Relationship Marketing Practices, Switching Cost and Customer Satisfaction among Tier One Supermarkets in Nairobi County, Kenya.

Abstract

Understanding relationship marketing practices and their enhancement of customer satisfaction from consumers’ point of view was the area of interest for this study. Grounded on practice theory, Rahim organizational conflict inventory model, Social exchange theory and Expectation disconfirmation theory, the study sought to examine the effect of relationship marketing dimensions: Information sharing, product customization, conflict handling and reciprocity, on customer satisfaction moderated by switching cost. A positivist paradigm research philosophy guided the study with deductive research approach employed in order to allow for the development of hypotheses by use of existing theories. Quantitative research techniques were employed to analyze data. The study data was attained from a sample size of 384 customers derived from a target population of 1,055,298 tier one supermarket customers within Nairobi county, Kenya. A response rate of 85.68% was attained translating to 329 valid questionnaires. Descriptive statistics was used to summarize data and show meaningful patterns while inferential statistics which included regression and correlation analysis employed to test the study hypotheses. The study models were deemed fit due to significant F statistics at 0.05 level of significance attained for each. From the attained significant beta coefficients, the results revealed that each independent variable was significant in affecting customer satisfaction among tier one supermarkets in Nairobi, Kenya since all the null hypothesis, H01, H02, H03 and H04 were rejected. The study also recorded positive changes in coefficient of determinations for each variable after incorporating the moderating variable ‘switching cost’ in each respective model. This proved that the moderating variable had a significant positive moderating effect on each independent variable’s relationship with customer satisfaction. A moderated multiple regression model with all the study variables acting together also recorded a positive change in coefficient of determination against the non-moderated multiple regression model which led to alternative hypothesis, Ha5 being adopted. In addition, the moderated model recorded insignificant betas for information sharing and conflict handling meaning that switching cost had no moderating effect in them in the model. The correlation analysis at 0.01 level of significance revealed information sharing and product customization had a low positive correlation with customer satisfaction while conflict handling and reciprocity had a moderate positive correlation with customer satisfaction. The study therefore concludes that application of relationship marketing practices significantly improve customer satisfaction while presence of switching cost has a positive moderation the relationship. The study therefore recommends that supermarket management should focus on enhancing relationship marketing practices through training of staff as a means of sustaining customer satisfaction with more emphasis on reciprocity. The study filled a knowledge gap concerning relationship marketing practices by theorizing relationship marketing practices based on practice theory in addition to contributing to existing literature by including switching cost as a moderating variable in the model. The study findings shall also be used to improve customer management policy decisions by retail organizations and marketing practitioners. The findings and recommendations can be used to form future research decisions by scholars and researchers even in other sectors of the economy.