Kibet, Y.Rono, Langat Daisy Chelangat2014-07-032014-07-032014-07-03http://ir-library.ku.ac.ke/handle/123456789/10283Department of Business Administration, 63p. 2013, HD 9275 .L3The Kenyan dairy industry is based mostly on smallholder milk production. About six hundred thousand smallholders produce some seventy percent of the country's marketed milk. Approximately fifty six percent of this milk is sold raw in the unregulated informal market; leading to public concerns about hygiene and safety. The aim of the study was to investigate determinants affecting value addition of dairy products in Sotik Division. The specific objectives were to examine the effects of cost of inputs on value addition of dairy products, investigate the effects of marketing skills on value addition of dairy products, examine the effects of entrepreneurial skills on value addition of dairy products and explore the effects of technologies on value addition of dairy products. This study used descriptive survey which is a method of collecting information by interviewing or administering a questionnaire to a sample of individuals. The subjects of the study were eighty small scale dairy entrepreneurs operating in the Sotik Division. The division was stratified into six locations in which the subjects reside. The primary data was collected through administering questionnaires to the respondents.. Secondary data was collected through reviewing previous studies. The data was analyzed by use of both quantitative and qualitative method of data analysis. The quantitative measures were used to generate descriptive statistics to analyze for frequencies, means and percentages while the qualitative measures was analyzed through summarizing key findings, explanations interpretations and making conclusions. The results were reported using descriptive statistics such as frequency tables. The findings of the study indicated cost of transport, raw materials and labour as key determinants in value addition of dairy products. It indicated that high cost of these inputs has hampered the growth of the dairy enterprises. The study also found out that the dairy entrepreneurs do not have adequate marketing and entrepreneurial skills. They also did not access technology on value addition. All theses have adversely affected the value addition of dairy products. To address these issues it is recommended that the road network is improved and the dairy entrepreneurs can be encouraged to come together to form groups or cooperatives so that they can transport together hence take advantage of economies of scale. It is also recommended that the relevant counties (where dairy enterprises can thrive) should therefore put in place programmes and policies that address these issues so as to enhance value addition of dairy products and hence spur the economic growth of the respective counties. Further research should be done to identify challenges affecting women entrepreneurs, effect of government policies on dairy enterprises and value addition technologies that are relevant, accessible and affordable.enThesis