FACTORS AFFECTING CONSUMER DEMAND IN THE RETAIL INDUSTRY

IN KENYA: A CASE STUDY OF AL-FATAH SUPERMARKET LIMITED

BY

ABDIKADIR GUDLE

A RESEARCH PROJECT SUBMITTED IN PARTIAL FULFILLMENT OF THE

REQUIREMENTS FOR THE AWARD OF DIPLOMA COURSE IN

MANAGEMENT (BUSINESS MANAGEMENT OPTION) OF THE KENYA

INSTITUTE OF MANAGEMENT

APRIL 2012

DECLARATION

Declaration by the student

This research study is my original work and has not been presented to any other

examination body. No part of this research should be reproduced without my consent or

that of The Kenya Institute of management.

Name _____________________Sign ____________________Date_________________

TKA /DBM/01871

Declaration by Supervisor

This research has been submitted for defense with my approval as the Kenya Institute

Of Management Supervisor .

Name _____________________Sign _________________ Date __________________

Lecturer supervising

For and on behalf of the Kenya Institute of Management

Name _____________________Sign ____________________ Date ________________

Branch Manager – Nairobi Branch.

ii

DEDICATION

I dedicate these projects to my religion(Islam),my mother Fatuma Jama and my brother

Salan Gudle not to forget my best friends Mubarak Mohammed and javan mwichigi

who supported me throughout the course. I also dedicate these projects to my supportive

friends who supported me during this process.

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ACKNOWLEDGEMENT

I greatly acknowledge my sincere love and indebted thanks to my supervisor, Mrs. Jane

munga for her guidance and support while writing this project. Without her tireless and

selfish less input, this work could have taken much longer.

Also special acknowledgement goes to Mubarak Mohamed , friend for his moral support

and encouragement while writing this research project. His contributions in availing

relevant information and ready willingness to assist when need arose helped me give

shape to this work.

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ABSTRACT

The lack of knowledge emphasis and intensive investments into the factors that

influenced consumers demand can be a source of more frustrating and wasteful

venture for any entrepreneur involved in the trade of goods and/or services targeted to

a final consumer. This study sought to establish factors that influenced demands of

locally manufactured goods in the leading retail outlets. Factors that were key to this

study were; corporate image, pricing, quality, competition and dealer support. Many

manufacturers of locally made goods had time and again voiced the lack of support on

the locally made goods by the local consumer. The said manufactured have repeatedly

gone to the press through the KAM, to fight foreign goods whose equivalent was

available locally. This was thought to have been a waste of resource due to lack of the

manufacturers of locally made goods to identify the reasons that lead the local

consumer opt for imported goods whose equivalent was available locally.

The researcher collected date relevant to the study, through questionnaires designed using

structured and unstructured questions. The questionnaires were sent to targeted

respondents chosen one of the leading organization in the retail trade , the Al-Fatah

Supermarket Limited. The collected data was analyzed both qualitatively and

quantitatively, for better and clear results of the findings, which represented the views

of the purchasing decisions makers at the said organization from which a

generalization of the outcome was drawn.

The major finding of the research was that; Corporate image , pricing , quality ,

competition and dealers support were indeed factors that influenced consumers

demand of the locally manufactured products. Corporate image, pricing, quality and

dealers support influenced consumers demand to a very great extent. Corporate image ,

pricing quality , competition and dealers support of locally made goods were very

poor and needed an urgent face lift for the manufacturers of locally made goods to

realize increased support from the local consumers /buyers thus realizing increased

returns on every of their shilling spend.

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TABLE OF CONTENTS

Title Page

Declaration-----------------------------------------------------------------------------------ii

Dedication-----------------------------------------------------------------------------------iii

Acknowledgement -------------------------------------------------------------------------iv

Abstract---------------------------------------------------------------------------------------v

Table of contents---------------------------------------------------------------------------vi

List of Tables------------------------------------------------------------------------------viii

List of Tables--------------------------------------------------------------------------------ix

List of acronyms-----------------------------------------------------------------------------x

Operational definition of terms-----------------------------------------------------------xi

CHAPTER ONE

INTRODUCTION TO THE STUDY

1.1 Introduction-------------------------------------------------------------------------1

1.2 Background of the study-----------------------------------------------------------1

1.3 Statement of the problem----------------------------------------------------------4

1.4 Objectives of the study------------------------------------------------------------5

1.5 Research questions-----------------------------------------------------------------5

1.6 Significance of the study----------------------------------------------------------5

1.7 Limitation of the study------------------------------------------------------------7

1.8 Scope of the study ----------------------------------------------------------------7

CHAPTER TWO

LITERATURE REVIEW

2.1 Introduction -----------------------------------------------------------------------8

2.2 Review of theoretical literature ------------------------------------------------8

2.3 Review of Critical literature and Gaps to be filled -----------------------25

2.4 Summary ------------------------------------------------------------------------26

2.5 Conceptual Framework--------------------------------------------------------31

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CHAPTER THREE

RESEARCH DESIGN AND METHODOLOGY

3.1 Introduction-------------------------------------------------------------------------33

3.2 Study Design -----------------------------------------------------------------------33

3.3 Target Population------------------------------------------------------------------33

3.4 Sample Design ---------------------------------------------------------------------34

3.5 Data Collection Procedure/ instruments----------------------------------------35

3.6 Data Analysis Methods-----------------------------------------------------------36

CHAPTER FOUR

DATA ANALYSIS, INTERPRETATION AND PRESENTATION OF FINDINGS

4.1 Introduction-------------------------------------------------------------------------37

4.2 Presentation of Findings (As Per the Research Objectives) ---------------37

4.3 Summary of Data Analysis------------------------------------------------------52

CHAPTER FIVE

SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

5.1 Introduction-----------------------------------------------------------------------54

5.2 Summary of Findings -----------------------------------------------------------54

5.3 Conclusions -----------------------------------------------------------------------56

5.4 Recommendations ---------------------------------------------------------------57

5.5 Suggestions for Further Research----------------------------------------------58

REFERENCES

APPENDICES

Appendix I Kim Letter

Appendix II Questionnaire

vii

LIST OF TABLES

Table 3.1 Target Population ----------------------------------------------------------------------40

Table 3.2 Sample Design -------------------------------------------------------------------------41

Table: 4.1 Response Rate -------------------------------------------------------------------------37

Table 4.2 Age distribution ------------------------------------------------------------------------38

Table 4.3: Gender distribution -------------------------------------------------------------------39

Table 4.4: Educational level ---------------------------------------------------------------------40

Table 4.5 Duration in the role of purchasing in Al-Fatah supermarket -------------------41

Table 4.6 Image of the Locally Manufactured Goods ---------------------------------------42

Table 4.7 Influence of Image to Consumer Demand-----------------------------------------43

Table 4.8: Rate of pricing of locally manufactured goods.---------------------------------44

Table 4.9: Influence of Price Demand of Locally Manufactured Goods----------------45

Table 4.10 Effect of Demand on Locally Manufactured Goods---------------------------46

Table 4.11: Extent to which quality influenced consumers demand-----------------------47

Table 4.12:Rate of Competition of locally manufactured goods----------------------------48

Table 4.13: Effects of Competition of Locally Manufactured Goods---------------------49

Table 4.14: Dealers support of locally manufactured goods.---------------------------------50

Table 4.15: Effects of Dealers Support on Locally Manufactured Goods ------------------51

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LIST OF FIGURES

Figure 1.1 Al-Fatah Supermarket Organization Structure-----------------------------------3

Figure 2.6: The Conceptual Framework--------------------------------------------------------31

Figure 3.1 Target Population --------------------------------------------------------------------34

Figure 3.2 Sample Design -----------------------------------------------------------------------35

Figure: 4.1 Response Rate -----------------------------------------------------------------------38

Figure 4.2 Age distribution ----------------------------------------------------------------------39

Figure 4.3: Gender distribution -----------------------------------------------------------------40

Figure 4.4: Educational level -------------------------------------------------------------------41

Figure 4.5 Duration in the role of purchasing in Al-Fatah supermarket ----------------42

Figure 4.6 Image of the Locally Manufactured Goods ------------------------------------43

Figure 4.7 Influence of Image to Consumer Demand---------------------------------------44

Figure 4.8: Rate of pricing of locally manufactured goods.-------------------------------45

Figure 4.9: Influence of Price Demand of Locally Manufactured Goods--------------46

Figure 4.10 Effect of Demand on Locally Manufactured Goods------------------------47

Figure 4.11: Extent to which quality influenced consumers demand-------------------48

Figure 4.12:Rate of Competition of locally manufactured goods-----------------------49

Figure 4.13: Effects of Competition of Locally Manufactured Goods----------------50

Figure 4.14: Dealers support of locally manufactured goods.-----------------------------51

Figure 4.15: Effects of Dealers Support on Locally Manufactured Goods ------------52

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ABBREVIATIONS

KAM Kenya Association of Manufacturers

VAT Value Added Tax

KBL Kenya Breweries Limited

EABL East Africa Breweries Limited

TV Television

B.MGR Branch Manager

RONGAI A Location/Street In Nakuru And Al-Fatah Branch Named After The

Location/Street In Nakuru Town.

MFG Mfangano A Street in Nairobi City and Al-Fatah after the Location.

HKT Hakati. A Location in Nairobi City and Al-Fatah after the Location.

PRN Pioneer. A Building In Nairobi City And Al-Fatah Branch Named After The

Building.

NKR Nakuru .A Town in Kenya and Al-Fatah Branch Located in Town.

NRB Nairobi. The Capital City Of Kenya And Al-Fatah Branch Located In The City.

GSA Garissa Town In Kenya And Al-Fatah Branch Located In The Town.

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OPERATIONAL DEFINITION OF TERMS

Competition An event or contest in which people compete

Dealer support Specialist who matches needs of different market and

facilitates dealing between

Demand An economic principle that describes a consumers desire

and willingness to pay a price of specific goods and

services.

Quality improvement Is a formal approach to the analysis of performance and

systematic effort to improve it.

Perception The act or faculty of apprehending by means of the senses

of the mind

Personality It’s made up the characteristics patterns of thoughts,

feelings and behaviors that make a person unique.

Occupation An activity that serves as ones regular source of livelihood.

xi

CHAPTER ONE

INTRODUCTION OF THE STUDY

1.0 Introduction

The introductory chapter covers the foundation information of the study with the details

of the background information, statement of the problem, objectives of the study,

research questions, and limitations of the study and significance of the study.

1.1 Background of the Study

Over the years, the Kenyan manufacturers have continually expressed the lack of support

from the local consumers on locally produced goods. Partly this has resulted in the

formation of an association of local manufacturers, the Kenya association of

manufacturers (KAM) , to counter the declining demand of the local products by the local

consumer/buyer.There also has been a “very peculiar” and even up to this date, an

unexplained appetite for alien products by local consumers more than the locally

manufactured goods. Daily nation (February 17th, (2009), intimate the local consumer

behavior much more clearly. An enduring puzzle has been the almost morbid craze of

Kenyan The local manufacturer, big, medium and small has consistently, time and again

found her in a turbulent world, an uncertain world, a competitive market environment

that has threatened her survival.

For the last over two decades now, the local manufacturer has risen above the lines of the

press through KAM, in a fierce fight over importation and selling of foreign products

whose equivalent was available locally. This fight has been occasioned by the continual

decline in the demand thus sales volumes and hence sales revenue of manufacturing

entities that were thought to perform well in the early years of monopolies, government

controls and protectionism.

The Kenyan market is a liberalized market economy, where anyone and any entity is free

to trade in any global product, fit for sale and /or consumption, provided all the rules ,law

and procedures of trade on such products are followed to the letter. Consequently, the

buyer/consumer is free to buy the product of his/her choice on offer from any offerer.

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This kind of economy may prove very competitive to market players / manufacturers in

such an economy. It has been of evidence that retails outlets locally stock for sale

products, which do not originate from the local production lines and whose equivalent

was available locally. Some of the products on the local retails shelves have been found

to originate from far across the country’s boundary and find their way into the country

through the country’s main entry point. Demands can be defined as the desire for a

product or service backed by the ability and willingness to pay a price-equivalent for the

products and services.

Demand is as old as human desire, need or want. The level of demand for a product or

service depends on several factors such as price for the goods, the size of population,

price of other goods, income of the consumer, the taste and preference of consumer, as

well as the volume and effectiveness of the advertisement among other factors. The word

local, with reference to this study was used to mean, “Made in Kenya”. Made in Kenya

consequently was used to mean all those goods whose ideas and consequent

manufacture/productions were conceived locally. The background or origin of locally

manufactured goods is as old as local trade and thus, dates back to the history of the

country of Kenya.

1.2.1 Company Profile

Al-Fatah Supermarket limited, being among the one of the leading chains of retail

supermarket in Kenya, Opened its doors in the retail trade over 28 years ago(1983) in

Nakuru municipality as a single retail shop. Over the years, through accumulation of

resources, investing and reinvesting in expansion programs, the firm has managed to

grow from a single retail shop to a chain of retail out lets to this date. The firm has 2

retail outlets in Garissa municipality, 6 outlets in Nairobi City and 1 retail outlet in

Eldoret town council Al-Fatah supermarket limited had a total workforce of 1500

employees in the nine branches and the Al-Fatah headquarters/central stores and at

different levels within its organization structures, Al-Fatah headquarters are located in

Nairobi, along Homebody road, off Enterprise road, Industrial Area. The goal of Al-Fatah

Supermarket was to be a “your friendly supermarket.”

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Chairman

Director Operation

Director Assets Director Administration

Director Purchasing

Administration manager

General Manager

B.MgrRongaiNKR

Account manager

B.MgrMajicNKR

B.MgrHKTGrs

B.MgrELDEld

B.MgrMFGNrb

B.Mgr\OTC(Nrb)

B.MgrPRNNrb

B.MgrGSA(GSA)

Apart from choosing to be a friendly supermarket, the firm is and endeavors to be an

“Everyday Low on Price” Supermarket. This has been and will continue to achieved

through the firms endeavor to be a socially responsible organization, both to its

employees, customers and the general society at large. It has been evidence that most of

the leading retails outlets in Kenya stocked for sale, foreign products whose equivalent

was available locally. Al-Fatah mattress supermarket stocked for sale, foodstuffs and

other items, which originates from foreign countries and whose equivalent was available

locally.

Fig 1.1 Organization Structure of Al-Fatah Supermarket

Source; Al-Fatah Supermarket (2012)

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1.3 Statement of the Problem

It has been observed that more and more local manufacturers were not enjoying the

support they used to from the local buyers. This could be traced back beyond the

inception of the Kenya Association of manufactures (KAM) in 1958, according to the

Kenya Times (December 7th, 1988, “History of Kenya Association of manufacturers).

According to the daily, one of the reasons to the formation of KAM was to counter the

threat posed by locally manufactured goods.

Some campaigns that have featured in some local dailies spoke volumes on the above

problems. Though the decline in consumer demand of the locally manufactured product

could have been affected by imports whose equivalents were available locally, the factors

that affected consumer demand of a good were varied. An organization’s image could

affect the consumer demands for a good. The extent to which organizations’ image was

favorable or unfavorable, could affect or influence to a bigger extent, the consumer

preference for a product or services from a manufacturers whose image was as such.

The price at which a manufacturer attaches to her offer could also determine how much

of her products or services were eventually bought at a given time period. How well a

good Mets the need and wants of a consumer, would determine whether the consumer

repeat-purchase the same good or not Manufacturers ought to always try and match their

product quality with ever-changing needs and wants of consumers.

An organization’s offer may face competition directly fro other offerer of the same

quality or a closer quality to that offer. As well, an offer may face competition from

unrelated offers, competing for the same consumer income. Retailers and consumers as

well, if not induced to buy a certain good, would only buy what was convenient to them

as well as only those product which were made available to them for acquisition. It was

appropriate for marketers to go extra mile to ensure that not only were her goods made

available or convenient to the buyers, but also to help the buyers in making decisions to

buy the same goods. Dealers support could influence how much of a producers goods

were bought at a given time prior. This study seeks to find out factors influencing

consumers’ demands of locally manufactured goods in retail outlets.

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1.4 Objectives of The Study

14.1 General Objective

The general objective of this study was to investigate the factors that influence

consumers’ demands of locally manufactured products within Al-Fatah Supermarkets.

1.4.2 Specific objectives

i. To find out the effect of corporate image on consumer demand in the retail industry in

Kenya.

ii. To establish the effect pricing on consumer demand in the retail industry in Kenya.

iii.To determine effects of product quality on consumer demand in the retail industry in

Kenya.

iv.To determine effects of competition on consumer demand in the retail industry in

Kenya.

v. To find out effects of dealer support on consumer demand in the retail industry in

Kenya.

1.5 Research Questions

The study sought information to address the following questions.

How corporate image does affects the demand in the retail industry in Kenya.

i. To what extent does the price at which products were pegged, affects demand in

the retail industry in Kenya?

ii. How product quality does affects demand in the retail industry in Kenya?

iii. To what extent does competition affect demand in the retail industry in Kenya?

iv. How does dealer support affects in the retail industry in Kenya?

1.6 Significance of the Study

This study aimed at identifying some of the major factors that influenced the demand and

sale of locally manufactured goods/ products. The study also sought knowledge on the

extent that these factors to be indentified above influence the demand and sale of locally

manufactured goods. This study was of benefit to;

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1.6.1 The local Manufacturers.

This study provided possible solutions to the reasons for decline in demand and sale of

locally manufactured goods. The local manufacturer had spent a lot of resources through

KAM to fight imported products whose equivalent was available locally This study

would be of importance to the local manufacturer as it aimed at providing an insight into

the problematic and potential problematic areas where resources could be economically

and necessarily utilized.

1.6.2 The managers of the day

The study was to act as an eye opener to some of the major areas where the local

manufacturers has failed along the course of her operations and such help the same

manager of the day improve the current situation.

1.6.3 KAM

An association of the local manufacturers, KAM was a beneficially of the final report of

this study, as the report could be used by the association to guide its members on the way

forward from the current problems.

1.6.4 Top Management of Al-Fatah supermarket

This was of benefit to the top management of Al-Fatah supermarket in that the

management of the said organization would be enlightened on the role it played in the

success of the local economy.

1.6.5 Employees of Al-Fatah Supermarket

The employees of supermarket were able to learn through this study that they too had a

stake to the success of the local economy.

1.6.6 The Government

The study was a source of informed knowledge to the government on the effects imports

whose equivalent was available locally has on the local economy .the study might also

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act as an influence to the government to provide the local manufacturers with the relevant

incentives to be more competitive both in the local as well as the global market.

1.6.7 Other Research in this area

So much had not been done and remains to be done in this area. This study provided

leads along which such relevant studies could be carried.

1.7 Limitations Of The Study

The quality of excepted results to this study in terms of its reliability and validity might

be compromised by:

1.7.1 Cooperation

The inadequacy of the repaired data as there was guarantee that will anticipate target

population and thus the sample from the population chosen, would respond adequately

towards the study as there might be correspondent’s lack of corporation in providing

valid and reliable data.

1.8 Scope Of the Study

Al-Fatah supermarket is located in Garissa District. Quite a lot could be done to increase

the accuracy of the report at the end of this study, however due to the above limitation; it

was only possible to delimit this study only to Al-Fatah supermarkets Limited. The

assumption here was that the outcome of the research process to be carried out at the said

retail outlet applied uniformity and universally to all retail outlets across the board in

Kenya.

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CHAPTER TWO

LITERATURE REVIEW

2.1 Introduction

This research study was triggered by a series of campaigns, which appeared on some

local dairies initiated by the local manufacturers, through KAM, against imported

products whose equivalent was available locally. Reference was made on some of the

dailies in furtherance to this study. Past research related to this study was also cited to put

in some more weight behind the reason to the carrying out of this study.

Related information and resourceful citation will also be visited and reviewed which

helped in the realization of the study. Review of the related literature was avoid the

duplication of previous studies, help the researcher to familiarize himself with the area of

the study, provide support for major issues in the study, describe what was done to other

people in related area, identify gaps in the existing knowledge with regards to this study,

and also to help point or suggest other viable areas worth researching on, in relation to

this study.

2.2 Theoretical Review

According to Grants (2000) demand was not the same thing as desire or need or want.

Grant says that the strength of desire for something not in itself, have any influence on

the price of the item. Only when the desire was supported by the ability and willingness

to pay the price, did it become effective demand and hence an influence on the market.

Effective demands in economies may be defined as the quality of a commodity, which

would be demanded at any given price over some period of time.

Grants (2000) brought out two types of demand; individual demand and market demand.

Individual demand was the relationship between quality demanded of a service by a

single individual and the price of that good and service. Market demand was the total

demand for good or services i.e. the total quantity demanded by each individual buyer at

each price.

8

On the other hand, Harvey (1998) defined demand from an economy point, as the desire

for something plus the willingness and the ability to pay a certain price in order to

possess it. Harvey says that demand was how much of a good people in the market

bought at a given price over a certain period of time.

Mullearn and Vane (1999) viewed demand from the consumer point with a question, “

for a particular good or service” which factors influence the precise quality demanded by

a consumer over a given time period” Price came out as the obvious factor , assuming all

other influenced upon demand remained unchanged (ceteris paribus assumptions). Thus

the higher the price the lower the demand and vice-versa.

Harvey (1998) included the price and the conditions of demand (the determinants of

demand other than price, a change or shortage, government policy, change in real

income, greater equality in the distribution of wealth and a change in the size and the

composition of the population).

According to Mullearn and Vane (1999), other factors other than price, that influences

consumer demand for goods or services were, consumer income, price of other goods and

services and preferences or tastes of consumers.

Saleemi (1987) defined supply as a commodity, which was offered for the sale at any

specific price. Supply was always related to price; Factors of change in supply, Rise or

fall in supply occurred due to the change in the following factors; costs of products,

climatic situations, improvement in the method of production, peace and security, policy

of the government, rate and taxes . At the same time the local manufacturer was

initiating a new policy to encourage the local consumer to buy locally made products.

The theme for the campaign was, “what Kenya makes” and was meant to underline the

fact that whenever the local consumer bought locally manufactured products they helped

build Kenya. While it was true that the government of the day had a role to play in the

success of any organization, it was also, and by large, the sole responsibility of a

marketer to keep and above all, to develop her market and market share.

Solomon, (2002) notes that the formulation of a policy to encourage local consumer

“Made in Kenya” was in itself a defect in thinking and practice. Instead, a policy to

9

encourage local manufacturers to produce what could be acceptable to the local as well as

the global consumer could have been viable initiative. Some local consumers were not

local per se, thus when producing “ locally “ for the local market, manufacturers ought to

have in mind that there may be local consumers who may have been exposed to more

superior products in some other parts of the globe, which satisfied the same needs as the

“locally manufactured”, but with more user added advantage. This called for policies that

sought to ensure that, what was produced locally matched or even exceeded what was

produced globally.

Ellison, (2009) states that the formulation off policies that sought to encourage

consumers to consume product for the sake of a “Common benefit” (to build Kenya), in

this era of globalization and customization was a primitive venture in marketing. Letting

the consumer dictate what she wanted and delivering it to her was the current concept in

marketing.

William, (2005) argues that it is of common knowledge today that the world has been

reduced into global village. In itself, this meant that people were trashing countries just

like any other village. The access of information had also been made easier due to

improvement and advancement in infrastructure; physical, technological and otherwise.

This had not only made it easier for people to move from one corner of the world to

another, but also it enabled people to access information just at the touch of a button.

Thus no matter what policies the government managed to put in place, to protect any

industry from its competitors, the final consumer would eventually access some of that

information/material which would eventually raise her level of knowledge. Once

consumers got the knowledge that their current needs could be met more satisfactorily for

example through the acquisition and use of alternatives products or services, than the

current state at which their needs were being met, this in itself was enough to trigger a

chain of reaction from the consumer’s sides which would only come to a stop only when

that better alternative had been acquired.

Quail (1999) states that as customers, the local business community and the government

could be induced to buying only what had been made locally. as earlier seen, government

could be relied upon by the local producer, for protection from imports, thus help the

10

local producer achieve her objectives, but even so, the critical questions would be; “Had

the local manufacturer done enough to ensure that the local consumer got value for every

coin spend?, or, “: Had the local consumer realized the perceived benefits from the local

products?

Nduati, (Daily nation, February 15th, 2006) Brought out the seriousness of the threat

posed by imports on the local product, A three-year campaign by the local manufacturer

titled “Buy made in Kenya and keep Kenya working” was aimed at policy makers and

consumers, sensitizing them on the negative effects imports had on the local economy.

The success of any manufacturer was at the helm of the final consumer of her products.

To what extent a product met consumers need; largely dictate the consumer’s post

purchase behavior towards the product in question. thus no matter the amount spend in

any campaign aimed at inducing the local customer/consumer to buy locally made goods,

the gap between the expected and the actual performance of a product would determine

the viability of such campaign.

Philip, (1997) observes that at the fiercest was a war between locally manufactured goods

and imported commodities. One of the causes of the battle was the liberalization of

import policies. The fight by the local firms was more sophisticated than most of the

other campaign on the same (against imports) which were said to has started back along

time. The objectives to convince local consumers to buy locally produced gods which

were said to belong to the endangered species was to be achieved only if the immense

local appetite for alien products was curbed and consumers induced to prefer home

grown products instead. There was general attitude by the local consumer that, foreign

products, though at times more expensive than the local other, were of higher quality.

The reality though was that the quality aspect of the foreign product in comparison to the

locally made product was debatable. Insufficient local demand for locally made products

was cited as one of the reasons for under-utilization of the industries, which were said to

be operating at between 60% and 70% capacity.

William, (2005) notes that consumer attitude towards products had been brought to our

attention. Indeed one of the basic factors to consumer attitude towards a product.

Consumer attitude towards a product was determined by several factors. A major factor

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was the image that consumer held in the offered of the product. This might be the

producer of the product or the seller of the same product. a manufacturer should always

make sure that the corporate image and the image created by the product, as well as the

image of the channels handling the product remained favorable as this ultimately

influenced on the attitude of the consumer towards the product and hence the final

destiny of the organization at large.

According to Opala (Daily nation, October 16th, 1994), Kenyan manufacturers

complained that foreign goods were being dumped locally due to inadequate tariff

protection, which exposed local industries to unfair competition.Lack of protection as

well as duties on raw materials, and finished goods were cited as factors that render

locally made products expensive and uncompetitive. Here the government was criticized,

especially due to poor liberalization arrangement and relaxing exchange controls, which

resulted in unfair competition and dumping. Inconsistent investment policies, which were

usually implemented in stop-gap fashion and at times reversed before taking effect, will

also be cited as additional reasons to poor performance of local products in the local

market.

2.2.1 Corporate Image

According to Jerkins and Yadin (2004), there are several kinds of images; this was the

image that the people in the organization, especially its leaders, believed to be impression

outsiders had of the organization. This could be an illusion bred on wishful thinking

because knowledge and understanding of the outside opinion was lacking. It was a

common situation based on “Everybody loves us” fantasies.

Robinson (1999) argues that the image held by people outside the organization, and it

might be based on experience or poor information and understanding. Current image

depends on how little or how much people knew and in a busy world their organization.

This was the desired image, the one management wished to achieve. It was however not

so much favorable or proffered image as a true one. Wish image applied to something

new when outsiders were as yet uninformed. Here we have the image of the organization

12

itself rather than of the product or services. Corporate image might be made of many

things such as the company history, financial success and stability, quality of production,

export success, industrial relations and reputation as an employer, social responsibility

and research record. A number of individuals, branches or other representation can each

create a particular image, which did not conform to a uniform image for the total

organization. There could be many images as there are, say sales staffs.

2.2.2 Price

According to Kotler and Armstrong (1996), price could be defined as the amount charged

for a product or service or the sum of value that consumers exchanged for the benefit of

having or using the product. Historically, price has been the major factor affecting buyer

choice. In recent decades however, non-pricing factors have become more important in

buyer-choice behavior.

Lundgren, (1996) notes that consumer perception of price and value, Consumer would

decide whether a product price was right. When setting price, companies ought to

consider consumer perception of price as well as how these perception affected

consumers buying decisions. Pricing decisions like other marketing mix decisions ought

to be consumer oriented. Consumers will exchange value (price) to get value (the benefit

of having or using the product). Effective buyer-oriented pricing involved understanding

how much value consumers placed on the benefit they received from the product and

setting prices that was fit for that value. Market demand- where costs did set the lower

limit of price, the market and demand did set the upper limit. Both consumer and the

industrial buyers balanced the price of a product against the benefit of owning it. Thus

before setting the price, marketers ought to understand the relationship between price and

demand for their product.

Lind, (2003) states that competitors’ cost, price and offers, Competitors’ costs, prices and

possible competitors’ reaction to the company’s own price moves also affected the

company’s price and value against the price and value of a comparable product made by

other competitors. In addition the company followed a high price, high-margin strategy, it

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might attract competition. A low –price, low margin strategy, however might stop

competitors or even drive them out of the market. Company needed also to benchmark its

costs against its competitor’s costs to learn whether it was operating at a cost advantage

or disadvantage. It also needs to learn the price and quality of each competitor’s offer.

Leslie, (2007) notes that once a company was aware of competitors’ price and offers, it

could use them as a starting point for its own pricing. If a company’s product was similar

to that of that of the competitor, then prices ought to be set close to that of the

competitors and vise versa. Basically a company should use price to position its offer

relative to that of the competition.

Lynch, (2000) observes that when setting prices, a company ought to also consider other

factors in external environment such as; Economic conditions. These have strong impact

on the firms pricing strategies. Economic factors e.g. Boom, recession, inflation and

interest rates affected pricing decision because they affected both the cost of producing

the product and consumer perception of the products’ price and value, Resellers. How

would resellers react to various prices? A company ought to set prices that gave resellers

fair profit, encourage their support, and helped them to sell the product effectively, Social

concerns. In setting prices, a company short term sales, market share and profit goals

might have tampered or affected by broader societal considerations, Government. This is

another external factor affecting pricing.

2.2.3 Product Quality

According to Armstrong, (2006) product was anything that could be offered to the market

for attention, acquisition, use or consumption that might satisfy a want or a need.

Products included physical objects, services, persons, places, organization and ideas,

Product quality was the ability of a product to perform its function; it will include product

overall durability, reliability, precision, ease of operation and repair and other valued

attributes. Although some of these attributes could be measured objectively from a

marketing point of view, quality ought to be measured in terms of buyers’ perceptions.

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Juran (1999) notes that , one of the qualities of Gurus, reaching an arrangement on what

was meant by quality is not simple. Juran defined quality as fitness for use. One

leadership for quality, Juran brought out two subsidiary definitions for quality, which

helped reduce the confusion by the word quality; Quality meant product features that

meet customer needs, According to Juran, high quality enabled companies to; increase

customer satisfaction, make product salable, meet competition, increase market share,

provide sales income and secure premium prices. According to this definition, the effect

of quality was on sales. Quality means freedom from deficiencies. Juran said that higher

quality enabled companies to; reduce error, reduce rework and wastes, reduce field

failure and warranties, reduce inspection and test performance. According to this

definition, major effect of quality was on costs.

Juran (1999) defined product as the output of any process. Product consisted mainly of

goods, “software” and service. Product features was a property possessed by a product

and what was intended to meet certain customer’s needs and thereby provide

satisfaction. A customer was anyone who received or was affected by a product or

process. Customer might be internal to the Organization or external to the organization.

Alphert, (1999) states that product satisfaction and customer satisfaction; Product

satisfaction was a result achieved when a product features responded to customers need.

It was synonymous with customer satisfaction. Product satisfaction was stimulus to

product salability. The major impact was on income, Products deficiencies were a

product failure that resulted in product dissatisfaction. Product deficiencies took such

forms as power outrages, failure to meet delivery dates, inoperable goods, blemished

appearance and nonconformance to satisfaction.

According to Ajzenicet (2005), Product satisfaction and product dissatisfaction were not

opposite, Product satisfaction had its origin in product features and was why clients buy

the product. Product dissatisfaction had its origin in nonconformance and was why

customers complain. There were many products that gave little or no dissatisfaction; the

product did what the supplier said they would do. Yet the products were not salable

because some competing product provided greater product satisfaction.

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According to Juran, (1999), managing for quality was done by use of three managerial

process of planning control and improvement, Quality planning; this was creativity of

developing the product and processes required to meet customers needs. It involves to

Determine who the customers, the need of the customers, develop features that responded

to the customer needs ,develop processes that were able to produce those product

features, transfer the resulting plans to operating forces, quality control; This process

consists of the following steps, Evaluate actual quality performance, Compare actual

performance to quality goals.

Ailawadi (2001) states that quality improvements: This process was the means of raising

quality performance to unprecedented levels (“breakthrough”). The methodology

consisted of a series of universal steps which include; establish the infrastructures needed

to secure annual quality improvement, Identify the specific needs for improvement-the

improvement project, For each project establish a project team with a clear responsibility

for bringing the project to a successful conclusion, Provide the resources, motivation and

training needed by the team; dialogue the cause, stimulate establishment of a remedy,

establish controls to hold the gains.

Garvin (1988) Pointed out five approaches to defining quality; the transcendent; product

based; user based; manufacturing base and value-based, Transcendent., “Quality was

neither mind nor matter; it was a conduction of excellence implying fine quality as

distinct from poor quality. Quality, Quality was achieving or reaching for highest

standards as against being satisfied with sloppy and fraudulent” Product based,

“Difference in quality amounted to difference in the qualities of some desired ingredients

or attributes” User-based,”Quality consisted of the capacity to satisfy wants” – “the

quality of a product depended on how well it fitted the pattern of consumer preference” –

“Quality was fitness for use”. Manufacturer –based. “Quality meant conformance to

requirement” – “quality was the degree to which a specific product conformed to a design

or specification. Value added. “Quality was the degree of excellence at an acceptable

price and controls of variability at an acceptable cost” – “quality means the best for

certain conditions. These conditions were; (a) The actual use and (b) The selling price of

the product”

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Garvin (1988), pointed out eight dimensions or categories of quality (product quality)

that had been identified; performance, features, reliability, conformance, durability,

serviceability, aesthetic and perceived quality. These dimensions allowed for multiple

strategies in the approach to quality management.

According to Garvin (1988), for quality to be more than a passing interest to managers, it

ought to have a demonstrable impact on the bottom line. It ought to be closely associated

to such key measures of business performance as price, advertising, productivity, cost,

market share and profitability.

2.2.4 Competition

According to Bearden, (2006), competition will led to poor performance or decrease in

demand of locally made products in the local market. The increase in competition was

attributed to dumping, inadequate tariff protection, duties on raw-materials and finished

goods, poor liberalization arrangements and exchange controls, as well as inconsistent

investing policies. Though increase in competition led to a decrease in demand of certain

products, the unwillingness and the inability of organization to proactively respond to

competition, pushed organizations to the edge and eventually saw their exit from the

market. Organizations in the world ought to have started bracing themselves to

competition for this was ultimately inevitable at one point in organizations’ life.

Otieno (Daily nation April 15th 2011) The collapse of some local industries, textile

industries being an example, could not solely be blamed on liberalization of local

economy, but also due to the illegal imports and dumping of subsidized and substandard

foreign goods in the local market. textile fabrics and ready-made garments brought into

the local market without payment of import duties, value added tax(VAT) and other

government taxes comprised the level playing field for the local textile and garment

industry in Kenya. Other factors apart from liberalization was cited as reasons for the

collapse of the local industries, illegal imports and dumping of subsidized and

substandard foreign goods. A research carried out by KAM found a decline in the number

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of local industries. This was associated with unbalanced competition caused by

liberalization .Less costly imports had taken up the local markets share.

Becket (2000) notes that, while it agreeable that unfair and unbalanced competition could

see the exit of an organization from the market, there are existed strategies to a proactive

organizations, which could be used to counter unfair and unbalanced competition among

other threats that organizations faced in the market place. A company that had a will to

keep its market and market share as well as developing the same, would go at any length

to keep its market and market share. The decline in the number of local industries

therefore could be attributed to the failure of the affected industries, to formulate as well

as employ winning strategies aimed at countering their external threats and being smart in

their operation as well.

According to daily nation reporter (daily nation may 14th 2002) the local manufacturer

had continuously sought to have all imports whose equivalent was available locally

Banned to protect the local industry. The local manufacturer wanted a five –year ban on

importation of textile products to revive the local industry. The local textile industry, the

reasons cited for death of the textile industry were the dumping of textile products and

high electricity tariffs. he brought to our attention that, not only had some of the local

textile industries closed down, but also that some others had relocated to other countries,

It was possible for the organizations in a situation like the local manufacturers to reclaim

their lost market share. Some cases of general knowledge and observation could be cited

that, Taking the case of the beer industry as an example ,Kenya breweries limited (KLB)

was under intense threat of losing a big chuck of its local market share to some local and

foreign products and organizations ,however ,through intensive marketing ,where price

reviews were done to reflect the current economic and competitive conditions ,a review

of product quality and distribution system intensive promotions ,use of state of the art

technology in its production lines, restricting to cut down on its total production

/operational costs ,and consequently changing its name (“image”)to east Africa breweries

limited.(EABL) to reflect a regional organization among other strategies, the said

organization managed to shake off some of its major competitors to reclaim part of its

lost market share.

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Another case should be that of shoes industry. Bata Shoes Company some years back was

on the verge of collapsing due to intense competition from the second hand shoes

imports. Bata Shoe Company however managed to reclaim back part of its lost market

share primarily through quality improvement; price cuts as well as increased promotion

among others. Given that the same situations (dumping and electricity tariffs among

others) were being faced by the organizations in the above cases( a &b), the question

would be ;while some organization have managed to fight off competition from imports,

where have the other organizations gone wrong in their management and operations?

2.2.5 Dealers Support

According to Bernstein, (2009) , today, understanding customers was not enough. Under

the marketing concept, companies gained competitive advantage by designing offers that

satisfied target consumers needs better than competitors offers. Organization delivered

more customers value by offering to customer’s lower prices for similar products and

services or by proving more benefits that justified higher prices. Thus marketing

strategies ought to consider not only the need of the target consumers, but also strategies

of competitors. The first steps was competitor’s analysis, the process of identifying and

assessing key competitors. The second stage was to develop competitive marketing

strategies that strongly positioned the companies against the competitors and give it

greatest possible competitive advantages.

Bailey (1999) states that to plan effective competitive marketing strategies, a company

needed to find out all it can about its competitors. It ought to constantly compare its

product, prices, channels and promotions with those of close competitors, to find out

areas of competitive advantages and disadvantage. And it could launch a more effective

marketing campaign against its competitors and prepare strong defenses against

competitor’s actions. Companies needed to know, their competitors, competitors

objectives, competitors strategies, competitors strength and weakness, competitors

reaction patterns. The competitor, a company could define competitors as companies

offering similar products or services to the same customers at similar prices. Broadly, a

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company might define competitors as all firms making the same product or class of

products. More broadly, competitors might include all companies making products that

supply the same service. Still more broadly, competitors might include all companies that

compete for the same customer shilling.

Boyd et.al (1990) argues that companies ought to avoid;”competitor myopia” A

company was more likely to be “buried” by their latent competitors than its current ones.

For example a film-making company might work about the growing competition from

film makers, but in actual sense if faced much greater threat from companies that had

advanced in the “film camera” technology where the cameras took video still pictures

that could be shown on a TV set, turned into hard copy and later erased. What a greater

threat was there to a film business than a filmless camera? Companies could identify

competitors from industry point of view or market point of view.

Bailey (1999) notes that the questions to marketers could be, “what did each competitor

seek in the market place?” or ““what drove each competitor’s behavior?” some

companies might be oriented towards “satisfying” rather than “maximizing” profits.

They have target profit, goal and were satisfied in achieving them, even if more profit

could have been produced by other strategies. Marketers ought to look beyond

competitors’ profit goals into competitor’s mix of objectives with different importance.

Indentifying competitors strategies- the more the ones firm’s strategies resembled

another firms strategy, the more the two companies competed. Companies need to look

at all the dimension those strategic groups (groups in a firm in an industry following the

same or similar strategy within the industry. They need to know each competitors

products quality. Features and mix, customers’ services, pricing policy, distribution

coverage: sales force strategies, and advertising and sales promotion programs. They

must study the details of each competitor’s research and development, manufacturing,

purchasing, financial and other strategies.

Braikie , (2003) states that assessing competitor’s strengths and weaknesses .marketers

need to carefully asses each competitor’s strength and weaknesses, in order to answer

critical questions such as “what can our competitors do? Companies ought to gather data

on each competitor’s goals, strategies and performance over the last few years. This will

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help among other things. Benchmarking, in other industries to find ways to improve

quality and performance. Benchmarking has become an important tool for increasing a

company’s competiveness.

Armstrong, (2006) notes that estimating competitors reactions, companies would want to

know what their competitors would do. Competitors’ objectives, strategies, strengths

and weaknesses go along way explaining their likely actions .as well as likely reactions

on company’s move such as price cuts, promotion increase or new product introduction.

Marketing managers need to deeply understand a given competitors mentally if they

wanted to anticipate how the competitor would act or react. After identifying and

evaluating major competitors, a company should design broad competition strategies

that best positioned its offer against competitors’ offers and give the company the

strongest possible competitive advantage. No one strategy was best for all companies,

thus each ought to determine which made the most sense given their position in the

industry and its objectives opportunities and resources.

According to Porter (2008), competition was at the core of success or failure of firms.

Competition determined the appropriateness of a firm’s activities that could contribute to

its performance, such as innovations, or cohesion culture or good implementation.

Comprehensive strategy was the search for a favorable competitive position in an

industry, the fundamental arena in which competition occurred. Competitive strategy

aimed at establishing and sustainable position against to focus that determined industry

competition.

Porter (2008) intimated that first fundamental determinant of a firm’s profitability were

industry attractiveness. Competition strategy should grow out of a sophisticated

understanding of the rules of competition that determined an industry’s attractiveness.

The ultimate aim of competitive strategy was to cope with and, ideally, to change those

rules in the firm’s favors. In any industry, whether domestic or international or produces

a product or services, the rules of competition were embodied in five competitive forces

which are indicated as the entry of a new competition, the threat of substitutes, the

bargaining power of buyers, The Bargaining power of suppliers, t he rivalry among the

existing competitors. The collectiveness strength of the above five competitive forces

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determines the ability of the firm in an industry to earn, on average , rates of return on

investments in excess of capital. The five forces determined industry profitability because

they influenced the prices, cost and required investments of firms in an industry.

Porter (2008) argues that buyer power influenced the prices that firms could change, as

did the threat of substitution. The power of buyers could also influence the cost and

investments, because powerful buyers demand costly services. The bargaining power of

supplies determines the costs of raw materials and other inputs. The intensity of rivalry,

influenced prices as well as the cost of competing in areas such as plant product

development, advertising and sales force. The threat of entry places a limit on prices and

shapes the investments required to deter entrants. Porter suggested some generic

competitive strategies. These included. Overall cost leadership- were companies worked

hard to achieve lowest cost of production and distribution so that they could price lower

than their competitors and win a large market share. Differentiation- were companies

concentrated on creating highly differentiated product line and market programs so that

they could come across as the class leaders in the industry. Focus- were companies

focused their efforts on serving a few segments well rather than going after the whole

market. Operation excellence- Companies provided superior value by leading their

industry in price and convenience. They work to reduce cost, create a lean and efficient

value delivery system. They serve customers who want reliable, good quality

products/services, but who want them cheaply and easily.

Garvin, (2002) notes that, while trying to expend total size, the leading firm also ought to

protect its current business against competitor’s attack. Market leaders should prevent or

fix weakness that provides opportunities for competitors. They need to keep their prices

in line with value the customers saw in their brand. Best defense was a good offense and

the best response was continuously innovation. The leaders refused to be content with the

way things were and led the industry in new products, customer service, distribution

effectiveness and value to customers. The leaders took the offensive, set the pace and

exploit competitor’s weakness. Position defense - This involves the defense of a fortified

position. This tends to be a weak defense because you become a “sitting duck”. It can

lead to a siege situation in which time is on the side of the attacker, that is, as time goes

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by the defender gets weaker, while the attacker gets stronger, Flank position - This

involves the re-deployment of your resources to deter a flanking attack. You protect

against potential loss of market share in a segment, by strengthening your competitive

position in this segment with new products and other tactics.

According to Garvin, (2002) ,Preemptive defense- striking competitors aggressively

before they could move against the company, Mobile defense - This involves constantly

shifting resources and developing new strategies and tactics. A mobile defense is

intended to create a moving target that is hard to successfully attack, while

simultaneously, equipping the defender with a flexible response mechanism should an

attack occur. Counter offensive - This involves countering an attack with an offense of

your own. If you are attacked, retaliate with an attack on the aggressor’s weakest point,

Contraction defense- strategy used by leaders if they found that their resources were

spread too thin and competitors were nibbling away on some fronts.

Jeikiu and yadin(2000) argues that, whether a company was a market leader, challenger,

follower or niche, it ought to watch its competitors closely and find the competitive

strategy that positioned it most effectively. And it ought to continuously adapt its

strategies to the fast-changing competitive environment. Whoever, a company could

spend too much time and energy, tracking competitors, while damaging its customer’s

orientation and customers focus. Dealer (marketing channel) referred to a set of

interdependent organization involved in the process of making a product available for use

or consumption by the consumer or business buyer. The reasons for using marketing

intermediaries were that.

Ajzenicet, (2005) notes that, intermediaries had greater efficiency in making goods

available to the target market. Though their contacts, experience, specialization and

scale of operation, intermediaries usually offered the firm more than it could achieve on

its own, Intermediaries reduced the amount of work that should have been done by both

the producers and consumers, as opposed to the use of direct marketing. Fro economic

system’s point of view, the role of intermediaries was to transform the assortment of

products made by producers into assortment of products wanted by consumers, and In

the distribution channel, intermediaries bought large quantities of many producers and

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broke them down into smaller quantities and broader assortment wanted by consumers.

Thus intermediaries played important role in matching supply and demands. Once a

company had reviewed its channel alternatives and decided on the best channel design, it

ought to implement and manage the chosen channel. Channel management called for the

selection and motivation of individual channel members and evaluation of their

performance over time.

Robinson (1999) notes that once selected, channel members ought to be continuously

motivated to do their best. Companies must not only sell through the intermediary, but to

them. Most producers saw the problem as finding ways to gain Intermediary

Corporation. They used the carrot-and-stick approach. At times, they offered positive

motivators such as high margins, special deals, premiums, cooperation advertising

allowance, display allowances and sale volume. At times, they used negatives

motivators such as threatening to reduce margin, to slow down delivery, or to end the

relationship all together. Most advanced companies try to forge a long-term partnership

with their distributors. This involved building a planned professionally managed,

vertical marketing system that meets the needs of both the manufacturers and the

distributors. E.g. Jointly planning merchandising goals and strategies, inventory, levels

and advertising and promotion plans, as well as helping the channel to be successful in

selling the company’s products.

According to Bennet, (2006), Producers ought to regularly check each channel member

performance against standards, such as sales quotas, average inventory levels, customers’

delivery times, and treatment of damaged and lost goods, cooperation in company

promotion and training programs and service to the customers. The company should

recognize and reward the intermediaries who perform well. Those who perform poor

should be helped. Manufacturers also needed to be sensitive to their dealers and not treat

them lightly, for manufacturers may risk losing dealers support, if they treated their

dealers as such.

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2.3 Critical Review

In his research on the factors that led to low market share of detergent (Omo) within the

manufacturing industry in Kenya, Kinuthia (June 200) found out some factors that effect

market share of the said product; poor government policies, stiff competition, poor

marketing strategies, technology , social-cultural factors, declining purchasing power, age

of consumers, consumer occupation.

Obengele (November 2002) found out several factors that led to poor sales performance

in the performance in the print media as; poor products quality, poor staffs training,

competition, tribal and political interference and liberalization. Some factors sales and

marketing of cigarette at Mastermind Tobacco Kenya Limited as ; stiff competition, high

prices, poor quality, ineffective distribution strategies.

According to Kotler and Armstrong (2006), Consumers made many buying decision

every day. Organization researched consumer buying decision in great detail to answer

questions about what consumers bought, when they bought and why they bought.

Marketer could study customer purchase to find answers to questions about what they

bought, where and how much. The central questions for the marketers was, “how did

customers respond to various marketing efforts that companies used?. The company that

really understood how consumer responded to different products features, prices and

advertising appeals had a greater advantage over its competitors.

Marketing stimuli consists of four p’s; price, place, product and promotion. Other

stimuli include major forces and events in the buyers environment; economic,

technological, political and cultural. All these inputs enter the buyer’s black box, where

the are turned into a set of observable buyer responses; product choice, brand choice,

dealers choice, purchase timing and purchase amount. Marketers want to understand

how stimuli were changed into responses inside the consumer’s black box, which had

two parts. First, the buyer’s characteristic influences how he/she perceived and reacted

to stimuli, second, the buyer decision process itself affect buyers behavior.

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2.4 Summary of Gap to be Filled by the Study

Consumer’s purchases are influenced strongly by cultural, social, personal and

psychological characteristics. For most parts, marketers cannot control such factors, but

they must take them into account.

Culture is the main cause of a person’s want and behavior. Human behaviors is largely

learned growing up in a society, a child learns basic values, perceptions and wants and

behaviors from the family and other important institutions. Every group or society’s

culture and cultural influences in buying behavior varied greatly from country to country.

Failure to adjust to these differences could result in ineffective marketing or embarrassing

mistakes. Marketers were always trying to sport cultural shifts in order to discover new

products they may be wanted, Sub-culture- each institute contained small sub-cultures or

group of people with shared values system based on common life experience and

situations.

Social class- almost every society had some form of a social class structure. Social

classes were society’s relative permanent and ordered divisions whose members shared

similar values, interests and behaviors. Social class was not determined by a single factor,

such as income, but was a measure of a combination of occupation, income, wealth and

other variables; Marketers ought to have interest in social class because people within a

given social class tended to exhibit similar buying behavior.

Consumer’s behavior was also influenced by the social factors such as consumer’s small

groups, family and social roles and status, Group -Many small groups influenced a

person’s behavior. Examples of such groups were membership groups and reference

groups. Manufacturers of a products and brands subjects to strong group influence should

figure out how to reach opinion leaders in relevant groups.

Family- family members could strongly influence buyer behavior. Family was the most

important consumer buying organization in the society. Marketers should be interested in

roles and influences of the husbands, wife and children on the purchase of different

products or services. Role and status- A person belongs to many groups-family, clubs,

organization etc. The person’s position in each group could be defined in terns of both

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role and status. Each status reflected the general esteem given to it by the society. People

often chose products that reflected/showed their status in society.

Buyers decision were also influenced by personal characteristics, such as buyers age, and

life-cycle stage, occupation, economic situations, lifestyle and personality and self –

concept. Age and life cycle stage- People change their goods and services they bought

over their lifetime. Buying was also shaped by the stage of the family life cycle.

Occupation- person’s occupation affected the goods and services bought; Economic

situation- A person’s economic situation affected product choice. Marketers of income

sensitive goods watched trends in personal income, savings and interest rates. If for

example economic indicator as pointed at recession, marketers took steps to design,

reposition and re price their product closely.

Lifestyle; People coming from the same subculture, social class and occupation, may

have different lifestyles. It was a person’s pattern of living as expressed in his/her

psychographics. It involves measuring consumers major AIO dimensions; i.e. activity

(work, shopping, sports, social events), interests, (food, fashion, family, recreation) and

Opinion (about themselves, social issues, business products).

Personality-Personality changes from person to person, time to time and place to place.

Therefore it can greatly influence the buying behavior of customers. Actually, Personality

is not what one wears; rather it is the totality of behavior of a man in different

circumstances. It has different characteristics such as: dominance, aggressiveness, self-

confidence etc which can be useful to determine the consumer behavior for particular

product or service.

A person’s buying choices were further influenced by four major psychological factors;

motivation, perception, learning, beliefs and attitude, People had many needs at a given

time. Some were biological arising from the state of tension such as hunger, thirst or

discomfort. Others were psychological, arising from the needs of recognition, esteem or

belonging. Most of the needs may not be strong enough to motivate the person to act at a

given point in time. A need became a motive once it was aroused to sufficient level of

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intensity. A motive (or drive) was a need that was sufficiently pressing to direct the

person to seek satisfaction.

needs. A person tried to satisfy the most important needs first. Once the need was

satisfied, it stopped being a motivator and the person tried to satisfy the next important

need.

A motivated person was ready to act. How the person acted was influenced by his or her

perception of the situation. Two people with the same motivation and in the same

situation acted quite differently because they perceived the situation differently. The

reason as to why two people perceived the same situation differently was that all of them

learnt by the flow of information through the five senses; sight, hearing, touch, smell and

tastes. However, each person receives, organizes and interprets this sensory information

in an individual way. Perception was a process by which people selected organized and

interpreted information to form meaningful pictures of the world.

People formed different perception of the same stimulus because of three perceptual

process; Selective attention, selective distortion and selective retention. People were

exposed to a great amount of stimuli every day, for example several products or

advertisements each single day. It was impossible for a person to pay attention to all these

stimuli.

Selective attention was the tendency for people to screen pout most of the information to

which they were exposed- which meant that marketers had to work especially hard top

attract the customers attention. Their message got lost on most people who were not in

the market of the product, or even people who were in the market might not notice the

message or the product unless it stood out from the surrounding sea of other products or

messages. even noted stimuli did not always come across in the intended way.

Selective distortion-is a term that refers to the tendency of people to interpret information

in a way that will support what they already believe. For example , consumer may hear

marketers praise their product, but because they had a strong learning towards particular

28

product from particular manufacturer (for example foreign manufacturer) the consumer

may distorted those marketing gimmicks or point on order to conclude that foreign

product were good.

Selective Retention: People forget much of the stimuli which they receive and only retain

that information which reinforces their values and decision. You are more likely to

remember the positive features of brand pressure cooker since they help reassure you that

the decision which you had made was correct. Because of selective exposure, distortion

and retention, marketers have to work hard to get their message through.

Once people act they learn. Learning describes changes in individual’s behaviors arising

from experience. Drives became motives once they were directed towards a particular

stimulus object/product. A response to the idea of buying a product for example was

conditioning by the surroundings cues. Cues were minor stimuli that determined when,

where and how the person responded. Through doing and learning, people acquire beliefs

and attitudes. These in turn influences the buying behaviors. A belief was a descriptive

thought that a person had about something. For example, a person might believe that a

product was of a superior quality and symbolized a certain social status.

These beliefs may have been based on real knowledge, opinion or faith and might not

carry an emotional charge. Marketers ought to be interested in beliefs that people

formulated about specific products and services, because these beliefs made up product

and brands images that affected buying behaviors. Should some of the beliefs be wrong

and prevent purchase, the marketer ought to launch a campaign to correct them.

People have attitude regarding religion, politics, clothes, music, food and almost

everything else. An attitude described a person’s relative consistent evaluations, feeling

and tendencies towards an object or idea. Attitude did put people into a frame of mind of

liking or disliking things or moving towards or away from them. For example, someone

might hold attitude as ; “Japanese make the best products in the world”. Then if the

attitude of those people were, “ buy the best”, then their favorite would be Japanese

products.

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Modern marketing called for more than just developing a good product, pricing it

attractively and making it available to the target customers. Companies ought to also

communicate with their customers, and what they communicated ought not to be left to

chance. Modern companies managed a complex marketing communication system.

Companies communicated with their middlemen, consumer and various publics. In turn,

the middlemen communicated with their consumers and various publics. Consumers had

a word-of-mouth communication with other and with other publics. Meanwhile, each

group provided feedback to each other.

Communication goes beyond the specific promotion tools. The product design, its price,

the shape and color of its packages, and the store that sell it-all communicated something

to the buyer. Thus although the promotion mix was the company’s primary

communication activity, the entire marketing mix, product, price, promotion and place,

should be coordinated for greatest communication impact.

Promotion mix- These were a company’s total marketing communications program that

consisted of the specific blend of advertising , personal selling , sales promotion, personal

selling and public relations tools that the company used to pursue its advertising and

marketing objectives. Though several related studies have been carried out previously,

none of them focused on the major market players (retailers) on this topic.

Retailers held a very important key to the success of a manufacturer, hence the study. this

study was triggered by the increased challenges that were faced by the local

manufacturers, challenges of which had been posed by foreign products who’s equivalent

was available locally . Thus this study hoped to provide some light as to the reason for

the decrease in demand form the locally manufactured products as well as some critical

steps to ease the problem.

30

2.5. CONCEPTUAL FRAMEWORK

The conceptual framework below serves as a simplification to the undertaking of the

relationship between the independent and the dependent variables.

Figure 2.1 The Conceptual framework.

Source; Author (2012)

Interpretation of Variables

2.5.1 Corporate image

Corporate image or reputation describes the manner in which a company, its activities

and its products or services are perceived by outsiders. In a competitive business climate,

many businesses actively work to create and communicate a positive image to their

customers, shareholders, financial community and the general public.

2.5.2 Pricing

According to Bernstern Jerold (2009) Pricing is the process of determining what a

company will receive in exchange for its products. Therefore the fair the price consumer

will create a good perception towards a product hence they will tend to have a behavior

or tendency of going for the product.

31

Corporate Image

Pricing

Competition

Product Quality

Dealer support

Consumer demand

Of locally manufactured products

Dependent VariableIndependent Variable

Influence/Effect

2.5.3 Product Quality

Product quality was the ability of a product to perform its function; it will include

product overall durability, reliability, precision, ease of operation and repair and other

valued attributes. Although some of these attributes could be measured objectively from a

marketing point of view, quality ought to be measured in terms of buyers’ perceptions.

2.5.4 Competition

The competitor, a company could define competitors as companies offering similar

products or services to the same customers at similar prices. Broadly, a company might

define competitors as all firms making the same product or class of products. More

broadly, competitors might include all companies making products that supply the same

service. Still more broadly, competitors might include all companies that compete for the

same customer shilling.

2.5.5 Dealer Support

Organization delivered more customers value by offering to customer’s lower prices for

similar products and services or by proving more benefits that justified higher prices.

Thus marketing strategies ought to consider not only the need of the target consumers,

but also strategies of competitors. The first steps was competitor’s analysis, the process

of identifying and assessing key competitors. The second stage was to develop

competitive marketing strategies that strongly positioned the companies against the

competitors and give it greatest possible competitive advantages.

32

CHAPTER THREE

RESEARCH DESIGN AND METHODOLOGY

3.1 Introduction

This chapter seeks to analyze the research design, target population, sample design, data

collection instruments and procedures, data analysis procedure and validity of research.

3.2 Research design

The design of the study was a descriptive research. Kerlinger (1969) pointed out that

descriptive studies are not only fact-finding but may often result to in the formulation of

the important principles of knowledge and solutions to significant problems. Descriptive

designs were more than just a collection of data since they involve measurements,

classification, analysis and interpretation.

3.3 Target Population

In the course of the field investigations, the target population was obtained from the

various levels, departments and section within Al-Fatah supermarket, where significance

purchasing decisions was undertaken.

There was selected levels ,department and titles along which purchasing decisions were

being carried out in Al-Fatah supermarket .each of those departments ,levels or titles had

a number of subjects responsible for making purchasing decisions .the target population

was only chosen from the titles /characteristics responsible for making significance

purchasing decisions within Al-Fatah supermarkets. In this regard, the targeted

population was obtained from the six branches operated in and within Garissa and the Al

-Fatah head officers located at Garissa area.

33

Table 3.1 Target population

Population characteristics Frequency Percentage

Directors 4 5

Purchasing managers 2 3

Branch managers 9 12

Supervisors 18 23

Section heads 45 58

Totals 78 100

Source: Author (2012)

3.4 Sampling Design

To answer the research question and the direct the research efforts towards achieving the

research objectives, it was possible to go to the census way, due to the restriction of time,

money and access to the population elements. Data from sample rather than the possible

cases was considered, to make generalization about all the cases from which the sample

was selected.

A combination of stratified sampling techniques and probability sampling was used to

obtain a representative sample from the target population. Through the identification and

use of the different strata along the line of purchase decision-making at Al-Fatah

supermarket, desire representative sample from the target population was obtained by

ensuring that the existing subgroups were more of less reproduced in the sample.

Purposive sampling and quota sampling of non probability was used .purposive sampling

was used to obtain only those subjects who are felt to have their required information in

respect to the objective of the study a combination of quota sampling and convenience

sampling was used to obtain the various subgroups or quotas in the target population

based on convenience and accessibility of subjects.

34

Table 3.4.1; Sample design

Population

characteristics

Frequency Sample Percentage

Directors 4 2 5

Purchasing managers 2 2 5

Branch managers 9 6 15

Supervisors 18 12 30

Section heads 45 18 45

Total 78 40 100

Source: Author (2012)

3.5. Data Collection methods and Instruments

3.5.1 Instruments

Self administered questionnaire was used in the research of relevant data to support the

researchers objectives and answer the research questions ,through the questionnaires, the

subjects were asked questions and was given time to fill the questionnaire by their own

and to best of their knowledge. Structured and unstructured questions was used to solicit

for the required data.At the initial stages the researcher walked into Al-Fatah retail

outlets to establish whether the retail chain is stock for retail, imported products whose

equivalent was available at the locally. This was the motivational point to the research

study information was obtained at the initial and successive stages, from, print media as

well as from reliable books To enable the researcher proceed with the study, a letter of

introduction was obtained from Kenya Institute of Management. Questionnaires were

prepared and the management of al-Fatah supermarket approached to allow the

researcher carried out the study in the said institution. Permission was granted and

employees of al-Fatah was approached individually and explanations given to them about

the objectives of the questionnaires. The subject was assured of confidentiality of their

feedback. Other procedures to be used were piloting, revision of the instruments and filed

35

work. The revised questionnaire was distributed to the subjects and later to be retrieved

for analysis.

3.6 Data Analysis methods and procedures.

Data presentation and analysis involved the use of descriptive statistics to summaries data

and describe the sample. This involved the use of tables which enabled the researcher to

have a better interpretation of the subject’s response thereby enabling the researcher to

meet the study objectives and answered the research questions. It was to interpret the data

that was reflected on table.

36

CHAPTER FOUR

DATA ANALYSIS, PRESENTATION AND INTERPRETATION OF FINDINGS

4.1 Introduction

This chapter covers research findings from the case study. Data analysis and information

was collected using questionnaires, interviews and observation. The data has been

presented mainly by tables, graphs and pie charts then analyzed and interpreted under

headings.

4.2 Presentation of Findings

The study targeted a sample of 40 employees in Al-Fatah supermarket limited. However

the response rate in the duration of data collection and retrieval was a total of 30

respondents .in other words 75% of the targeted representative sample completed the

questionnaire and handed back the same to the researcher. 75% response rate was

enough and adequate responses to warrant a reliable Information.

4.2 .1 Response Rate

Table: 4.1 Response Rate

Questionnaires Distributed Frequency Percentage %

Returned 30 75

Not returned 10 25

Total 40 100

Source: Author (2012)

37

Figure: 4.1 Response Rate

75%

25%KeyReturnedNot Returned

Source: Author (2012)

Table 4.1 and figure 4.1 shows that 40 questionnaires were sent to 40 respondents of

which 75% answered and returned the questionnaires to the researcher. The 25% non

respondents were those which were incomplete or inconsistence.

4.2.2 Response According to Age distribution

Table 4.2 Age distribution

Age bracket Frequency Percentages

21-25 years 6 20

26-30Years 10 33

31-35 years 8 27

36-40years 4 13

Over 40 years 2 7

Total 30 100

Source: Author (2012)

38

Figure 4.2 Age distribution

21-25 years 26-30Years 31-35 years 36-40years Over 40 years

0%

5%

10%

15%

20%

25%

30%

35%

21-25 years26-30Years31-35 years36-40yearsOver 40 years

Respodents

Perc

enta

ge

Source: Author (2012)

Table 4.2 and figure 4.2 shows that ,20% of the respondents were between 21-35 years

while majority 33% of the respondents were in the age brackets of 26-30 years .27% were

in the age of 35 years .13% were aged 36-40 years while the rest 7% were aged over 40

years. Therefore the majority of respondents were between the ages of 26-30 Years.

4.2.3 Response According to Gender of the Respondents

Table 4.3: Gender distribution

Gender Frequency Percentages

Male 25 83

Female 5 17

Totals 30 100

Source author [2012]

39

Figure 4.3: Gender distribution

83%

17%

KeyMale Female

Source: Author (2012)

Table 4.3 and figure 4.3 above shows that, 83% of the respondents were male while rest

17 % of the respondents were female .Therefore Majority of the respondents were male.

4.2.4 Response According to Education Level

Table 4.4: Educational level

Level Frequency Percentage

Secondary 7 23

College 15 50

University 8 27

Others 0 0

Total 30 100

Source :Author (2012)

40

Figure 4.4: Educational level

23%

50%

27%Key

SecondaryCollegeUniversityOthers

Source author (2012)

Table 4.4 and figure 4.4 above shows that 23% of the respondents had secondary level

education while 50% of the respondents were of college level and 27% of the respondents

had university education. Therefore the majority of the respondents had gone through

college education.

4.2.5 Response According to Duration in the role of purchasing in Al-Fatah

supermarket

Table 4.5 Duration in the role of purchasing in Al-Fatah supermarket

Duration Frequency Percentage

Less than 2 years 6 20

3-6 years 8 27

7-10 years 8 27

11-14 years 3 10

Over 15 years 5 16

Totals 30 100

Source; Author (2012)

41

Figure 4. 5 Duration in the role of purchasing in Al-Fatah supermarket

20%

27%

27%

10%

16%

KeyLess than 2 years3-6 years7-10years11-14 yearsOver 15 years

Source; Author (2012)

Table 4.5 and figure 4.5 shows that 20% of the respondents had less than 2 years

carrying out the role of purchasing at 27 % had an experience of 3-6 years in purchasing

at Al-Fatah , another 27% had an experience of 7-10 years ,10% had 11-14 years

experience while those who had made purchasing decisions for over 15 years

represented 16% of the respondents .Therefore the majority had the experience of 7-10

years.

4.2.6 Response According to Corporate Image of Locally Manufactured Goods

Table 4.6 Image of the Locally Manufactured Goods

Characteristics Frequency Percentages

Very good 0 0

Good 0 0

Fair 0 0

Poor 1 3

Very poor 29 97

Total 30 100

Source :Author 2012

42

Figure 4.6 Image of the Locally Manufactured Goods

3%

97%

KeyPoorVery poor

Source :Author 2012

Table 4.6 and figure 4.6 above shows that 97% of the respondents indicated tat the image

of locally manufactured good was very poor 3 % of the respondents said that the image

was poor . Therefore the majority stated that the image was very poor. This clearly

indicated that the image of the locally made the goods was not appealing to the local

buyer.

4.2.7 Response according to the influence of image to consumer demand

Table 4.7 Influence of Image to Consumer Demand

Characteristics Frequency Percentages

Yes 30 100

No 0 0

Total 30 100

Source; Author (2012)

43

Figure 4.7 Influence of Image to Consumer Demand

1

KeyYesNo

Source: Author (2012)

Table 4.7 and figure 4.7 above shows that ,All 100% of the respondents agreed that

image was a factor that influenced consumer demand.

4.2.8 Response According to Rate of Pricing of Locally Manufactured Goods

Table 4.8: Rate of pricing of locally manufactured goods.

Characteristics Frequency Percentages

Very good 0 0

Good 0 0

Fair 0 0

Poor 2 3

Very poor 28 97

Totals 30 100

Source: Author 2012

44

Figure 4.8: Rate of pricing of locally manufactured goods.

3%

97%

Key

PoorVery poor

Source: Author 2012

Table 4.8 and figure 4.8 shows that ,93% of the total respondents stated that pricing of

locally manufactured goods was very poor while 7% indicated that pricing was poor .

Therefore the majority agreed that pricing was very poor.This in essence meant that

locally manufactured goods were over priced and or that the manufacturers of the same

product did not put the economic situation of the local buyer in consideration when

pricing their product.

4.2.9 Response According to influence of Price Demand of Locally Manufactured

Goods

Table 4.9: Influence of Price Demand of Locally Manufactured Goods

Characteristics Frequency Percentages

Yes 30 100

No 0 0

Total 30 100

Source :Author 2012

45

Figure 4.9: Influence of Price Demand of Locally Manufactured Goods

1

Key

YesNo

Source: Author (2012)

Table 4.9 and figure .9 above shows that, 100% of the respondents indicated that pricing

or price was indeed a factor that influenced consumers demand. This was to say that local

buyers looked at the price of a product before choosing the product to buy or before

making any purchasing decision.

4.2.10 Response According to effect of Demand on Locally Manufactured Goods

Table 4.10 Effect of Demand on Locally Manufactured Goods

Characteristics Frequency Percentages

Yes 30 100

No 0 0

Total 30 100

Source: Author (2012)

46

Table 4.10 Effect of Demand on Locally Manufactured Goods

1

KeyYesNo

Source: Author 2012

Table 4.10 and figure 4.10 shows that, 100% of the respondents were in agreement that

quality was a factor that influenced consumer. A clear testimony as to how buyers valued

product quality when making purchasing decisions.

4.2.11 Response According to Extent of effects of Quality on consumers demand

Table 4.11: Extent to which quality influenced consumers demand

Characteristics Frequency Percentages

29 97

Great 1 3

Fair 0 0

Low 0 0

Very low 0 0

Total 30 100

Source; Author (2012)

47

Figure 4.11: Extent to which quality influenced consumers demand

97%

3%

KeyVery greatGreat

Source: Author 2012

Table 4.11 and figure 4.11 above shows that , 97% of the respondents indicated that

quality affected consumers demand to a very great extent, while 3% of the respondents

indicated that quality affected consumer demand to a great extent. Here then, quality

came out as a very strong factor in influencing consumers demand of locally made goods.

4.2.12 Response According to Rate of competition of locally manufactured goods

Table 4.12:Rate of Competition of locally manufactured goods

Characteristics Frequency Percentages

Very good 0 0

Good 0 0

Fair 1 3

Poor 3 10

Very poor 27 87

Total 30 100

Source; Author (2012)

48

Figure 4.12: Rate of Competition of locally manufactured goods

3%10%

87%

KeyFairPoorVery poor

Source: Author 2012

Table 4.12 and figure 4.12 shows that, 87 % of the total respondents indicated

competition of locally manufactured goods was very poor 10% indicated poor and 3%

indicated fair competition. Therefore the majority indicated that the competition of

locally manufactured goods was very poor. This in translation meant that most of the

locally made goods were not at all competitive.

Table 4.13 Response According To Effects of Competition of Locally Manufactured

Goods

Table 4.13: Effects of Competition of Locally Manufactured Goods

Characteristics Frequency Percentages

Yes 30 100

No 0 0

Total 30 100

Source; Author (2012)

49

Figure 4.13: Effects of Competition of Locally Manufactured Goods

1

KeyYes

No

Source: Author 2012

Table 4.12 and figure 4.13 shows that, 100% of the respondents indicated that

competition influenced consumer demand. This response characteristic in fact suggested

that competition was indeed a factor that influenced consumers demand and that, any

effort that neglected product competitiveness was an effort towards product and or

organization’s failure.

4.2.14 Responses According to Rate of Dealers Support on Locally Manufactured

Goods

Table 4.14: Dealers support of locally manufactured goods.

Characteristics Frequency Percentages

Very good 0 0

Good 0 0

Fair 0 0

Poor 2 7

Very poor 28 93

Total 30 100

Source: Author (2012)

50

Figure 4.14: Dealers support of locally manufactured goods

7%

93%

KeyPoorVery poor

Source: Author 2012

Table 4.14 and figure 4.14 shows that ,93% of the total respondents indicated that the

local manufacturers’ support to the local retailer was “very poor” . 7% of the respondents

indicated “ poor” dealers support. Therefore the majority of respondents indicated that

the rate of dealers support on locally manufactured goods was very poor. This shows that

the local manufacturer had not adequately supported the local retailer offload the locally

manufactured products into the local market.

4.2.15 Response According to Effects of Dealers Support on Locally Manufactured

Goods

Table 4.15: Effects of Dealers Support on Locally Manufactured Goods

Characteristics Frequency Percentages

Yes 30 100

No 0 0

Total 30 100

Source; Author (2012)

51

Figure 4.15: Effects of Dealers Support on Locally Manufactured Goods

1

KeyYes

No

Source; Author (2012)

Table 4.15 and figure 4.15 shows that, 100% of the respondents indicated that dealer

support was indeed a factor that influenced consumer demand of locally manufactured

product.

4.3 Summary of Data Analysis

When asked of their suggestions on the image of locally manufactured goods, most of the

respondents called on the local manufacturers to invest a lot on image improvement of

the locally made goods for them (manufacturers of locally made goods) to realize

increased benefits on their investments.

On pricing, most of the respondents agreed that the price of the locally made goods was

very poor and called on the manufacturers of locally made goods to improve on or

harmonize the pricing of the local goods and affix the prices that were reflective of the

local economic situation and consumer product affordability.

52

Suggestion on quality, most of the respondents urged the local manufacturers to improve

the quality of the locally made goods so as the same manufacturers could realize benefits

form their own investments. Products feature that reflects or were in line with the

changing consumers tastes and preferences were felt to be essential to improved

consumer demand of locally made goods.

On competition, the respondent indicated that the competition of the locally

manufactured goods was very poor and suggested that the local manufacturers should

invest a lot in product variety and sizes to meet the different consumer tastes and

preferences and product affordability.

When asked on suggestions of dealers support, the respondents intimated that the

manufacturers of the locally made goods did not adequately support the local retailer to

offload the locally made products to the final consumer. Some respondents suggested

increase in product promotion and advertisement both in the media and in the retail stores

to increase product awareness and provision of product information and technical support

to technical product which would eventually result in increased product take off from the

retail stores.

The general findings were that the manufacturers of locally made goods were rated very

poorly on all of the following factors which were under investigation in this study; image,

price, quality, competition an dealers support and that the said factors indeed influenced

consumers demand to a very great extend. The manufacturers of the locally made product

were also advised to urgently address the above factors which would result to an over

whelming support by the local retail and the local consumer as well, thus reversing the

current problem.

53

CHAPTER FIVE

SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

5.1 Introduction

This study was carried out with the aim of finding out the factors that influenced

consumers’ demand of locally manufactured goods in the retail outlets. As such the

researcher wanted to establish if/whether corporate image, pricing, quality, competition

and dealer support influenced consumer demand in Al-Fatah supermarkets.

To facilitate the undertaking of this study, a researcher questionnaire was formulated,

directed to the employees of Al-Fatah who carried out the role of making purchasing

decision .purchasing decision makers in any retail organization hold a key to determining

the organizations clientele, what is bought both by their organization and its clients .from

which the manufacturer the organization buys from, as well as influencing what the

customer /consumer bought or purchased. there were a total of nine retail outlets that Al-

Fatah supermarket limited operated country wide as at the time of the study ,but only six

retail outlets within Nairobi city were targeted and the Al-Fatah headquarters /central

stores.

Tables with frequencies and percentages were used to help tabulate and analyze the

received data.

5.2 Summary of Findings (According to Research Questions)

The researcher was able to establish that, corporate image, pricing, quality, competition

as well as dealer support were factors that influenced consumer demand of locally

manufactured products in the leading retail outlets. image/co operate of local

manufacturers and /or that of locality manufactured goods was found to be very poor as

rated by the respondents most respondents agreed that the image was a factor that

influenced the consumer demand to a very great extend .there were suggestions that for

the manufacturers of locally made products to realize increased benefits on their

investments .the image of locally made goods had to be improved as well as the image of

the manufacturers of the locally made goods.

54

The local manufacturer had not yet invested a great deal in product quality and quality

improvements / enhancement. Despite the fact that quality influenced customers’ demand

of the locally manufactured goods to a very great extent. The manufacturers of the locally

made goods were urged to urgently improve on product quality. (Product features), to be

inline or to reflect the ever changing consumers taste and preferences for improved

consumers demand.

Competition of locally manufactured product was found to be below the expectations of

the local buyer. Competition was found to be a factor that influenced consumers demand

to a very extend. Manufacturers of locally made goods ought to urgently invest a lot in

increased product variety and sizes to meet the different consumers’ tastes, preferences

and product affordability to improve of product consumers demand.

Majority of the locally manufactured were not offering support to the local consumer and

or the local chains of distribution channels. Most of the respondents indicated very poor

dealer support and that the respondents recognized dealers support as indeed a factor that

influenced consumers demand to aver great extent. Increase in product promotion,

product awareness creation was called for, both in the media and in retail stores.

Technical support on technical products was also felt a major boost to increased support

by the local buyer.

The research questions were answered as following; On factors that influenced Al-Fatah

supermarket to demand and sale locally manufactured products, corporate image, pricing

quality, competition and dealer support were found to be a factor that influenced the said

firm to stock and sale of locally made goods.

5.2.1 How does corporate image affect demand In the retail industry in Kenya?

From the findings 100 % of the respondents stated corporate image affected demand in

retail industry in Kenya. Corporate image could have influenced the demand and sale of

locally made products in Al-Fatah. Indeed image was found to have influenced the

demand and sale of locally made product in the said organization.

55

5.2.2 To what extent does the price at which products were pegged, affected demand

in the retail industry?

Fro the findings 975 stated that price affected demand to a very great extent while%

indicated that price affected demand to a great extent. Price and its effects on the demand

and sale of locally made goods in al-fatah, quality was found to be a factor that

influenced to vary great extent the demand and sale of locally made good in the leading

retail outlets.

5.2.3 How does product quality affect demand in retail industry in Kenya?

From the findings 100% of the respondents indicated that quality affected demand in

retail industry in Kenya. Product quality was a factor that influenced the demand and sale

of locally made products in Tusker, quality was found to influence the demand and sale

of locally made goods in the leading retail outlets to a very great extent.

5.3.4 To what extent does competition affect demand in retail industry in Kenya?

From the findings 97% of the respondents stated that competition affected demand in

retail industry in Kenya to a great extent% to a great extent and 3% to a fair extent.

Competition on the demand and sale of locally made goods in Al-Fatah, competition was

found to have influenced to a very great extent by majority of respondents, the demand

and sale of locally made goods in the leading retail outlets.

5.2.5 How does dealer support affect demand in the retail industry in Kenya?

From the findings 100% of the respondents stated that dealer support affected demand I

the retail industry in Kenya. Dealer support was a factor that influenced the demand and

sale of locally made goods in Al-Fatah, dealer support was indeed found to be a factor

that influenced to a very great extent the demand and sale of locally made goods in the

said firm.

56

5.3 Conclusions

Organization ought to have equal opportunity employer. Good education was essential

when recruiting staffs in the key departments of any organization, for this determined the

success of the organization. Experience in a given line of duty was essential in

understanding the functions , roles expectations and requirement of any given work or

department.

The manufacturer of the locally made goods have been challenged by the local buyers to

invests a lot on the improvement on the image of both the local product and the

manufacturers of the same for image was a way below the expectation of the local buyer.

It can thus be said that, the local manufacturers has not yet made enough effort in

ensuring that the local customers benefited adequately from product pricing. the

manufacturers of the local goods have thus been challenged to take into considerations

the local situation and the product affordability by the local consumer when pricing their

goods.

The manufactures of the locally made goods has been left with no better option than to

improve on product quality to meet the ever-changing consumers tastes and preferences.

It was required of the manufacturers of the locally made goods to improve products

features and hence quality to match the ever changing consumers tastes and preferences.

The manufacturers of locally made goods had not realized the reward and effects of

product competitiveness. To improve on product competitiveness, the local manufactures

was required to invest a lot in increased product variety and sizes.

Adequate dealer support by the manufacturer of the local made goods was lacking. The

said manufacturers should Endeavour to invest increased resources in dealer support to

realize increased support for the local customers.

The manufacturers of the locally made goods needs to move with the speed to rectify and

urgently attend to the image , price, quality , competition of the local made products as

well as the dealer support on the local consumers for said manufactures to realize

increased return on every of their shillings that they invest.

57

5.4 Recommendations

The local manufacturers had tried to invest a lot in resources win back and improve

consumer demand of the locally manufactured goods by the local consumers/buyer.

However despite those efforts, the local buyer had not qualified the local manufacturers

as having done enough. The manufacturers of the locally made goods have thus been

challenged by this report to;

5.4.1 Corporate Image

The researcher recommends that the organization should carry out a continuous image

appraisal by way of continuous research on corporate image rating by the local buyer.

5.4.2 Price

The researcher recommends that the organization should carry out continuous price

reviews and appraisal, in line with the existing economic parameters and situations and

set consumers friendly prices.

5.4.3 Product Quality

The researcher recommends that the organization should carry out continuous product

quality review and appraisal, product features improvement with time, in line with the

changing consumer’s tastes and preferences.

5.2.4 Competition

The researcher recommends that the organization should improve on the product variety

and increase product choice to cater for all different consumers’ wants and preferences

across the consumer income classes for improved competitiveness.

5.2.5 Dealer Support

The researcher recommends that dealer support should be enhanced to help shorten the

product shelf life through the various activities that improve consumers product

knowledge and awareness, including increased product promotion and advertising in the

both media and distribution as well as the retail outlets. Being the best in the above issues

58

is the challenge that this research report and the local consumers are placing in every

local manufacturer’s boardroom.

5.5 Suggestion for further studies.

A lot remains to be studied on the factors that influenced or were essential to support of

the manufacturer of the locally made goods by the local buyers as well as the factors that

led to poor performance of the local manufacturer in the local market. For a clearer

understanding on the above issues, further research along with the following lines could

lead to better understanding on the same.

Factors that lead to the poor performance among the members of the Kenya Association

of manufacturers goods in the market, Macro-environmental factors that influenced

consumers demand in the retail industry, Micro-environment factors that influenced

consumers demand in the retail industry and finally on factors that influenced consumers

demand of the local transport industry.

59

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61

QUESTIONNAIRE

SECTION 1: PERSONAL INFORMATION

1. Age Bracket: (Below 20 yrs) (21-25 yrs) (31-35 yrs)

36-40 yrs (Over 51 yrs)

2. Gender: Male Female

3. Highest Level of Education: Secondary level

College level

University level

Other specify……………………………………………………

4.. For how long have you undertaken the role of purchasing in the Al-Fatarh

supermarket

Less than 2 years 3-6 years 7-10 years

11-14 years Over 15 yrs

i

SECTION B

CORPORATE IMAGE

1. How is the image of locally manufactured goods sold at Al-Fatah supermarket?

Very good Good Fair Poor Very poor

2. a) Do you think the image is a factor that influences consumers demand of locally

manufactured goods?

Yes No

(b) If yes, to what great extent?

Very great Great Fair Low very Low

3. What are you suggestion of image of locally manufactured good?

……………………………………………………………………………………………

……………………………………………………………………………………………

SECTION C

PRICING

4. How is the pricing of locally manufactured goods sold in the Al-fatal supermarket?

Very good Good Fair poor Very poor

5. (a) Do you think that price is a factor that influences consumers demand of locally

manufactured goods?

Yes No

6. What are your suggestions of pricing of locally manufactured goods?

……………………………………………………………………………………………

……………………………………………………………………………………………

ii

SECTION D

QUALITY

8. a) Does quality affect consumer's demand of locally manufactured goods?

Yes No

If yes, to what great extent?

Very great Great Fair Low

Very Low

9. What is your suggestion of quality of locally manufactured goods?

…………………………………………………………………………………………

…………………………………………………………………………

SECTION E

COMPETITION

10. How is the competition of locally manufactured goods sold in the Al-Fatah

supermarket?

Very good Good Fair Poor

Very poor

11 a) Do you think that competition is a factor that influences consumer demand of

locally manufactured goods?

Yes No

b) If yes, to what extent?

Very great Great Fair Low

Very Low

iii

12. What is your suggestion of competition of locally manufactured goods?

…………………………………………………………………………………………

…………………………………………………………………………

SECTION F

DEALER SUPPORT

13. How is the dealer support of locally manufactured good sold in the Al-Fatah

supermarket?

Very good Good Fair Poor

Very Poor

14 a) Do you think that dealer support is a factor that influences consumers demand of

locally manufactured goods?

Yes No

b) If yes, To what great extent

Very great Great Fair Low

Very Low

15 What is your suggestion of dealer support of locally manufactured goods?

…………………………………………………………………………………………

………………………………………………………………………………………..

iv