Factors Influencing Millennials Consumer Purchase Behavior Within the Airline Industry in Kenya: a Case Study of United States International University-Africa

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Factors Influencing Millennials Consumer Purchase Behavior Within the Airline Industry in Kenya: a Case Study of United States International University-Africa FACTORS INFLUENCING MILLENNIALS CONSUMER PURCHASE BEHAVIOR WITHIN THE AIRLINE INDUSTRY IN KENYA: A CASE STUDY OF UNITED STATES INTERNATIONAL UNIVERSITY-AFRICA BY CATHERINE WAMBUI MWANGI UNITED STATES INTERNATIONAL UNIVERSITY AFRICA SPRING 2018 FACTORS INFLUENCING MILLENNIALS CONSUMER PURCHASE BEHAVIOR WITHIN THE AIRLINE INDUSTRY IN KENYA: A CASE STUDY OF UNITED STATES INTERNATIONAL UNIVERSITY-AFRICA BY CATHERINE WAMBUI MWANGI A Project Submitted to the Chandaria School of Business in Partial Fulfillment of the Requirement for the Degree of Masters in Business Administration (MBA) UNITED STATES INTERNATIONAL UNIVERSITY AFRICA SPRING 2018 ii STUDENT’S DECLARATION I, the undersigned, declare that this is my original work and has not been submitted to any other college, institution or university other than the United States International University in Nairobi for academic credit. Signed: __________________________ Date: ________________________ Catherine Wambui Mwangi (ID No. 620175) This project has been presented for examination with my approval as the appointed supervisor. Signed: __________________________ Date: ________________________ Dr. Peter Kiriri Signed: __________________________ Date: _____________________________ Dean, Chandaria School of Business iii COPYRIGHT All rights reserved; No part of this work may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without the express written authorization from the writer. Catherine Wambui Mwangi © 2018 iv ABSTRACT The general objective of this study was to examine the factors influencing millennials consumer purchase behavior within the airline industry in Kenya. The study was guided by three specific objectives; to determine the influence of price on millennials consumer choice of airline; determine the influence of product on millennials consumer choice of airline; and determine the influence of marketing communications on millennials consumer choice of airline. The descriptive research design was adopted for the research. The target population of the study was students of USIU – Africa, a sampling frame of 6,766 students enrolled in Spring Semester 2018. Stratified random sampling procedure was utilized which involved distinguishing the target population into post-graduate and undergraduate students in the population. Use of mathematical sampling procedures to determine the sample size was used to establish the sample for the study as 384 respondents. The study relied on primary data which was collected using a structured questionnaire that was distributed to the students. The questionnaire consisted of two sections seeking the background information and variable information. The variable information was gathered using 5 – point Likert scale items to gather the perceptions and attitudes of respondents on factors that influence their consumer choice of airline. Quantitative methods were used for data analysis. Specifically, the study used descriptive statistics, inferential statistics, specifically correlation and regression to analyze the data and relationships between factors and consumer choice of airlines among millennials and to find meaning in the collected data. The Statistical Package for Social Sciences (SPSS) Version 23 was used to analyze the data. Frequencies and percentages were used to analyze the nominal data (general information) and mean and standard deviation were used to analyze the interval data (Likert scale items). The data was presented in tables and supported by the researcher‟s interpretation. In determining the influence of price on millennials consumer choice of airline, it was deduced that the price of an airline ticket is based on a number of factors and for purposes of this research focus was on the demand, operation costs and competitor pricing. The findings show that respondents choose an airline that bundles the air ticket together with v accommodation and tours together when deciding what airline to travel with, a strategy used in competitor pricing. With regards to the influence of product on millennials consumer choice of airline, it was deduced that the perception of the product of an airline is reliant on various factors and for purposes of this research focus was on the consumer tastes and preferences, brand perception and customer loyalty. It was found that respondents preferred to plan, book and pay for their air tickets online which is a strategy used to meet the millennials tastes and preferences as they are a digital intensive generation. In determining the influence of marketing communications on millennials consumer choice of airline, the variables that the study focused on were the influence of advertising, social media and sales promotion. The findings were that advertisements of an airline determined how respondents felt and thought about an airline. The study recommends that airlines and travel agents should design travel packages and airline travel fares that are suitable or target the millennials; that airlines and travel agencies should design their products on digital and online platforms so as to reach millennials; that airlines and travel agencies should advertise their services and products on digital and online platforms so as to reach more of the millennials market. There is need for further study that utilizes secondary data to deduce determinants of consumer choice of airline among millennials. vi ACKNOWLEDGMENT First and foremost I would like to thank God for the good fortune, health and wellbeing, that was core to completing the Master‟s degree program. I owe special thanks to my parents, brothers, sisters, friends and classmates who were a source of emotional support throughout the journey. I would like to thank my supervisor Dr. Peter Kiriri, who shared his vast knowledge, experience, insight and guidance from the start which enabled me to finish this research successfully. Thank you all and may God Bless you abundantly more than you can ever imagine. vii DEDICATION I would like to dedicate this work to my parents, brothers, sisters, friends and classmates. I am forever grateful for the support and encouragement throughout the period, may God bless you abundantly. viii TABLE OF CONTENT STUDENT’S DECLARATION ...........................................................................................iii COPYRIGHT ........................................................................................................................ iv ABSTRACT ............................................................................................................................ v ACKNOWLEDGEMENT ................................................................................................... vii DEDICATION.....................................................................................................................viii LIST OF TABLES ................................................................................................................ xi LIST OF FIGURES ............................................................................................................. xii LIST OF ACRONYMS AND ABBREVIATIONS ..........................................................xiii CHAPTER ONE .................................................................................................................... 1 1.0 INTRODUCTION............................................................................................................ 1 1.1 Background of Study ......................................................................................................... 1 1.2 Statement of the Problem ................................................................................................... 5 1.3 General Objective .............................................................................................................. 7 1.4 Specific Objectives ............................................................................................................ 7 1.5 Significance of the Study ................................................................................................... 7 1.6 Scope of the Study ............................................................................................................. 8 1.7 Definition of Terms............................................................................................................ 8 1.8 Chapter Summary .............................................................................................................. 9 CHAPTER TWO ................................................................................................................. 11 2.0 LITERATURE REVIEW ............................................................................................. 11 2.1 Introduction ...................................................................................................................... 11 2.2 The Influence of Price on Millennials Consumer Choice of Airline ............................... 11 2.3 The Influence of Product on Millennials Consumer Choice of Airline ........................... 16 2.4 The Influence of Marketing Communications on Millennials Consumer Choice of Airline. ................................................................................................................................... 23 2.5 Chapter Summary ............................................................................................................ 29 CHAPTER THREE
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