Differentiation Strategies Adopted by Manufacturers of Fast Moving Consumer Goods in Nairobi

Abstract

The fast moving consumer goods manufacturers (FMCG) are faced with intensified competition, consumers who are more value conscious and less brand loyal, dwindling product life cycles and increasingly powerful retailers; this means that most of the FMCG products fall by the wayside. Despite the critical nature of the product differentiation process, very little is known about the differentiation strategies adopted by manufacturers of fast moving consumer goods. In this industry, products dealt with have close similarities and therefore, one company‟s products need be differentiated from those of the other in order to survive in this competitive market. This study therefore needed to fill the gap by attempting to answer the question: what are the differentiated strategies adopted by manufacturers of fast moving consumer goods in Nairobi. This was a descriptive survey aimed at determining the differentiation strategies adopted and used by manufacturers of fast moving consumer goods in Nairobi. Seventy eight (78) companies constituted the population of study. A census study was conducted. . Data was collected using semi-structured questionnaires and was self administered through drop and pick method (a form of mail questionnaire). Out of the seventy eight questionnaires distributed, fourty nine (49) respondents managed to fill and return their questionnaires, translating to a response rate of 62.8%. Data was analyzed using frequency distributions, percentages, mean scores and standard deviations. Organizations in the fast moving consumer goods industry should be recommended to concentrate their efforts in several differentiation strategies. However, these firms should combine a few of the strategies that are very important in the industry and which cannot be easily copied by the competitors, since, differentiation of market offerings is the art of designing meaningful differences to distinguish company offering from those of competitors (Kotler, 1997). If this is accomplished, it may in turn influence high customer retention levels, high customer loyalty, premium prices, greater market share and overall profitability. The first limitation faced during the research was to get respondents at their work stations due to field assignments away from their offices. In some instances, more time and resources were invested in making follow ups. Secondly, respondents‟ apprehension was very high and it was difficult to get the responsible senior officials to accept to be interviewed. They viewed the exercise with a lot of suspicion due to the stiff competition in the fast moving consumer goods industry. There is adequate opportunity for further research on the differentiation strategies adopted by manufacturers in other industries, where there are more players and higher competition. Finally, longitudinal and more controlled studies (field experiments) should be conducted with a view to establishing “a true” effect of differentiation strategies and competitive advantage. In the fast moving consumer goods industry, I suggest that a study should be conducted to establish the challenges faced by manufacturers in initiating and implementing the various differentiation strategies. This will help marketers to tailor their differentiation strategies to suit the right product with the right consumers in order to achieve the overall organizational goals.