Influence of Product Market Strategies on the Growth of Deposit Taking Savings and Credit Cooperatives in Kenya

Abstract

Deposit Taking Savings and Credit Cooperatives (DT-SACCOs) in Kenya grapple with several challenges, including low profitability, low loan interest rates, and limited investment avenues. Additionally, intense competition from banks, mobile money lenders, and other financial entities hampers their market share growth (Feather & Meme, 2019). According to the annual DT-SACCOS regulatory report (2022), these organizations have adopted a product market strategy comprising product segmentation, product differentiation, and product positioning to enhance their growth potential. Nonetheless, their growth performance still lags behind that of banks. Therefore, the aim of this research was to determine how product market strategies have influenced the growth of DT-SACCOS in Kenya. Specifically, it addressed the following research question, what is the influence of product market strategies on the growth of Deposit Taking Sacco’s in Kenya? This research drew its theoretical inspiration from Ansoff Matrix, Dynamic Capability theory, and Market Orientation theory. This research utilized a correlational research design. The population encompassed the 174 DT-SACCOS that were officially licensed by SASRA as of December 31, 2022. The sample size was 70 DT-SACCOS. The data gathered was primarily derived from structured questionnaires utilizing a five-point Likert scale. A combination of descriptive and inferential statistics were used to examine the gathered information. From the analysed data, this research concluded that market segmentation and product differentiation are not significant in the growth of DT-SACCOS in Kenya. On the contrary, it was discovered that product positioning aided in DT-SACCOS expansion in Kenya. This research suggests that in order to enhance growth of DT-SACCOS in Kenya, management of DT-SACCOS should focus on product positioning strategies.