Influence of mobile telephone product differentiation on customer retention, a case of Nairobi county-Kenya

Abstract

This project is an investigation and analysis of the influence of mobile service differentiation on customer retention in Kenya. The study was prompted by the realization that, despite much effort by some mobile phone network service providers to adopt cost leadership as a competitive advantage in Kenya, the most expensive mobile phone network service provider recorded the lowest rate of customer churn and experienced the highest number of new SUbscriptions of the four network service providers in the country. Telecommunication has been seen as a key resource for a countries development and hence the importance to understand the trends that influence its penetration in the country.

The study looks at the key differentiation services available to the subscribers from the various service providers and compares how they influence' customer retention. Customer retention is vital for the continuity of an organization .The target population for this project is Nairobi county mobile phone owners who are approximately 870,163 households. A sample size of 360 randomly selected respondents' from the target population. This sample was selected by use of multi-stage sampling.

Data collection was done by use of pretested questionnaire and data analyzed using descriptive statistics by means of Statistical Package for Social Sciences. The study suggests that mobile phone service providers should invest in product differentiation and strive to be the first to offer it in the market. It is clear that once subscribes link to a network they are retained by a string of products that are somehow related. While offering product differentiation service providers should learn the product properties, either access to VAS, cost, quality of service or any other, which are vital and ensure to achieve desired standards in order to satisfy their customers.