DIFFERENTIATION STRATEGIES AND THEIR EFFECT ON SALES PERFORMANCE OF SUPERMARKETS IN KENYA: A CASE OF NAIVAS SUPERMARKET

Abstract

Competition among firms intensifies due to various organizational and environmental factors, including globalization, deregulation, and emerging technologies. These factors are a fast-changing environment that creates high levels of uncertainty in the business environment and makes companies change their positions to achieve competitive advantage. Nonetheless, Naivas supermarket continues to record increased growth and expansion in the Kenyan retail market, positioning it among the most dominant supermarkets in this sub-sector. This study aimed to evaluate the impact of differentiation strategies on the sales performance of Naivas supermarket, focusing specifically on three key strategies: image differentiation, service differentiation, and relationship differentiation, which is discussed as a form of market segmentation below. It was administered to two hundred and four senior and mid-management employees of Naivas supermarket head office. Since it was a study with a small population, the researcher had to use the census to do the sampling. The study employed the quantitative research method. Descriptive analysis was used to describe the collected data while analyzing the research data. Correlation analysis was employed to assess the hypothesis that an intimate relationship between differentiation strategies and sales performance exists. Simple and multiple logistic regression tests were applied to analyze each of the strategies as well as the differences in strategic joint combination. The results revealed that they have a positive impact with image differentiation (R² = 0.4746), service differentiation (R² = 0.3376), and relationship differentiation (R² = 0.3306), which explains the variations with regard to sales performance. These strategies had a high predictive accuracy of sales performance outcomes with R² = 0.649. Therefore, the study found that the above differentiation strategies are crucial in augmenting the sales performance of Naivas supermarket, causing a competitive edge in the marketplace. The research suggests that retail stores implement these differentiation strategies to enhance their general sales performance and satisfy consumers’ new requirements in the context of increased competition. Future research should extend the range of differentiation strategies under consideration and study factors that might influence the sales performance in a more significant number of supermarkets in Kenya. Key Words: Differentiation strategies, image differentiation, service differentiation, relationship differentiation, sales performance, and Naivas supermarket.