Customer Retention Strategies Used by Internet Service Providers in Kenya

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CUSTOMER RETENTION STRATEGIES USED BY INTERNET SERVICE PROVIDERS IN KENYA

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TABLE OF CONTENTS
PART ONE INTRODUCTION ……….………………………………………………….……………3 1.1 Background ……………………………………………………………………….3 1.1.1 Customer Retention Strategies…………………………………………………….4 1.1.2 Internet Service Providers …………………….…………………………………..6 1.2 Research Problem ………………………………………………………………...8 1.3 Objectives of the Study ………………………………….………………………10 1.4 Importance of the Study ……………………………………………………...….10 PART TWO LITERATURE REVIEW ……………………………………………………………….11 2.1 Introduction…….… ……………………………………………………………..11 2.2 Customer Retention ……………………………………………………………..11 2.3 Customer Retention Strategies………………… ………………………………..13 2.4 Summary of Literature review………………… ………………………………..25 PART THREE RESEARCH METHODOLOGY ……… ……………………………………………………26 3.1 Research Design ………………….……………………………………………...26 3.2 The Population ……………………………………………………………..……26 3.3 Data Collection Method ………………………….…………………………..….26 3.4 Operational Dimensions of Customer Retention Strategy ………………...…….26 3.4 Data Analysis …………………………………………………………………....27

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PART ONE INTRODUCTION
1.1 Background
The environment is constantly changing and so it makes it imperative for organizations to constantly adapt their activities in order to succeed (Ansoff, 1987). The fast-changing global business environment has led to more competition, increased choice for consumers, lower prices, lower margins, replacement of tangible assets with information, dramatically changing global infrastructures, from dependence to independence to interdependence, boundaries collapsing, market economies expanding i.e. deregulation and privatization, telecommunications infrastructure, investment from analog to digital (Muchira,2005).This has necessitated and resulted to strategic changes in the way organization carry out there business, the way they relate to there customers that is to the overall internal and external environment. In today’s competitive environment companies are being increasingly confronted with the threat of loosing key customers to competitors.

Muturi (2004) has outlined that the marketing environment facing Kenyan firms has been very dynamic. There has been a shift from a stable, non volatile, predictable and competitive environment to one that is quite volatile, unpredictable and competitive. Deregulation and globalization has turned around the Kenyan marketing environment. Globalization has spearheaded the integration of the Kenyan economy with other world economies such that Kenya is now part of the global village.

Grant (1998) outlines that though the primary purpose of strategy is to guide management decisions toward superior performance through establishing competitive advantage, strategy also acts as a vehicle for communication and coordination within the organization. According to Porter (2001), a firm can achieve a sustainable competitive advantage by focusing on operational effectiveness and distinctive strategic positioning. Operational effectiveness is doing the same things your competitors do but doing them better. Strategic positioning involves not only doing things differently than competitors, but also devising and delivering unique value to the target markets.

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Odhiambo (2003) outlines that due to the changes in the market place and for companies to survive many are changing in a number of ways, here are some of the trends: Reengineering from focusing on functional departments to reorganizing by key process, each managed by multidiscipline teams. Outsourcing; from making everything inside the company to buying more goods and services from outside if they can be obtained cheaper and better. E-commerce; from attracting customers to stores and having sales people call on offices to making virtually all products available on the Internet. Benchmarking; from relying on self improvement to studying “world class performance” and adopting “best practices”. Alliances; from trying to win alone to...
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