THE ROLE OF MARKET PENETRATION STRATEGIES ON BUILDING SUSTAINABLE PERFORMANCE FOR DEPOSIT TAKING SAVINGS AND CREDIT COOPERATIVE SOCIETIES IN NAIROBI CITY COUNTY, KENYA
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Abstract
The dynamic business environment in Kenya has posed challenges to deposit-taking savings and credit cooperative societies, leading to slow growth and competition. The sector experienced a slow growth, with a marginal increase from 9.84% in 2022 to 9.80% in 2021. In addition, the number of Large Tiered deposit taking SACCOs with assets exceeding Kshs 5 billion rose from 42 in 2021 to 47-Regulated deposit-taking SACCOs in 2022. Thus the study examined the impact of market penetration strategies on the performance of deposit-taking SACCOs in Nairobi City County. Specifically, the research examined the effect of price leadership strategies, product differentiation strategies, market segmentation strategies and distribution expansion strategies on the performance. The Ansoff matrix model, dynamic capability theory, and resource-based view theory served as the foundation for the investigation. The research will embrace descriptive research design. The study population was all the fourth two DT-SACCOs in Nairobi City County. A sample size of one hundred and sixty-eight was utilized, employing stratified random sampling techniques. A structured questionnaire was implemented to acquire primary data. The research found a significant correlation between price leadership, product differentiation, market segmentation, and distribution expansion strategies. The study recommends implementing a combination of pricing leadership strategies, developing customized financial products, conducting thorough market research, and expanding reach by establishing branches in underserved areas and investing in digital channels. Further research is needed on indicators outside market penetration approaches and success, as well as examining counties beyond Nairobi City County.
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References
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Donders, K. (2019). Public service media beyond the digital hype: Distribution strategies in a platform era. Media, Culture & Society, 41(7), 1011–1028. https://doi.org/10.1177/0163443719857616
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Mutembei, C., & Njuguna, J. (2019). Competitive strategies and market penetration of insurance companies in Kenya. International Academic Journal of Human Resource and Business Administration, 3(7), 552–571.
Muthoka, R. (2022). Strategic Alliance and Performance of Small and Medium Enterprises in Manufacturing Sector in Nairobi City County, Kenya. Kenyatta University.
Mwangi, R., & Waithaka, P. (2020). Market Penetration Strategy and Performance of Agrochemical Companies in Nakuru County, Kenya. 4(4), 23–33.
Nella, A., & Christou, E. (2021). Market segmentation for wine tourism: Identifying sub-groups of winery visitors. European Journal of Tourism Research, 29, 2903. https://doi.org/10.54055/ejtr.v29i.2414
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Rusliati, E., Affandi, A., Mulyaningrum, M., & Alghifari, E. (2022). Technopreneurship on Market Penetration and Product Development in Micro and Small Enterprises. Trikonomika, 21(1), 30–36. https://doi.org/10.23969/trikonomika.v21i1.5694
Sanguinetti, A., Karlin, B., & Ford, R. (2018). Understanding the path to smart home adoption: Segmenting and describing consumers across the innovation-decision process. Energy Research & Social Science, 46, 274–283. https://doi.org/10.1016/j.erss.2018.08.002
SASRA. (2023). The Annual Statutory Report on the operations and performance of Regulated SACCO Societies in Kenya (p. 220). The SACCO Societies Regulatory Authority.
Saunders, M. N., Saunders, M., Lewis, P., & Thornhill, A. (2011). Research Methods for Business Students (5th ed.). Pearson Education.
Shannaq, B., Saleem, I., & Shakir, M. (2024). Maximizing Market Impact: An In-Depth Analysis of the Market Penetration Strategy and Its Effective Tools for Sales Growth and Brand Expansion in the E-commerce Markets of Oman and Bahrain. In The AI Revolution: Driving Business Innovation and Research (Vol. 524, pp. 277–291). Springer Nature Switzerland. https://doi.org/10.1007/978-3-031-54379-1_25
Suciati, T. R., Kurniawan, D., & Iswahyudin, D. (2020). SWOT Analysis and Ansoff Matrix in Creative Food Industry Business Development: A Study on Creative Food Business “Komala.” Open Access Indonesia Journal of Social Sciences, 3(2), 69–76. https://doi.org/10.37275/oaijss.v3i2.30
Suherna, S. (2021). Empirical examination of customer relationship management on the market penetration capabilities and marketing performance in the SME sector. 11(2), 681–688.
Teece, D., & Pisano, G. (1994). The Dynamic Capabilities of Firms: An Introduction. Industrial and Corporate Change, 3(3), 537–556. https://doi.org/10.1093/icc/3.3.537-a
Wani, D., Dong, Y., Malhotra, M. K., & Xu, K. (2021). Emerging Market Penetration and Emissions Performance. Decision Sciences, 52(1), 283–324. https://doi.org/10.1111/deci.12436
Wernerfelt, B. (1984). A resource-Based View of the firm. Strategic Management Journal, 5(2), 171–180.
Alkasim, S., Bohari, A., Abdullah, S., & Sallehddin, M. (2018). The mediating effect of cost leadership on the relationship between market penetration, market development, and firm performance. Journal of Business and Retail Management Research, 12(3), 190–200.
Ansoff, H. L. (1965). Corporate Strategy. McGraw Hill.
Ansoff, I. (1953). Strategies for Diversification. Harvard Business Review.
Auma, N., & Waithaka, T. (2020). Influence of Market Penetration Strategy on Organizational Performance of Public Universities in Kenya. International Research Journal of Business and Strategic Management, 1(1), 48–58.
Bulle, M. (2020). Market Penetration Strategies on Organizational Performance in Telkom Kenya Limited, Nairobi City County, Kenya [Unpublished MBA Project]. Kenyatta University.
Chiguvi, D., Khumalo, S., Tadu, R., Dube, Zenzo. D., & Jazi, J. (2019). Product Differentiation for Competitive Advantage in the Private Tertiary Education Institutions in Botswana. Applied Economics and Finance, 7(1), 21. https://doi.org/10.11114/aef.v7i1.4631
David, S., Kiiru, G., & Wambugu, H. (2021). Market Penetration Strategies and the Performance of Dairy Cooperatives in Meru, Kenya. Journal of Business and Management, 23(8), 49–60.
Donders, K. (2019). Public service media beyond the digital hype: Distribution strategies in a platform era. Media, Culture & Society, 41(7), 1011–1028. https://doi.org/10.1177/0163443719857616
Elgarhy, S. D., & Mohamed, L. M. (2023). The Influences of Services Marketing Mix (7ps) on Loyalty, Intentions, and Profitability in the Egyptian Travel Agencies: The Mediating Role of Customer Satisfaction. Journal of Quality Assurance in Hospitality & Tourism, 24(6), 782–805. https://doi.org/10.1080/1528008X.2022.2080148
Gherghina, Ștefan C., Botezatu, M. A., Hosszu, A., & Simionescu, L. N. (2020). Small and Medium-Sized Enterprises (SMEs): The Engine of Economic Growth through Investments and Innovation. Sustainability, 12(1), 347. https://doi.org/10.3390/su12010347
Gregory, G. D., Ngo, L. V., & Karavdic, M. (2019). Developing e-commerce marketing capabilities and efficiencies for enhanced performance in business-to-business export ventures. Industrial Marketing Management, 78, 146–157. https://doi.org/10.1016/j.indmarman.2017.03.002
Gurcaylilar-Yenidogan, T., & Aksoy, S. (2018). Applying Ansoff’s Growth Strategy Matrix to Innovation Classification. International Journal of Innovation Management, 22(04), 1850039. https://doi.org/10.1142/S1363919618500391
He, L., Rong, Y., & Shen, Z. M. (2020). Product Sourcing and Distribution Strategies under Supply Disruption and Recall Risks. Production and Operations Management, 29(1), 9–23. https://doi.org/10.1111/poms.13065
Ismail, A., Ahmadi, S., Yatim, N., & Ismail, P. (2020). The impact of board characteristics on co-operative reputation from the lense of resource-based view theory (RBVT). International Journal of Financial Research, 11(3), 43–61. https://doi.org/10.5430/ijfr.v11n3p43
Kubai, E., Karanja, P., & Kihara, A. (2021). Influence of Cost Leadership Strategy on Performance of the Insurance Companies in Kenya. Journal of Business and Strategic Management, 6(3), 44–56. https://doi.org/10.47941/jbsm.695
Lubis, A., Purike, E., Stiadi, M., Judijanto, L., & Tobing, F. (2023). The Triad of Marketing Success: Product Innovation, Customer Engagement, and Market Penetration. Nternational Journal of Economic Literature, 1(3), 245–257.
Mugenda, O., & Mugenda, A. (2003). Research Methods, Quantitative and Qualitative Approaches. ACT.
Mutembei, C., & Njuguna, J. (2019). Competitive strategies and market penetration of insurance companies in Kenya. International Academic Journal of Human Resource and Business Administration, 3(7), 552–571.
Muthoka, R. (2022). Strategic Alliance and Performance of Small and Medium Enterprises in Manufacturing Sector in Nairobi City County, Kenya. Kenyatta University.
Mwangi, R., & Waithaka, P. (2020). Market Penetration Strategy and Performance of Agrochemical Companies in Nakuru County, Kenya. 4(4), 23–33.
Nella, A., & Christou, E. (2021). Market segmentation for wine tourism: Identifying sub-groups of winery visitors. European Journal of Tourism Research, 29, 2903. https://doi.org/10.54055/ejtr.v29i.2414
Ngo, Q.-H. (2022). The Positive Effect of Innovative Culture on Differentiation Strategy: Empirical Results from Vietnamese Smes. Quality - Access to Success, 23(189). https://doi.org/10.47750/QAS/23.189.20
Penrose, E. (1959). The Theory of the Growth of the Firm. In Oxford (Ed.), Economic Foundations of Strategic Management (3rd ed.). https://doi.org/10.4324/9781315257068-16
Rusliati, E., Affandi, A., Mulyaningrum, M., & Alghifari, E. (2022). Technopreneurship on Market Penetration and Product Development in Micro and Small Enterprises. Trikonomika, 21(1), 30–36. https://doi.org/10.23969/trikonomika.v21i1.5694
Sanguinetti, A., Karlin, B., & Ford, R. (2018). Understanding the path to smart home adoption: Segmenting and describing consumers across the innovation-decision process. Energy Research & Social Science, 46, 274–283. https://doi.org/10.1016/j.erss.2018.08.002
SASRA. (2023). The Annual Statutory Report on the operations and performance of Regulated SACCO Societies in Kenya (p. 220). The SACCO Societies Regulatory Authority.
Saunders, M. N., Saunders, M., Lewis, P., & Thornhill, A. (2011). Research Methods for Business Students (5th ed.). Pearson Education.
Shannaq, B., Saleem, I., & Shakir, M. (2024). Maximizing Market Impact: An In-Depth Analysis of the Market Penetration Strategy and Its Effective Tools for Sales Growth and Brand Expansion in the E-commerce Markets of Oman and Bahrain. In The AI Revolution: Driving Business Innovation and Research (Vol. 524, pp. 277–291). Springer Nature Switzerland. https://doi.org/10.1007/978-3-031-54379-1_25
Suciati, T. R., Kurniawan, D., & Iswahyudin, D. (2020). SWOT Analysis and Ansoff Matrix in Creative Food Industry Business Development: A Study on Creative Food Business “Komala.” Open Access Indonesia Journal of Social Sciences, 3(2), 69–76. https://doi.org/10.37275/oaijss.v3i2.30
Suherna, S. (2021). Empirical examination of customer relationship management on the market penetration capabilities and marketing performance in the SME sector. 11(2), 681–688.
Teece, D., & Pisano, G. (1994). The Dynamic Capabilities of Firms: An Introduction. Industrial and Corporate Change, 3(3), 537–556. https://doi.org/10.1093/icc/3.3.537-a
Wani, D., Dong, Y., Malhotra, M. K., & Xu, K. (2021). Emerging Market Penetration and Emissions Performance. Decision Sciences, 52(1), 283–324. https://doi.org/10.1111/deci.12436
Wernerfelt, B. (1984). A resource-Based View of the firm. Strategic Management Journal, 5(2), 171–180.