The Moderating Effect of Brand Architecture on the Relationship Between Tangibility and Customer Loyalty Among Telephone Mobile Subscribers in Kenya

Abstract

The telecommunication market is growing in Kenya and so there is competition among the mobile service providers to tap the vast market. The telecommunication mobile service providers know so well that making present customers loyal is very beneficial. Customer loyalty leads to many benefits including customer retention and high profits among others. The purpose of this study was to assess the moderating effect of brand architecture on the relationship between tangibles and customer loyalty in the mobile telecommunications industry in Kenya. Mobile telecommunication providers have been introducing a portfolio of services to the market in a bid to attract and retain customers and these are of concern because the providers need to make their customers perceive these services as a package and use the entire package. These services need to be structured in a manner that customers understand. The concern of this study was that the structure of these services (brand architecture) may moderate the relationship between tangibles and customer loyalty. The specific objective of this study was to establish the moderating effect of brand architecture on tangibles and customer loyalty in the mobile telecommunications industry in Kenya. This study adopted an explanatory survey design. The telecom mobile subscribers of the four telecom mobile providers, (Safaricom, Airtel, Telecom Kenya Limited (Orange), and Essar (YU), in Western Kenya formed the target population. The study further targeted all mobile service subscribers of Eldoret town who total over 306,683. Before brand architecture was introduced into the relationship, it was established that tangibles determine customer loyalty of mobile subscribers of telecom mobile providers. The results for “My service provider’s physical activities are visually appealing” were beta=.177 and p- value=.001, “Contact employees appear neat” were beta=.121 and p- value=.035, and “Materials associated with the service (such as pamphlets etc.) are visually appealing” were beta=.156 and p- value=.003. The results of the regression indicated that R² was .143 (14.3%) which meant that the total variance explained by the three variables and customer loyalty was 14.3%. After the introduction of brand architecture into the relationship it was established that there was both a positive effect and a negative effect. With the introduction of the moderator variable only the item “my service provider’s physical activities are visually appealing” had a significant effect on customer loyalty. The other items become insignificant. The recommendations of the study are that while deciding on the physical activities the telecom mobile providers should see to it that the materials are appealing, their employees are neat and that materials associated with the service (such as pamphlets etc.) are visually appealing. All those have a bearing on customer loyalty.  Telecom mobile providers should mind the structure of their products because it has a bearing on the already built customer loyalty.

Keywords: Brand Architecture, Tangibility, Customer Loyalty, Moderating