Product Differentiation and Performance at Tier 3 Deposit Taking Saccos in Kenya

Abstract

Differentiation of products as a competitive strategy allows organizations to develop more valuable products that can penetrate markets with ease. Therefore, firms have a responsibility in finding appropriate ways of not only creating but also adding value to their target customers. While the decline in market share is an inevitable consequence of industry dynamics, it has serious implications for the long-term viability and competitiveness of small- and medium-sized DT-SACCOs. The objective of this research was to establish the relationship between Product differentiation and performance of Tier 3 Deposit Taking SACCOs. This research was underpinned on Resource-Based View and Differentiation Theory. The research adopted a cross-sectional research design. The study focused on the 84 tier 3 Deposit Taking SACCOs in Kenya. The survey method was employed to collect data for the research, with s elf-administered, structured questionnaires being used to gather primary data. The researcher used SPSS V.25.0, a statistical package for social science, to undertake a descriptive statistical analysis of the quantitative data, and then presented the findings in the form of percentages, means, standard deviations, and frequencies. Qualitative analysis followed theme coding of the qualitative information. A regression analysis was performed to draw inferences from the gathered facts. Based on the findings, the Sacco members have a preference for the company's products because of their high quality, the rising product variety has increased its reliability in the industry, the company charges a premium for its products because of their superior craftsmanship, and the company designs its products with the members' needs in mind. In addition, some establishments have earned a stellar reputation for providing high-quality products and services, while some SACCOs tailor their customer support to each individual's unique set of needs, taking into account factors like age, income, and education level. The research also concluded that the SACCOs' output lacked any distinguishing qualities (quality). The research discovered that the results of Deposit Taking SACCOs was most affected by horizontal differentiation, next by vertical differentiation, and finally by mixed differentiation. Deposit Taking SACCOs were urged to develop competitive strategies that are technology focused and up to date in order to improve product differentiation. The research also suggested that management focus on improving the quality of goods and services on a larger scale.