Effect of relationship marking on customer loyalty to brand Choice: a survey of supermarkets in Kisumu city

Abstract

Essential and deliberate marketing practices like quality products, quality of services, as well as appropriate product pricing among others must be employed to retain .key customers besides attracting new ones. At an annual growth rate of over 20%, the supermarket sector in Kisumu City has six major players: Uchumi, Naivas, Tuskys, Choppies, Tumaini and Khetias all of which have huge customer base in the city. These firms have together close to 10 shops spread over the city without accounting for other small outlets fighting for a customer base of approximately less than 10,000 active purchasers. It is however unknown whether these supermarkets practice customer relationship marketing to retain their customers to their brands. The purpose of the study was to investigate the effect of customer relationship marketing on loyalty to brand choice among supermarkets in Kisumu city. Specific objectives were to: establish the effect of product quality, assess the effect of customer service quality, and to establish the effect of product pricing on loyalty to brand choice. Assimilation theory was used to guide the study. Descriptive survey design was adopted on a target population of 371 employees from eight supermarkets. Yamane's formula (1987) was used to obtain a sample size of 193 respondents. The study adopted proportional random technique to select respondents for questionnaire administration based on population in each supermarket. Instrument reliability was attained through test retest during a pilot study on 19 respondents from marketing departments of the supermarkets, where a coefficient of 0.8095 was realised. Content validity index of 0.78 was attained through expert consultation of the University lecturers. Data was analysed by means of descriptive statistics, while the relationship between customer relationship marketing and loyalty to brand choice was estimated using regression analysis. Findings revealed that product quality (B=7.29), customer service (B=19.277) and product pricing (B51.39) all have significant (p=O.OOO)effect on loyalty to brand choice. The three variables contribute 25.3% change in loyalty of customers to brand choice (R2 =0.253; P=O.OOO).This implies that 74.7% change in customer loyalty to brand choice is caused by other factors other than CRM practices. The study concludes that product pricing has the highest effect on loyalty of customer to brand choice. Supermarkets should ensure that products are priced fairly to ensure that customer loyalty to brand choice is enhanced. Further studies are recommended on the influence of customer reception at entry points on loyalty to brand choice and the effect of product discount on customer loyalty to brands merchandised by supermarkets. The study findings might help in formulation of CRM practices capable of enhancing loyalty of customers.