respondents were educated well enough to
understand the questions and thus would give credible results.
Also, Table4.1 Item Number-4 service year of respondents in order to determine whether
satisfaction on procurement was determined by their service year. The findings shown that
41.5% of employees had work experience of 6-10 years, 32.0%of employees of Sendafe city
Administration had work experience of ≤ 5 years, 17.1% of Sendafe city Administration
employees serve the organization 11-15 and the rest 9.8% of employees of Sendafe city
Administration had work experience of above 16 years. This implies that the majority of the
respondents in Sendafa Beke city Administration, had worked for a considerable period of time
and therefore they were in a position to give credible information relating to this study.
The final demographic profile is duty of the respondent’s shows at Table4.1 Item Number-5. As
per the current structure of the Sendafe city Administration, it has a hierarchy of positions:
experts, team leaders, and Chief executives. Therefore, from the total respondent, the expert
contributes to 70.7%, team leaders 19.5% and Chief executives with 9.8%.
So, according to the demographic variable results we can conclude that the responses were
worthwhile since all the relevant respondents are involved in this study.
4.3. Descriptive Analysis of collected Data
In this research for analysis of the collected data a likert scale was used. A Likert Scale is a type
of rating scale used to measure attitudes or opinions. With this scale, respondents are asked
to rate items on a level of agreement. In this description analysis measuring instrument used to
calculate issues related to consumer satisfaction on public procurement. In the first part
Perceived Factors which affect consumer satisfaction on public procurement and procurement
process of the organization on the second part discussed. Answers of the respondent are scaled 1
35
to 5. 1= strongly disagree, 2=disagree, 3=neutral, 4=agree and 5=strongly agree. Accordingly, a
factor takes its average for the questions under it with no decimal point
4.3.1. Descriptive Analysis for Perceived Factors which affect consumer satisfaction
related questioners
Table 4.2: Quality of procurement service related questioners
Item QP- Quality of procurement service Responses

Code N % cumulative
QP101 Quality of product or service Strongly disagree 16 39 39
Disagree 15 36.6 75.6
Neutral
Agree 7 17.1 92.7
Strongly agree 3 7.3 100
QP 102 Responsive to internal customer needs Strongly disagree 13 31.7 31.7
Disagree 20 48.8 80.5
Neutral 3 7.3 87.8
Agree 5 12.2 100
Strongly agree
QP 103 Flexibility to changing internal customers’ Strongly disagree 14 34.1 34.1
needs Disagree 12 29.3 63.4
Neutral 5 12.2 75.6
Agree 10 24.4 100
Strongly agree
QP 104 On time delivery of procured product Strongly disagree 23 56.1 56.1
Disagree 11 26.8 82.9
Neutral 7 17.1 100
Agree
Strongly agree
QP 105 Ability to meet internal customer Strongly disagree 19 46.4 46.4
expectation Disagree 16 39 85.4
Neutral
Agree 6 14.6 100
Strongly agree
QP 106 On time delivery of information regarding Strongly disagree
our procurement process Disagree 3 7.3 7.3
Neutral 5 12.2 19.5
Agree 21 51.2 70.7
Strongly agree 12 29.3 100
36
In the above table respondents were asked questions related to Quality of procurement service.
As shown on the above table, respondents were asked regarding Quality of product or service
availed by organization. In response to these questions 39% of the respondents comprising
36.6% are strongly disagreed and dis agree to the statement. Regarding the second item which
says that the Responsive to internal customer needs, the majority of the respondents expressed
with percent of 48.8% disagreed to the statement and 31.7% of respond were strongly disagree.
Regarding the third item which says Flexibility to changing internal customers’ needs 34.1% of
the respondents comprising 29.3% are strongly disagreed and dis agree to the statement.
Regarding to the fourth item which says there is on time delivery of procured product of their
organization majority of respondents 82.9%, shows that there is the lack of on time delivery.
When come to the fifth item weather their organization has the aability to meet internal customer
expectation, majority of respondents 85.4% shows that there is also the lack of ability to meet
internal customer expectation. According to the sixth item the respondent ask about their
organizations on time delivery of information regarding our procurement process 81% of the
respondents strongly agree and agree to the statement.
The cumulative percentage from the response implies that quality of procurement service has not
played an instrumental role in creating consumer satisfaction in the Administration. Thus the
organization should pay more attention quality of procurement service in order to realize the
satisfaction level of the consumers.
37
Table 4.3: Supplier Response related questioners
Item Code SR- Supplier Response Responses

N %
SR201 Strongly disagree 4 9.76
Disagree 3 7.31
There is rapid responses from suppliers Neutral 6 14.63
Agree 12 29.27
Strongly agree 16 39.02
SR 202 Strongly disagree 16 39.02
Disagree 8 19.51
The extent of gaining More reliable
Neutral 4 9.76
information from suppliers is high
Agree 6 14.63
Disagree 15 36.58
Easier to purchase goods and make decisions
Neutral 3 7.31
since the products that the supplier has in stock.
Agree 7 17.07
Disagree 12 29.27
Technological skills of supplier staff is good Neutral 5 12.19
Agree 4 9.76
Disagree 16 39.02
My organization has a System Integration with
Neutral 2 4.87
suppliers
Agree 1 2.43
Disagree 14 34.14
Complaining handling of the suppliers is good. Neutral 2 4.87
Agree 5 12.19
In the above table respondents were asked questions related to their perception about Supplier
Response. As shown on the above table, respondents were asked if there is rapid responses from
suppliers. In response to these questions majority 68.29% of the respondents were strongly
agreed and agree that rapid responses from suppliers. Regarding the second item which asks
regarding the extent of gaining more reliable information from suppliers, the majority of the
respondents expressed with percent of 58.53% strongly dis agreed and disagree to the statement.
Regarding the third item which says it is easy to purchase goods and make decisions since the
38
products that the supplier has in stock; 58.53% of the respondents believe that it is not easy to
purchase goods and make decisions since the products that the supplier has in stock. Regarding
the fourth item which asks technological skills of supplier staff is good, 70.73% of the
respondents didn’t believe that technological skills of supplier staff is good. When we come to
the fifth item which asks the respondents weather their organization has a System Integration
with suppliers, 90.23% of the respondents answered that there is not system integration with
suppliers. For the last questioned regarding Complaining handling of the suppliers was good,
70.72% of them strongly disagree to the statement.
This means that the organization did not make appropriate mechanism to raise supplier response
in the existing procurement processes. Thus the city Administration should do more to have an
increased supplier response in their procurement business to business activities.
Table 4.4: Participation and decision making related questioners
Item Code PD-Participation and decision making Responses

N %
PD301 There is Participation on the Strongly disagree 7 17.07
preparation of specification to Disagree 5 12.19
procure product or service. Neutral 4 9.76
Agree 13 31.70
PD 302 There is a legal framework to raise Strongly disagree 17 41.46
consumer participation and decision Disagree 15 36.58
making. Neutral 4 9.76
Agree 3 7.31
PD 303 The extent of participation on Strongly disagree 17 41.46
Tender process is high. Disagree 15 36.58
Neutral 3 7.31
Agree 3 7.31
39
PD 304 End-users feedback was used for the Strongly disagree 15 36.58
procurement process. Disagree 15 36.58
Neutral 2 4.87
Agree 4 9.76
PD305 There is freedom of decision making Strongly disagree 12 29.27
on the procurement to meet end Disagree 13 31.70
Neutral 7 17.07
users functional need.
Agree 5 12.19
In the above table respondents were asked various questions issues related to their organizations
Participation and decision making. So as can be learned from table 4.4 item (1) that
describes there is Participation on the preparation of specification to procure product or service,
the majority (60.97%) are agreed. Similarly from table 4.4 item (2) the majority (78.04%)
respondents are disagreed that there is a legal framework to raise consumer participation and
decision making in their organization. In Table 4.4. For the question the extent of participation
on Tender process is high, the majority (78.04%) respondents are disagree to the statement.
For the question regarding End-users feedback was used for the procurement process, 73.16% of
the respondents that strongly disagreed. For the last item on the table 60.97% of the respondents
strongly disagreed that for the question there is freedom of decision making on the procurement
to meet end users functional need in their organization. From the percentages of the respondents
we can say that the city administration should do more to enhance participation and decision
making of the staff regarding public procurement to increase their satisfaction.
4.3.2 Descriptive Analysis for Issues related with public procurement process of the
organization related questions
Here bellow a descriptive analysis and interpretation of public procurement process of the
organization are analysed. In this regards respondents are asked to rate items on a level of
agreement, 1 to 5. 1= strongly disagree, 2=disagree, 3=neutral, 4=agree and 5=strongly agree.
Accordingly, a factor takes its average for the questions under it with no decimal point.
Therefore, each variable data is detail here under, indicated in table 4.5 below
40
Table 4.5: public procurement process related questioners
# Regarding public procurement process issues Responses
N %
PP101 The organizations five Rs i.e. buying at the Right Strongly disagree 19 46.34
price, time, source, quality and quantity Disagree 16 39.02
successfulness. Neutral 1 2.43
Agree 2 4.87
PP102 The organization establish legal framework to Strongly disagree 21 51.21
create consumer satisfaction. Disagree 17 41.46
Neutral 5 12.19
Agree
Strongly agree
PP103 The public procurement realized expected benefits Strongly disagree 16 39.02
to the organization. Disagree 12 29.26
Neutral 6 14.63
Agree 3 7.31
PP104 The procurement process was completing at its Strongly disagree 22 53.65
expected completion time Disagree 16 39.02
Neutral
Agree 1 2.43
PP105 The extent of rapid responses from the Strongly disagree 13 31.70
organization regarding procurement Disagree 12 29.26
Neutral 6 14.63
Agree 5 12.19
PP106 Availing of important information regarding Strongly disagree 19 46.34
public procurement process is high. Disagree 14 34.14
Neutral 1 2.43
Agree 4 9.75
PP107 The organizations extent use of technology on the Strongly disagree 22 53.65
public procurement process is good. Disagree 17 41.46
Neutral
Agree
Strongly agree
PP108 Requisitioning and approval processes are less Strongly disagree 16 39.02
bureaucratic. Disagree 14 34.14
Neutral
Agree 6 14.63
41
As can be learned from table 4.5 item (1) shows that 85.36% of the respondents feel that they are
not lucky by their organization in buying at the Right price, time, source, and quality and
quantity successfulness.
The study shows that 92.67% of the respondents disagreed for the question regarding their
organization establish legal framework to create consumer satisfaction.
In the above table 68.28% of the respondents not agreed that the public procurement realized
expected benefits to the organization.
Also 92.67% respondent did not agree that the procurement process was completing at its
expected completion time.
As can be learned from Table 4.5 item (5) shows that majority (60.96%) respondents believe that
they are not lucky regarding the extent of rapid responses from the organization regarding
procurement.
As shown at table 4.3 item number-6 regarding the availing of important information regarding
public procurement process, respondents' reply was 80.48% strongly disagree. It implies that
availing of important information regarding public procurement process was poor.
As can be seen from the above table 95.11% of the respondents not agreed that regarding the
organizations extent use of technology on the public procurement process is good. Similarly,
majority of respondents 73.16% didn’t believe that requisitioning and approval processes are less
bureaucratic.
From the response, it can be seen that the respondents believe that public procurement process
was the crucial factor while in doing public procurement.
4.4. Correlation analysis
42
Research often uses inferential statistics (correlation and regression) to determine if there is a
relationship between an independent and an outcome variable as well as the strength of that
relationship. So, inferential statistics are used to reach on conclusion about associations between
the variables of the study and is designed to test hypotheses that states about relationship
between predictor(s) and an outcome(s) variables.
The objective of this research is to explore whether the seven factors namely; quality of
procurement service, Supplier Response and Participation and decision making on the public
procurement can significantly consumer satisfaction on public procurement. To do so, the
researcher undertook hypothesis testing using correlation and regression analysis to illustrate the
conclusion in the study area.
Correlation is one of the inferential statistics methods for assessing the relationship between
variables. To be more precise, it measures the extent of association between the ordering of two
random variables (Leech, Barrett and Morgan, 2008). As a rule, we can categorize the type of
correlation by considering as one variable increases what happens to the other variable. That is,
we can say there is a positive correlation if the increase in the independent variable will result in
a tendency to increase the other variable. We can say there is a negative correlation, if the
increase in independent may result in the other variable to decrease; No correlation means the
increase or decrease in independent variable does not affect the other variables.
4.4.1. Correlation analysis between independent and dependent variables

The following correlation tests are made to assertion whether or not a relationship exists between
independent variables (quality of procurement service, Supplier Response and Participation and
decision making on the public procurement) and dependent variables public procurement. Then,
the correlation output of each dependent variable with the independent variables is interpreted
based on the following tables.
Table 4.6: Correlation between independent variables and dependent variable

Correlation
Public quality of Supplier Participation
procurement procurement Response and decision
service making
Public Correlation 1
procurement Coefficient
Sig. (2- tailed) .000
quality of Correlation .447** 1
43
procurement Coefficient
service Sig. (2- tailed) .000 .000
Supplier Correlation .468** .823** 1
Response Coefficient
Sig. (2- tailed) .000 .000 .000
Participation and Correlation .544** .562** 639** 1
decision making Coefficient
Sig. (2- tailed) .000 .000 .000 .000
**. Correlation is significant at the 0.01 level (2-tailed).
In the above inter-correlation matrix table (Table 4.6), association among seven independent
variables (quality of procurement service, Supplier Response and Participation and decision
making on the public procurement) was tested and found to be positive and they are significantly
correlated, to each other at the given level of significance.
4.5. Multiple Linear Regression Analysis

Before analyzing multiple linear regressions, the researcher has conducted basic assumption tests
for the model. These are normality of the distribution, the linearity of the relationship between
the independent and dependent variables and multi collinearity tests. Each test is explained
below.
4.5.1. Assumptions of Multiple Regressions

Assumption 1 - Normality Distribution Test
Multiple regressions require the independent variables to be normally distributed. Skewness and
kurtosis are statistical tools that enable the researcher to check if the data is normally distributed
or not. According to Smith and Wells (2006), kurtosis is defined as “property of a distribution
that describes the thickness of the tails. The thickness of the tail comes from the number of
scores falling at the extremes relative to the Gaussian/normal distribution” Skewness is a
measure of symmetry. A distribution or data set is symmetric if it looks the same to the left and
right of the center point.
If the skewness and kurtosis test results of the data are within the acceptable range (-1.0 to +1.0),
it can be concluded that the data is normally distributed. For this purpose and taste of normal
distribution, the kurtosis and skewness results are shown in table 4.7
44
Table 4.7: Tests of Normality
N Mean Std. Skewness Kurtosis
Deviation
Statistic Statistic Statistic Statistic Std. Statistic Std.
Error Error
Quality of procurement service 41 3.1026 1.10006 -.628 .272 -.303 .538
Public procurement 41 3.0000 .73855 .000 .272 -1.139 .538
Supplier Response 41 3.1154 .89705 .100 .272 .425 .538
Participation and decision 41 2.5769 .76480 1.075 .272 .211 .538

making
Valid N (list wise) 41
Source: SPSS output of survey questionnaire, 2023
The acceptable range for normality for both statistics is between -1.0 and + 1.0. as shown in table
4.7, all variables for both skewness and kurtosis statistics are fall in the acceptable standard of
normality (-1.0 -, +01.0) except the variable Participation and decision making is not fallen in the
region of skewness and variable Public procurement is not fall in the region of kurtosis.
Assumption 2 - Multicollinearity Test
When independent variables are multi collinear, there is “overlap” or sharing of predictive
power. This may lead to the paradoxical effect, whereby the regression model fits the data well,
but none of the predictor variables has a significant impact in predicting the dependent variable.
This is because when the predictor variables are highly correlated, they share essentially the
same information. Thus, together, they may explain a great deal of the dependent variables, but
may not individually contribute significantly to the model. Meaning, they can be considered as
45
one variable than two separate variables. The existence of multicollinearity can be checked using
“Tolerance” and “VIF” values for each predictor variable. Tolerance values less than 0.10 and
VIF (variance inflation factor) greater than 10 indicates the existence of multicollinearity
(Robert, 2006). As can be seen from the table below, multicollinearity is not an issue for this
current data.
Table 4.8: Multicollinearity Test Table

Model Collinearity Statistics
Tolerance VIF
quality of procurement service .643 1.556

Supplier Response .695 1.439
Participation and decision making .574 1.743
Source: SPSS output of survey questionnaire, 2023
As it is stated above for the assumption to be met values of Variance Inflation Factor (VIF)
scores must be below 10, and tolerance scores to be above 0.1; which is the case in as shown in
table 4.8, the tolerance and VIF of quality of procurement service, Supplier Response and
Participation and decision making are .643, .695 and .574 respectively. For this reason, this
research model fits the requirement and collinearity is not a problem.
4.5.2. Model Summary

According to Ho (2006), a measure of strength of the computed prediction equation is Rsquare,
sometimes called the coefficient of determination. In the regression model, R-square is the
square of the correlation coefficient between the observed and predicated value of dependent
variable. If R-square is 1(100%), there exists a perfect linear relationship between the predicators
(x i ‟s) and dependent variable (y). An R-square of 0 indicates no linear relationship.
Table 4.9 (b) Model Summaryb

Model R R Square Adjusted R Square Std. Error of the
46
Estimate
1 .997 .993 .993 .05932
a. Predictors: (Constant), quality of procurement service, Supplier Response and
Participation and decision making
b. Dependent Variable: public Procurment
Source: SPSS output of survey, 2023
In the model summary the multiple correlation coefficients R, indicates a very strong or high
correlation of .997 between organization’s public performance and the independent variables. R2
= .993 reveals that the model accounts for 99.3% of the variation in the organization’s public
performance and is explained by the linear combination of all the independent variables of
consumer satisfaction effect in the public procurement activities of the Administration.
4.5.3 Beta Coefficient

As it can be seen from table 4.10 below, the standardized coefficient of Supplier Response is the
largest value followed by Quality of procurement service and Participation and decision making
respectively. The larger the standardized coefficient, the higher is the relative effect of the factors
on consumer satisfaction of public procurement.
The significance tests of the 3 explanatory variables indicate that quality of procurement service,
Supplier Response and Participation and decision making factors are significant with p-value (P0
.05 (P > ∂), and these factors are not statistically significant to predict the Organization’s
logistics performance.
Table 4.10. Beta Coefficient

Coefficients
Model Unstandardized Coefficients Standardized t Sig.
Coefficients
B Std. Error Beta
1 (Constant) .003 .025 .105 .916
Quality of procurement .376 .012 .434 30.124 .000

service
Supplier Response .525 015 .524 34.863 .000
Participation and decision .118 .012 .126 9.495 .000
47
making
a. Dependent Variable: Public Procurement

Source: own survey (2023)
48
CHAPTER FIVE
5.SUMMARY OF FINDING, CONCLUSION AND RECOMMENDATION
The study was conducted to assess consumer satisfaction in public procurement in case of
Sendafa Beke city Administration. The effect of Quality of procurement service, Supplier
Response and Participation and decision making on the public procurement practice in Sendafe
Beke city Administration were examined from questionnaire responses of the respondents
developed by the researcher. The status of consumer satisfaction on public procurement has also
been assessed. The following findings are obtained from the analysis.
5.1 Summary of Finding

5.1.1 Quality of procurement service
The first objective was to examine the extent of Quality of procurement service which affects
consumer satisfaction on public procurement practice in Sendafa Beke city Administration. More
than 75.6% of the respondents strongly disagree that quality of product or service availed by the
organization was good. It’s not good also in giving responsive to internal customer and
flexibility to changing internal customers’ needs. Regarding to on time delivery of procured
product of their organization 82.9% of respondents believe that there is the lack of on time
delivery. According to the result 85.4% shows that there is also the lack of ability to meet
internal customer expectation but with regard to delivery of information about their procurement
process 81% of the respondents says it’s good.
5.1.2 Supplier Response

The second objective was to examine the extent to Supplier Response which influence the public
procurement practice Sendafa Beke city Administration. The result shows that there were rapid
responses from suppliers. Regarding the extent of gaining more reliable information from
suppliers strongly dis agreed to the statement. Also 58.53% of the respondents believe that it is
not easy to purchase goods and make decisions since the products that the supplier has in stock.
Regarding the technological skills of supplier staff respondents didn’t believe about it. Also
majority of respondent believe that there is not system integration with suppliers. For the last
questioned regarding Complaining handling of the supplier’s majority believe that it wasn’t
good.
49
5.1.3 Participation and Decision Making
The third objective was to assess the effect of Participation and decision making on consumers
regarding public procurement in the case of Sendafa Beke city administration. So, in relation to
issues related to their organizations Participation and decision making there is Participation on
the preparation of specification to procure product or service. But, there is no a legal framework
to raise consumer participation and decision making in their organization. With regard to extent
of participation on Tender process majority disagree to the statement. Also regarding end-users
feedback it wasn’t used for the procurement process. Lastly, as can be learned from the above
result there is no freedom of decision making on the procurement to meet end users functional
need in their organization.
5.1.4 Public Procurement Process

The main objective of this study was assessing the effect of public procurement on consumer
satisfaction in Sendafa Beke city administration and the result indicate that there were problems
buying at the Right price, time, source, quality and quantity successfulness. Also there was a
problem in their organization to establish legal framework to create consumer satisfaction.
Majority of the respondents did not agree that public procurement in their organization realized
expected benefits and the procurement process was completing at its expected completion time.
Also respondents believe that they are not lucky regarding the extent of rapid responses and
availing of important information from the organization regarding procurement. As can be
learned from the above result extent use of technology on the public procurement process was
poor. Also requisitioning and approval processes are more bureaucratic.
50
5.2. Conclusions
The primary purpose of this thesis was examining consumer satisfaction on public procurement
in Sendafa Beke city administration.
From the data analysis result the researcher reached in conclusion. The following are conclusion
drawn from the above finding.
 The demographic information of respondent shows that even if the numbers found in
each variable a symmetrical, it was enough for the research.
 The descriptive analysis shows that in Sendafa Beke city administration; even though the
delivery of information about their procurement process is good they are not lucky in
having quality product or service and on time delivery of procured product. Also their
organization was poor in giving response to internal customer. The consumers are
complaining about their organizations flexibility and ability to meet internal customer
expectation.
 Even if, the above finding shows that there were rapid responses from suppliers. There is
a problem in gaining more reliable information from suppliers and it is not easy to
purchase goods and make decisions since the products that the supplier has in stock. Also
according to the data we can conclude that the technological skills of supplier staff were
poor and there is not system integration with suppliers.
 Regarding Participation and decision making we can conclude that in Sendafa Beke city
administration even if, there is Participation on the preparation of specification to procure
product or service. There is no legal framework, freedom of decision making and
participation on Tender process. Also end-users feedback wasn’t used to meet end users
functional need in their organization.
 Generally, there were problems on buying at the right price, time, quality and quantity.
Also organizations extent use of technology was poor and requisitioning and approval
processes on the public procurement process was more bureaucratic poor. There is no
legal frame work of public procurement to meet expected benefits and at its expected
completion time to create consumer satisfaction. We can conclude that the extent of rapid
responses and availing of important information of the organization was poor.
51
5.3 Recommendation
Upon the research findings and conclusion, the following recommendations and policy
implication were forwarded;
 Management of the organization should establish procurement procedure and manual to
have quality product or service to meet realized benefit on time.
 Management of Sendafa Beke city administration must provide continuous training how
to prepare the procurement need plan to procurement staffs continuously to improve the
quality of the procured products.
 Management of Sendafa Beke city administration should make regular assessment on the
public procurement practice to identify and solve basic problems that affect consumer
satisfaction.
 Procurement unit should develop appropriate mechanisms to use end users feedback.
 The Management of Sendafa Beke city administration must establish well organized and
integrated, easily assessable ICT infrastructure systems that support the whole public
procurement practice of the organization.
 Management should find ways and means of communicating employees regarding
information about their procurement process.
52
References
53
Appendixes
College of Finance, Management and Development

Department of Public Procurement and Asset Management (MA)
Questioners to be filled by Consumers
Dear respondents,
This questionnaire is intended to collect data for the analysis of ‘consumer satisfaction on public
procurement a case study on Sendafe Beke City administration sectoral offices’. The information
obtained will be used for a research. The study is conducted for academic purpose and hence would not
affect any one in any case. The information collecting through the questionnaire is keep confidentiality
and only used for academic purpose. However, the finding of the study and the recommendations
forwarded are believed to provide valuable input to explain thesis title.
Therefore, your genuine, frank and timely response is crucial for the success of the study. Thus, you
are kindly request to respond to each question items carefully and responsible.
Thank you!
General Direction
1. You are not required to write your name.
2. Respond to all close ended question item by putting “ ” mark in the boxes or by making circle one
of the numbers for questions with rating scale.
N.B rating scale (strongly Disagree = 1, Disagree =2, Undecided = 3, Agree = 4, strongly Agree =5)
3. For any information, contact no. (0993480249)
54
Part I: Respondent Demographical Information - Please put ‘X’ in the box
1. Sex: Male female
2. Age: Below 20 26-30 36-40
20-25 31-35 above 40
3. Educational Background: Below Grade 12 Diploma
Grade 12 Complete First degree
Certificate Second Degree
4. Your service year:
≤5 ≤ 6 – 10
≤ 11 – 15 ≤ 16 – 20
≤ 21 and above
1.6. Duty
Manager Supervisor
Team leader Officer
55
Part II: Issues Related with the research area
Please select the number in the box which best represents your opinion using a scale of 1 to 5 by
circling the numbers in the column. (Please Select Only One Box for each Question).
Where: 1 = Strongly Disagree; 2 = Disagree; 3 = Neutral; 4 = Agree; 5 = Strongly Agree
Code Perceived Factors which affect consumer 5 4 3 2 1

satisfaction
QP- Quality of procurement service
QP101 Quality of product or service
QP 102 Responsive to internal customer needs
QP 103 Flexibility to changing internal customers’
needs
QP 104 On time delivery of procured product
QP 105 Ability to meet internal customer
expectation
QP 106 On time delivery of information regarding
our procurement process
SR- Supplier Response
SR201 Rapid responses from suppliers
SR 202 The extent of gaining More reliable
information from suppliers
SR 203 Easier to purchase goods and make
decisions since the products that the supplier
has in stock.
SR 204 Technological skills of supplier staff
SR 205 System Integration with suppliers
SR 206 Complaining handling of the suppliers.
PD-Participation and decision making
PD301 There is Participation on the preparation of
specification to procure product or service.
PD 302 There is a legal framework to raise
consumer participation and decision
making.
PD 303 The extent of participation on Tender
process.
PD 304 End-users feedback was used for the
procurement process.
PD 305 Freedom of decision making on the
procurement to meet end users functional
need.
56
Part III: Issues Related with public procurement process of the organization
Please select the number in the box which best represents your opinion using a scale of 1 to 5 by
circling the numbers in the column. (Please Select Only One Box for each Question).
Where: 1 = Strongly Disagree; 2 = Disagree; 3 = Neutral; 4 = Agree; 5 = Strongly Agree
Regarding Public Procurement

Code 5 4 3 2 1
Process Issues
PP101 The organizations five Rs i.e. buying at the
Right price, time, source, quality and quantity
successfulness
PP102 The organizations legal framework to create
consumer satisfaction.
PP103 The public procurement has the realized
expected benefits to the organization.
PP104 The green procurement process was
completing at its expected completion time
PP105 The extent of rapid responses from the
organization
PP106 Availing of important information regarding
public procurement process.
PP107 The organizations extent use of technology on
the public procurement process.
PP108 Requisitioning and approval processes are
less bureaucratic.
Thank you!!
57

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COLLEGE OF FINANCE, MANAGEMENT AND

CONSUMER SATISFACTION ON PUBLIC PROCUREMENT A

BY: MENGISTU ASHINIE

A THESIS SUBMITTED TO COLLEGE OF FINANCE, MANAGEMENT

Consumer Satisfaction on Public Procurement:-The Case of Sendafe

By: Mengistu Ashinie

Advisor: Biniam Berhie (PhD)

A Thesis Submitted to College of Finance, Management and Development,

Name of Researcher……………………. Signature………… Date……………............

Name of Advisor………… ……Signature………………. Date……………....................

Name of Internal Examiner

Name of Head of Department

1.1. Background of the study.......................................................................................................1

1.2. Statement of the problem......................................................................................................2

1.3 Research Question..................................................................................................................4

1.4. Objective of the study...........................................................................................................4

1.4.1 General objectives...........................................................................................................4

1.4.2 Specific Objectives..........................................................................................................4

1.5. Significant of the study.........................................................................................................4

1.6. The scope of the study..........................................................................................................5

1.7. Description of the study Area...............................................................................................5

1.8. Organization of the paper......................................................................................................6

2.1 Theoretical Review................................................................................................................7

2.1.1. Public Procurement........................................................................................................7

2.1.2 Factors Affecting Public Procurement Effectiveness......................................................8

2.1.3 Consumer Satisfaction.....................................................................................................9

2.1.4 Quality of products vs. satisfaction...............................................................................11

2.1.5 Role of Product Pricing on Consumer Satisfaction.......................................................11

2.1.6 Satisfaction of Consumers and Their Buying Behavior................................................12

2.2 Review of Empirical Studies................................................................................................13

2.4 Conceptual Framework........................................................................................................14

3.1. Description of the study area..............................................................................................16

3.2. Research Design..................................................................................................................16

3.3. Research Type and Approach.............................................................................................17

3.4. Source of Data and data collection method........................................................................17

3.5. Sample and Sampling technique.........................................................................................17

3.5.2 Sample Design, sampling frame and Sampling Technique...........................................17

3.5.3. Sampling Units.............................................................................................................18

3.6. Data Analysis /Treatment of Data.......................................................................................18

3.7. Data presentation.................................................................................................................18

3.9. Ethical considerations.........................................................................................................19

4. DATA PRESENTATION, ANALYSIS AND DISCUSION....................................................20

4.1. Response Rate.....................................................................................................................20

4.2. Demographic Profile...........................................................................................................20

4.3. Descriptive Analysis of collected Data...............................................................................22

4.4. Correlation analysis.............................................................................................................29

4.4.1. Correlation analysis between independent and dependent variables...........................30

4.5. Multiple Linear Regression Analysis..................................................................................31

4.5.1. Assumptions of Multiple Regressions..........................................................................31

4.5.2. Model Summary...........................................................................................................33

4.5.3 Beta Coefficient.............................................................................................................34

5.SUMMARY OF FINDING, CONCLUSION AND RECOMMENDATION...........................35

5.1 Summary of Finding............................................................................................................35

5.1.1 Quality of procurement service.....................................................................................35

5.1.2 Supplier Response.........................................................................................................35

5.1.3 Participation and Decision Making...............................................................................36

5.1.4 Public Procurement Process..........................................................................................36

Table 4.1: Demographic profile information distribution............................................................21

Table 4.3: Supplier Response related questioners........................................................................25