Abstract:
Competition among firms intensifies due to various organizational and environmental
factors, including globalization, deregulation, and emerging technologies. These factors
are a fast-changing environment that creates high levels of uncertainty in the business
environment and makes companies change their positions to achieve competitive
advantage. Nonetheless, Naivas supermarket continues to record increased growth and
expansion in the Kenyan retail market, positioning it among the most dominant
supermarkets in this sub-sector. This study aimed to evaluate the impact of differentiation
strategies on the sales performance of Naivas supermarket, focusing specifically on three
key strategies: image differentiation, service differentiation, and relationship
differentiation, which is discussed as a form of market segmentation below. It was
administered to two hundred and four senior and mid-management employees of Naivas
supermarket head office. Since it was a study with a small population, the researcher had
to use the census to do the sampling. The study employed the quantitative research
method. Descriptive analysis was used to describe the collected data while analyzing the
research data. Correlation analysis was employed to assess the hypothesis that an intimate
relationship between differentiation strategies and sales performance exists. Simple and
multiple logistic regression tests were applied to analyze each of the strategies as well as
the differences in strategic joint combination. The results revealed that they have a
positive impact with image differentiation (R² = 0.4746), service differentiation (R² =
0.3376), and relationship differentiation (R² = 0.3306), which explains the variations with
regard to sales performance. These strategies had a high predictive accuracy of sales
performance outcomes with R² = 0.649. Therefore, the study found that the above
differentiation strategies are crucial in augmenting the sales performance of Naivas
supermarket, causing a competitive edge in the marketplace. The research suggests that
retail stores implement these differentiation strategies to enhance their general sales
performance and satisfy consumers’ new requirements in the context of increased
competition. Future research should extend the range of differentiation strategies under
consideration and study factors that might influence the sales performance in a more
significant number of supermarkets in Kenya.
Key Words: Differentiation strategies, image differentiation, service differentiation,
relationship differentiation, sales performance, and Naivas supermarket.
