Customer loyalty in fast food foreign franchises in Nairobi : antecedents and behavioral consequences
Date
2014
Authors
Nguti, Lucy Esther Kuthea
Journal Title
Journal ISSN
Volume Title
Publisher
Strathmore University
Abstract
The aim of the study was to determine the levels of loyalty of the customers of the fast food foreign franchises, the factors that influence customer loyalty in fast food foreign franchises and the behavioural impact of customer loyalty in the fast food foreign franchises in Nairobi.
Using purposive sampling, data was collected from the 25th of March 2014 to the 1st of April 2014 from one hundred and fifty customers who had visited fast food franchises in Nairobi more than once. The data was analysed using descriptive statistics, linear regression analysis and correlation analysis. It was established that factors that influence customer satisfaction and trust, and by extension customer loyalty, in fast food foreign franchises in Nairobi are service quality, price, good environment, food quality and convenient location. Service quality, price fairness and good environment were critical in ensuring customer satisfaction and trust which lead to customer loyalty.
The study also established that the consequences of customer loyalty were willingness to pay more, interpersonal communication and repurchase behaviour. However, despite having a positive relationship with loyalty, the consequence of being willing to pay more only has a weak relationship with loyalty. This means that the customers may be loyal but they will still be price sensitive, thus when setting prices franchise holders will need to take that into consideration. The findings also indicated that only 40 percent of the consumers of fast food foreign franchises in Nairobi are truly loyal to their franchises of choice and were not likely to switch to other brands or establishments. However, 53 percent of the respondents exhibited spurious loyalty, which is a volatile type of loyalty. The franchise holders therefore need to handle their customers carefully since large proportions are liable to switch if dissatisfied.
Further research could focus on a comparative study in loyalty levels between local and foreign fast food franchises in Kenya since about sixty percent of the respondents indicated that they were not loyal to the foreign fast food franchises. Further research could also be conducted in other towns with foreign fast food franchises such as Mombasa.
Description
Submitted in partial fulfillment of the requirements for the Degree of Master of Commerce
Keywords
Franchising, Business, Fast food, Nairobi, Customers, Loyalty, Customer behaviour