Role of Marketing Mix on Perfomance of Microfinance Institutions in Kenya- A Case Study of Selected Microfinance Institutions in Kenya.
Marketing mix playa key role in the performance of any institution. Previous studies attempting to link the role of marketing mix and its consequences on micro finance performance have not been conducted. Therefore the purpose .of this study was to assess the role of marketing mix on performance of MFls. Objectives of the study were: to determine how products and services affect performance of microfinance institutions, to establish the effect of promotion on the performance of micro finance institutions, to find out the extent to which pricing affects performance of microfinance institutions, and to examine the relationship between the distribution and performance of micro finance institutions. The study adopted descriptive design. The target population of this study was derived from the five selected microfinance institutions. The target population considered was the marketing managers who are based in head office in each of five institutions and the business development officers who are involved in marketing and selling of products on daily basis. A sample size of 13 marketing managers was selected purposively while 60 business development officers were selected randomly from the population. The study used questionnaire to collect the primary data. Piloting was carried out to test the validity and reliability of the instruments. Data was then coded, entered into a computer and was subjected to SPSS 19.0 for analysis. The study found out that majority of the respondents rated their institutions good or average in profitability. Sales promotion had the highest influence on performance of MFI followed by publicity; the third element of promotion mix which influenced the performance of MFls was advertisement. Public relation did not strong association with performance of MFls. Other factors that had significant influence though with weaker level of association were personal selling and display of products. Pearson correlation analysis between the pricing strategies used and the MFI performance indicated that, the pricing strategies had negative relationship with the profitability, pricing strategies had a weak negative relationship with the number of clientele served, similarly a positive correlation exists between pricing strategy and market share. The study therefore concluded that design, packaging and delivery of products and services in microfinance institutions highly impact on the performance of the institution by building the clientele, increasing the amount of loan sold, enhancing loan repayment and profitability. The suitability of product to the customer needs enhance sales, attract more customers and minimize the amount of loan repayment defaults thereby enhancing performance of MFls. Poor pricing strategies result to inflated interest rates that turn away potential clients and reduce the amount of loan demanded. This study therefore recommended to MFls to have well articulated, marketing mix incorporated in their marketing plans as a way of enhancing their performance. It also recommended that for MFls to achieve better results in building the clientele base, amount of loan sold, and improved profitability, they can leverage on the current developments in the banking industry especially adoption of mobile banking and agency banking.