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

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.