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Analysis of the Relationship Between Social Bonding Strategies and Customer Loyalty Among Supermarkets in Western Region, Kenya; a Focus on the Role of Brand Identity

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Analysis of the Relationship Between Social Bonding Strategies and Customer Loyalty Among Supermarkets in Western Region, Kenya; a Focus on the Role of Brand Identity ANALYSIS OF THE RELATIONSHIP BETWEEN SOCIAL BONDING STRATEGIES AND CUSTOMER LOYALTY AMONG SUPERMARKETS IN WESTERN REGION, KENYA; A FOCUS ON THE ROLE OF BRAND IDENTITY. YATUNDU FARAJI ANDUKU BBM (MMUST), MBA (MMUST) A Research Thesis Submitted to the School of Postgraduate Studies in Partial Fulfillment of the Requirements for the Conferment of the Degree of Doctor of Philosophy in Business Administration, Marketing Option of School of Business and Economics, Department of Business Administration and Management. KISII UNIVERSITY 2020 DECLARATION AND RECOMMENDATION I the undersigned, declare that this research thesis is my original work and has not been presented for a degree in any other university. Faraji Anduku Yatundu ……………… ………………. DCB/10218/15 Signature Date RECOMMENDATION BY THE SUPERVISORS This research thesis has been submitted for examination with our approval as University supervisors Dr. Kennedy Ntabo Otiso, PhD ……………… ……………………. Lecturer Signature Date Department of Business Administration and Management, School of Business and Management Sciences University of Eldoret Dr. Tom Mboya, PhD ……………… ……………………. Lecturer Signature Date Department of Business Administration and Management, School of Business and Economics Kisii University Prof. Christopher Ngacho, PhD ……………… ……………………. Associate Prof. Operations Management Signature Date Department of Management Science, School of Business and Economics Kisii University ii COPYRIGHT No part or whole of this thesis may be reproduced, stored in a retrieval system or transmitted in any form or means such as electronic, mechanical or photocopying, recording without prior written permission from Kisii University on my behalf. © 2020 Yatundu Faraji Anduku. All right reserved iii DEDICATION This thesis is dedicated to my beloved wife Samira Mercyline Lunani, my beloved daughters Zuneiya, Fatuma and Saumu Anduku and sons Khalif, Barack and AbdulKarim Anduku. iv ACKNOWLEDGEMENTS To Allah I give all the Glory for the gift of life he has bestowed upon me. This far, it’s Allah’s wish that I realize my dream. I wish to express my appreciation in a special way to my supervisors: Dr. Kennedy Ntabo Otiso, Dr. Tom Mboya and Prof. Christopher Ngacho whose intellectual guidance, contribution, advice and encouragement have been infinite. I would like to thank Kisii University for providing an enabling academic environment that has enabled me pursue my academic dream and provided a serene academic environment that has enabled me acquire knowledge. I extend my appreciation to Kisii University Department of Business Administration and Management for prh nboviding a team of lecturers who have ably guided me through the learning session. I would also appreciate the support gained from Dr. Yobes Benjamin Nyaboga, Dr.Khisa Mbotela all of Kisii university, Dr.Charles Guandaru of Technical University of Mombasa and Dr.Munir Muganda and Dr. Rashid Simiyu Fwamba of Kibabii University who went through my document and made necessary corrections bettering this piece of work. To all of them and many others not mentioned may Allah bless them abundantly. I would also like to thank my classmates and friends who have been a great source of encouragement towards the completion of this proposal. With all sincerity, I also register my appreciation to my parents for all their sacrifices during my pre-occupation with this work. I am grateful to everyone who contributed in every small way to enable me put this work in place. v ABSTRACT Customer loyalty is considered to play a key role in shifting the focus on how firms can explore ways of creating competitive advantage in the retail market that is hitherto undergoing transformation by use of various social bonding strategies and brand identity. Even with supermarkets management putting in measures to attract prospective customers, there are a myriad of challenges, key being customer defection that has led to low sales, closure of a number of outlets, others have reduced their branch network and a few are managed on receivership basis. The purpose of this study was to analyse the relationship between social bonding strategies and customer loyalty among supermarkets in Western region, Kenya with a focus on the role of brand identity. Specifically the study sought to establish the relationship between social events, loyalty programs, customers’ communication and social support on customer loyalty and lastly assessed the role of brand identity on the relationship between social bonding strategies and customer loyalty among supermarkets in western region in Kenya. The study was guided by network-based relationship marketing theory and supported by social Identity and social exchange theories and the study applied explanatory survey research design. The target population of the study was 30,200 respondents drawn from the four supermarkets namely, Choppies, Tuskys, Khetias, and Naivas operating in Western Kenya region. The study adopted a stratified and snowball Sampling methods from which a sample of 395 customers was obtained using Yamane’s formula. Cronbach alpha method was used to test the reliability of the research instruments while factor analysis and expert judgment was used to test the validity of the research instruments. Further, the data collected was analyzed using descriptive statistics that were used to summarize data using mean, standard deviation, skewness and Kurtosis and inferential statistics that included factor analysis that adopted principal component analysis with varimax rotation with sampling adequacy being tested using Kaiser-Meyer-Olkin measure. Diagnostic tests used to test the research hypothesis included test of normality and collinearity. Mediation test was conducted following Barron and Kenny four steps of 1986. Further, Sobel test was used to test the level of significance of the mediation. The results revealed that Loyalty programs, Customers’ communication and Social support had significant effect on Customer loyalty; only Social events had no significant effect and hence never predicted customer loyalty. Further, Brand identity had partial mediation effect on the relationship between Loyalty programs, Customers’ communication, Social support and Customer loyalty. The study recommends that supermarket management should put more emphasis on Social bonding strategies since they influence Brand identity and hence Customer loyalty. Future researchers to conduct research in Social bonding strategies and brand identity with emphasis on the findings which seemed contrary to the expectations of the study. More research to be carried out to ascertain why there was no relationship between social events and customer loyalty when all the four factors are considered. Also, future studies to have larger samples most likely covering the whole country while combining more than one data collection instruments, with more variables being employed. The study provides new theoretical insight into factors influencing customer loyalty by incorporating Brand identity as a mediator in the relationship between Social Bonding Strategies and customer loyalty. vi TABLE OF CONTENTS DECLARATION AND RECOMMENDATION ........................................................ ii COPYRIGHT ............................................................................................................. iii DEDICATION ............................................................................................................ iv ACKNOWLEDGEMENTS ......................................................................................... v ABSTRACT…. ........................................................................................................... vi TABLE OF CONTENTS .......................................................................................... vii LIST OF TABLES .................................................................................................... xiii LIST OF FIGURES ................................................................................................... xv LIST OF APPENDICES .......................................................................................... xvi LIST OF ABBREVIATION AND ACRONYM ..................................................... xvii CHAPTER ONE: INTRODUCTION ......................................................................... 1 1.1 Background to the Study .......................................................................................... 1 1.2 Statement of the Research Problem .......................................................................... 8 1.3 Objectives of the Study ............................................................................................ 9 1.3.1 Main Objective ..................................................................................................... 9 1.3.2 Specific Objectives ............................................................................................... 9 1.4 Research Hypotheses ............................................................................................. 11 1.5 Significance of the Study ....................................................................................... 12 1.6 Scope of the Study ................................................................................................. 13 1.7 Limitations of the Study ......................................................................................... 13 1.8 Assumptions of the Study .....................................................................................
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