Effects of marketing mix strategies on the growth of customers for microfinance banks in Nairobi
Ndungu, Charles Waithaka
MetadataShow full item record
Microfinance Banks in Kenya are faced with stiff competition from non-regulated financial institutions and established commercial banks. Growth in customers is a necessary prerequisite to performance of these organizations as their primary funding is from customer deposits. Restrictions imposed by Central bank and limitations of financial resources inhibit growth through expansion for the Microfinance Banks. It is therefore imperative that they employ effective marketing strategies that will allow for recruitment and retention of customers. Research on effective marketing strategies and their effect on organization performance through growth in customers for financial institutions is deficient in the microfinance bank context. This study focused on the correlation between selected elements in the 4Ps of marketing mix model and growth in customer numbers for the 13 microfinance banks in Kenya. A descriptive research design was used in this study. Data was collected by the use of questionnaires. A multiple regression Analysis aided by statistical package for social science (SPSS) was used to analyse data. Pearson correlation found that promotional marketing strategy, product marketing strategy and placement marketing strategy have a significant association with the growth in customer numbers for MFBs. It was also found that promotion marketing strategy and growth in customer numbers for MFBs have a positive and significant relationship. Moreover, product marketing strategy and growth in customer numbers for MFBs have a positive and significant relationship. Placement marketing strategy had a positive and significant relationship with growth in customer numbers for MFBs. It is also concluded that marketing strategies influence the growth of customer numbers for microfinance Banks in Nairobi. The study therefore recommends a combined and effective application of marketing mix strategies for growth of customer numbers. The results of the study are beneficial to MFBs operating in Nairobi in the design of effective marketing strategies and resource application in growth of customer numbers, enhanced funding of deposit accounts and significant improvement in other performance parameters. The results are also significant to the regulator CBK as a guide to policy making for Microfinance Banks. The study was deficient geographically as it addressed only MFBs operating in Nairobi. The confidential nature of most financial institution on their data was also a limitation. Further study is recommended for MFBs operating outside Nairobi.