Influence of Coffee Pricing on Reviving Coffee Production in Cooperative Societies in Meru County, Kenya

Abstract

Purpose: The purpose of this study was to examine the influence of coffee pricing on reviving coffee production in cooperatives societies in Meru county, Kenya. Methodology: A descriptive survey research design was used in the study. The respondents were the coffee farmers and managers from coffee cooperative societies. A sample of 30%, that is,42 cooperative societies in Meru county was considered. Coffee farmers were sampled using simple random sampling for those who met inclusion and exclusion criteria, while all managers in all the sampled cooperative societies participated in the study. Data collection was done using closedended questionnaires and interviews. To ensure validity and reliability, pre-testing of questionnaires was done on 10 active coffee farmers, while pre-test interviews were administered to 5 managers from Kamuthi housing cooperative society of Murang’ a County. Coded data in SPSS 24.0 computer program was analyzed quantitatively using descriptive statistics such as mean, percentage, and standard deviation. Univariate regression and multiple regression were used to test the hypothesis of the study. Tables, graphs, and detailed explanations were used to present the final results of the study. Results: Coffee pricing had the highest average mean score of 4.42 and a standard deviation of 0.89. The model summary of coffee pricing indicated that R-value was 0.932 and R-square was 0.869. This confirmed that coffee pricing predicted 86.9 % of the revival of coffee production. While being interviewed managers came out strongly that effective coffee pricing had increased new customers; there were improved sales quantities and there was retainment of old customers; clearance of stocks on time which improved revenue and reduced spoilage of coffee beans. The study therefore found out that coffee pricing significantly influences reviving coffee production in cooperative societies in Meru county Kenya. Unique contribution to theory, policy and practice: The study contributed that coffee pricing significantly influenced reviving coffee production in cooperative societies in Meru county Kenya. Coffee farmers should be encouraged to be interested in different types of coffee pricing to offer innovative suggestions to coffee cooperative societies. Managers should be well versed with different price types and also be innovative enough to suggest new ones based on various locations and different quality of the coffee sold. The marketing department in a cooperative society should do more research on their current market base to see what prices are working and the ones that are not. The government should set up policies that will see to it that local coffee consumption has improved. This is because only 5% of coffee is consumed locally while 95% is exported.