Effect of In-Store Promotion on Consumer Purchase Behaviour in Multinational Supermarkets in Nairobi City County
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EFFECT OF IN-STORE PROMOTION ON CONSUMER PURCHASE BEHAVIOUR IN MULTINATIONAL SUPERMARKETS IN NAIROBI CITY COUNTY MARTIN KAMAU MUCHIRI A RESEARCH PROJECT SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION, SCHOOL OF BUSINESS, UNIVERSITY OF NAIROBI 2019 i DECLARATION This research project is my own original work and has not been presented to any other university, college or institution of higher learning for academic credit other than the University of Nairobi Signed: ……………………………………….. Date:……………………… D61/71403/2008 SUPERVISOR This research project has been presented for defense with my approval as the designated university supervisor Signed: …………………………………….. Date: ………………………… Dr. Catherine Ngahu Department of Business Administration School of Business University of Nairobi ii DEDICATION My project is dedicated to my family, especially my two sons Carlson Muchiri and Jeremy Gichohu who provided me with lots of happiness and joy during the entire time, they made it more fun to carry out this project. They have had to tolerate my absence and tight schedule – work and studies, which have been consuming significant time. May God bless them! iii ACKNOWLEDGEMENTS I would like to thank God for giving me a chance and resources to go through my education during this time. I would also wish to acknowledge all the individuals who assisted in various ways towards completion of this research proposal. I thank my supervisor Dr. Catherine Ngahu for her role in guiding me throughout this journey. Her guidance and support were valuable to the completion of this project. I am also indebted to my colleagues Margaret & Gladwell who have contributed through comments and encouragement. I appreciate your input, especially during the tough moments because you helped me not to give up. To all the above, I extend my earnest appreciation iv TABLE OF CONTENTS DECLARATION............................................................................................................... ii DEDICATION.................................................................................................................. iii ACKNOWLEDGEMENTS ............................................................................................ iv LIST OF TABLES ......................................................................................................... viii LIST OF FIGURES ......................................................................................................... ix ABBREVIATIONS AND ACRONYMS ..........................................................................x ABSTRACT ...................................................................................................................... xi CHAPTER ONE: INTRODUCTION ..............................................................................1 1.1 Background of the Study ...........................................................................................1 1.1.1 In-store Promotion ...............................................................................................2 1.1.2 Consumer Purchase Behavior .............................................................................4 1.1.3 Retail Industry in Kenya ......................................................................................5 1.1.4 Multinational Supermarkets in Kenya .................................................................6 1.2 The Research Problem ...............................................................................................7 1.3 Objective of the Study ...............................................................................................8 1.4 Value of the Study .....................................................................................................8 CHAPTER TWO: LITERATURE REVIEW ...............................................................10 2.1 Introduction .............................................................................................................10 2.2 Theoretical Framework ...........................................................................................10 2.2.1 The Theory of Buyer Behavior .........................................................................10 2.2.2 Market Orientation Theory ................................................................................11 v 2.3 In-store Promotion and Consumer Purchase Behaviour .........................................12 2.4 Effects of In-Store Promotion .................................................................................14 2.4.1 Promotional Effects ...........................................................................................14 2.4.2 Atmospheric Effects ..........................................................................................16 2.5 Empirical Literature ................................................................................................17 CHAPTER THREE: RESEARCH METHODOLOGY ..............................................21 3.1 Introduction .............................................................................................................21 3.2 Research Design ......................................................................................................21 3.3 Target Population ....................................................................................................21 3.4 Sampling Size and Design .......................................................................................22 3.5 Data Collection ........................................................................................................23 3.6 Data Analysis ..........................................................................................................24 CHAPTER FOUR: DATA ANALYSIS, RESULTS, AND DISCUSSION ................25 4.1 Introduction .............................................................................................................25 4.2 Response Rate .........................................................................................................25 4.3 Background Information of the Respondents ..........................................................26 4.3.1 Gender ...............................................................................................................26 4.3.2 Citizenship .........................................................................................................26 4.3.3 Education ...........................................................................................................27 4.3.4 Marital Status ....................................................................................................27 4.3.5 Age ....................................................................................................................28 4.3.6 Monthly Income ................................................................................................28 4.3.7 Religion .............................................................................................................29 vi 4.4 Descriptive Statistics ...............................................................................................30 4.4.1 Descriptive Statistics for In-store Promotion ....................................................30 4.4.1 Descriptive Statistics for Consumer Purchase Behaviour .................................31 4.5 Inferential Statistics .................................................................................................33 4.6 Discussion ...............................................................................................................36 4.6.1 Effect of In-store Promotion on Consumer Purchase Behaviour ......................36 4.6.2 Effect of Price Reduction, In-Store Promoters, and In-Store Visibility on Purchase Decision .........................................................................................................38 CHAPTER FIVE: SUMMARY, CONCLUSIONS AND RECOMMENDATIONS .39 5.1 Introduction .............................................................................................................39 5.2 Summary .................................................................................................................39 5.3 Conclusion ...............................................................................................................40 5.4 Recommendations ...................................................................................................40 5.5 Limitations ...............................................................................................................41 5.6 Suggestions for Further Studies ..............................................................................41 REFERENCES .................................................................................................................42 APPENDICES ..................................................................................................................46 APPENDIX I: QUESTIONNAIRE ...............................................................................46 vii LIST OF TABLES Table 3.1 Sample Size Calculation………………..……………………………………..23 Table 3.1: Reliability Results……………………..………………………………..….....24 Table 4.1 Response Rate……………………………………………………....................25 Table 4.2 Education…………………………………………………………….………..27 Table 4.3 Marital Status………………………………………..…………………..……28 Table 4.4 Age…………………………………………………….…………..............…..28 Table 4.5 Monthly Income……………………………………….……………..……......29