Achieving sustainable competitive advantage through product differentiation in deposit taking microfinance institutions in Kenya
Product differentiation involves creating a product that is perceived unique thus making it more attractive to a particular target market as compared to others. Different MFIs which encompass a wide range of these financial services vary in legal structure, mission, and operations. MFIs offer these financial services to clients who do not have access to mainstream banks or other formal financial service providers. Due to change in business environment where the marketplace is increasingly competitive and the rate of innovation is rising, together with the pressure of the emergence of global knowledge-based economy, it has dawned on MFIs that product differentiation strategies is their key asset . The study sought to determine how Deposit Taking Microfinance institutions in Kenya could achieve sustainable competitive advantage through product differentiation strategies. This research adopted a survey design where the population of interest was all the six registered Deposit Taking Microfinance institutions in Kenya. The study carried out a census of six registered Deposit Taking Microfinance institutions Kenya. A questionnaire was used as primary data collection instrument which was divided into two parts. The data was then summarized, coded and tabulated. Descriptive statistics means and standard deviation were used to analyze the data. Data presentation was done by the use of pie charts, bar charts and graphs, percentages and frequency tables for easy of understanding and interpretations. The study concluded that Deposit Taking Microfinance institutions in Kenya offer different products to the market including loan facilities, training, voluntary savings, fund transfer services, insurance services and effective delivery systems such as ATMs. Deposit Taking Microfinance Institutions therefore differentiate its products through offering services such as loans, savings, money transfers, insurance services, and other financial services to low-income earners in both rural and urban areas. The study concluded that product differentiation strategies had been effective in Deposit Taking Microfinance institutions to a very great extent as it had enabled them to achieve competitive advantages as it had allowed the MFIs to target specific populations in the market, offer financial services fast and speedily, improve performance, and improve financial quality, responsiveness, availability and ease of integration.