ROLE OF CUSTOMER LOYALTY IN MAINTAINING

SUSTAINABLE COMPETITIVE ADVANTAGE: A STUDY

OF TECNO COMPANY OUTLETS

BY

ELIZABETH W. MUNYUA

UNITED STATES INTERNATIONAL UNIVERSITY-

AFRICA

FALL 2016

ROLE OF CUSTOMER LOYALTY IN MAINTAINING

SUSTAINABLE COMPETITIVE ADVANTAGE: A STUDY

OF TECNO COMPANY OUTLETS

BY

ELIZABETH W. MUNYUA

A Research Project Proposal Submitted to the Chandaria

School of Business in Partial Fulfilment of the Requirement

for the Degree of Master of Business Administration

UNITED STATES INTERNATIONAL UNIVERSITY-

AFRICA

FALL 2016

ii

COPYRIGHT

All rights reserved. No part of this paper may be reproduced, stored in a retrieval system

or transmitted in any form, scanning or photocopying or otherwise, without the prior

consent of the author.

Copyright © 2016 Elizabeth Munyua

All Rights Reserved

iii

DECLARATION

I, the undersigned declare that this is my original work and that it has not been submitted

to any other College, Institution or University other than United States International

University for academic purposes.

Signed……………………….. Date ………………….

Munyua Elizabeth Wangeci (ID 627151)

This research proposal has been submitted for examination with our approval as

university supervisors.

Signed………………………………. Date ………………….

Name: Professor Peter Lewa

Signed………………………………. Date ………………….

Dean, Chandaria School of Business

iv

ACKNOWLEDGEMENT

I would like to give thanks to the Almighty God for the guidance all through. My sincere

gratitude goes to my supervisor Prof. Peter Lewa for being supportive and his guidance.

Finally, I would like to acknowledge my dad, mum, brothers, son and all my friends who

have been with me in this journey.

v

DEDICATION

I would like to dedicate this proposal to my entire family for the prayers, support and

motivation they gave me all through.

vi

ABSTRACT

The purpose of this study was to investigate the role of customer loyalty in maintaining

sustainable competitive advantage. The research was guided by the following objectives:

To discuss the meaning and scope of customer loyalty in the context of Tecno; to

examine the contribution of customer loyalty to sustainable competitive advantage; to

discuss how customer loyalty enhances sustainable competitive advantage. The research

targeted managers, supervisors and promoters in these outlets. A descriptive research

approach was used andthe target population was 340. Stratified and simple random

sampling technique was used to select a sample size of 102. Statistical Package for Social

Sciences (SPSS) was used to analyse data. The research also used qualitative and

quantitative data. Percentages, means, standard deviations and frequencies were used to

present results. In addition, correlation was used to explore the relationship between the

variables. ANOVA analysis was also carried out to determine the differences in means

between the variables. The research distributed 102 questionnaires but only 100 were

filled and returned. The demographic factor revealed that the company has been in

existence for 10 years and majority of the respondents have worked at Techno for

duration of 6-10 years.

On analysis of the first objective on the meaning and scope of customer loyalty, the

findings revealed that most respondents agreed that customers who come to buy Tecno

devices have had an experience with other Tecno devices before. They also agreed that

the company has a good reputation from their customer’s feedback and that it is easy to

convince customers to buy Tecno devices as compared to other devices. In addition, the

least mean was recorded from the variable that the company gives priority to its

customers always.

The second objective was to examine the contribution of customer loyalty to sustainable

competitive advantage. It was established that most respondents neither agreed nor

disagreed that retaining customers was an easy task for the company. Therespondents

however agree that most of the customers who come to buy have bought a Tecno Device

before, and that the company knows well where it lies in terms of competitive position in

the industry. Furthermore the respondents also agreed that customers do not keep their

complaints to themselves rather express them to the management, customers give a lot of

vii

attention to prices on the device and that customers get information about Tecno products

from their friends through word of mouth.

The third objective was to discuss how customer loyalty enhances sustainable

competitive advantage. Most respondents agree that the company can almost be sure of

its existence in the future and the company has increased its operations to other towns in

the country of late. In addition, employee involvement in their customers has brought a

positive impact on the company’s sales, Tecno comes up with new products from time to

time, the company has affiliated with other major companies in the mobile industry to

boost their efficiency and the company has been accredited to work with major phone

retail outlets like Safaricom and Airtel.

On analysis of the first objective, the study recommended that Tecno should put the needs

of their customers first by understanding their customer needs, do a survey and find out

what customers want, ensure that customers will be able to easily access their products

and acknowledge customers. On analysis of the second objective, it was recommended

that for Tecno to retain its customers, it should build trust through relationships, listen to

customers, implement customer feedback survey, offer products of high qualityand offer

price discounts that build a brand name in the minds of the consumers. On analysis of the

third objective, it was recommended that the company should come up with new products

for them to be able to adapt to customers taste and preferences.

For further research, the researcher recommends that since the mobile industry is

growing, it is important for more research to be done and other factors to be used to

determine the influence of customer loyalty in maintaining sustainable competitive

advantage.

viii

TABLE OF CONTENTS

COPYRIGHT ..................................................................................................................... ii

DECLARATION ............................................................................................................. iii

ACKNOWLEDGEMENT ............................................................................................... iv

DEDICATION ................................................................................................................... v

ABSTRACT ...................................................................................................................... vi

LIST OF TABLES ............................................................................................................ xi

LIST OF FIGURES ......................................................................................................... xii

CHAPTER ONE .................................................................................................................. 1

1.0INTRODUCTION .......................................................................................................... 1

1.1 Background of the Problem ........................................................................................... 1

1.2 Statement of the Problem............................................................................................... 3

1.3 Purpose of the Study ...................................................................................................... 4

1.4 Research Questions ........................................................................................................ 4

1.5 Research Objectives....................................................................................................... 4

1.6 Importance of the Study................................................................................................. 5

1.7 Scope of the Study ......................................................................................................... 6

1.8 Definition of Terms ....................................................................................................... 6

1.9 Chapter Summary .......................................................................................................... 6

CHAPTER TWO ................................................................................................................. 8

2.0LITERATURE REVIEW ............................................................................................... 8

2.1 Introduction.................................................................................................................... 8

2.2 The meaning and scope of Customer Loyalty ............................................................... 8

ix

2.3 Contribution of Customer Loyalty to Sustainable Competitive Advantage ................ 13

2.4 Creation of Sustainable Competitive Advantage through Customer Loyalty ............. 17

2.5 Chapter Summary ........................................................................................................ 21

CHAPTER THREE ......................................................................................................... 22

3.0 RESEARCH METHODOLOGY ............................................................................. 22

3.1 Introduction.................................................................................................................. 22

3.2 Research Design .......................................................................................................... 22

3.3 Population and Sampling Design ................................................................................ 22

3.4 Data Collection Methods ............................................................................................. 24

3.5 Research Procedures .................................................................................................... 25

3.6 Data Analysis Methods ................................................................................................ 25

3.7 Chapter Summary ........................................................................................................ 26

CHAPTER FOUR ........................................................................................................... 27

4.0 DATA ANALYSIS AND INTERPRETATION ...................................................... 27

4.1 Introduction.................................................................................................................. 27

4.2 Demographic Information ........................................................................................... 27

4.3 Meaning and Scope of Customer Loyalty ................................................................... 38

4.4 Customer Loyalty and Sustainable Competitive Advantage ....................................... 41

4.5 Customer Loyalty and its Role in Enhancing Sustainable Competitive Advantage ... 45

4.6 Chapter Summary ........................................................................................................ 48

CHAPTER FIVE ............................................................................................................. 49

5.0 DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS ........................ 49

5.1 Introduction.................................................................................................................. 49

x

5.2 Summary ...................................................................................................................... 49

5.3 Discussions and Findings ............................................................................................ 51

5.4 Conclusion ................................................................................................................... 57

5.5 Recommendations........................................................................................................ 58

REFERENCES ................................................................................................................ 60

APPENDIX I: QUESTIONNAIRE ................................................................................ 64

APPENDIX II: RESEARCH BUDGET ........................................................................ 67

APPENDIX III: IMPLEMENTATION SCHEDULE ................................................. 68

xi

LIST OF TABLES

Table 3.1: Population ......................................................................................................... 23

Table 3.2: Sample .............................................................................................................. 24

Table 4.1: Response Rate ................................................................................................... 27

Table 4.2: Age .................................................................................................................... 28

Table 4.3: Gender ............................................................................................................... 28

Table 4.4: Marital Status .................................................................................................... 29

Table 4.5: Education .......................................................................................................... 30

Table 4.6: Work Experience .............................................................................................. 31

Table 4.7: Time the Company Has Been in Existence ...................................................... 32

Table 4.8: Firm Composition ............................................................................................. 33

Table 4.9: Cell Phone Use .................................................................................................. 34

Table 4.10: Frequency of Cell Phone Use ......................................................................... 35

Table 4.11: Visit Outlets .................................................................................................... 36

Table 4.12: Frequency of Outlet Visit ............................................................................... 37

Table 4.13: Descriptive on Scope of Customer Loyalty .................................................... 39

Table 4.14: Model Summary of Customer Loyalty and Competitive Advantage ............. 39

Table 4.15 : ANOVA between Customer Loyalty and Competitive Advantage ............... 40

Table 4.16: Coefficient of Customer Loyalty and Competitive Advantage ...................... 41

Table 4.17: Descriptive on Contribution of Customer Loyalty to Competitive ................ 42

Table 4.18: Model Summary of Customer Loyalty contribution and Competitive ........... 43

Table 4.19: ANOVA Customer Loyalty contribution and Competitive Advantage .......... 43

Table 4.20: Coefficient of Customer Loyalty and Sustainable Competitive Advantage ... 44

Table 4.21: Descriptive on Customer Loyalty Enhance Sustainable Competitive

Advantage .......................................................................................................................... 45

Table 4.22: Model Summary on Customer Loyalty and Sustainable Competitive

Advantage .......................................................................................................................... 46

Table 4.23: ANOVA on Customer Loyalty and Sustainable Competitive Advantage ...... 46

Table 4.24: Coefficient on Customer Loyalty in enhancing Sustainable Competitive

Advantage .......................................................................................................................... 47

xii

LIST OF FIGURES

Figure 4.1: Gender ............................................................................................................. 29

Figure 4.2: Education ......................................................................................................... 30

Figure 4.3: Education ......................................................................................................... 31

Figure 4.4: Work experience .............................................................................................. 32

Figure 4.5: Time the Company Has Been in Existence ..................................................... 33

Figure 4.6: Firm composition ............................................................................................. 34

Figure 4.7: Cell Phone Use ................................................................................................ 35

Figure 4.8: Frequency of Cell Phone Use .......................................................................... 36

Figure 4.9: Visit to the outlets ............................................................................................ 37

Figure 4.10: Frequency of Visit to the outlets ................................................................... 38

1

CHAPTER ONE

1.0INTRODUCTION

1.1 Background of the Problem

This study is on Tecno company outlets. Tecno is one of the constituents of the mobile

industry in Kenya. The Kenyan mobile industry as of now is a bit flooded since there are

so many brands. Some of the brands have been in existence for long while others have

just come up. Competition is on the rise, and everyone has to make sure they provide the

best to their customers. Oliver (2010) defines customer loyalty as a deeply held

commitment to re buy or re- patronize a preferred product/service consistently in the

future, thereby causing repetitive same brand or same-brand set purchasing, despite

situational influences and marketing efforts having the potential to cause switching

behaviours.

The market research studies of, Sharp and Sharp, (2013); Reichheld and Sasser (2010)

strongly suggest that loyalty programs can increase business revenue and total customer

market share. This is because customers will always choose to purchase their products

from your organization, hence increasing the company’s income and the total number of

customers. Reichheld (2013) suggest that customer loyalty means hanging in there even

when there may be a problem. This occurs because the organization has been good to

them in the past and addresses issues when they arise. It means that they do not seek out

competitors and, when approached by competitors, are not interested. It also means being

willing to spend the time and effort to communicate with the organization to build on past

successes and overcome any weaknesses. It means a customer wants and actually does

the business with the company.

Goodwin and Gremler (2015) suggest that loyal customers tend not to consider

alternatives or shop for lower prices. Price is not really a factor for them to consider

purchasing what they need from your company. If they choose to buy from another

company, it is because the company cannot provide them with what they need at that time

and have assurance from the company that they cannot get it. An organization can be said

to have customer loyalty if people choose to buy one particular product preferably from

one particular outlet, rather than buy products made by other companies and from other

2

outlets. This should take place within a certain extended period for it to be considered to

have customer loyalty.

The relationship between customers and companies has strongly developed to a direction

where the customers have a dominating position in a sense of bargaining power (Porter,

2008). With this power, customers have become more demanding towards service

providers (Porter, 2008). For instance, when customers walk into an outlet selling Tecno

phones, they have a right to bargain so they can get a product that fits the amount of

money they are willing to spend. Gaining sustainable competitive advantage in today’s

business service organizations is a very serious task for managers, because they need to

find a way to deliver superior value to their customers (Yap et al. 2012; Yu & Dean

2014). The focus in many management theories has been to create a unique value and

competitive position for organizations (Porter, 2008; Barney, 2013; Eisenhardt& Martin

2014). Having a sustainable competitive advantage means that the organization has

measures that are seen through the core competencies of the organization through the

employees and operations at large.

The organization may be ahead of the others but makes it easy for others to copy them

which means they will have a competitive advantage now but later the competitions will

outdo them because they will copy what they do. Tecno has to make sure that what they

do to attract and keep their customers is not imitable by their competitors. Reichheld,

Markey and Sasser (2010) define that a company’s competitive advantage is explained by

having relatively lower retention rate than its competitors. For instance, in Tecno case,

this study will show how they retain their clients and even attract more. The study will

point out the importance of customer-oriented strategic planning, which can be used as a

dynamic capability to gain competitive advantage (Eisenhardt&Martin 2014).

Organizations must make sure that they satisfy their customers to ensure that they meet

their needs. An unsatisfied customer is a threat to any organization as they are most likely

going to spread bad information about the organization, leading to downfall. Evans and

Lindsay (2011) stated that companies with satisfied customers have a good opportunity to

convert them into loyal customers who purchase from those firms over an extended time

period. Building customer loyalty is not a choice any longer with businesses. It is in fact

the only way of building sustainable competitive advantage.

3

Customer loyalty, gaining and maintaining a sustainable competitive advantage are

directly related. If one fails, the other is most likely bound to fail. Once customers are

satisfied by having their needs met by the products and services they get, they end up

being happy customers. They will use the most effective form of spreading the good

reputation about the company to others, which is by word of mouth. One customer will

most likely talk to five or seven people about their experience from an organization, so it

would be good to make sure that they get the best service so they can spread good news

about the company to others. Customers, if satisfied will reach a point where they do not

really care about such stuff as price, so long as they purchase what they need from that

organization. This is where an organization gets to know that they have got loyalty from

their customers. Market share increases which is a source of competitive advantage.

1.2 Statement of the Problem

Tecno Company is part of the mobile industry which is fast growing. From the times we

used to have very few mobile phones or just one company making phones for clients,

many players have joined the industry. Eras have also changed from the time when few

people could afford mobile phones since it cost a fortune to have one back then.

Nowadays, almost everyone owns one, from the low income earners to even the little

children. It’s almost becoming a basic need for individuals mainly for communication

purposes. The mobile phone industry is already flooded, with all kinds of phones ranging

at different prices. Everyone has something they can get from these different companies.

According to Porter (2008), competition will always be there and will always grow.

Competitors include Huawei, Samsung, Wiko, and Lenovo among others. All these are

being sold at Safaricom outlets, which means most people trust that they are good brands

if they are sold from such an outlet. Tecno therefore has to come up with strategies to

make sure that they beat competition and retain their customers.

According to Goodwin and Gremler(2015), customers need to get satisfied so they can

become loyal to the organization. Tecno needs to make sure that it identifies what makes

their clients happy and leads to them being their number one choice. They also need to

know their main competitors so they can always make sure that they are ahead of them

and maintain that. Tecno has a brand image to improve as it is, or at least make sure that

they do not go below what they are in the minds of their customers now. Some people

4

think that Tecno is for the low income earner, which is very wrong since the company has

some of the best middle and high end phones. Thus, they have to make sure that they

retain the clients they already have, and make sure that they give them the best so they

can pass the good word to others hence bringing in more customers.

The business environment keeps changing and so do the customer needs. People have

gone from just wanting phones for the basic reason of communication, now to other many

more needs such as finding information on the internet. Therefore, Tecno has to look into

their devices and see whether they provide such services to the modern customer and if

not, go back to the drawing board. This explains why the company brings in different

phones every now and then, especially for the middle income earner. This study therefore

aims to identify the role of customer loyalty in maintaining sustainable competitive

advantage at Tecno company outlets.

1.3 Purpose of the Study

The purpose of this study is to gain a better understanding of role of customer loyalty in

maintaining sustainable competitive advantage at Tecno company outlets.

1.4 Research Questions

This research will be guided by the following research questions:

1.4.1 What is the meaning and scope of Customer Loyalty?

1.4.2 How does Customer Loyalty contribute to Sustainable Competitive Advantage in

Tecno?

1.4.3 How does Customer Loyalty enhance Sustainable Competitive Advantage in

Tecno?

1.5 Research Objectives

1.5.1 To discuss the meaning and scope of customer loyalty in the context of Tecno.

1.5.2 To examine the contribution of customer loyalty to sustainable competitive

advantage in Tecno.

1.5.3 To discuss how customer loyalty enhances sustainable competitive advantage in

Tecno.

5

1.6 Importance of the Study

1.6.1 Tecno Company

This study will help in making sure that Tecno Co. knows where exactly they lie in terms

of fulfilling the needs that their clients want and how to retain that satisfaction. Once they

know what brings about customer retention, they will make sure that they improve most

in those areas so they can retain the customers they have and attract new ones. This will

lead to them staying ahead of their competitors, leading to long-term success of the

organization.

1.6.2 Mobile phone industry in Kenya

This study will be of assistance to the industry at large; as it will help the competitors

know where they stand when it comes to competitiveness with Tecno. They will get to

know what they are not doing right or neglecting, reason for Tecno being ahead of them

even if slightly. It will spur more healthy competition among the mobile phone

companies.

1.6.3 The Government

The government at large will get to know where they go wrong in terms of the assistance

they should give to this kind of organizations. Therefore, if the organization brings them

good returns, then they put up measures to support them to the end. It will also help the

government to learn important information about the organization that it might not have

known before.

1.6.4 The Academia

This study will help the people involved in research (researchers) by providing

information to them that they might have never got before; therefore helping in providing

relevant information for future reference when one wants to carry out research in a

related field. The information they get from this study would also just serve to make

some of the points they got before more clear, not necessarily provide them with new

information.

6

1.7 Scope of the Study

This study was based on the perspectives of customers who use Tecno phones in Kenya.

The study relied on information from the employees of the company in different

locations in Nairobi County and the customer feedback as well. The research was

conducted on the month of July 2016.

1.8 Definition of Terms

1.8.1 Customer loyalty

Customer loyalty is the result of an organization creating a benefit for customers so that

they will maintain and increasingly repeat business with the organization (Anderson and

Jacobsen, 2010). True customer loyalty is created when customers become an advocate of

an organization without any incentive (Oliver, 2012).

1.8.2 Sustainable Competitive Advantage

The prolonged benefit of implementing some unique value-creating strategy not

simultaneously being implemented by any current or potential competitor, along with the

inability to duplicate the benefits of this strategy (Hoffmann, 2013).

1.8.3 Customer Perceived

Customer perceived value is defined as the “consumer’s overall assessment of the utility

of a product based on perceptions of what is received and what is given” (Zeithaml,

2010).

1.8.4 Customer Satisfaction

The result of an organization creating a benefit for customers so that they will maintain

and increasingly repeat business with the organization (Anderson, & Jacobsen, 2010).

1.9 Chapter Summary

This chapter has described what is customer loyalty and sustainable competitive

advantage. It has shown the positive relationship between the two. There is need for a

company to realize that they need to keep their customers happy and satisfied so they can

retain them and attract more.

7

The next chapter provides relevant literature review on what brings about customer

loyalty, how it contributes and enhances sustainable competitive advantage.

8

CHAPTER TWO

2.0LITERATURE REVIEW

2.1 Introduction

This chapter is organized as follows. Section 2.1 is a brief introduction of what the whole

chapter is about; which is going into details on customer loyalty and sustainable

competitive advantage. Section 2.2 discusses the scope and meaning of customer loyalty

and what leads to an organization achieving it. Section 2.3 is about the contribution

customer loyalty makes towards achieving a sustainable competitive advantage. Finally,

section 2.4 shows how customer loyalty enhances sustainable competitive advantage.

2.2 The meaning and scope of Customer Loyalty

Customer loyalty is both an attitudinal and behavioural tendency to want one brand over

all others, whether or not because of delight with the product or service, its convenience

or overall performance, or virtually familiarity and comfort with the logo. Loyalty

encourages clients to keep buying more consistently, spend an extra share of their wallet,

and have a nice experience about shopping; assisting in enticing consumers to familiar

manufacturers in the face of competitive surroundings (Barney, 2013).Customer loyalty

is a very important factor in bringing out the success of an organization. Once a company

gets to know who their target customers are and what they need, then they should make

sure that they deliver to make the customers believe in them and that way, loyalty is

slowly gained (Yu, 2014). Customer Loyalty has a variety of dimensions, which are

discussed below.

2.2.1 Customer Satisfaction

Competition is on the rise in the business sector, and if a business does not keep up with

competition and let competitors take over, it will lose its clients. Customer loyalty has

become one of the crucial aspects of sustainable competitive advantage. This is because,

customers’ loyalty is recognized as one of the effective ways to maintain and retain the

customers (Yu, 2014). Moreover, today’s consumers become more demanding and have

more bargaining power. An organization therefore has to make sure that they get to know

exactly who their target customers are so that they bring them products and services that

9

they need. When this is done, it is most likely that a customer will feel appreciated and

will spread the good word to others, leading to a good reputation for the organization.

Evans and Lindsay (2011) stated that companies with satisfied customers have a good

opportunity to convert them into loyal customers who purchase from those firms over an

extended time. Today’s highly competitive and dynamic corporate environment compels

the mobile phone providers to have satisfied customers and retain them in order to

survive and compete with other market players successfully. However, having satisfied

customers is not enough, there has to be extremely satisfied customers. This is because

customer satisfaction must lead to customer loyalty. Building customer loyalty is not a

choice any longer with businesses. It is in fact the only way of building sustainable

competitive advantage. Tecno for example, connect emotionally with their local

customers by listening to what they want and working on areas they recommend for

improvement. The devices they bring to Kenya are created with the Kenyan customer in

mind, making sure that they have all the requirements especially for the average Kenyan.

This ensures that the customers get what they need from the devices hence are satisfied

and their market share increases.

2.2.2 The Right Employees

Employees are crucial beings in the running of an organization. They are the face of the

organization since they are the ones who interact with customers one on one. When an

organization is hiring people to work for them, they are supposed to make sure that those

people have people skills, in that they can relate well with others. Effective employee

training on improving interpersonal competences, skills in empathy, customer service

capabilities, problem solving skills, product knowledge and perspective taking skills help

employees attain customer trust and loyalty (Liao, 2014; Liao &Chuang, 2012).

For example, if one goes into a Safaricom outlet, the first people the customer gets to

interact with are the brand ambassadors of the various mobile phone brands. They are

mostly the face of Safaricom outlets in Kenya. They therefore serve to assist the various

clients on what they need from the various brands that are available. Tecno brand

ambassadors therefore, should have learnt to approach customers with a friendly attitude

and guide them through what they want. Serving customers with empathy and smile has

10

been found to be an effective way to offer better service experience (Kim & Yoon, 2012;

Pugh, 2012) leading to attaining their loyalty.

If a client wants a different brand form theirs, they are supposed to show the client but at

the end of the day give them a better offer from Tecno. If they win the customers, they

are supposed to help the client by setting up the phone for them, and guiding them on

how to use the device. If there are any promotion bundles, they are supposed to redeem

them for the client on their Safaricom lines. Once they do this, customers will have a

good impression about them, and will spread the good word leading to many people

wanting to buy from them.

According to Liao and Chuang (2012), employees at the top level management should

make sure that they have a good relationship, first of all with each other and their

subordinates, which goes down to their clients. The ones at the top level should treat all

their subordinates equally without any discrimination. This will make sure that they have

good relationships and the work morale will increase as a result. When the employees are

all satisfied and feel that none is favoured more than the others are, they work without

holding back; this positively affects their customers who end up being treated well. Any

customer who feels appreciated is bound to come back for service or even products from

that employee. If an employee has problems relating with the clients, and all the time

clients keep complaining about him/her, they are supposed to be warned and if they do

not change, then the organization should terminate their services.

Employees at the service centre as well should make sure that they are kind and give a

listening ear to every client, no matter how small or irrelevant their complain seems to be.

Once a customer has bought a phone and they experience a problem with it later on, they

are supposed to be given the best quality service when they go the repair centres. This

will keep them from having a bad image about the company, as they are sure that

whenever they have a problem, someone is going to take care of them as they expect. If

an organization makes sure that their employees relate well with their clients, customer

satisfaction develops which leads to customer loyalty (Liao, 2014).

11

2.2.3 Product Availability

Availability is becoming a growing concern and one of the key concerns for customer

loyalty. If customers find that a product is out of stock in a store, they are most likely to

change and purchase from another one (Anderson & Jacobsen, 2010). If they get better

services from the new store, high chances are that they will make the new store their new

shopping centre. A study done by Tecno in November 2015 in Moi Avenue Safaricom

outlet in Nairobi CBD showed that majority of customers admit to switching shops and

brands if they cannot get the key products they need. Stock-out also negatively affects

retailer’s business performance (Grewal & Levy, 2015). It can directly lead to sale

decrease, most of all when customers give up the purchase, change the retail store or opt

for a cheaper substitute (brand or item) (Ehrenthal & Stolzle, 2013). For instance, when a

customer goes looking for a certain Tecno phone and does not get it, go to another store

and still do not get it, they might end up switching to another brand, and get a device that

still serves them as the Tecno would. The loss of one customer to another brand might be

the beginning of losing many more customers.

Customers like to be served as fast as they can and get their needs met. Once they walk to

an outlet, they want to be attended to and given a solution to their issues as fast as

possible because they have other errands they need to run in a day. Therefore, every

organization must make sure that their employees are fast in delivering services to their

clients. If for any reason a company anticipates unavailability of a certain product, they

should communicate to their clients so they wait till they get it. An organization that

makes their products available almost at all times, tend to have more customers since

customers always know that they will never lack what they need form them (Grewal and

Levy, 2015). If the product is completely unavailable, the company should communicate

to their clients and maybe provide an equivalent product that will serve them just as the

other. This will create trust from the customers that the organization has everything

planned well and will lead to them sticking to your brand nonetheless.

2.2.4 AfterSale Services

According to Serkan and Gökhan (2013) customer satisfaction can be stated as the overall

satisfaction; overall satisfaction is the result of accumulative experience and encounter

rather than specific satisfaction or dissatisfaction, which is longitudinal by nature.

12

Customers want to get satisfied during purchase of goods and even after that if possible.

It gives them a sense of belonging and feels appreciated.

After sale services include everything that the customer gets after buying the product. For

instance, for the Tecno clients, this would include setting the phone up for them and

taking them through what they are supposed to know in the operations of the device.

However basic the process may seem, it’s good for a customer to be taken through some

training, unless they say they do not have a need for that. After being shown how to use

the device, they are supposed to be shown the way out of the outlet with a smile and

assured that they are welcome in case they have any problem or clarification they would

want in the future (Dmanpour, 2010).

Care centres are supposed to be up and running so that the customers can have a place to

go to in case they have issues with their devices. It’s important for the management team

responsible for hiring employees to make sure that the people employed there have

excellent people skills (Damanpour, 2010). This is because a care centre is a very

sensitive department for an organization as people go there having so many complaints. If

employees are placed there and cannot handle pressure and even petty complaints, the

organization might end up having a bad reputation. The care centres are supposed to be

within reach for easy access by the customers. Since it is not possible to have care centres

in all towns, they should be there at least in the major towns. Tecno for example has care

centres in Nairobi (Caxton House 2nd floor, Kenyatta Avenue), Mombasa and Kisumu

towns. In the smaller towns, technicians should be present in some of the major outlets

where the customers buy the products, for example in Safaricom outlets for the Tecno

clients. Minor issues can be solved from there. If not possible, there should be an

arrangement of how the devices will be taken to the nearest main care centre.

According to Dmanpour (2010), customer loyalty will arise if clients feel cared for, and

their complaints taken into consideration without any biasness. They will want to buy

products from an organization that they feel have a backup measure to help them when

they have a problem. This means that spare parts will be available to them as well. They

will end up spreading good news about the organizations good service that they do not

only care about the money they make but how the customer feels after closing the sale.

13

2.2.5 Product Quality

Every customer’s happiness is to get a product or service that fulfils their needs or wants

(Ehrenthal & Stolzle, 2013). This can only be done if what they get is of good quality

and does not disappoint them. Nothing lasts forever so there must be a time period

within which what they purchased will expire but till then, customers must be assured of

good service. Before getting products from manufacturers, the organization should make

sure that they have gone through how the products have been made, including

everything that is used to make the product so they can be sure that they are getting a

good deal. If there is anything that might be causing the products to have some faults,

then it should be changed and trials carried out so that once they bring the product to the

market, they are sure that it is a good thing they are bringing.

Organizations should always have a good back up plan just in case they get one or two

returns from their customers on products that have disappointed them (Ehrenthal &

Stolzle, 2013). The customers should be aware of the terms within which they can return

the products and probably get new ones. For example, when one buys a Tecno device,

they are allowed to return it within three days of use if it has a manufacturing issue such

as battery failure. However, if the problem arises from mishandling by the customer, the

customer has to pay for the services so it can be repaired. Quality gives rise to an

organization getting many clients buying their products since they are sure they will get

the very best service from the products. Regardless of cost, poor quality makes

consumers dislike the product (Campbell & Frei, 2010; Terpstra & Verbeeten, 2014).

Customers will definitely purchase from companies that provide them with the best

quality products. The result is customer loyalty, if the organization maintains the good

quality products.

2.3 Contribution of Customer Loyalty to Sustainable Competitive Advantage

Customer loyalty can provide a firm with major aggressive benefits that may, without

delay, result in profitability and growth. These include repeat buying which reduces

operational cost; the merchandise commanding higher fees resulting into higher income;

gaining monetary and moral aid from satisfied customers in instances of corporate

disaster; word of mouth publicity from glad clients presenting new market place

14

opportunities; happy customers not purchasing other products and services other than

yours.

2.3.1 Price insensitivity

Price sensitivity refers to the extent to which individuals perceive and respond to

changes or differences in prices for products or services (Monroe, 2010). Price could be

a factor to compete on, depending on the target market an organization chooses to focus

on. There are some customers who associate low prices with low quality and vice versa.

However, others understand that at times pricing is not a reflection of quality but is

dependent on factors such as the place that the product is being sold from. Customers are

likely to be price sensitive if they are still looking for an organization they can identify

with (Monroe, 2010). Competitors take advantage of this fact whilst others use low

prices to get into a new market. For example, when Tecno brings in a new device to the

Kenyan market, they put it up with slightly lower prices than their competitors who have

the same devices as they do. This translates into many customers going for the brand,

especially the middle income earners. The high end customers may be reluctant a bit;

until they are proven to that the devices are as good as any other (Terpstra &Verbeeten,

2014).

An organization though should not relax and assume that they have achieved it by having

their customers stick to them despite the price changes in the business environment. To

retain their customers, they should continue giving them good service and make sure that

their products are of good quality (Goldsmith &Newell, 2011). If any of this deteriorates,

the customers will start looking for options and go for the next available option. Even the

most loyal of customers can change their perception about an organization if

continuously served badly. There are times when customers will still buy from your

organization despite the fact that they know that they could get the same products or

services at another outlet probably at a cheaper price. Loyal customers are price

insensitive to the price changes while non-loyal customers are sensitive in making

decisions about a brand (Goldsmith & Newell, 2011). Loyal customers give the

organization a competitive advantage and if the customers stick around for a long time,

then sustainable competitive advantage is attained.

15

2.3.2 Repurchase intention

This is concerned with an individual’s judgment about buying again a designated service

form the same company, taking into account his or her current situation and likely

circumstances. A customer decides not to try new products from other companies no

matter how good the offers are, just to buy again and again from your organization. As

behaviour, customer loyalty has been measured as the customers repeat purchase

probability (Rajshekhar & Moberg, 2013). This means if customers repeatedly buy from

your store, it means either the organization is heading towards having customer loyalty

or already there.

2.3.3 Word of mouth

A satisfied customer is like a free marketing ‘material’ for an organization and this is

according to Ranaweera and Prabhu (2011) who further state that one customer will talk

to several others about the experience they have had from an organization. This is the

reason it is most important for an organization to treat a customer as king always.

Customers can either lead to the success of an organization or the downfall of the same.

It is all dependent on the importance the organization has placed on the customer. It is

usually accepted that satisfied customers or customers who are positively surprised are

more likely to engage in positive word of mouth.

Once an organization has treated a customer right, the customer is happy at the end of the

day and will definitely go back and make purchases from the same company (Asugman,

2011). An organization should make sure that they find out what exactly customers want

from them so they can try as much as they can to get them that. They can carry out

surveys so that they can get the right information straight from the customer. For

example, at times Tecno comes up with questionnaires that customers are kindly asked to

fill when purchasing their devices. These are taken back to the management team for

analysis and from this; they get to know what the customer needs and how they were

treated.

People have a tendency to believe others especially when told by word of mouth.

Therefore, when customers go around talking to each other, they can either spread hatred

or good news about a company. One on one form of communication is very much trusted

16

as compared to written. Customers who are loyal to your organization will talk to others

and convince them that no other organization is better compared to yours. If customers

keep praising your company to others, the company ends up having a sustainable

competitive advantage since other companies don’t have a chance to convince customers

that they are the best. Customers will already have heard it from others and will believe

it.

2.3.4 Complaint Behaviour

Customer satisfaction is very important, if a customer is not satisfied, they are bound to

complain. Evans and Lindsay, (2011) stated that companies with satisfied customers have

a good opportunity to convert customers who purchase from those firms over an extended

time period into loyal customers. Complaints have both good and bad effects on the

running of a company and maintaining a sustainable competitive advantage. The negative

effects could be because the company might end up losing their customers, especially if

they did not get to know that their clients are complaining about them. Customers will

end up feeling neglected and this would result to them walking away and choosing other

companies.

The positive side of having complaints from customers is it helps the organization know

where it has fallen in carrying out its duties. Complaints are a result of dissatisfaction

which means the customers want or expected more than you offered them. A company

should keep its ears wide open to the cries of their customers. Once they get to know

what exactly the customers complain about, they should make a move to correct the

issues immediately. If for any reason the issue cannot be addressed with immediate

effect, then the organization should let the customers know that they are aware of their

concerns and they are working on it, so they can be patient.

A company that listens to their customer’s gets loyalty in return. As a result, such

customers will not go other companies seeking attention since they know and are

confident that their organization always gives them an ear. Whenever they have a

problem, they know they will be sorted somehow. They give suggestions to the company

on how to improve their services and products and this helps in making sure that what the

organization offers is always on top of the game. Competitors may never reach the level

17

of such an organization. This results in having a complete edge over competitors (Evans

& Lindsay, 2011).

2.3.5 Frequent Purchase and No Switching Behaviour

A company that has sustainable competitive advantage has customers who always come

back to purchase from them no matter the circumstances. Customer loyalty is the result of

an organization creating a benefit for customers so that they will maintain and

increasingly repeat business with the organization (Anderson and Jacobsen, 2010).The

customer does not go to another service provider for they consider that a personal loss of

their time, effort and money. They prefer to stick with the organization they are used to

instead of hopping from one to the other.

Anderson and Jacobsen (2010) further highlight that loyal customers do not just make a

single purchase, they keep making many more. The purchase might not just be of one

product, but of many. Other customers who have used other companies’ products may try

to convince them to change their organization but if they are loyal, they will not heed that

advice. For example, there are people who are completely Tecno fans, and in as much as

you tell them to change their brand, they will not accept. They might have got a few

problems here and there with their devices but still do not change their perception about

the brand because the good outdoes the bad. They might stick to the brand still knowing

that there are better devices within their range from competitors, but loyalty makes them

stick to Tecno. As a result, this give the company a lot of trust in them and it spurs the

need to treat them well always. It serves the organization at an advantage if competitors

do not treat theirs well since they move away from them and prefer other companies

(Anderson &Jacobsen, 2010).

2.4 Creation of Sustainable Competitive Advantage through Customer Loyalty

Customer loyalty serves to put the loyal customers off the competition since the

organization has already proved to them that they can deliver what they need. This results

into some factors as discussed below.

2.4.1 Improvement and Development of New Products

According to Damanpour, (2010) organizational innovation combines the development

and implementation of new ideas, systems, products, or technologies. Every organization

18

must learn to come up with new products from time to time. Stagnation is a dangerous

path for an organization to tread upon since competitors are always looking for ways to

improve their services and satisfy their customers. Customers’ needs keep changing every

now and then and what they needed yesterday is not really a guarantee of what they will

need tomorrow.

Organizations should come up with new products within a specified period of time. This

makes them stand out and customers get to be sure that they will always get something

new from time to time. This is done to counter their competitors since some of them do

not ever think of coming up with new products. For example, Tecno introduces a new

product into the Kenyan market after every four to five months. This makes sure that they

keep up with competition. Most of the devices that they bring often are meant for the

middle class earners, high end devices take more time before being introduced. It is not a

must to have new products (Anderson& Jacobsen, 2010). If an organization does not

have resources to do this, they can improvise and improve the products they have. This

could be as a result of issues that have come up or just because they need to make the

product better by adding some features that were not available. This kind of information

is got from the customers’ feedback about their experience with the products. The

organization therefore responds to their needs by making sure that they renovate the

current products making them better.

This is a good way of enhancing sustainable competitive advantage since it makes sure

that customers keep guessing and waiting to see what new products they are going to get

or at least what new features they will get from the products they have. It is boring to

always have the same products all the time, change is good. Companies that do not

innovate their products lag behind and competitors overcome them. Tecno has made sure

that it does this and that is why their market share is growing fast. Innovation is part of

them and their products do not take so long in the market before another comes up. Their

customers are loyal since they know they have good products from them always that meet

their needs well.

2.4.2 Ability to Enter New Markets

Customer loyalty means a company has got the attention of their clients and retains them.

This leads to a large market share which grows from time to time since more customers

19

come in. An organization that has a large market share is more likely to register higher

revenues compared to one that has fewer customers supporting them. Once an

organization has achieved customer loyalty, they can easily enter new markets (Anderson

& Jacobsen, 2010). This is because it is easier for them to enter a new market having a

reference point of their previous and current success. An organization has to carry out

surveys first so as to be sure whether they want to enter that market or not. They have to

come up with strategies on how they will storm that market.

Strategies are all the way from how the business will be managed, their target market,

pricing, what kind of products will be good for that market among other factors. For

example, Tecno mostly bring in their devices at a lower price compared to other brands

that have the same features as theirs. This is so as to attract customers but at the same

time make sure that the quality of the product is high. This happens mostly in Safaricom

outlets whereby you find Tecno devices coming in at a cheaper price. A new market can

be the source of a downfall if not given the attention it requires (Hoffmann, 2013).

Different markets are made up of different customers, so an organization should try as

much as they can to avoid applying the same measures in all markets, not unless they

have tried and are working well. It is important to make sure that they fight to get their

customers be loyal to them, so they can end up getting an edge over their competitors. If

they do, and put their customers before anything else in their organization, then they end

up having a sustainable competitive advantage.

2.4.3 Boost the Ability to Attract, Retain, and Incentivize Employees (Talent)

Employees are attracted to an organization that is performing well. Everybody wants to

be associated with success, and this includes everyone in an organization. Customers

become loyal and this leads to sustainable competitive advantage making the organization

in question stand out among many others in terms of success. It becomes the envy of

many. Liao, (2014) suggests that employees are at the core of a business success. People

looking for jobs will be attracted to such a company. They want to be part of the big team

that makes it happen and be recognized for their good work. Most of them want to do

their very best to make sure that they get employed by such a company so they can

contribute to its success. This is the reason one finds so many applications from different

people when vacancies are put up for such organizations.

20

Getting new employees is not a difficult task since qualified people will always be there

looking for jobs. Once they have been employed, employers have to make sure that they

satisfy them and make them feel comfortable around their work areas. Their needs must

be met for them to give their best to the organization (Liao, 2014). Their morale affects

each other and even their customers. So once an organization has employed them, it

should make sure that it motives them and encourages them to grow always. Happy

employees are easy to retain. Incentives work best in boosting the morale of employees

(Liao, 2014). Incentives could range from fully paid holidays, commission on their sales,

increase in their wages among others. A company that has loyal customer’s hence

sustainable competitive advantage most likely will record good returns. Part of these

should be dedicated to making the employees happy by rewarding them from time to

time. For example, Tecno gives commission to their promoters on every device sold in

their individual outlets. This serves to motivate them and make sure that they work best

to attract more clients.

2.4.4 Yield Greater Employee Productivity, Satisfaction, and Engagement

As a company grows towards success, employees do their best every day to be more and

more productive. They do this since they have the best interest at heart for the

organizations growth. According to Liao, (2014) employees at times go out of their way

and make sacrifices such as working late or overtime so as to meet deadlines and make

sure everything is running on smoothly. Customers are not a bother to them as they want

to make sure that before they leave for their own agendas, they have satisfied the

customer. There is a need to include employees in the organizations operations. They

should not be left out; neither should anything they propose be ignored. They are the ones

who interact with customers on a daily basis and more frequently therefore know exactly

what the customers want from them. They are best suited to give advice to the top level

management. Liao (2014) further says that some organizations fail because of not putting

into consideration what their employees tell them. Employees at times come up with

innovative ideas on how to conquer their competitors and if some of these bright ideas are

put into action, they end up beating their competitors and even acquiring their customers

and make them theirs.

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2.5 Chapter Summary

This chapter has given an insight into what customer loyalty is and what brings it. It has

shown how having loyal customer’s leads to a sustainable competitive advantage and also

how the same enhances sustainable competitive advantage. Organizations should put into

consideration many factors, ignoring none so as to stay way ahead of competition. The

next chapter gives details on the research methodology that was used in carrying out this

research.

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CHAPTER THREE

3.0 RESEARCH METHODOLOGY

3.1 Introduction

The study involves a blueprint for the collection, measurement and analysis of data. This

section therefore focused on identifying the procedures and techniques that were used in

the collection, processing and analysis of data.

3.2 Research Design

The research design that was employed here is the descriptive survey. This design is the

best to use here since the main interest is to establish the relationship and analyze how the

factors supported matters under analysis in one organization. According to Kothari

(2013) a descriptive study is concerned with finding out the what, where and how of a

phenomenon. Descriptive research design is chosen because it enables the researcher to

generalise the findings to a larger population.

According to Mugenda and Mugenda, (2012) it is important to use data where subjects

are observed in either natural set ups without manipulating the environment. It is a good

method to use when dealing with collection of information about people’s attitudes and

opinions. It is an efficient way to obtain information needed to describe the attitudes,

opinions and views of management staff in Tecno Company to show how customer

loyalty leads to sustainable competitive advantage.

3.3 Population and Sampling Design

3.3.1 Population

Study population is a well-defined or specified set of people, group of things, households,

firms, services, elements or events, which are being investigated. Thus, the population

should fit a certain specification, which the researcher is studying and the population

should be homogenous (Cox, 2014). This study targeted all Tecno outlets in Nairobi

region, which were sixty in number. Not all of them are owned by the company, some are

from their partners but they were still considered as theirs since they sell their products

from there. The researcher targeted the managers, supervisors and promoters in these

23

outlets who gave 210 respondents. This population provided a significant representation

of the whole country, Kenya.

Table 3.1 Target Population

Category Population Percentage

Managers 30 8.8

Supervisors 100 29.4

Promoters 210 61.8

Total 340 100

Source: Author (2016)

3.3.2 Sampling Design

3.3.2.1 Sampling Frame

Cooper and Schindler, (2013) define a sampling frame as the list of elements from which

a sample will be drawn. A sampling frame provides a means for choosing the particular

members of the target population that are to be interviewed in the survey. It is a list of all

those within a population who can be sampled, and may include individuals, households

or institutions (Chandran, 2014). The sampling frame of this study was the Tecno

managers which included the supervisors and the promoters who are in different outlets

in Nairobi.

3.3.2.2 Sampling Technique

The study was carried out using stratified and simple random sampling to select the

objects that represented the population. Factors that divided the population into

subpopulations were considered when selecting a sample from the population. Using the

stratified method helped in obtaining a sample that is a representative of the population.

Taking samples from each stratum or sub-group of a population was a stratified sample.

A population with several strata, was required to have the proportion of each stratum in

the sample, this should be the same as in the population. Using this method, the sample

was divided into different stratus at the organization, the divisions being according to

their working departments. An advantage of using this method is that the cost per

observation in the survey might have been reduced, and that an estimate of the parameters

24

was used for each sub-population. The sampling method will make sure that all

individuals in the population are included in the study. A random sample was used since

it is free from any bias.

3.3.2.3 Sample Size

The study was a survey so the researcher here studied all the Tecno outlets in Nairobi.

From the 340 possible sample population, stratified random sampling was employed to

select managers, supervisors and promoters from each of these outlets and obtain a

sample of 102 respondents. This was 30% of the total population. Kothari, (2013) argues

that if well chosen, samples of about 30% of a population can often give good reliability

findings. In addition, Mugenda and Mugenda, (2012) states that in stratified sampling

where population within each strata is known, a sample of 30% is an adequate

representation for data collection. The chosen respondents were the best since they come

into contact with customers on a daily basis and are the best in giving feedback.

Table 3.2 Sample Size

Category Population Sample Ration Sample Size

Managers 30 0.3 9

Supervisors 100 0.3 30

Promoters 210 0.3 63

Total 340 0.3 102

Source: Author (2016)

3.4 Data Collection Methods

According to Cox, (2014) there are many methods of data collection. The attributes of

subjects, research topic, problem question, objectives, design, expected data and results

determine the choice of a tool and instrument to be used in collecting data. The reason

behind this was because every tool and instrument collects different data. This study

required the use of questionnaires to collect data directly from the various respondents

who gave primary data. The questionnaire had two sections where the first part contained

information on the company background which includes the gender, age and years of

experience. The second part focused on how far customer loyalty has been achieved at

25

Tecno so as to know whether sustainable competitive advantage is being achieved. Both

close and open ended questions were employed in the questionnaire.

3.5 Research Procedures

According to Uma, (2015) questionnaires are valuable because they are efficient in terms

of (a) researcher time, (b), researcher effort, and (c), financial resources. However, he

also points out the major disadvantages of questionnaires: the answers may be so simple;

respondents may be unmotivated or unreliable; the famous halo effect; the agreement

and prestige biases; self-deception issues and respondent literacy and finally the effect of

fatigue in cases where the questionnaires are too long. The research used both the

structured and semi structured questionnaires so as to meet the research objectives.

Using the close-ended questions helped in limiting irrelevance to the goals that the

questionnaires wanted to achieve. The open ended on the other hand was designed to

enhance clarity of the responses during the interviews. According to (Bailey et al.,

2012) questionnaires make each respondent respond to the set of questions and provide

efficient way of collecting responses from a large sample prior to the quantitative

analysis. If everyone given the questionnaire would be good enough to return it fully

answered, then data collection and analysis would be much simpler and faster. The

researcher individually gave the research instruments to a sample of 102 respondents all

working in the Tecno outlets in Nairobi. He/she had to keep a record of the

questionnaires issues and keep track of how many were returned to keep track of how

data collection is going on.

3.6 Data Analysis Methods

SPSS was appropriate in analyzing quantitative data collected using questionnaires. The

information was presented through percentages, means and frequencies. Frequency

tables and charts were applied to display the information. Analysis of the data collected

from the open-ended questions was done using content analysis. According to Kirk and

Miller, (2014) content analysis uses a set of categorization for making valid and

replicable inferences from data to their context. This offered a systematic and qualitative

description of the objectives of the study. The researcher conducted a multiple regression

26

analysis to determine the relationship between customer loyalty and the variables of the

study.

3.7 Chapter Summary

This chapter covered the main research methodology that was used to carry out the

study. It covered the research design (descriptive design), population and sampling

design, data collection methods and instruments (questionnaires being the main ones), a

pilot study and data analysis methods (data collected was analyzed by the use of

descriptive statistics using SPSS). It waved the way for the next chapter which dealt with

data analysis covered in chapter five of the project.

27

CHAPTER FOUR

4.0 DATA ANALYSIS AND INTERPRETATION

4.1 Introduction

This chapter presents the findings established from the study as well as their

interpretations. The chapter has the results on demographics of the respondents such as

age, sex, marital status, highest education level achieved, work experience, years in

business operation, length of time the company has been in existence, company

composition, cell phone ownership, frequency of use of mobile phone and frequency of

visiting retail outlets. The chapter will further assist to gain a better understanding of

Tecno in satisfying its customers.

4.1.1 Response Rate

The response rate of a test measures the statistical power of a research and the higher the

rate the better. In this study, the researcher distributed 102 questionnaires and only 100

were filled and returned. Two (2) respondents did not return the questionnaires. This

represents a response rate of 98 % as shown in table 4.1.

Table 4.1: Response Rate

Questionnaires Number Percentage

Filled and collected 100 98

Non Responded 2 2

Total 102 100

4.2 Demographic Information

This section of the analysis offers the results on the demographic factors of the

respondents who participated in this research study.

4.2.1 Age

From the study, the age variable was evenly distributed with a mean of 2.42 and a

standard deviation of 0.901. Majority of the respondents were aged between 26-30

28

accounting for 47% of the population while those aged between 31-35 were 25%, those

aged above 35 were 15%, and those below 23 were the least at 13% as shown in table 4.2

and figure 4.1. This implies that the firm emphasises on hiring the young people and the

majority at the outlets are aged between 26 and 30 years.

Table 4.2: Age

Variable Distribution

Frequency Percent

below 25 13 13.0

26-30 47 47.0

31-35 25 25.0

above 35 15 15.0

Total 100 100.0

4.2.2Gender

To investigate the sex of the respondents the variable had a mean of 1.67 and a standard

deviation of 0.473. Females were the majority with 67% response rate while the male

were 33% as shown in table 4.3 and figure 4.2. Most of the work at the firm involves

making direct sales, as such, the firm has more females who are able to easily convince

the customers.

Table 4.3:Gender

Variable Distribution

Frequency Percent

Male 33 33.0

Female 67 67.0

Total 100 100.0

29

Figure 4.1: Gender

4.2.3Marital Status

To investigate the marital status of the respondents the variable had a mean of 2.07 and a

standard deviation of 0.856. 57% of the population was single, this was followed by 23%

who were married while the widow and divorced were both 10% respectively as shown in

table 4.4 and figure 4.2.

Table 4.4: Marital Status

Variable Distribution

Frequency Percent

married 23 23.0

Single 57 57.0

Widow 10 10.0

divorced 10 10.0

Total 100 100

30

Figure 4.2: Education

4.2.4 Education

To analyze the education level the variable was found to have a mean of 2.49 and a

standard deviation of 0.904. From the findings, 47% of the respondents were university

graduates, 35% had college education, and those with secondary education were 18%, as

shown in Table 4.5 and figure 4.3. Therefore, Techno has very qualified employees to

offer the services and products.

Table 4.5: Education

Variable Distribution

Frequency Percent

Secondary 18 18.0

College 35 35.0

University 47 47.0

Total 100 100

31

Figure 4.3: Education

4.2.5. Work Experience

To investigate how long the respondents have been working for the firm, the variable had

a mean of 2.27 and a standard deviation of 0.983. The findings revealed that most of the

respondents have worked between 6-10 years representing 42%; below five were 23%,

this represented 20% and those above 15 accounted for 15% as shown in table 4.6 and

figure 4.4. Majority of the employees are very experienced in the telecommunication

sector.

Table 4.6: Work Experience

Variable

Distribution

Frequency Percent

below 5 23 23.0

6-10 42 42.0

11-15 20 20.0

above 15 15 15.0

Total 100 100.0

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Figure 4.4: Work experience

4.2.6. Time the Company Has Been In Existence

The study sought to establish the time the company has been in existence in years. The

variable had a mean of 2.62 and a standard deviation of 0.896. Those who filled below

five were 13%, between 6-10 was 52%, while between 11-20 had 35% as shown in table

4.7 and figure 4.5

Table 4.7: Time the Company Has Been in Existence

Variable Distribution

Frequency Percent

below 5 13 13.0

6-10 52 52.0

11-20 35 35.0

Above 20 0 0

Total 100 100

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Figure 4.5: Time the Company Has Been in Existence

4.2.7. Firm Composition

To investigate the composition of the firms, the variable had a mean of 2.59 and a

standard deviation of 0.637. The findings revealed that most of the firms had a work force

of 11-60 workers representing 67%, those with between 5-10 was 25%, those between

1-4 was 8% as shown in table 4.8 and figure 4.6.

Table 4.8: Firm Composition

Variable

Distribution

Frequency Percent

Micro(1-4 workforce) 8 8.0

Small (5-10 workforce) 25 25.0

medium(11-60 workforce) 67 67.0

Total 100 100.0

34

Figure 4.6: Firm composition

4.2.8. Cell phone Use

The study sought to establish the number of cell phone users and it revealed that the

variable had a mean of 1.02 and a standard deviation of 0.141. Those with a cell phone

accounted for 98%, while those without were only 2% as shown in table 4.9 and figure

4.7.

Table 4.9: Cell Phone Use

Variable Distribution

Frequency Percent

Yes 98 98.0

No 2 2.0

Total 100 100.0

35

Figure 4.7: Cell Phone Use

4.2.9. Frequency of Cell Phone Use

To investigate the frequency of cell phone use the variable had a mean of 1.13 and a

standard deviation of 0.338. The findings revealed that most of the respondents use their

cell phones representing 87% and those who used it weekly were only 13% as shown in

table 4.10 and figure 4.8.

Table 4.10: Frequency of Cell Phone Use

Variable

Distribution

Frequency Percent

daily 87 87.0

weekly 13 13.0

Monthly 0 0.0

Not interested 0 0.0

Total 100 100.0

36

Figure 4.8: Frequency of Cell Phone Use

4.2.10. Visit to Retail Outlets

The study sought to establish the number of respondents who visit the outlets and the

study revealed that the variable had a mean of 1.23 and a standard deviation of 0.423.

Those who visit the outlets were 74% as shown in table 4.11 and figure 4.9.

Table 4.11: Visit Outlets

Variable Distribution

Frequency Percent

Yes 74 74.0

No 26 26.0

Total 100 100.0

37

Figure 4.9: Visit to the outlets

4.2.11. Frequency of Outlet Visit

The study sought to establish the number of visits the respondents made to the outlets and

the study revealed that the variable had a mean of 2.24 and a standard deviation of 0.773.

Those who visited the outlets weekly were 38 and accounted for 51% of the total

respondents, those who visited monthly were 21 and accounted for 28%, daily visitors

were 11 and accounted for 15%, those who were not interested were only four

representing 5% as shown in table 4.12 and figure 4.10.

Table 4.12: Frequency of Outlet Visit

Variable Distribution

Frequency Percent

Daily 11 15

Weekly 38 51

Monthly 21 28

Not Interested 4 5

Total 74 100.0

38

Figure 4.10: Frequency of Visit to the outlets

4.3 Meaning and Scope of Customer Loyalty

The study sought to establish the meaning and scope of Customer Loyalty and the

respondents were asked a number of questions that they were to rate with the least being

Strongly Disagree (5) and the highest being Strongly Agree (1).

4.3.1 Descriptive on the Meaning and Scope of Customer Loyalty

Most respondents agreed that customers who come to buy Tecno devices have had an

experience with other Tecno devices before and this had the highest mean of (2.82). They

also agreed that the company has a good reputation from their customers‟ feedback

(2.64) and also that it is easy to convince customers to buy Tecno devices as compared to

other devices (2.54). The least mean was recorded from the variable that the company

gives first priority to its customers always (2.08) as shown in table 4.13 below

39

Table 4.13: Descriptive on Scope of Customer Loyalty

Mean Std.

Deviation

Many customers prefer buying Tecno devices in most outlets. 2.33 1.341

It is easy to convince customers to buy Tecno devices as compared to other

devices.

2.54 1.096

The company has a good reputation from their customers‟ feedback. 2.64 1.168

Most of the customers who come to buy Tecno devices have had an

experience with other Tecno devices before.

2.82 1.140

The company gives first priority to its customers always. 2.08 1.134

The company gets increasing numbers of customers often. 2.32 1.109

4.3.2 Regression between Customer loyalty Scope and Competitive Advantage

A regression analysis was done between variables of customer loyalty scope and

competitive advantage of Techno outlets. On analysis, the adjusted R square value was

0.532 and a p-value of (0.000) was significant. This means that 53.2% of the variation

in competitive advantage was caused by the variation in the customer loyalty as shown

in table 4.14.

Table 4.14: Model Summary of Customer Loyalty and Competitive Advantage

Model R R

Square

Adjusted R

R Square

Std. Error

of the

Estimate

Change Statistics

R Square

Change

F

Change

df1

df2

Sig. F

Change

1 .748a .560 .532 .289 .560 19.726 6a 93 .000

An ANOVA analysis was done between customer loyalty and sustainable competitive

advantage at 95% confidence level, the F critical was 19.726 and the P value was

(0.000) therefore significant the results are shown in table 4.15 below.

40

Table 4.15: ANOVA between Customer Loyalty and Competitive Advantage

Model Sum of Squares Df Mean Square F Sig.

1

Regression 9.917 6 1.653 19.726 .000b

Residual 7.793 93 .084

Total 17.710 99

4.3.3 Coefficient of Customer Loyalty and Competitive Advantage

A Pearson correlation was done between competitive advantage (dependent variable)

against other factors of customer loyalty. The results of the regression coefficients,

statistics, standard errors of the estimates and p values are shown in table 4.16. When

organizational competitive advantage was predicted on customer loyalty (constant) p

value=0.000. The variable customers prefer buying Tecno devices in most outlets had a

(Beta=0.182, p value =0.500); It is easy to convince customers (Beta=0 .155, p

value=0.577); The company has a good reputation from their customers feedback

(Beta=0.127, p value=0.703); Customers who come to buy Tecno devices have had an

experience with other Tecno devices before (Beta=0..957,p value 0.000) and the

company gives first priority to its customers always (Beta=.209, p value=0.414); The

company gets increasing numbers of customers often (Beta=1.284 , p value 0.000) as

shown.

These results imply that for an organisation to have a competitive advantage over their

competitors they need to find a way to ensure that many customers buy their devices all

across the country. The firms also need to establish ways of convincing customers to buy

the products compared to the competition although this may have no significant effect.

The company also needs to have a good reputation from their customer’s feedback. This

is because most of the customers buy products they have had an experience with before.

The company also needs to gives first priority to its customers always.

41

Table 4.16: Coefficient of Customer Loyalty and Competitive Advantage

Model Unstandardized

Coefficients

Standard

Coefficient

T Sig.

B Std.

Error

Beta

(Constant) 1.609 .095

16.984 .000

Many customers prefer buying Tecno devices

in most outlets.

.057 .085 .182 .677 .500

It is easy to convince customers to buy Tecno

devices as compared to other devices.

.060 .107 .155 .559 .577

The company has a good reputation from their

customers‟ feedback.

.046 .120 .127 .382 .703

Most of the customers who come to buy Tecno

devices have had an experience with other

Tecno devices before.

.355 .093 .957 3.837 .000

The company gives first priority to its

customers always.

.078 .095 .209 .821 .414

The company gets increasing numbers of

customers often.

.490 .085 1.284 5.774 .000

4.4 Customer Loyalty and Sustainable Competitive Advantage

The study sought to establish the contribution of Customer Loyalty and the respondents

were asked a number of questions that they were to rate with the least being Strongly

Disagree (5) and the highest being Strongly Agree (1).

4.4.1 Descriptive on Contribution of Customer Loyalty to Competitive Advantage

Most respondents neither agreed nor disagreed that retaining customers was an easy task

for the company with a mean (0.322), the respondents however agreed that most of the

customers who come to buy have bought a Tecno Device before (2.85), and that also the

42

company knows well where it lies in terms of competitive position in the industry (2.83).

The respondents also agreed that customers do not keep their complains to themselves,

rather express them to the management (2.67), customers give a lot of attention to prices

on the device (2.5) and also that customers get information about Tecno products from

their friends through word of mouth (2.37) as shown in table 4.17.

Table 4.17: Descriptive on Contribution of Customer Loyalty to Competitive

Advantage

Mean Std.

Deviation

Retaining customers is an easy task for the company. 3.22 1.219

Customers give a lot of attention to prices on the devices. 2.50 1.176

Most of the customers who come to buy have bought a Tecno Device

before.

2.85 1.167

Customers get information about Tecno products from their friends

through word of mouth.

2.37 1.212

Customers do not keep their complains to themselves, rather express

them to the management.

2.67 1.035

The company knows well where it lies in terms of competitive position

in the industry.

2.83 1.092

4.4.2 Regression between Customer loyalty Contribution and Competitive

Advantage

A regression analysis was done between variables of customer loyalty contribution and

competitive advantage of Techno outlets. On analysis, the adjusted R square value was

0.516 and a p-value of (0.000) was significant. This means that 51.6% of the variation

in competitive advantage was caused by the variation in the customer loyalty

contribution as shown in table 4.18.

43

Table 4.18: Model Summary of Customer Loyalty contribution

Model R R

Square

Adjusted

R

Square

Std. Error

of the

Estimate

Change Statistics

R Square

Change

F

Change

df1

df2

Sig. F

Change

1 .739a .545 .516 .294 .545 18.598 6a 93 .000

An ANOVA analysis was done between customer loyalty contribution and sustainable

competitive advantage at 95% confidence level, the F critical was 18.598 and the P

value was (0.000) therefore significant the results are shown in table 4.19 below.

Table 4.19: ANOVA Customer Loyalty contribution

Model Sum of Squares Df Mean Square F Sig.

1

Regression 9.660 6 1.610 18.598 .000b

Residual 8.050 93 .087

Total 17.710 99

4.4.2 Coefficient of Customer Loyalty contribution and Competitive Advantage

A Pearson correlation was done between competitive advantage (dependent variable)

against other factors of customer loyalty contribution. The results of the regression

coefficients, t-statistics, standard errors of the estimates and p values are shown in table

4.20. When organizational competitive advantage was predicted on customer loyalty

(Constant p value=0.000). Retaining customers is an easy task for the company (Beta

0.324 p value=0.001), Customers give a lot of attention to prices on the devices

(Beta=0.135, p value=0.630), most of the customers who come to buy have bought a

Tecno Device before(Beta=0 .619, p value=0 .004), Most of the customers who come to

buy Tecno devices have had an experience with other Tecno devices before

(Beta=0.733, p value=0.006), and customers get information about Tecno products from

their friends through word of mouth (Beta=0.119, p value=0.591), the company knows

44

well where it lies in terms of competitive position in the industry (Beta=0..338, p

value=0.080).

Table 4.20: Coefficient of Customer Loyalty and Sustainable Competitive

Advantage

Model Unstandardized

Coefficients

Standard

izedCoefficient

T Sig.

B Std.

Error

Beta

(Constant)

1.921 .105 18.296 .000

Retaining customers is an easy task for the

company.

.112

.031 .324 3.585 .001

Customers give a lot of attention to prices

on the devices.

.049

.100 .135 .484 .630

Most of the customers who come to buy

have bought a Tecno Device before.

.225

.076 .619 2.963 .004

Customers get information about Tecno

products from their friends through word

of mouth.

.256

.091 .733 2.823 .006

Customers do not keep their complains

to themselves, rather express them to the

management.

.049

.090 .119 .540 .591

The company knows well where it lies in

terms of competitive position in the

industry.

.131

.074 .338 -1.768 .080

Customer loyalty and sustainable competitive advantage all the co-efficients were

positive, this therefore implies that firms are able to gain competitive advantage through

customer retention. They should therefore consider the prices they charge on the devices.

Since customers do not keep their complaints to themselves, rather express them to the

management all the complaints should be well addressed. The company knows well

where it lies in terms of competitive position in the industry.

45

4.5 Customer Loyalty and its Role in Enhancing Sustainable Competitive Advantage

The study sought to establish how customer loyalty enhances sustainable competitive

advantage and the respondents were asked a number of questions that they were to rate

with the least being strongly Disagree (5) and the highest-ranking being Strongly Agree

(1).

4.5.1 Descriptive on Customer Loyalty Enhancing Sustainable Competitive

Advantage

Most of the respondents agree that the company can almost be sure of its existence in the

future (2.55), the company has increased its operations to other towns in the country of

late (2.43), employee involvement in their customers has brought a positive impact on the

company’s sales (2.41), Tecno comes up with new products from time to time (2.33), the

company has affiliated with other major companies in the mobile industry to boost their

efficiency (2.22), the company has been accredited to work with major phone retail

outlets like Safaricom and Airtel (1.84) as shown in table 4.21

Table 4.21: Descriptive on Customer Loyalty Enhance Sustainable

Competitive Advantage

Variable Mean Std.

Deviation

Tecno comes up with new products from time to time 2.33 1.138

Employee involvement in their customers has brought a positive impact on

the company’s sales.

2.41 1.207

The company has increased its operations to other towns in the country of

late.

2.43 1.241

The company has affiliated with other major companies in the mobile

industry to boost their efficiency.

2.22 1.292

The company has been accredited to work with major phone retail outlets

like Safaricom and Airtel.

1.84 1.220

The company can almost be sure of its existence in the future. 2.55 1.417

A regression analysis was done between variables of customer loyalty enhancement and

competitive advantage of Techno outlets. On analysis, the adjusted R square value was

46

Table 4.22: Model Summary on Customer Loyalty and Sustainable

Competitive Advantage

Model R R

Square

Adjusted

R

Square

Std. Error

of the

Estimate

Change Statistics

R Square

Change

F

Chang

e

df1

df2

Sig. F

Change

1 .898a .807 .795 .192 .807 64.929 6a 93 .000

0.795 and a p-value of (0.000) was significant. This means that 79.5% of the variation in

competitive advantage was caused by the variation in the customer loyalty enhancement

as shown in table 4.22.

An ANOVA analysis was done between customer loyalty enhancement and sustainable

competitive advantage at 95% confidence level, the F critical was 64.929, the P value

was (0.000), and therefore significant the results are shown in table 4.23.

Table 4.23: ANOVA on Customer Loyalty and Sustainable Competitive

Advantage

Model Sum of Squares df Mean Square F Sig.

1

Regression 14.297 6 2.383 64.929 .000b

Residual 3.413 93 .037

Total 17.710 99

4.5.2 Coefficient on Customer Loyalty Enhance Sustainable Competitive Advantage

A Pearson correlation was done between competitive advantage (dependent variable)

against other factors of customer loyalty enhancement. The results of the regression

coefficients, t-statistics, standard errors of the estimates and p values are shown in table

4.24.

When organizational competitive advantage was predicted on customer loyalty (Constant

p value=0.000).Tecno comes up with new products from time to time (Beta=0.030,

pvalue0.778), employee involvement in their customers has brought a positive impact on

the company’s sales.(Beta0.056, p value 0.734), the company has increased its operations

47

to other towns in the country of late (Beta=0.053, pvalue0.739), the company has

affiliated with other major companies in the mobile industry to boost their efficiency

(Beta=0.002, p value 0.976), the company has been accredited to work with major phone

retail outlets like Safaricom and Airtel (Beta=0.970, p value=0.000), the company can

almost be sure of its existence in the future (Beta=0.183, p value=0.068).

From the findings only the variable, the company has been accredited to work with major

phone retail outlets like Safaricom and Airtel was significant (p value<0.05).

Table 4.24: Coefficient on Customer Loyalty and its Role in enhancing

Sustainable Competitive Advantage

Model Unstandardized

Coefficients

Standardized

Coefficient t Sig.

B Std.

Error

Beta

(Constant)

.538 .127 4.227 .000

Tecno comes up with new products from time

to time

.011

.040 .030 .283 .778

Employee involvement in their customers has

brought a positive impact on the company’s

sales.

-.020

.058 -.056 -.341 .734

The company has increased its operations to

other towns in the country of late.

.018

.054 .053 .334 .739

The company has affiliated with other major

companies in the mobile industry to boost

their efficiency.

.001

.022 .002 .030 .976

The company has been accredited to work

with major phone retail outlets like

Safaricom and Airtel.

.336

.033 .970 10.098 .000

The company can almost be sure of its

existence in the future.

.055

.030 .183 1.849 .068

48

To ensure customer loyalty plays a role in enhancing sustainable competitive advantage

to guarantee competitive advantage, the companies should strive to become innovative.

The telecom company should also affiliate with other major companies in the mobile

industry to boost their efficiency.

4.6 Chapter Summary

This chapter presented the findings, results and interpretation as per the research

objectives. The first section provided an analysis of the various demographic data on the

respondents. The second part analyzed the findings on what is the meaning and scope of

customer loyalty, the third section provided findings on contribution of customer loyalty

to sustainable competitive advantage, the fourth section presented how customer loyalty

enhances sustainable competitive advantage. The next chapter will discuss the findings,

conclusions and recommendations.

49

CHAPTER FIVE

5.0 DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS

5.1 Introduction

This chapter presents the summary and discussions on the findings of this study as well as

explanations and importance to related literature. It analyses the role of customer loyalty

in maintaining sustainable competitive advantage. Conclusion and recommendation

sections are presented based on the research questions.

5.2 Summary

The purpose of this study was to investigate the role of customer loyalty in maintaining

sustainable competitive advantage. The research was guided by the following objectives:

to discuss the meaning and scope of customer loyalty in the context of Tecno; to examine

customer loyalty and sustainable competitive advantage; to discuss the creation of

sustainable competitive advantage through customer loyalty; and to make

recommendations to Tecno about how to improve their sustainability in the research

targeted managers, supervisors and promoters in these outlets.

A descriptive research approach was used and the target population was 340. Stratified

and simple random sampling technique was used to select a sample size of 102. Statistical

Package for Social Sciences (SPSS) was used to analyse data. The research also used

qualitative and quantitative data. Percentages, means, standard deviations and frequencies

were used to present results. In addition, correlation was used to explore the relationship

between the variables. ANOVA analysis was also carried out to determine the differences

in means between the variables.

Questionnaires were used to collect data and 102 questionnaires were distributed but only

100 were filled and returned. The demographic factor revealed that the company has been

in existence for 6-10 years and majority of respondents have worked at Techno for a

duration of 6-10 years. An analysis of the age revealed that respondents with the age

group 31-35 have the highest proportion and females had the highest proportion. Majority

of the respondents were single with a university degree. From the findings, it was

50

revealed that 98% of the respondents use their cell phone, 87% use it daily and 75% visit

techno outlets.

The first objective was to discuss the meaning and scope of customer loyalty. The

findings revealed that most respondents agreed that customers who come to buy Tecno

devices have had an experience with other Tecno devices before and they also agreed that

the company has a good reputation from their customer’s feedback and that it is easy to

convince customers to buy Tecno devices as compared to other devices. In addition, the

least mean was recorded from the variable that the company gives first priority to its

customers always. A regression analysis was done between variables of customer loyalty

scope and competitive advantage of Techno outlets. On analysis, the adjusted R square

value was 0.532 and a p-value of (0.000). A Pearson correlation was also done between

competitive advantages (dependent variable) against other factors of customer loyalty.

Loyalty was used. While most of the variables were positively correlated, the p-values

were not significant. This is because that had a p-value that was more than 0.05. Betas

were positive. However, only many of the customers prefer buying Tecno devices in most

outlets, most of the customers who come to buy Tecno devices have had an experience

with other Tecno devices before, and the company gets increasing numbers of customers

often had a significant relationship.

The second objective was to examine the contribution of customer loyalty to sustainable

competitive advantage. It was established that most respondents neither agreed nor

disagreed that retaining customers was an easy task for the company; the respondents

however agree that most of the customers who come to buy have bought a Tecno Device

before, and that the company knows well where it lies in terms of competitive position in

the industry. Furthermore, the respondents also agreed that customers do not keep their

complaints to themselves, rather express them to the management, customers give a lot of

attention to prices on the device and that customers get information about Tecno products

from their friends through word of mouth. A regression analysis was done between

variables of customer loyalty contribution and competitive advantage of Techno outlets.

On analysis, the adjusted R square value was 0.516 and a p-value of (0.000) was

significant. A Pearson correlation was done between competitive advantage (dependent

variable) against other factors of customer loyalty contribution. However, Beta was

positive on only many customers prefer buying Tecno devices in most outlets, the

51

company has a good reputation from their customers‟ feedback, and most of the

customers who come to buy Tecno devices have had an experience with other Tecno

devices before were significant.

The third objective was to discuss how customer loyalty enhances sustainable competitive

advantage. Most respondents agree that the company can almost be sure of its existence in

the future, the company has increased its operations to other towns in the country of late,

employee involvement in their customers has brought a positive impact on the company’s

sales, Tecno comes up with new products from time to time, the company has affiliated

with other major companies in the mobile industry to boost their efficiency and that the

company has been accredited to work with major phone retail outlets like Safaricom and

Airtel. A regression analysis was done between variables of customer loyalty

enhancement and competitive advantage of Techno outlets. On analysis, the adjusted R

square value was 0.795 and a p-value of (0.000) was significant. A Pearson correlation

was done between competitive advantages (dependent variable) against other factors of

customer loyalty enhancement. Employee involvement in their customers has brought a

positive impact on the company’s sales was the only variable that had a negative Beta.

However, Tecno comes up with new products from time to time, the company has been

accredited to work with major phone retail outlets like Safaricom, and Airtel were the

only variables that were significant.

5.3 Discussions and Findings

5.3.1The Meaning and Scope of Customer Loyalty

The findings revealed that most customers prefer buying Tecno devices in most outlets

and respondents also agreed that the company gives first priority to its customers always

hence increasing numbers of customers often. According to similar findings Evans and

Lindsay, (2011) stated that companies with satisfied customers have a good opportunity

to convert customers who purchase from those firms over an extended time into loyal

customers. Today’s highly competitive and dynamic corporate environment compels the

mobile phone providers to have satisfied customers and retain them in order to survive

and compete with other market players successfully.

52

Customers like to be served as fast as they can and get their needs met. Once they walk to

an outlet, they want to be attended to and given a solution to their issues as fast as

possible because they have other errands they need to meet in a day. Therefore, every

organization must make sure that their employees are fast in delivering services to their

clients. If for any reason a company anticipates unavailability of a certain product, they

should communicate to their clients so they wait until they get it. An organization that

makes their products available almost at all times, tend to have more customers since

customers always know that they will never lack what they need from them (Grewal and

Levy, 2015).

On analyzing the ease to convince customers to buy Tecno devices as compared to other

devices, majority agreed that it was easy for them to convince customers to buy Tecno

device. The high quality relationship with customers is the main influence of a successful

service provider which determines customer satisfaction and loyalty (Lymperopoulos,

2006; Panda, 2003). After sale services include everything that the customer gets after

buying the product. For instance, for the Tecno clients, this would include setting the

phone up for them and taking them through what they are supposed to know in the

operations of the device (Damanpour, 2010). Ehrenthal and Stolzle (2013) highlighted

that customers should be aware of the terms within which they can return the products

and probably get new products. For example, when one buys a Tecno device, they are

allowed to return it within three days of use if it has any manufacturing issue such as

battery failure. However, if the problem arises from mishandling by the customer, the

customer has to pay for the services so it can be repaired. Quality gives rise to an

organization getting many clients buying their products since they are sure they will get

the very best service from the products.

Organizations should come up with new products within a specified period. This makes

them stand out and customers get to be sure, that they will always get something new

from time to time. This is done to counter their competitors since some of them do not

ever think of coming up with new products. For example, Tecno introduces a new product

into the Kenyan market after every four to five months. This makes sure that they keep up

with competition. Most of the devices that they bring often are meant for the middle class

earners, high-end devices take more time before being introduced. It is not necessary to

have new products (Anderson & Jacobsen, 2010).

53

According to Liao (2014), employees at times go out of their way and make sacrifices

such as working late or overtime so as to meet deadlines and make sure everything is

running on smoothly. Customers are not a bother to them as they want to make sure that

before they leave for their own agendas, they have satisfied the customer. There is a need

to include employees in the organizations operations.

According to the findings it was established that most of the customers who come to buy

Tecno devices have had an experience with other Tecno devices before and also the

company has a good reputation from their customers’ feedback. According to Rajshekhar

and Moberg (2013), repurchase intention is concerned with an individual’s judgment

about buying again a designated service form the same company, taking into account his

or her current situation and likely circumstances. A customer decides not to try new

products from other companies no matter how good the offers are, just to buy again and

again from your organization. As behaviour, customer loyalty has been measured as the

customers repeat purchase probability. According to Asugman, (2011), once an

organization has treated a customer right, the customer is happy at the end of the day and

will definitely go back and make purchase from the same company.

5.3.2 Customer Loyalty contribute to Sustainable Competitive Advantage

The findings revealed that most respondents neither agreed nor disagreed on whether

retaining customers was an easy task for the company. A study done by Tecno in

November 2015 in Moi Avenue Safaricom outlet in Nairobi CBD showed that majority of

customers admit to switching shops and brands if they cannot get the key products they

need. Stock-out also negatively affects retailers’business performance (Grewal & Levy,

2015). It can directly lead to sale decrease, most of all when customers give up the

purchase, change the retail store or opt for a cheaper substitute (Ehrenthal & Stolzle,

2013). For instance, when a customer goes looking for a certain Tecno phone and does

not get it, go to another store and still do not get it, they might end up switching to

another brand, and get a device that still serves them as the Tecno one would. The loss of

one customer to another brand might be the beginning of losing many more customers.

In contrast to this, Bowen and Chen (2001) suggest that a high level of customer

satisfaction will decrease the perceived need to switch the service provider, thereby

increasing customer repurchase intention and ultimately enhancing profitability of the

54

organization. According to previous studies, some have revealed that there is a positive

relationship between customer retention and customer loyalty and others have revealed

that there is a negative relationship between customer retention and customer loyalty

(Petterson, 2014). A company that has sustainable competitive advantage has customers

who always come back to purchase from them no matter the circumstances. Customer

loyalty is the result of an organization creating a benefit for customers so that they will

maintain and increasingly repeat business with the organization (Anderson &Jacobsen,

2010).

The results indicate that most respondents agreed that customers give a lot of attention to

prices on the devices. Price could be a factor to compete on, depending on the target

market an organization chooses to focus on. There are some customers who associate low

prices with low quality and vice versa. However, others understand that at times pricing is

not a reflection of quality but is dependent on factors such as the place that the product is

being sold from. Customers are likely to be price sensitive if they are still looking for an

organization they can identify with (Monroe, 2010). Competitors take advantage of this

fact whilst others use low prices to get into a new market. For example, when Tecno

brings in a new device to the Kenyan market, they put it up with slightly lower prices than

their competitors who have the same devices as they do. This translates to many

customers going for the brand, especially the middle income earners. The high-end

customers may be reluctant a bit; until they are proven to that, the devices are as good as

any other brand.

According toMonroe (2010), customers are likely to be price sensitive if they are still

looking for an organization they can identify with. Loyal customers are price insensitive

to the price changes while non-loyal customers are sensitive in making decisions about a

brand (Goldsmith & Newell, 2011). The findings revealed that most respondents agreed

that customers who come to buy have bought a Tecno device before in addition to this;

customers also get information about Tecno products from their friends through word of

mouth. According to Campbell and Frei, (2010); Terpstra and Verbeeten, (2014), quality

gives rise to an organization getting many clients buying their products since they are sure

they will get the very best service from the products. Regardless of cost, poor quality

makes consumers dislike the product.

55

People have a tendency to believe others especially when told by word of mouth.

Therefore, when customers go around talking to each other, they can spread either hatred

or good news about a company. One on one form of communication is very much trusted

as compared to written. Customers who are loyal to your organization will talk to others

and convince them that no other organization is better compared to yours. If customers

keep praising your company to others, the company ends up having a sustainable

competitive advantage since other companies do not have a chance to convince customers

that they are the best. Customer loyalty is the result of an organization creating a benefit

for customers so that they will maintain and increasingly repeat business with the

organization (Anderson & Jacobsen, 2010).

On analysis of customer complains, majority of the respondents revealed that customers

do not keep their complains to themselves, rather express them to the management.

According to Evans and Lindsay (2011), the positive side of having complaints from

customers is it helps the organization know where it has fallen in carrying out its duties.

Complaints are a result of dissatisfaction, which means the customers, wants or expected

more than you offered them. A company should keep its ears wide open to the cries of

their customers. Once they get to know what exactly the customers complain about, they

should make a move to correct the issues immediately. If for any reason the issue cannot

be addressed with immediate effect, then the organization should let the customers know

that they are aware of their concerns and they are working on it, so they can be patient. A

company that listens to their customers gets loyalty in return. They give suggestions to

the company on how to improve their services and products and this helps in making sure

that what the organization offers is always on top of the game. Competitors may never

reach the level of such an organization. This results in having a complete edge over

competitors.

5.3.3 Enhancement of Sustainable Competitive Advantage by Customer Loyalty

The findings revealed that majority agreed that Tecno comes up with new products from

time to time. The study also agrees with Anderson and Jacobsen (2010), Tecno introduces

a new product into the Kenyan market after every four to five months. This makes sure

that they keep up with competition. Most of the devices that they bring often are meant

56

for the middle class earners, high-end devices take more time before introduced. It is not a

must to have new products.

According to Damanpour (2010), organizational innovation combines the development

and implementation of new ideas, systems, products, or technologies. Every organization

must learn to come up with new products from time to time. Stagnation is a dangerous

path for an organization to tread upon since competitors are always looking for ways to

improve their services and satisfy their customers. Customers’ needs keep changing every

now and then and what they needed yesterday is not really a guarantee of what they will

need tomorrow. This is a good way of enhancing sustainable competitive advantage since

it makes sure that customers keep guessing and waiting to see what new products they are

going to get or at least what new features they will get from the products they have.

The study has established that the company has increased its operations to other towns in

the country. According to Anderson and Jacobsen, (2010) availability is becoming a

growing concern and one of the key concerns for customer loyalty. If customers find that

a product is out of stock in a store, they are most likely to change and purchase from

another one. An organization that makes their products available almost at all times, tend

to have more customers since customers always know that they will never lack what they

need from them (Grewal & Levy, 2015). The care centres are supposed to be within reach

for easy access by the customers. Since it is not possible to have care centres in all towns,

they should be at least one in the major towns. Tecno for example has care centres in

Nairobi (Caxton House 2nd floor, Kenyatta Avenue), Mombasa and Kisumu towns. In the

smaller towns, technicians should be present in some of the major outlets where the

customers buy the products, for example in Safaricom outlets for the Tecno clients. Minor

issues can be solved from there, if not possible, there should be an arrangement of how

the devices will be taken to the nearest main care centre.

The findings revealed that majority agreed that the company has affiliated with other

major companies in the mobile industry to boost their efficiency and majority strongly

agreed that the company has been accredited to work with major phone retail outlets like

Safaricom and Airtel. For example, if one goes into a Safaricom outlet, the first people

the customer gets to interact with are the brand ambassadors of the various mobile phone

brands. They are mostly the face of Safaricom outlets in Kenya. They therefore serve to

57

assist the various clients on what they need from the various brands that are available.

Tecno brand ambassadors therefore, should learn to approach customers with a friendly

attitude and guide them through what they want. Serving customers with empathy and

smile has been found to be an effective way to offer better service experience (Kim &

Yoon, 2012; Pugh, 2012) leading to attaining their loyalty.

The study established that employee involvement in their customers has brought a

positive impact on the company’s sales.Employees are attracted to an organization that is

performing well. Everybody wants to be associated with success, and this includes

everyone in an organization. Customers become loyal and this leads to sustainable

competitive advantage making the organization in question to stand out among many

others in terms of success. It becomes the envy of many. Liao, (2014) suggests that

employees are at the core of a business success. People looking for jobs will want to be

attracted to such a company. They want to be part of the big team that makes it happen

and be recognized for their good work. Most of them want to do their very best to make

sure that they get employed by such a company so they can contribute to the success. This

is the reason one finds so many applications from different people when vacancies are put

up for such organizations. Liao (2014) further says that some organizations fail because

of not putting into consideration what their employees tell them. Employees at times

come up with innovative ideas on how to conquer their competitors and if some of these

bright ideas are put into action, they end up beating their competitors and even acquiring

their customers and make them theirs.

5.4 Conclusion

5.4.1 What is The Meaning and Scope of Customer Loyalty

The findings revealed that most customers who come to buy Tecno devices have had an

experience with other Tecno devices before, the company gives first priority to its

customers always hence; they prefer buying Tecno devices in most outlets. In addition, it

was also revealed that it is easy to convince customers to buy Tecno devices as compared

to other devices; the company also has a good reputation from their customer’s feedback

hence increasing numbers of customer.

58

5.3.2 Customer Loyalty contribute to Sustainable Competitive Advantage

The findings revealed thatmost of the customers who come to buy have bought a Tecno

Device before, use of word of mouth advertisement has helped the company get new

customers through referrals from friends, and customers give a lot of attention to prices

on the devices. Furthermore, customers are allowed to express their complains to the

manager and the company knows where it lies in terms of competitive position in the

industry.

5.4.3 How Customer Loyalty enhance Sustainable Competitive Advantage

The findings revealed that the company has been accredited to work with major phone

retail outlets like Safaricom, Airtel, the company has affiliated with other major

companies in the mobile industry to boost their efficiency, and the company has increased

its operations to other towns in the country of late. Through this, the company will be able

to reach a wider market hence make products available to customers. In addition, Tecno

comes up with new products from time to time and employee involvement in their

customers has brought a positive impact on the company’s sales. Development of new

products will enable the company meet their customers taste and preferences hence

increase in revenue. The company can almost be sure of its existence in the future.

5.5 Recommendations

5.5.1 Recommendations for Further Improvements

5.5.1.1 The Meaning and Scope of Customer Loyalty

It was recommended that the company should look for ways of putting the needs and

requirement of their customers first. They should ensure that their employees understand

their customer needs, do a survey and find out what customers want, ensure that

customers will be able to easily access their products, acknowledge customers by sending

thank you messages and they should encourage customers to give feedback thorough

email, social website, or SMS.

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5.5.1.2 Customer Loyalty contribute to Sustainable Competitive Advantage

According to the findings, respondents neither agreed nor disagreed that retaining

customers is an easy task for the company. In order for Tecno to retain its customers, it

should build trust through relationships, listen to customers, implement customer

feedback survey, price discounts, build a brand name in the minds of the consumers and

offer high quality products.

5.5.1.3 How Customer Loyalty enhance Sustainable Competitive Advantage

According to the findings majority of respondents believe that the company should

always come up with new products in order for them to be able to adapt to customers taste

and preferences. Through this, the company will be able to attract new customers and

retain their existing customers hence increase in revenue.

5.5.1 Recommendations for Further Studies

The researcher recommends that since the mobile industry is growing, it is important for

more research to be done and other factors to be used to determine the influence of

customer loyalty in maintaining sustainable competitive advantage.

This study mostly looked at the employees and therefore implies that the results are

skewed towards a particular direction by the data from one institution. It is recommended

that similar studies be done in to increase the statistical prowess of the study.

60

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APPENDICES

APPENDIX I: QUESTIONNAIRE

Section A: Demographic Details

1. Age

Below 25 yrs 25-30yrs

30-35 yrs Above 35 yrs

2. Sex Male Female

3. Marital status.

Married Single

Widowed Divorced

4. Highest education level achieved

Form four/Six College

University None

5. Work Experience (years in business operation)

5 years and below [ ] 5-10 [ ] 10 – 15 yrs [ ] 15 years and above [ ]

6. Length of time the company has been in existence.

5-10 yrs[ ] 10–20 [ ] Above 20 [ ]

7. Company composition.

Micro scale (1-4 workforce)

Small scale (5-10 workforces)

Medium scale (10-50 workforces)

8. Do you own a cell phone? Yes No

9. How regularly do you utilize your mobile?

Daily [ ] Weekly [ ]

65

Monthly [ ] Not interested [ ]

10. Do you visit your retail outlets? Yes [ ] No [ ]

11. In case of YES in question 10, how often do you do that?

Daily Weekly

Monthly Not interested

SECTION A

Please indicate your opinion as per the level of disagreement or agreement with the

outline statement using1 to 5 scale guideline.

1= Strongly Agree 2- Agree, 3= Neutral, 4 =Disagree, 5= Strongly Disagree

A.Customer Loyalty 1 2 3 4 5

Many customers prefer buying Tecno devices in most outlets.

It is easy to convince customers to buy Tecno devices as

compared to other devices.

The company has a good reputation from their customers’

feedback.

Most of the customers who come to buy Tecno devices have had

an experience with other Tecno devices before.

The company gives first priority to its customers always.

The company gets increasing numbers of customers often.

SECTION B

Please indicate your opinion as per the level of disagreement or agreement with the

outline statement using1 to 5 scale guideline.

1= Strongly Agree 2- Agree, 3= Neutral, 4 =Disagree, 5= Strongly Disagree

B. Competitive Advantage of the Company 1 2 3 4 5

66

Retaining customers is an easy task for the company.

Customers give a lot of attention to prices on the devices.

Most of the customers who come to buy have bought a Tecno

Device before.

Customers get information about Tecno products from their

friends through word of mouth.

Customers do not keep their complains to themselves, rather

express them to the management.

The company knows well where it lies in terms of

competitive position in the industry.

SECTION C

Please indicate your opinion as per the level of disagreement or agreement with the

outline statement using 1 to 5 scale guideline.

1= Strongly Agree 2- Agree, 3= Neutral, 4 =Disagree, 5= Strongly Disagree

Competitive Position of Tecno 1 2 3 4 5

Tecno comes up with new products from time to time

Employee involvement in their customers has brought a positive

impact on the company’s sales.

The company has increased its operations to other towns in the

country of late.

The company has affiliated with other major companies in the

mobile industry to boost their efficiency.

The company has been accredited to work with major phone retail

outlets like Safaricom and Airtel.

The company can almost be sure of its existence in the future.

END OF QUESTIONS

THANK YOU

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APPENDIX II: RESEARCH BUDGET

Budget Line Items Cost in (Ksh)

1.Proposal Development

Materials 4,000/=

Printing 5,000/=

Photocopying 2,500/=

2.Data Collect (Field work)

Photocopying 2,500/=

Travelling 3,000/=

Research Assistant 5,000/=

3.Data Analysis & Interpretation

Data Analysis 3,500/=

4.Report Writing & Dissemination

Report Writing 2,000/=

Binding & Dissemination 500/=

Total Cost 28,500/=

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APPENDIX III: IMPLEMENTATION SCHEDULE

Research Activities

Timeframe

Start Finish Duration

1.Proposal Development Summer 2016 Summer 2016 3 months

2.Data Collect ( Fieldwork) Wk 1 Fall 2016 Wk 4 Fall 2016 1 month

3.Data Analysis &

Interpretation

Wk 5 Fall 2016 Wk 7 Fall 2016 2 weeks

4.Report Writing Wk 8 Fall 2016 Wk 11 Fall 2016 4 weeks

5.Report Dissemination Wk 12 Fall 2016 Wk 14 Fall 2016 2 weeks