Determinants of brand loyalty in leading supermarket chains in Kenya

Abstract

In the context of a retail supermarket, building customer and brand loyalty is a successful means of achieving market share and competitive advantage. Consumers, whose desires and expectations have been met or exceeded in the course of experiencing the service, are more satisfied and are likely to continue patronizing the organization. The Kenya retail industry has had its fair share of competition and rapid growth that has put smaller retailers out of business. Increased competition has led to an increase in more innovative services and stores. This study looked at the perspective of the user and will help the seller on how they can build brand loyalty, reduce price sensitivity and achieve more profitability. This study evaluated the determinants of brand loyalty in leading supermarkets in Kenya. The study specific objectives were to determine the influence of service quality on brand loyalty; establish the effect of customers’ value perception on brand loyalty; evaluate the effect of sales promotions on brand loyalty; determine the effect of brand image on brand loyalty; assess the extent to which customer satisfaction mediates the relationship with brand loyalty. The theoretical framework that guides this study is given by service quality theory, means-end theory, expectation disconfirmation theories, the brand consumer relationship theory, Social class theory and adaptation level theory. The study adopted a descriptive survey research design. The study covered the Nairobi and Nakuru county customers of the four main supermarkets (Nakumatt, Tusky’s, Naivas and Uchumi). Sampling was done using multi-stage sampling method to get an optimum sample of the supermarket stores and the customers. A supermarket store sample of 30 stores was picked using stratified random sampling. The study adopted a sample of 384 customer respondents. The research instrument used was a structured questionnaire. Exploratory Factor Analysis (EFA) was used to identify the main factors that define the independent variables. Regression analysis was used to evaluate the relationships between dependent and independent variables. The data was coded, sorted and analysed using the Statistical Package for Social Sciences (SPSS Version 23). The study found that brand loyalty in leading supermarkets in Kenya, was influenced positively by brand image, customer perceived value and service quality. The study also found that customer satisfaction significantly partially mediates on the combined effect of service quality, customer perceived value and brand image on brand loyalty. The study failed to reject the null hypothesis that there is no significant effect of sales promotions on brand loyalty in leading supermarket chains in Kenya. Sales promotions were found not to affect brand loyalty. Sales promotions are viewed as a short-term marketing activity to increase flow of customers and influence sales into the supermarket stores in the short run. The study concluded that service quality, customer perceived value and brand image are antecedents to brand loyalty. Brand Image, service quality and customer perceived value are variables that marketing practitioners in the supermarkets can focus on to increase high levels of customer satisfaction and hence brand loyalty. The measurement of these dimensions is a significant marketing tool for retail stores that wish to develop a competitive advantage and enhancing the customers repurchase intention and intention to recommend.