Positioning Strategies, Customer Experience and Market Performance of Insurance Firms in Kenya

Abstract

Positioning strategy plays a crucial role in marketing the product and brand of insurance firms to the employee if integrated with positive customer experience leading to customer satisfaction and high market performance. However, high competition from international insurance and banc-assurance products from commercial banks have affected the performance of insurance in Kenya leading to low market share and overall performance. Kenyan insurance products are facing high competition; low penetration as evident by constant dropped in market penetration between 2015 to 2022 from 2.7% to 2.2% showing that the insurance sector is constantly losing its market share to competing financial products. This is accelerated by poor customer experience leading to high default rate among customers. The insurance firms require continuous branding of the product and the firm; however, most marketers make an error of under positioning, over positioning or confused positioning creating dissonance between customer’s expectations and experience. Therefore, there is need to examine positioning strategies in relation to customer experience and market performance. The general objective of the study was to examine the relationship among positioning strategies, customer experience and market performance of insurance firms in Kenya. The specific objectives were to determine the relationship between brand focus positioning and market performance, customer focus positioning, and price focus positioning, and market performance in Kenya. The study also assessed the moderating effect of customer experience on positioning strategies and market performance of insurance firms in Kenya. The study adopted theory of customer satisfaction, assimilation-contrast theory, Keller Expectancy Theory and Market Base View Theory. The study adopted positivism research design. A mixed research design was employed which, incorporated cross-sectional and correlation designs. The target population of the study was 220 top management respondents who are responsible in implementing positioning strategies in the firm. Using census method data was collected from all the 220 target respondents. Data was collected using structured questionnaires. Experts in the area of study and supervisors assisted in scrutinizing the questionnaire for validity in terms of face, content and construct. The reliability of the questionnaire was tested using the Cronbach Alpha coefficient where a threshold of 0.7 is deemed reliable. For data summarization, descriptive statistics such as mean and standard deviation was employed in the study. Inferential statistics: - regression and correlation were used to test the relationship between variables. The study found that brand focus positioning (B=0.266, p<0.05), customer focus positioning (B=0.302, p<0.05) and price focus positioning (B=0.689, p<0.05) had a positive significant influence on market performance of insurance firms in Kenya. It was also found that customer experience significantly moderates the relationship between positioning strategies and market performance (B = 0.785, p < 0.05). The moderating effect of customer experience contributed 7.3% to change in market performance (R2

-Change = 0.073). The findings highlight the importance of integrating a positive customer experience with positioning strategies to improve market performance. The study concluded that positioning strategies that is brand, customer and price focus play a significant role in market performance. Consequently, customer experience plays an important role in enhancing positioning strategies leading to higher market performance. The study recommended that businesses should focus on customer experience when implementing positioning strategies creating a competitive advantage of insurance products in the market and better market performance. These results might be beneficial to insurance and related firms who are looking for market of their products in a competitive market environment.