Differentiation Strategies and Performance of Cement Manufacturing Companies in Kenya
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Date
2022
Authors
Mung’asia, Carolyne Midecha
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
Cement is a very important component used in the construction sector. Cement companies
in Kenya had a dwindling sales performance from 2016 to 2020 despite the construction
sector flourishing. This caused some companies to go into receivership while others
recording a profit warning. The research used the various differentiation strategies in place
to analyze how production of cement increased in the long run. The research objectives
were; to examine the effect of service differentiation; to investigate the effect of channel
differentiation; to analyze the effect of product differentiation and lastly, to determine the
effect of Image differentiation and performance of cement manufacturing companies in
Kenya. The theories used include; Contingency theory, Resource Based View Theory and
Dynamic Capabilities Theory. The research used descriptive survey design. Three Hundred
and Seventy-Five employees formed research target population. The respondents’ sample
was reached by calculating a 30% of the total population to bring a total of 112 employees.
Pilot testing was done at Mombasa Cement Company in Kilifi County at the Kenyan Coast
where validity and reliability of the research instruments was tested. Under the pilot testing
20 respondents from the lower level management were used for data collection.
Questionnaires were the data collection instrument applied. Collection of data was done by
drop and pick later method. Secondary information was derived from the company’s
performance reports. In addition, it was also derived from global cement Markets Company
and Kenya Bureau Statistics websites generated in 5 years ranging from 2016 to 2020.
Data analysis was arrived at through descriptive statistics, regression analysis and
correlation coefficient. Results showed that service differentiation (β=0.376, p=.000),
distribution channel differentiation (β=0.362, p=.000), product differentiation (β=0.253,
p=.009) image differentiation (β=0.316, p=.002) had a noteworthy effect on performance of
cement companies. The research concluded that service differentiation increases company
efficiency as well as company loyalty. The study concluded that conducting quality checks
on products before distributing them to the consumers helped companies to sell quality
products to the consumers which improved the company performance. Further, enhancing
marketing techniques would boost the volume of sales and improve firm performance. The
study suggested to the administration to devise steps and directives that will ensure
effective implementation of feedback received on service improvement. Cement company
directors should consider launching of branches in convenient locations to exploit the
growing market in the Kenyan economy. The study recommends that the administration of
cement companies should boost investment in research and development so as to gain
prompt ideas needed for prioritizing for better product expansion. The researcher
recommends that further studies on the same title should be carried out in different
industries and countries for the purpose of comparison.
Description
A Research Project Submitted to School of Business,
Economics and Tourism in Partial Fulfillment of the
Requirements for the Award of Degree of Master of
Business Administration (Strategic Management) of
Kenyatta University
Keywords
Strategies and Performance, Cement Manufacturing, Companies, Kenya