Abstract:
Market positioning has long been recognized as a vital tool to confront competitive pressures and improve
organizational performance. Firms which position themselves within a particular market place relative to
competitors, earn higher rates of return. Competition and profitability pressures mean that firms must be
responsive to the market conditions. The study sought to determine the effects of market positioning
strategies on organizational performance in the airlines industry in Kenya using Kenya Airways (KQ) as a case.
The study covered 215 respondents drawn from a population of 1230 (staff and customers). Questionnaire
was used to collect data. Content analysis, descriptive and Pearson’s Product Moment of Correlation were
used to analyze data. The results revealed that variations in organizational performance are explained by
pricing strategies with a confidence level of 95%. The results indicated a P-value of less than 0.005 against all
the study variables. Pricing strategies had a significant effect on cost strategies, perceived service quality,
differentiated benefits, innovation and organizational performance. The study revealed a positive correlation
between pricing strategies and perceived service quality with a correlation coefficient of 0.574; an average and
positive correlation between pricing strategies and innovation with a correlation coefficient of 0.464. There
also existed a positive correlation between pricing strategies and differentiated benefits with a correlation
coefficient of 0.650. Moreover, the correlation efficient between pricing strategies and performance was also
positive, meaning that as a firm charges fair prices, compared to its competitors, performance is improved as
supported by Kimes and Wirtz (2002). Pricing strategies had a coefficient value of 0.170 against organizational
performance. The study concluded that positioning is firmly placed within the general segmentation-targetingpositioning
framework and plays a pivotal role in marketing strategy. Market positioning strategies have
yielded to improved performance. The study recommends that KQ and indeed other airlines should continue
positioning themselves favorably within the global market to enable them earn high profits. They should plan
the product mix for a combination of elements such as physical product, product services, brand and package
desired by the target consumers. Further, they should continue their focus on high quality service to
customers and markets in order to build customer royalty.
