FOCUS STRATEGY AS A DETERMINANT OF CUSTOMER LOYALTY: A SURVEY OF SELECTED SPECIALTY RESTAURANTS IN NAIROBI

Abstract

This study examined Focus Strategy as a Determinant of Customer Loyalty. It was carried out in speciality restaurants in the county of Nairobi. The specific objectives of the study include:- To establish the effect of quality strategy on customer loyalty, to determine the influence of product differentiation on customer loyalty, to find out the degree to which customer services influences customer loyalty and to establish the effect of cost strategy on customer loyalty. This study adopted the theory of multidimensional brand loyalty. The study used a descriptive survey design and a target population of 40 speciality restaurants. The study developed two sets of likert scale questionnaires for both the customers and employees. Purposive sampling was used to select restaurant managers and supervisors totalling to 60 respondents. The target population for the customers was 1,200 and a calculated sample size of 57 customers. Descriptive and inferential statistics was used to analyse the data. The study findings showed that Quality had significant relationship (β=0.805, p = 0.000,) between quality and customer loyalty. There was also a significant relationship (β= -0.238, p = 0.000) between product and customer loyalty. There was a significant relationship (β=0.230, p = 0.003) between customer service and customer loyalty and finally low cost there was no significant relationship between low cost and customer loyalty with (β= -0.019, p=0.776). From the above study it can be concluded that the model summary indicated that (R2 = 0.753) implying that a unit change in focus strategy can led to 75.3% of customer loyalty. The study recommended that: - Restaurant managers need to recognize their dependence on repeat customers and building strong differentiated brands is essential for the restaurant business as strong brands enable the restaurant operators to charge premium prices as well as to foster customer loyalty. Finally, the recommendation for further study is proposed that future research may be conducted to find out the degree of loyalty and customer loyalty factors in other types of restaurants besides specialty restaurants.