Market Penetration Strategies On Organizational Performance In Telkom Kenya Limited, Nairobi City County, Kenya

ABSTRACT

The telecommunication industry has responded to the changing business environment with several strategies aimed at maintaining and consequently growing its portfolio. Telkom Kenya limited was granted exclusive monopoly for 5 years on landline operations in Kenya, but during the monopoly period it lost a significant part of its business. Most of the clients swapped fixed lines phones for mobiles from other providers and this exacerbated the competitive pressure on the company‟s performance. This and other factors eroded the company's performance and effectively by the end of the monopoly period Telkom Kenya Limited was technically on the verge of bankruptcy and its business prospects were bleak. Therefore, this study sought to evaluate the influence of market penetration strategies on performance of Telkom Kenya Limited. The specific objectives of the study were to examine the influence of pricing strategy, distribution channel strategy, diversification strategy and promotional strategy on organizational performance. The study was anchored on market based view theory, open systems theory, product life cycle theory and resource based view theory. This study employed a descriptive survey research design. The target population was 65 members of staff obtained from 4 Departments which included technology department, business units-mobile department, pre-sales and post-sales department, and support department. A census of 65 respondents was carried out. The study employed questionnaires to collect primary data. The data collected was analyzed using both descriptive statistics and presented in tables, charts and figures. Regression analysis was used to how the relationship between variables. The study established that pricing strategy, distribution channel strategy, diversification strategy and differentiation strategy had positive significant influence on organizational performance. The study concluded that a competitive pricing strategy positions the organizational product in reference to other options on the market. Using an existing distribution network, however, extends the organizations geographical reach much more easily and quickly. Diversification helps the organization to maximize the use of potentially underutilized resources. Differentiation strategy is a marketing strategy that organization uses to distinguish a product from similar offerings on the market. The study recommended that the organization should understand their buyers‟ behaviour as this will help in redefining marketing activities and lead to an understanding of customers‟ willingness to buy at a given price. The organization should determine what value a channel partner adds to the organization‟s products and services. The organization should incorporate diversification in its business operations through use of technological advancements and other aspects such as innovation and benchmarking strategies to realize full benefits of diversification. The organization should select one type of differentiation best suited to target market desires, as well as its own financial constraints, and focus its efforts on honing products along that dimension. The study findings would benefit management of Telkom Kenya limited, government and policy makers as it would obtain details on market penetration strategies influences their performance and open a gap to other academicians and researchers.