CONSUMER PERCEPTION OF TUSKER BRAND STRATEGY IN THE BEER INDUSTRY IN KENYA SARAH KUBAI D65/85629/2016 SUPERVISOR DR. CATHERINE NGAHU A RESEARCH PROJECT SUBMITTED IN PARTIAL FULFILLMENT FOR THE REQUIREMENTS OF THE AWARD OF DEGREE OF MASTER OF SCIENCE IN MARKETING, SCHOOL OF BUSINESS, UNIVERSITY OF NAIROBI 2018 DECLARATION I declare that this research project has not been submitted to any university for examination purposes. Signature ____________________________ Date __________________________ Sarah Kubai D65/85629/2016 The research project has been submitted for examination with my approval as the University supervisor. Signature ____________________________ Date __________________________ Dr. Catherine Ngahu Senior Lecturer Department of Business Administration School of Business University of Nairobi ii DEDICATION I dedicate this project to my parents who have supported me with my education and encouraged me to reach for the stars. iii ACKNOWLEDGEMENT I am grateful to God Almighty for giving me the strength and capacity to work on and finish this project. I am grateful to my parents, Mr. and Mrs. Kubai who have supported me throughout this program. I would also like to thank my supervisor, Dr Catherine Ngahu, who has patiently guided and supervised me as I worked on this project. iv ABBREVIATIONS AND ACRONYMS AfDB African Development Bank EABL East African Breweries Limited EPZA Export Processing Zones Authority GDP Gross Domestic Product KML Kenya Malting Limited KBL Kenya Breweries Limited SAB South African Breweries SPSS Software Package for Social Sciences v TABLE OF CONTENTS DECLARATION............................................................................................................... ii DEDICATION.................................................................................................................. iii ACKNOWLEDGEMENT ............................................................................................... iv ABBREVIATIONS AND ACRONYMS ......................................................................... v TABLE OF CONTENTS ................................................................................................ vi LIST OF TABLES ........................................................................................................... ix LIST OF FIGURES .......................................................................................................... x ABSTRACT ...................................................................................................................... xi CHAPTER ONE: INTRODUCTION ............................................................................. 1 1.1 Background of the Study............................................................................................... 1 1.1.1 Consumer Perception .......................................................................................... 3 1.1.2 Brand Strategy .................................................................................................... 4 1.1.3 Beer Industry in Kenya ....................................................................................... 5 1.1.4 The Tusker Brand ............................................................................................... 7 1.2 Research Problem ......................................................................................................... 8 1.3 Research objectives ..................................................................................................... 11 1.4 Value of the Study ...................................................................................................... 11 CHAPTER TWO: LITERATURE REVIEW .............................................................. 13 2.1 Introduction ................................................................................................................. 13 2.2 Theoretical Foundation ............................................................................................... 13 2.2.1 The Theory of Reasoned Action ....................................................................... 13 2.2.2 The Associative –Network Memory................................................................. 14 2.2.3 Brand Relationships Theory ............................................................................. 15 vi 2.3 Consumer Perception and Branding strategy .............................................................. 16 2.4 Conceptual Framework ............................................................................................... 19 2.5 Summary of the Study ................................................................................................ 20 CHAPTER THREE: RESEARCH METHODOLOGY ............................................. 21 3.1 Introduction ................................................................................................................. 21 3.2 Research Design.......................................................................................................... 21 3.3 Population ................................................................................................................... 22 3.4 Data Collection ........................................................................................................... 23 3.5 Data Analysis .............................................................................................................. 24 CHAPTER FOUR: RESEARCH FINDINGS AND DISCUSSIONS ........................ 25 4.1 Introduction ................................................................................................................. 25 4.1.1 Response Rate................................................................................................... 25 4.2 General Information .................................................................................................... 26 4.2.1 Gender Distribution .......................................................................................... 26 4.2.2 Age of Respondents .......................................................................................... 26 4.2.3 Sources of Income ............................................................................................ 27 4.2.4 Length of Drinking ........................................................................................... 28 4.2.5 Frequency of Beer Consumption ...................................................................... 29 4.3 Perceptions on Branding Strategies ............................................................................ 29 4.4 Branding Strategy ....................................................................................................... 32 4.5 Effect of Consumer Perception on Branding Strategies ........................................... 34 4.5.1 Model Summary ............................................................................................... 34 4.5.2 Analysis of Variance ........................................................................................ 34 4.5.2 Regression Coefficients .................................................................................... 35 vii 4.6 Discussion of the Findings .......................................................................................... 37 CHAPTER FIVE: SUMMARY, CONCLUSSION AND RECOMMENDATIONS 39 5.1 Introduction ................................................................................................................. 39 5.2 Summary of the Findings ............................................................................................ 39 5.2.1 Price Fairness .................................................................................................... 40 5.2.2 Quality of Products ........................................................................................... 40 5.2.3 Ease of Accessibility ........................................................................................ 41 5.2.4 Transparency in Pricing .................................................................................... 41 5.3 Conclusion .................................................................................................................. 42 5.4 Recommendations of the Study .................................................................................. 42 5.5 Limitations of the Study.............................................................................................. 43 5.6 Suggestions for Further Studies .................................................................................. 43 REFERENCES ................................................................................................................ 44 APPENDIX I: QUESTIONNAIRE ............................................................................... 50 viii LIST OF TABLES Table 4.1: Response Rate .................................................................................................. 25 Table 4.2: Sources of Income .......................................................................................... 28 Table 4.3: Length of Drinking .......................................................................................... 28 Table 4.4: Frequency of Beer Consumption ..................................................................... 29 Table 4.5: Perceptions on Branding Strategies ................................................................. 30 Table 4.6: Branding Strategy ...........................................................................................