Product life cycle extension strategies, market based policies, customer loyalty and performance of fast moving consumer goods firms in kenya

Abstract

Proliferations of strategic interplay among manufacturing firms threaten the sustainability of fast-moving consumer goods in Kenya. In realization of vision 2030, manufacturing was envisaged as a core area in job creation and poverty eradication. Unfortunately, previous statistics showed that there has been a downward trend on performance of manufactured fast moving consumer goods in Kenya. It is in this regard that this study sought to determine the influence of product life cycle extension strategies, market-based policies and customer loyalty on performance of fast-moving consumer goods firms in Kenya. The study was anchored on three theories namely; game theory that was used to model the study, marketing mix theory and economic theory of regulation from which the variables were derived. The study adopted pragmatism research philosophy and cross-sectional research design. Through census, study population was 193 fast moving consumer goods firms. Secondary data was collected using questionnaires and data collection schedules for the period covering 2017-2021 for 161 firms since 32 did not respond to the questionnaires hence expunged from the study. Data was analyzed using multiple linear regression models. Study found that repositioning, promotion, price adjustment and rebranding strategies had positive and significant effect on performance of fast-moving consumer goods firms in Kenya. Secondly, the study established that market-based policies had a negative and significant moderating effect on the relationship between product life cycle extension strategies and performance of fast-moving consumer goods firms in Kenya. Lastly, the results indicated that customer loyalty had positive and significant mediating effect on the relationship between product life cycle extension strategies and performance of fastmoving consumer goods firms in Kenya with evidence of partial mediation. The study concluded that adoption of PLC extension strategies namely repositioning, promotion, price adjustment and rebranding strategies were important in enhancing performance of FMCG firms in Kenya. The study further concluded that market-based policy led to poor performance while adopting product life cycle extension strategies played an important role in enhancing customer loyalty which would lead to improved performance. The study recommends that senior management staff of the firms should embrace and enhance implementation of the four PLC extension strategies for prolonged profit reaping. In addition, management should improve the current implementation approaches of PLC extension strategies as a whole so as to enhance customer loyalty that will lead to high rate of repeat and referral customers. Further, the study recommends that relevant Kenyan Government authorities and policy makers reconsider and revise current market-based policies regarding input tariffs on fast moving consumer goods so as to improve performance. The study contributes to the existing body of knowledge in this area.