INFLUENCE OF PRODUCT CATEGORIZATION ON CUSTOMER RETENTION IN SACCO’S IN THARAKA NITHI COUNTY, KENYA
Stellah Gitari - Tharaka University, Department of Business Studies, Kenya
Dr. Viona Muleke Aluvale - Tharaka University, Department of Business Studies, Kenya
Dr. James Nyamu - Tharaka University, Department of Business Studies, Kenya
Sitienei Collins - Tharaka University, Department of Business Studies, Kenya
ABSTRACT
Savings and Credit Cooperative Societies (SACCOs) play a critical role in providing financial services and fostering economic development, especially in rural areas such as Tharaka Nithi County, Kenya. Despite their significance, many SACCOs face challenges related to customer retention, largely due to inadequate product categorization strategies and substandard service delivery. Therefore, the current study will fill this gap by determining the influence of product categorization on customer retention in Sacco’s in Tharaka Nithi County, Kenya. The study adopted a descriptive research design which focused on 10 SASRA Registered SACCOs operating in Tharaka Nithi County. The reliability was tested using Cronbach's alpha where the results showed that the research instruments were reliable. Primary data was collected using a questionnaire submitted to 349 customers consuming products in the 10 SASRA Registered SACCOs. The researcher used descriptive statistics to describe key features of data and inferential statistics such as t-test used to test the significance of regression coefficients. Data was analyzed with the help of Statistical Package for Social Sciences (SPSS) version 28.0. The findings implied a strong positive relationship between product categorization and customer retention. This suggests that customer retention is increased by application of product categorization in terms of product portfolio, product development, frequency and product alignment with market trend in SACCOs in Tharaka Nithi County, Kenya. The top management in the SACCOs should invest in market research to continuously update their product offerings, keeping them in line with customer expectations and market trends.