Analysis of Product Differentiation on the Performance of Supermarkets in Nairobi City County, Kenya

The rapidly changing Kenya market creates challenges for retail stores to retain their customers and build new competitive strategies against modern retailing. The study sought to analyze the influence of product differentiation strategy on the performance of supermarkets in Nairobi, to evaluate how cost leadership affect performance of supermarkets in Nairobi. The target population consisted of 147 managers and supervisors form the 7 main supermarkets in Nairobi City County. Primary data was collected using a semi—structured questionnaire and the data was analyzed using SPSS. Descriptive and Inferential statistics were used to analyze the data. The study used a multiple regression model to show the relationship between the study variables. The results obtained were represented on tables, charts and graphs. The findings revealed an R squared of 0.696 and adjusted R squared of 0.663 at 95% significance level, implying that the competitive strategies adopted in this study explained 69.6 percent of the variation in performance of supermarkets in Nairobi City County. The study also found that product differentiation strategy as an aspect of competitive strategies had a positive and significant effect on the performance of supermarkets in Nairobi (β =.357, p=.029<.05). The study concluded that product differentiation as a competitive strategies adopted had positive and significant effect on the performance of supermarkets in Nairobi. The study thus recommended that the supermarkets in Nairobi City County should consider fully implementing competitive strategies such as product differentiation as ways of enhancing their performance. Keywords: Product Differentiation, Performance, Supermarkets, Competitive Strategies