Influence of Customer Value Strategy on Competitiveness of Insurance Companies in Kenya

Abstract

The state of globalization that transcends economic development in different countries has led to markets being increasingly volatile, fragmented and thus becoming challenging for managers to maintain their state of competitiveness. The study's goal was to ascertain how customer value initiatives affected the competitiveness of Kenyan insurance firms. The study's specific goal was to determine how functional, relational, and emotional value strategies affected the competitiveness of insurance businesses in Kenya. The research was anchored by the unified service theory, the resource-based view, and the structure-conduct-performance framework. Because the study included a univariate topic and the researcher did not tamper with the data collection, a cross-sectional descriptive research method was used. The sample included each and every insurance company doing business in Kenya. The researcher used a simple random sampling approach for ease of use. The researcher provided one questionnaire to each insurance firm targeting marketing managers, business development managers, or those who held similar roles since this was the target audience for each insurance company. The primary data for this research came from structured questionnaires with closed-ended questions. The computation of descriptive and inferential statistics was done using a statistical package for social science. While the inferential statistics demonstrated the link between the dependent and independent variables, the descriptive statistics gave a summary of the study's results. The research indicated that insurance firms have adopted strategies that support the emotional, relational, and functional dimensions of customer value strategies to a fair level based on the descriptive data. The relational element of customer value strategy and organizations' competitiveness were shown to have a favourable and substantial relationship. The research discovered a positive beta coefficient (β=0.371) and a significant value smaller than 0.05 (α=0.000) for relational value. Based on the regression model, functional value contributes a positive β(=0.291) and significant (α=0.000) value to competitiveness of the enterprises. The research demonstrated a positive and substantial effect of functional dimension on competitiveness of the firms in question. The research also showed that functional value strategy results in the frequent generation and updating of client needs. The results also show that the practical use of a customer value strategy significantly enhances competitiveness. Based on the results, it was determined that emotional value had a favorable (β=0.086) but insignificant (α=0.138) impact on insurance businesses' ability to compete. According to the study, insurance companies have implemented ways to improve the execution of their emotional value approach. These include addressing customer concerns in a satisfactory manner, caring for its clients, and using feedback from clients to raise the quality of the products. The research determined that the deployment of customer value strategies has significantly boosted the competitiveness of insurance businesses based on the overall impact of those strategies on that factor. The research found a modest association between customer value strategy and organizational competitiveness, with a correlation coefficient of 0.532. Additionally, the study found that the three dimensions of customer value strategies; relational, functional and emotional value strategies explain 28.3% of the overall company competitiveness. In conclusion, in relation to relational value, insurance companies have frontline staff who take good care of customers and they have products that are reliable and serve the interests of their customers. The functional aspect was concluded as enhancing competitiveness by positively and significantly improving competitive capacity of insurance companies. The study recommends enhanced implementation of customer value strategies for enhanced competitiveness.