A survey of customer loyalty programs applied by petrol stations in Nairobi
Abstract
Liberalization of the Kenyan economy has allowed several new players to locally market
petroleum products. Moreover, in this sector physical factors such as convenience, location,
quality and price affect customers and their purchases. One way for these petrol stations to
remain profitable in the competitive market is to ensure that they have customers that remain
with them for longer. However, the customer loyalty programs applied by these stations
were not known. The objectives of the study were to establish the customer loyalty programs
applied by petrol stations and determine the extent to which the loyalty programs had
resulted in customer loyalty.
This was a descriptive study, whose population of interest consisted of all branded petrol
stations in Nairobi. A sample size of 100 petrol stations was used, with non-proportionate
stratified sampling method being used to select sample sizes for the oil stations from each oil
firm. The study used primary data collected by use of semi-structured questionnaires
administered to all the branded petrol stations in Nairobi, which was analyzed by use of
descriptive statistics. The study's response rate was 72%.
The study established that the loyalty programs applied by these stations include various
types of loyalty cards, maintaining databases of customers, utilizing various kinds of
communication modes, giving customers different bonuses and maintaining collaborative
partnerships with other non-competing organizations. It was further established that that
loyalty cards had to a greater extent led to the stations having loyal customers than the other
programs, while creation of customer databases had only led to the stations having loyal
customers to a moderate extent.
This study faced different limitations. Some of the target respondents were unwilling to be
interviewed. Secondly, in some stations target respondents could not respond without the
required authority from their Head Offices, which was lacking. From the research findings,
further research was suggested to establish the perception of the customers to the loyalty
programs applied by the petrol stations in influencing customer loyalty to the respective
stations and the relationships between loyalty programs and the performance of these petrol
stations.
Citation
Masters Of Business Administration (MBA) Degree, School Of Business, University of NairobiPublisher
University of Nairobi School of Business
Description
A management research project submitted in
partial fulfillment of the requirements for
the Masters Of Business Administration (MBA)
Degree, School Of Business, University of
Nairobi