Relationship between Corporate Image and Customer Loyalty in the Mobile Telecommunication Market in Kenya

Abstract

Customer loyalty is considered to be a key ingredient in enhancing the survival of businesses especially in the situations faced by highly competitive industries. This study assessed the relationship between corporate image and customer loyalty. While the antecedents of customer loyalty connected with the marketing mix factors have been well investigated, much still remains to be studied regarding some of the intermediate conditions created by the marketing mix factors and customer loyalty. This study sought to investigate the relationship between the dimensions of corporate image and customer loyalty in the mobile telecommunication market in Kenya. The study was guided by several hypotheses that tested the nature of the relationship between corporate image and customer loyalty using four dimensions of corporate image, namely service quality, chief executive officer (CEO) reputation, brand image, and physical evidence. The study adopted the descriptive survey research design and used a multi-stage stratified sampling technique to target 320 respondents from among students across campuses of Kenyatta University (KU). Primary data was obtained using a structured five-point Likert scale questionnaire and analyzed using Pearson product-moment correlation coefficient and regression analysis to test the degree of association between the dependent and the independent variables. The study registered a high response rate of 97.8% from the target respondents. The findings of the study based on the correlation analysis indicated that the four dimensions of corporate image positively correlate with customer loyalty at p < 0.01. The regression analysis results however showed that even though the four dimensions correlate with customer loyalty, only service quality and brand image significantly predict customer loyalty. The regression model used explained 25% variation in the dependent variable. The null hypotheses one and four were supported while hypotheses two and three were not. The study concluded that of the four dimensions of corporate image, brand image and service quality predict customer loyalty within the Kenyan mobile telecommunication sector. The study suggests that future research undertakes integrate aspects of quality management into the dimensions of corporate image in order to predict variations in customer loyalty.