Influence Of Marketing Strategies On Customer Retention In Fast Moving Consumer Goods Companies:a Case Of Kenchic Processing Plant Limited In Kiambu County, Kenya.

Abstract

Kenchic has been n market leader for years, the reports for financial year 2015-2016 the market share was 78% in but in 2017-2018 the market share reduced to 62%. This state of affairs is indeed alarming, various factors were concluded that have been the cause of this drop and they are; entry of competitors in the market leaving the customer with a higher bargaining and government policies and regulations which causes company operating costs becoming high. These factors have resulted to loss of loyal customers of the company, which has resulted to a significant link between loss of customers and reduction of the market share. Various marketing strategies such as branding, product diversification, effective pricing and advertising have been employed by the firm. However, these strategies appear somewhat defective and inefficient. This study therefore seeks to examine the influence of marketing strategies on customer retention at Kenchic limited in Kiambu County, Kenya. The study was guided by the following objectives: to examine the influence of branding on customer retention at Kenchic limited in Kiambu County, to establish the influence of product diversification on customer retention at Kenchic Limited in Kiambu County, to assess the influence of advertising on customer retention at Kenchic Limited in Kiambu County, and to verify the influence of pricing on customer retention at Kenchic Limited in Kiambu County. The study adopted descriptive survey design to carry out the investigation. 300 respondents responded to the questionnaires that were roled out.To ensure content validity, the researcher requested a panel of three experts to critically examine questionnaire items to determine their representativeness before large scale administration. Spearman-Brown Prophesy formula was used to determine reliability. A coefficient of 0.8 was obtained. Findings indicated that there was a strong positive correlation coefficient between Branding and Customer retention as indicated by correlation factor of 0.731. It was significant at 95% and was found to be statistically significant since the significant value was less than 0.05. Results show that there was a strong positive correlation coefficient between product diversification and Customer retention in fast moving consumer goods as indicated by correlation factor of 0.534. It was significant at 95% and was found to be statistically significant since the significant value was 0.022, which was less than 0.05. This agreed with the expectation that diversification of a product enhance customer retention since they can obtain a variety of products. Findings indicate that there was a strong positive correlation coefficient between Advertising and Customer retention as indicated by correlation factor of 0.656. It was significant at 95% and was found to be statistically significant since the significant value was 0.000, which was less than 0.05. This agreed with the expectation that increase advertising by the organization would lead to increase in customer retention. Results indicate that there was a strong negative correlation coefficient between and customer retention as indicated by correlation factor of -0.685. It was significant at 95% and was found to be statistically significant since the significant value was less than 0.05. This agreed with the expectation that increase in pricing would lead to decrease in customer retention. Based on the model employed, it was established that holding branding, product diversification, advertising and pricing to constant, Customer retention would be at 1.132. An increase in unit in branding would lead to an increase in customer retention by 0.486, an increase in unit in product diversification would lead to increase in customer retention by 0.649, unit increase in advertising would lead to an increase in Customer retention by 0.513, an increase in unit in pricing would lead to an increase in customer retention by 0.586. This confirms that there was a positive relationship marketing strategies and customer retention. The study recommends the following since the study focused on Kenchic Company as one of the organizations dealing with fast moving consumer goods only, this may not fully represent all the fast moving consumer goods companies in Kenya. Further studies can be carried out in other companies in order to obtain a conclusive results. More studies should be conducted on marketing strategies and how they influence customer retention in the economy.