REBRANDING STRATEGY AND PERFORMANCE OF SAVINGS
AND CREDIT CO-OPERATIVES IN MERU COUNTY, KENYA
Machoki Lenah Makena
A RESEARCH PROJECT REPORT SUBMITTED IN PARTIAL FULFILLMENT
OF THE REQUIREMENTS FOR THE AWARD OF A DEGREE OF MASTER OF
BUSINESS ADMINISTRATION IN THE UNIVERSITY OF NAIROBI
2014
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DECLARATION
This research study report is my original work and has not been presented to any other
examination body. No part of this research should be reproduced without my consent
or that of University of Nairobi.
Signature………………………………..
Date………………………………………
Machoki Lenah Makena
Reg No. D61/76254/2012
This research project report has been submitted for review with the approval of the
following supervisor:
Signature…………………………………
Date……………………………
Dr. J. M Munyoki
Senior Lecturer
Department of Business Administration
University of Nairobi
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DEDICATION
To my late father and mother who always taught me to aim higher in life and whatever
I undertake; to do it to my best ability. To my daughters, Emelda and Shamin, they
always encouraged me to soldier on despite many ups and downs during my study.
Lastly, to my cousin Beth Gakii for her support throughout the study period.
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ACKNOWLEDGEMENT
I recognize the support of my family and friends, their encouragement and understanding
was enormous throughout the period of study.
I acknowledge much effort from my supervisor Dr. J. M Munyoki, his sage advice,
positive criticism and availability aided the completion of this research work. I deeply
appreciate the contribution from all lecturers and student colleagues in the School of
Business, University of Nairobi.My sincere gratitude goes to the SACCO officials who
took their time to fill the research questionnaires. Their contribution enhanced the
completion of this research work.
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ABSTRACT
Branding is a long – term strategy adopted by enterprises to develop a successful brand in
order to achieve specific goals. Branding as a strategy aims at defining a company’s core
values and beliefs. In this respect, branding enables companies to communicate the
benefits and values that a product or service offers which in the long run forms the
foundation of enterprise’s very identity, or brand. While branding is concerned with
creating a brand identity, rebranding is recreating that identity. Based on this review; there
is no known study in Kenya that has investigated the effect of rebranding on performance.
Therefore this study seeks to fill this information gap by investigating effects of
rebranding strategy on performance of SACCOS in Kenya by carrying out a survey of
SACCOs in Meru County. The objective of the research is to investigate the effect of
rebranding strategy on performance of SACCOs in Meru County, Kenya. The survey
incorporated both branded and non branded SACCOs in Meru County. 75% of SACCOs
in Meru were selected using Stratified random sampling which was necessitate by the fact
that SACCOs in Meru were divided into seven categories based on the location ( districts).
This ensured that SACCOs from all areas within Meru County were part of the study
which gives the study an all inclusive report as pertains to SACCOs in Meru County.
In particular, the effect of rebranding on membership, customer satisfaction and corporate
identity was evaluated. Data was gathered using a closed ended Likert scaled
questionnaire which incorporated various factors which could be used to evaluate the
desired variable. Data analysis was conducted using SPSS version 20. 1. Cross-tabulations
and Pearson correlation was used for analysis of the data. Confidence interval was set at
95%. Data was presented using graphs and tables. According to the results obtained
SACCOs rebrand for various reasons including: to improve competitiveness, improve
diversity and SACCO’s relevance. Re-branded SACOOs in Meru county noted
rebranding had been necessitated by SASRA regulations that required all deposit-taking
SACCOs to have a core capital of not less than 10 million shillings; which forced
SACCOs to find alternative ways of expanding the common bond, respondents from
rebranded SACCOs felt that branding can have an effect on brand equity greatly by
improving brand loyalty, customer attitude, and perception of quality and brand
awareness. They also noted that branding can have a positive effect on SACCO
membership via enhanced membership retention, increase in membership and increases in
shareholding and savings. Putting the results into perspective, it can be asserted that
rebranding is a viable alternative for SACCOS seeking to project a new image and
improve its market share. However, further data are needed to more definitely clarify the
specifics of rebranding and its effect on SACCO’s membership and image among others.
Such studies should evaluate a large number of SACCOs and should preferably be
longitudinal. More studies on rebranding and performance should be carried out even in
other sectors of the economy.
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TABLE OF CONTENTS
DECLARATION................................................................................................................................. ii
DEDICATION.................................................................................................................................... iii
ACKNOWLEDGEMENT ................................................................................................................ iv
ABSTRACT..........................................................................................................................................v
LIST OF TABLES ............................................................................................................................. ix
LIST OF FIGURES .............................................................................................................................x
ABBREVIATIONS AND ACRONYMS .......................................................................................... xi
1.1 Background of the Study .................................................................................................... 1
1.1.1 The Concept of Branding ......................................................................................... 2
1.1.2 The Concept of Rebranding ..................................................................................... 4
1.1.4 Organizational Performance .................................................................................... 5
1.1.5 The SACCO Sub - Sector in Kenya......................................................................... 7
1.2 Research Problem............................................................................................................... 8
1.3 Study Objectives .............................................................................................................. 10
1.4 Value of the Research ....................................................................................................... 10
CHAPTER TWO: LITERATURE REVIEW .................................................................................12
2.1 Introduction ...................................................................................................................... 12
2.2 Theoretical Framework ................................................................................................... 12
2.2.1 Darwin’s theory of evolution by natural selection ................................................. 13
2.3 Effects of Rebranding on Membership and shareholders’ Value ..................................... 14
2.4 Effects of Rebranding on Customer satisfaction .............................................................. 15
2.5 Effects of Re-Branding on Brand Identity ....................................................................... 16
2.6 Empirical Studies ............................................................................................................ 17
2.7 Conceptual Framework .................................................................................................... 18
CHAPTER THREE: RESEARCH METHODOLOGY ...............................................................20
3.1Introduction ....................................................................................................................... 20
3.2 Research Design ............................................................................................................... 20
3.3 Study Population .............................................................................................................. 20
3.4 Sampling Techniques and Sample Size........................................................................... 21
3.5 Validity of the Research Instruments .............................................................................. 22
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3.6 Reliability of the Research Instruments ........................................................................... 23
3.7 Data Collection Procedure ............................................................................................... 23
3.8 Data Analysis.................................................................................................................... 24
CHAPTER FOUR: DATA ANALYSIS AND RESULTS ................................................................25
4.1 Introduction ...................................................................................................................... 25
4.2 Results on the test for reliability and reproducibility ....................................................... 25
4.3 Characteristic of the respondents ..................................................................................... 25
4.4 Rebranding strategies ....................................................................................................... 26
4.5 To determine the effect of rebranding on membership .................................................... 29
4. 5.1 To establish the effects of rebranding on new members ....................................... 29
4.5.2 The effects of Rebranding on Membership Retention ........................................... 31
4.5.3 Effect of rebranding on shareholding .................................................................... 32
4.5.4 Effects of rebranding on member savings ............................................................. 33
4.5.5 Pearson Correlation Matrix for the factors Associating Rebranding and SACCO
Membership .................................................................................................................... 35
4.6 To establish the effect of rebranding on customer satisfaction ........................................ 36
4.6.1 Effect of Rebranding on customer attitudes........................................................... 37
4.6.2 Effect of Rebranding on Customer Behavior......................................................... 38
4.6.3 Effect of Rebranding on Customer Preference ...................................................... 39
4.6.4 Rebranding effects on Customer Loyalty .............................................................. 40
4.6.5 Pearson Correlation Matrix for the factors Associating Rebranding and
Customer Satisfaction ..................................................................................................... 41
4.7 To investigate the effect of rebranding on corporate identity. .......................................... 42
The effect of rebranding on corporate logo was evaluated ............................................. 42
4.7.1 Rebranding effect on Logo .................................................................................... 42
4.7.2 Effect of rebranding on SACCO image ................................................................. 43
The effect of rebranding on SACCO image was also evaluated. ................................... 43
4.7.3 Rebranding effect on SACCO name ...................................................................... 44
4.7.4 Pearson Correlation Matrix for the factors Associating Rebranding and
Corporate Identity ........................................................................................................... 46
CHAPTER FIVE: SUMMARY, DISCUSSION, CONCLUSION, LIMITATIONS AND
RECOMMENDATION .....................................................................................................48
5.1 Introduction ...................................................................................................................... 48
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5.2 Summary of the findings .................................................................................................. 48
5.3 Discussion ........................................................................................................................ 50
5.4 Conclusion ....................................................................................................................... 53
5.5 Limitations ....................................................................................................................... 54
5.6.1 Recommendation on policy implications ............................................................ 55
5.6.2: Recommendation for further studies .................................................................... 55
REFERENCE .....................................................................................................................................57
APPENDICES ....................................................................................................................................61
Appendix 1: EFFECTS OF REBRANDING STRATEGRY ON PERFORMANCE OF
SAVINGS AND CREDIT CO-OPERATIVES: ..................................................................... 61
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LIST OF TABLES
Table 3. 1 Sample Size ........................................................................................................... 22
Table 4. 1: characteristics of the respondents ........................................................................ 26
Table 4.3: Rebranding strategy as relates to its effect on improved relevance,
competitiveness and diversification. ....................................................................... 28
Table 4.4: Rebranding strategies related to customer satisfaction ......................................... 29
Table 4.5: Rebranding versus increase in membership .......................................................... 30
Table 4. 6: Effect of rebranding status on membership retention ......................................... 31
Table 4. 7: Effect of rebranding on shareholding ................................................................... 32
Table 4.8 Rebranding and member savings ........................................................................... 34
Table 4. 9: Correlation Matrix on rebranding and membership components ....................... 35
Table 4.10: Rebranding and customer attitude ....................................................................... 37
Table 4. 11: Effect of rebranding on customer behavior ........................................................ 38
Table 4.13: effect of Rebranding on customer loyalty ........................................................... 40
Table 4. 14: Correlation factors associating rebranding and components of customer
satisfaction............................................................................................................... 41
Table 4.15: Rebranding and Sacco Logo ............................................................................... 42
Table 4. 16: Effect of rebranding on SACCO image ............................................................ 43
Table 4. 17: Effect of rebranding and name change .............................................................. 45
Table 4. 18: Pearson Correlational matrix associating rebranding and components of
corporate identity .................................................................................................... 46
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LIST OF FIGURES
Figure 2. 1: Relationship between factors influencing rebranding strategy and SACCOs
Performance........................................................................................................................ 19
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ABBREVIATIONS AND ACRONYMS
B2B:
Business to Business
CVI:
Corporate Visual Identity
FOSA:
Front Office Services
GDP:
Gross Domestic Product
IFAD:
International Fund for Agriculture Development
KUSCCO:
Kenya Union of Saving and Credit Co-operatives
ROE:
Return on Equity
ROI:
Return on Investment
SACCOS:
Savings and Credit Co – operative Societies
SARSA:
Sacco Societies Regulatory Authority
WOCCU:
World Council of Credit Unions
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CHAPTER ONE: INTRODUCTION
1.1
Background of the Study
A SACCO is democratic, unique member driven organization; SACCOs are owned,
managed and run by its members. The members decide how their money will be used for
the benefit of each other (SACCO Savings and Credit League of South Africa). SACCOs
are managed by board members who are democratically elected on the basis of one
member one vote, members also elect supervisory committee that play an audit role. In the
past, Co-operative societies were started by members to promote their welfare within
certain geographical location; in line with this, they also adopted names that were
synonymous with the place. In other cases professions or main activity was used to create
a common bond and the name. However, in recent past SACCOs have chosen to rebrand
in order to open up the common bond to all Kenyans irrespective of the locality and
profession.
Branding is a long – term strategy adopted by enterprises to develop a successful brand in
order to achieve specific goals. A well defined and executed brand strategy will impact on
all aspects of organization’s business and has a direct link with the customer needs,
emotions and is responsive to competitive environment. SACCO re-branding has been
necessitated by SASRA regulations that require deposit-taking SACCOs to have a core
capital of not less than 10 million shillings. This has forced SACCOs to find alternative
ways of expanding the common bond. Re-branding has enabled most deposit – takers to
expand membership and increase the core capital in order to be licensed by regulatory
authority. However, re-branding as a business strategy has also its challenges that if not
well addressed can have negative impact on business performance. Since SACCOs in
1
Kenya are major players in the financial Industry with about 25% of the GDP in members’
deposits, prudent management is therefore important to ensure safety of member’s deposit.
This can only be achieved if proper strategies are adopted in the management of SACCOs.
Strategies can only be effective if properly conceived and executed. Poorly executed
strategies can lead to inefficiency and financial losses that can be detrimental to the long –
term survival of the SACCO.
In the past, Co-operative societies were started by members to promote their welfare
within certain geographical location; in line with this, they also adopted names that were
synonymous with the place. In other cases professions or main activity were used to create
a common bond and the name. However, in recent past SACCO’s have chosen to rebrand
in order to open up the common bond to all Kenyans irrespective of locality or profession.
One such case is Meru Mwalimu SACCO that has re-branded to solution SACCO with the
aim of giving the SACCO a national identity to enable them appeal to more members and
set up a national network. Another example is Imenti South Tea Growers SACCO that
changed name to Yetu SACCO, having opened a branch in Nairobi County.
1.1.1 The Concept of Branding
Branding is the process of giving an enterprise or product an identity that will allow the
creation of a differentiated position in the market as well as in the mind of stakeholders.
Branding as a strategy aims at defining a company’s core values and beliefs. In this
respect, branding enables companies to communicate the benefits and values that a
product or service offers which in the long – run forms the foundation of enterprise’s very
identity, or brand heritage. The true value that successful branding has for an enterprise
2
through brand name can be identified in how customers are prepared to buy those well –
known brand names, thus creating valued or brand equity for the enterprise.
The development of the internet has also made branding to become increasingly important
because of the huge amount of choice and variety of products and services offered in
almost every market. And with consumers finding an ever growing availability and
accessibility of products and services, business must adopt ways of remaining competitive
and strengthen their visibility in the market. Furthermore businesses are now recognizing
the growing importance of social media amongst consumers. And as business begin to
show their presence in the social media, their marketing strategy must also identify with
the new channel to communicate their brands to stakeholders. According to (Gray 2006,
Fill 2009), brand managers have less influence on managing corporate reputation because
consumers now have more influence in the branding process. In the past, brand owners
had more control over their brand but now consumers have more influence on redefining
what brands means to them, how competing brands differentiate, and how they perceive
and attribute brand personality (Fill, 2009).
A brand comprises
both tangible and intangible elements and when communicated
effectively, differentiates the product and service, reduces the risk involved in a buying
decision, leads to sustained competitive advantage and ultimately, to long-term
profitability. Un-branded product or services does not deliver any extra value to the
customer and is indistinguishable except in terms of price (Wood, 2005).
Successful
brands create strong, positive and lasting impressions, all of which are seen by audience to
be of value to them personally. The additional value that customers perceive in a brand
ultimately builds long – term loyalty, or brand equity, which contribute to sustained
3
competitive advantage and to marketing power. Marketing power allows businesses to
carry out their marketing activities more productively, as customers are respective to the
brand; they know what the brand stands for and are aware of the brand identity (Wood,
2005). Branding also include brand image, brand personality, brand positioning and brand
awareness.
1.1.2 The Concept of Rebranding
While branding is concerned with creating a brand identity, rebranding is recreating that
identity. Business adopting new names, slogans or visual identities rebrand in cases of
mergers and acquisitions or change of corporate or business strategy. There are various
definitions of rebranding by different authors for instance; Daly & Maloney (2004) define
rebranding as a continuum from revitalizing a current brand to full name change that
involves alterations in brand values and promises. Similarly, Stuart and Muzellec (2004)
describe rebranding as a continuum. Whilst both views regard rebranding as a process
along a continuum of minor to major change, Muzellec and Lambkin (2005) make the
distinction between evolution, which involves the slogan or logo only, and revolution,
which incorporates the elements of slogan and logo, as well as the name. Furthermore,
both define rebranding as the creation of a new name, term symbol, design or a
combination of them for an established brand with the intention of developing a
differentiated (new) position in the mind of stakeholders and competitors (Muzellec &
Lambkin, 2005).
According to Muzellec et al. (2003), rebranding process comprises four stages:
repositioning, renaming, redesigning and relaunching. Repositioning is required when
there is a decision to create a new position in the minds of customers and other
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stakeholders. Renaming is considered when it is necessary to send a strong signal to all
stakeholders that the business is changing its strategy, refocusing its activity or changing
ownership. The third stage is redesign and concerns aesthetics and tangible elements such
as logo, offices, advertisements and other visible elements of the business’s desired
position. The fourth and final stage relaunch, will determine how stakeholders regards the
new name and new brand.
Muzellec and Lambkin (2008) point out that as corporate and brand images change, and as
restructuring occur due to mergers, acquisitions or sales of brands, brand architectures
must equally adapt and evolve as a result of these changes. Such changes can follow an
integration strategy, where the idea is to unite all elements under one identity or branded
house which is aimed at gaining market share and providing greater visibility. On the other
hand, brand separation aims to disassociate. By contrast, this strategy leads to a house of
brands architecture. Reasons for rebranding concern conveying the desired message to the
customer and other stakeholders. Rebranding is more than just creating a new name for a
brand but must be focused on reinforcing new message to the market so that the value
proposition becomes more relevant given the market dynamics (Aaker, 2011)
1.1.4 Organizational Performance
Performance is a multidimensional concept that depends upon the indicators used to assess
it. The empirical literature reports a high diversity of performance indicators (Combs,
Crook, & Shook, 2005; Venkataraman & Ramanujam, 1986); a common distinction is
between financial and non-financial measures. Non – financial measures includes goals
such as satisfaction and business success rating made by owners or business managers;
financial measures includes factors such as sales growth and Return on Investments (ROI)
5
(Smith, 1976).
Regarding financial performance, there is often a low convergence
between different indicators (Murphy, Trailer, & Hill, 1996). On a conceptual level, one
can distinguish between growth measures and measures of profitability. While these
concepts are empirically and theoretically related, there are also important differences
between them (Combs et al, 2005). For instance, a business may invest heavily in longterm growth, thereby sacrificing short-term profits.
In SACCOs, profitability is not the primary concern (Branch & Baker). However, the
WOCCU report (2005) takes a different look at profitability of SACCOs. It stated that
Sacco’s should generate profit in order to directly benefit the owners as they (members)
serve as both the owners of the Sacco’s and the recipients of the services offered by the
organization. Thus when SACCOs maximize their profits, it results in the form of lower
interest rates on loans, lower service fees and higher dividends for the members. In line
with the WOCCU report (2005), Bauer (2007) states that SACCOs organized to meet the
needs of their members thus surplus or profit are returned to members in the form of
reinvestment in the Sacco, dividends to members, or lower interest rates on loan products.
Rebranding can impact on financial performance of a SACCO because it has an effect on
Members purchase intentions, satisfaction and customer loyalty. Satisfied and loyal
customers are not only less likely to be enticed by short – term competitor promotions;
they are also less sensitive and more willing to pay premium prices for products and
services (Chaudhuri & Holbrook, 2001; Zeithmal, Bitner, & Gremler, 2009). In addition,
they also tend to have high attitudinal attachment to their preferred products and services
so much so that many would even consider changing the timing of their purchase to ensure
that they get the right products and services (Tideswell & Fredline, 2004). Brand – loyal
customers are also more likely to make choices and recommendations to others based on
6
longer – term views and attitudes towards the business and reduce the marketing costs
associated with attracting new customers (Getty & Thompson, 2004 Sim et al., 2006).
The link between customer satisfaction and loyalty, and financial performance is in line
with Reichheld and Sasser (1990) findings that increase in customer retention contributes
to increase in profitability. Taken together, most researcher have established a link
between the length of time the customer stays in relationship with a business (Satisfied
and loyal), and the profitability of the firm.
1.1.5 The SACCO Sub - Sector in Kenya
SACCO societies were introduced in Africa in 1931 with the intention of assisting
villagers improve their economic well being (Ng’ombe & Mikwamba, 2004). English
speaking nations were first at adopting Saccos with Ghana, Uganda, Nigeria, Tanzania and
Kenya being the first countries. Most non-English speaking nations in Africa appreciated
SACCOs much later. In Kenya, the first co-operative society was Lumbwa co-operative
Society formed in 1908 by the European Farmers with the aim of supporting agricultural
activities and products to take advantage of economies of scale (Kenya Union of Savings
and Credit Co-operatives (KUSCCO, 2006). After independence, the Kenyan government
recognized co-operatives as suitable for achieving economic development of the nation.
Necessary steps were then taken by the government which saw the rapid expansion and
growth of Sacco society movement in the country (Gardeklint, 2009).
The SACCO sub-sector is part of the larger co-operative movement in Kenya. There are
two major categories of co-operatives: Financial co-operatives (Savings & Credit cooperatives societies – SACCOs) and Non-financial co-operatives (includes farm produce
and other commodities marketing co-operative, housing, transport and investments co-
7
operative). In the recent past, SACCOs have witnessed faster growth than other cooperatives. And the establishment of SACCO societies Act 2008 places regulation under
the armpit of SACCO regulatory Authority (SASRA). The new legal framework has been
introduced to guide the growth and development of SACCOs.
Meru County is endowed with rich and fertile agricultural land; it is on the basis of the
various agricultural products and economic activities that co-operatives are based. This
comprises of 43 coffee societies, 33 dairy societies, 7 multipurpose co-operative societies,
6 housing co-operative society and 53 SACCOs (Kenya Union of Savings and Credit Cooperatives).The area of concern as pertains to this research is SACCOs in Meru County,
Kenya.
1.2 Research Problem
Kenya has a vibrant co-operative movement in the region that aims at improving
members’ welfare within their common bond. To achieve their target, SACCOs have
adopted different business strategies to ensure survival in a highly competitive industry.
One such strategy is rebranding that is aimed at expanding the common bond and the
national network. Rebranding strategy might be attractive in solving company’s problems,
but is not without risk. Rebranding exercise has the potential to alienate employees and
customers, provoke a loss of goodwill, and cause confusion that can lead to losses and the
eventual dissolution of a SACCO. Furthermore, rebranding is equally an expensive, time
consuming and risky activity that should be undertaken with a clear marking and financial
case in its favor and a strong marketing plan in place to support its implementation. Stuart
and Muzellec (2004) caution that the name is the primary means of communication for the
8
organization; changing it is risky because what is being communicated about the
organization changes dramatically.
Numerous studies have been done all over the world focusing on various aspects of
branding. For instance in USA Keller & Lehmann, (2005) carried out research on brand
and branding and after an extensive review of literature concluded that there still remains a
number of opportunities for research in the area of branding. In Europe Smith &
Brynjolfson, (2000) investigated effect of internet on branding and found that while there
is lower friction in many dimensions of Internet competition; branding, awareness, and
trust remain important sources of heterogeneity among Internet retailers, while in
Malaysia Karbhari et. al, (2004) researched on the impact of name change on the
Malaysian companies around the announcement date and found no impact on stock return
on the announcement date for a company name change unless it was accompanied by
some restructuring plan. Woon, (2010) investigated the impact of rebranding on customer
perception in Hong Kong and found that brand equity can be improved when rebranding is
evaluated positively.
In India Dhillon (2013) focused on brand loyalty in hospitality sector in Goa and found
that customers’ perceptions on tangibles, empathy and reliability contributed to fostering
their loyalty with hotel brand. Finally, Ogbuji & Anyamwu, (2011) carried an empirical
study on the impact of branding on consumer choice in Nigeria and recommended that
firms should focus on the company name and packaging and also integrate brand name
and brand mark as supportive elements in fashioning effective branding strategy. Locally,
Mahoney (2012) conducted a study on changing strategies in marketing Kenya’s tourist
Art from ethnic brand to fair trade label.
9
Based on this review, there is no known study in Kenya that has investigated the effect of
rebranding on performance. Therefore this study seeks to fill this information gap by
investigating effects of rebranding strategy on performance of SACCOS in Kenya by
carrying out a survey of SACCOs in Meru County. The aim of the researcher was to
answer the question, what are the effects of rebranding on performance of SACCOs in
Meru County, Kenya?
1.3 Study Objectives
The objective of the research is to investigate the effect of rebranding strategy on
performance of SACCOs in Meru County, Kenya. The following are specific objectives.
i)
To determine the effect of rebranding on membership.
ii)
To establish the effect of rebranding on customer satisfaction.
iii)
To investigate the effect of rebranding on corporate identity.
1.4 Value of the Research
The findings of this research are an important first step in enhancing the effort of SACCOs
in coming up with strategies on rebranding that can help their operations in setting up
management strategies. The research also provides immense knowledge in the way
SACCOs should rebrand and thus provide management with information on how
SACCOs should adopt new strategies for the benefit of members. In addition, the research
study can facilitate better SACCO management enhancing the knowledge of Board
members in overseeing the management of the institution. SACCO members can also be
able to understand the importance of rebranding and realize their role in the operations of
the newly rebranded SACCOs. Based on the information obtained, members can be able to
make sound decisions on issues of rebranding given that such decisions are not taken by
10
SACCO management without consulting members. Therefore their contribution in Annual
General meeting can be enhanced.
In addition, the information acquired from the study will be useful in formulating policies
both in government and SACCOs especially in strengthening policy consideration in the
sector. The findings of the study may open opportunities for further research in the area of
rebranding strategy in Kenya even in other sectors of the economy. Regulatory authorities
such as SASRA may benefit from the study by formulating policies and regulations that
are aimed at safe guarding member’s funds.
The study can also contribute positively in establishing models of corporate re-branding
that will account for the shortcomings in the process of re-branding. A model on corporate
re-branding can explain how the corporation adopts its new name and what influences the
process. Process is the nature, sequence and order of activities and events that a
corporation undergoes when it changes its name. Activities and events include the actions
and decisions the corporation takes. In addition, different time scales in the same process
and the dynamic nature of the processes are considered (Van de Ven, 1992: Langley,
1999). The findings can also expound on studies by Daly and Moloney (2004) and
Muzellec and Lamkin (2006) description of corporate re-branding in theory development.
Daly and Moloney (2004) suggest that the corporate re-branding process has the following
stages: pre-campaign situation analysis, stage one:
partnership campaign, stage two:
vision and values, stage three: interim/dual branding (brand naming), stage four: prelaunch, and stage five: launch.
11
CHAPTER TWO: LITERATURE REVIEW
2.1
Introduction
This chapter examines the literature to develop a framework for this study. It is organized
under the following subheadings: Theoretical framework, game theory, effects of
rebranding on membership and shareholding, financial performance, customer satisfaction,
corporate identity and empirical studies. Finally, the chapter gives a summary and
highlight gaps and issues raised and reviewed as well as the conceptual framework of the
study.
2.2
Theoretical Framework
The theoretical framework of a research project relates to the philosophical basis on which
the research takes place, and forms the link between the theoretical aspects and practical
components of the investigations undertaken. The theoretical framework, therefore, has an
implication for every decision made in the research process (Mertens, 1998). The starting
point in developing a research proposal according to Crotty (1998, 3) is to identify the
methodologies and methods that will be utilized in the research project and then to justify
their choice. Methodologies relate to “the strategy, the plan of action, process and design
lying behind the choice and the use of particular methods, and linking the choice and use
of methods to the desired outcomes” (Crotty, 1998, 3). The methods applied convey the
techniques or procedures used to gather and analyze data related to some research
questions” (Crotty 1998, 3). Therefore, it is important “to find a method which is
compatible with the kind of kind of problem being investigated (Mackay 1993).
12
2.2.1
Darwin’s theory of evolution by natural selection
Darwin’s theory of natural selection states that the observable characteristics of a trait in
an organism (phonotype) are determined by an interaction between the genes (genotype)
and the environment in which the gene exist. In sexual reproduction, there is a reshuffling
(recombination) of the genes responsible for a trait. This results in each offspring having
different combination of the same set of genes responsible for a particular trait. The
offspring expressing a particular combination of the genes controlling a trait is usually
more favoured by the environment than others. With time, this offspring survives and
reproduces than the offspring with other variant of the same trait. In the process the
offspring with variant that is more favored by the environment gradually takes over, and
the offspring with other variants becomes extinct. In this way, the population evolves. This
process is called natural selection which the main adaptive form of evolution (Gofrey
et.al).
Evolution by natural selection in organisms and rebranding corporate organizations are
one and the same thing. Evolution by natural selection shows that the environment
influences observable expressions of genes and also selects particular heritable traits for
survival. This corresponds with the external and internal factors that influence a corporate
brand. These factors influence the creation and expression of values. Therefore corporate
rebranding is a continuous recombination of values or their extension in an attempt to be
selected for survival by the environment in this case the customers. Brands that are
continuously chosen by customers normally survive. The goal of the corporate rebranding
phenomenon is to survive and thrive just like natural selection and evolution. Organisms
adapt to an environment through evolution by natural selection; corporate brands adapt to
their environment by corporate rebranding (Goi &Goi, 2011).
13
2.3
Effects of Rebranding on Membership and shareholders’ Value
Existing literature analyze the brand value performance from two perspectives.
Accounting – based performance and market – based performance. Accounting – based
performance links brand attributes with operating results such as revenues, profits, return
on investment and cash flows. A study by Kim, Kim and An (2003) uncovered a positive
relationship between brand equity characteristics and the firms’ revenue. The existing
research on market based performance reveals a positive association between brand value
and security prices. Simon and Sullivan (1993) use a firm’s market value to estimate a
firm’s brand equity and determined that industries and firms with common known brand
names possess high estimates of brand equity. Aaker and Jacobson (1994) examine the
relationship between measures of brand quality and security returns and the authors
established a positive and economically significant association between brand quality and
company returns. In the consequent study, Aaker and Jacobson (2001) show that brand
attitude can predict firm’s market return and future accounting financial performance
measures by return on equity (ROE).
While these studies provide empirical evidence suggesting a relationship between
corporate branding and firm’s market performance, they cannot conclusively demonstrate
whether strong brand create shareholder value. However, recent studies have focused on
branding and shareholders’ value creation.
Doyle (2001) developed a theory that
analyzing the link between corporate brand planning, shareholders’ wealth and firm
market risk. Madden et al (2005) by using the Fama – French model investigated the
association between corporate branding and shareholders’ value and their findings suggest
that strong brand have lower market risk and deliver higher returns shareholders. Pahud de
Mortanges and Van Riel (2003) attained the same results.
14
2.4
Effects of Rebranding on Customer satisfaction
Despite several attempts to measure and explain the meaning of customer satisfaction,
there is still no consensus regarding its definition (Giese and cote, 2000). However,
customer satisfaction can be defined as a post consumption evaluative judgment
concerning a product or service (Gundersen, Heide and Olsson, 1996). According to
Oliver (1980) customer satisfaction is the result of an evaluative process that contrasts
prepurchase expectations with perception of performance during and after the
consumption experience. The most widely accepted concept of customer satisfaction is the
expectancy disconfirmation theory (Barksy, 1992, Finn and Wiley, 2000). The theory was
first developed by Oliver (1980) who proposed that satisfaction level is a result of the
difference between expected and perceived performance. Satisfaction occurs when product
or service is better than expected.
The importance of rebranding and customer satisfaction has been well-studied in both
academia and practice (Gruca and Rego, 2005, Zeithmal, 2000). Studies carried out in
service industry, identified that achieving customer satisfaction and customer loyalty as a
critical factor for success given the fact that the cost of soliciting new customers can be
five to seven times higher than that of retaining existing ones (Sim, Mak & Jones, 2006).
Other studies have provided support for the link between branding and customer
satisfaction. Aaker (1991) found that where a customer has a strong attachment to a brand,
they are likely to demonstrate resistance to change to other brands. Mazanec (1995) found
that a desirable image (a construct of brand equity) can lead to customer satisfaction and
customer preference (a dimension of customer loyalty). Getty and Thompson (2004)
studied the relationships between quality of service, satisfaction, and the effect on
customer’s intentions to recommend to others. They concluded that customers’ intention
15
to recommend is a function of their perception of service quality. According to Frederick
and Salter (1995), brand image can affect loyalty because it can support or undermine the
value that customers feel they are getting.
2.5
Effects of Re-Branding on Brand Identity
An organization can effectively manage its corporate identity by building understanding
and commitment among its diverse stakeholders. This can be manifested by attracting and
retaining customers and employees, achieve a strategic alliance, gain the support of
financial market and generate a sense of direction and purpose. According to Val Riel and
Balmer (1997), corporate identity is concerned with all organization’s stakeholders and
differs from the traditional brand marketing in ways of communication. Balmer (1998)
asserts that corporate identity has three distinct features. First, corporate identity is
concerned with reality; what the organization is, its strategy, philosophy, history, business,
range and type of products, and its communication. Second, corporate identity is multifaceted and draws on several disciplines. Third, corporate identity is based on corporate
personality or on the values present within the organization.
De Chernatony (1999) describes corporate identity as ways in which managers and staff
make brands unique. He observed that identity is about ethos, aims and values that
differentiate the brand, while image is an impression of the relative position of a brand
among its perceived competitors. Rosson and Brooks (2004) argues that corporate
branding is concerned with identity than image, stating identity is how the company
perceive itself and would like to viewed by others, while image is how a company is
perceived by outsiders and reflects on how the identity has been created and received.
According to Witkowski et al (2003) identity comprises of four elements; properties,
16
product, presentation and publication, with specific identity elements varying from one
industry to another and from parent corporation to their brands. From these arguments, it
can be suggested that re-branding has a direct effect on the corporate visual identity of a
firm, since it is closely linked to the brand name.
2.6
Empirical Studies
A study by Woon (2010) investigating a Hong Kong retail brand which had undergone
rebranding strategy in the year 2007 carried out by collecting data from existing customers
of the brand and using street intercept survey and 548 valid cases found a negative
relationship between customers’ perceived loyalty towards the initial brand and their
attitude towards the rebranding process of that brand. Furthermore, brand perceptions are
found to be a full mediator between attitudes towards the branding and behavioral
intentions of customers. The findings also reveal that perceived brand image similarity
moderates the influence of perceived loyalty towards the initial brand on customers’
perceptions to renovated brand.
An overview of the world’s 100 strongest brands by interbrand (2006) indicates that
industrial branding is increasingly playing an important role because of commoditization
of many industrial products such that branding and brand management can no longer be
considered the exclusive domain of consumer marketing. The major reason for branding
is the growing importance of B2B buying and selling vial internet. The study indicates that
online buyers are likely to use cue like the brand to reduce the risks involved in purchasing
decisions. A study by Smith and Brynjolfson (2000) after analyzing 20268 shopbot
consumers selected from 33 retailers over 69 days concluded that although retailers
offered homogenous products, brand was an important determinant of consumer choice.
17
They went further to state that, the three most heavily branded retailers held a $1.72 price
advantage over more generic retailers in head- to -head price comparison. In furthering
their research, they found that consumers used brand as a proxy for retailer credibility in
non-contractible aspects of the product and service bundle, such as shipping reliability.
Howe (1982) used an event study to analyze effects of rebranding (name change) on
performance of 121 companies during 1962-1980 found that there were no significant
stock market reactions to such changes. Similarly, Horsky and Swyngedouw (1987) also
used an event study methodology to study the effect of a company’s name change
announcement on the stock market using 58 firms. The findings show an overall positive
performance in terms of abnormal returns and name change seemed to act more as a signal
that serious change is underway. Furthermore, a name change seemed to have a greater
effect on performance for industrial products and for more risky firms and for those with
previously poor performance. In another study of failed and nonfailed Malaysian firms
between 1984and 1996 by Karbhari et al. (2004) found that name change did not show any
positive stock market reaction if it was not accompanied by other firm restructuring news.
On the other hand, Lee (2001) found that companies that changed their names to dot coms
showed significantly positive increases in stock prices and trading activity and with higher
magnitude for those name changes that were announced with other firm strategies.
2.7
Conceptual Framework
The conceptual framework for this study considers rebranding as a critical component of
organizational performance. According to this framework, rebranding constitute a new
approach to strategy for SACCOs aimed at achieving better performance and widening the
common bond. The conceptual framework recognizes the dependent variables of the study
18
which are assessed through various elements namely: membership/shareholders,
customers’ satisfaction and brand identity. On the other hand, rebranding strategy is
considered to be the independent variable assessed in terms of indicators such as:
corporate brand identity, brand equity, corporate strategy and communication strategy. In
the study, the moderating factors include; regulation and corporate governance. The
conceptual framework for this study illustrates the relationship between the variables in
the Figure: 1.
Figure 2. 1: Relationship between factors influencing rebranding strategy and
SACCOs Performance
(Source: Author).
.
19
CHAPTER THREE: RESEARCH METHODOLOGY
3.1Introduction
This chapter outlines the methods that was used for the study and adopts the followings
structures: research design, population and sample, population description, data collection
methods, research procedures and data analysis and presentation methods.
3.2 Research Design
A research design is defined as an overall plan for research undertaking (Saunders, Lewis
& Thornhill, 2009). This study has adopted a descriptive survey design which according to
Churchill (1991) is appropriate where the study seeks to describe the characteristics of
certain groups, estimate the proportion of people who have certain characteristics and
make predictions. The study was aimed at collecting information from respondents on
effect of rebranding on SACCOs performance in Meru country in Kenya. Descriptive
survey was recommended because of its use in preliminary and exploratory studies to
allow researchers to gather information and summarize, present and interpret data for the
purpose of clarification (Orodho, 2003). Gay (1992) asserted that surveys are self-report
study that requires the collection of quantifiable information from the sample. They are
useful for describing, explaining or exploring the existing status of two or more variables
(Mugenda and Mugenda, 1999).
3.3 Study Population
Study population is the specific items about which information is desired. According to
Ngechu (2004), a population is a well defined or set of people, services, elements, events,
group of things or households that are being investigated. The study was carried out in
20
Meru County and the study population comprises of 53 SACCOs registered in Meru
country.
3.4 Sampling Techniques and Sample Size
Naoum (2007) defined a sample size as finite part of a statistical population whose
properties are studied to gain information about the whole. Orodho (2003) defined
sampling as selecting a given number of subjects from a defined population as
representative of that population. Any statements made about the sample should also be
true of the population. It is however agreed that the larger the sample the smaller the
sampling error (Mugenda and Mugenda, 2003).
Hart (2004) underscores the importance of selecting a representative sample through
making a sampling frame. From the population frame the required number of subjects,
respondents, elements or firms were selected in order to make a sample. Stratified
proportionate random sampling technique was used to select the sample. Stratification is
aimed at reducing standard error by providing some control over variance. The study
grouped the population into seven geographical areas (District).
For each stratum, simple random sampling was used to select 41 SACCOs. According to
Cooper and Schindler (2003), random sampling frequently minimizes the sampling error
in the population. This in turn increased the precision of any estimation methods used.
Statistically, in order for generalization to take place, a sample of at least 30 must exist
Cooper and Schindler, (2003). Moreover, larger sample minimize errors.
21
Table 3. 1 Sample Size
District
Frequency
Percentage
Sample size
Imenti North
22
75
17
Imenti South
6
75
5
Meru Central
3
75
2
Tigania East
5
75
4
Igembe South
8
75
6
Igembe Central
3
75
2
Buuri
6
75
5
Total
53
75
41
Source: (Ministry of Co-operative & Marketing, 2013)
From the above population of 53, a sample of 75% from within each district in proportions
that each district bear to the population as a whole was taken using stratified random
sampling which would give each item in the population an equal probability chance of
being selected. According to Kothari (2004) a representative sample is one which is at
least 10% of the population thus the choice of 41 SACCOS was considered as a
representative. Stratified random sampling technique was used when population of interest
is not homogeneous and could be subdivided into groups or strata to obtain a
representative sample.
3.5 Validity of the Research Instruments
Validity shows whether the instrument measure what they are designed to measure (Borg
and Gall 1989). The researcher used content validity to examine whether the instruments
would answer the research questions Borg & Gall (1996). Consultations and discussions
22
with the supervisor were done to establish content validity. Further, validity of the
research instrument was tested for internal consistency by use of Cronbach’s Alpha (α)
with a 60% acceptance level. The Cronbach (α) indicates the extent to which a set of test
item will be treated to measures a single variable (Cronbach, 1951). A cut – off value of
0.7 will be recommended for validity.
3.6
Reliability of the Research Instruments
Reliability refers to the consistency of the research and the extent to which data collection
technique or analysis can be replicated (Wiersma, 1996). In this study, reliability was
achieved by test-pretesting interview protocols and questions, using fixed-choice
responses, and systematically collecting data for others to review where necessary. The
research questionnaire was reviewed by professional colleagues and contains questions
that were test-retested.
3.7
Data Collection Procedure
Primary as well as secondary data was collected. Secondary data was obtained from
relevant
literature
review
from
Annual
reports
and
Financial
Statements,
dissertations/thesis, journals, magazines and the internet. Primary data was collected using
questionnaires. The data collection process took at least 15 days.
A structured
questionnaire was used to collect primary data. The questionnaires are preferred in this
study because respondents of the study were assumed to be literate therefore able to
answer questions asked adequately. Kothari (2004) terms the questionnaire as the most
appropriate instrument due to its ability to collect a large amount of information in a
reasonably quick span of time. It guarantees confidentiality of the source of information
23
through anonymity while ensuring standardization (Churchill, 1991). It is for the above
reasons that questionnaire method was chosen as an appropriate instrument for this study.
A questionnaire is a data collection tool in which written questions are presented and are
to be answered by the respondents in written form. According to Mugenda and Mugenda
(1999), questionnaires are commonly used to obtain important information about a
population under study. Each item is developed to address specific themes of the study. In
addition, Ngulube (2003) stated that questionnaires allow respondents to answer questions
at times that are convenient to them. Secondary information was collected from Annual
Accounts and Financial Statements, SACCO magazines, journals and other relevant
materials on the SACCO Industry.
3.8
Data Analysis
The process of data analysis involved several stages namely; data clean up and
explanation. The process of data cleanup adopted included editing, coding, and tabulation
in order to detect any anomalies in the responses and assign specific numerical values to
the responses for further analysis. Completed questionnaires were edited for completeness
and consistency. The data was then coded and checked for any errors and omissions
(Kothari, 2004). Frequency tables, percentages and means were used to present the
findings. Responses in the questionnaires were then tabulated, coded and processed by use
of a computer Statistical package for Social Science (SPSS) Version 21 programme to
analyze the data. The responses from the open-ended questions were listed to obtain
proportions appropriately; the responses were then reported by descriptive narrative.
Descriptive statistics such as frequencies were used. Tables were then used to present
responses and facilitate comparison.
24
CHAPTER FOUR: DATA ANALYSIS AND RESULTS
4.1 Introduction
In this section, findings of the study are detailed. A case processing summary of the data
collected will be presented initially. This is followed by an analysis of specific features on
rebranding in SACCOS in Meru County. Secondly, an analysis of the association between
rebranding and specific variables is evaluated. The presentations will take the form of
cross-tabulations tables, charts and Pearson correlation analysis. For all these factors, cross
analysis will be presented with reference to rebranding status.
4.2 Results on the test for reliability and reproducibility
Preliminary data was gathered by administering a pilot questionnaire to 10 respondents.
The questionnaire was then re-administered to them after 2 weeks to test for
reproducibility. Cronbach’s alpha was used to test the reliability, the values for the
components evaluated under the disparate variables (effect of re-branding on membership,
effect of rebranding on customer satisfaction among others) ranged from 0.82 to 0.89 with
an overall Cronbach’s alpha of 0.8 showing good reliability.
4.3 Characteristic of the respondents
The sample population consisted of 41 SACCOs, the response rate was 73% (n=30). Nonrebranded SACCOs were 60% (18) of the sample with rebranded SACCOs consisting of
40% (12) of the sample. Stratified by sex and educational level, the respondents
characteristics were as follow: 80% (24) were males and 20% (6) were females.
Respondents with diplomas were 10% (3) of the sample population, while undergraduate
level education comprised 60% (18) of the population. 30% (9) of the respondents had
post graduate education.
25
Table 4. 1: characteristics of the respondents
Variable
Classification
Frequency Percentage
Cumulative
%
Rebranding Status
Rebranded
12
40
40
Of SACCOs
Non rebranded
18
60
100
30
100
100
Total
Sex of
Male
24
80
80
Respondents
Female
6
20
100
30
100
100
Diploma
3
10
10
Graduate
18
60
70
Post Graduate
9
30
100
30
100
100
Total
Education level
Total
4.4 Rebranding strategies
Various rebranding strategies were evaluated to establish the relationship between the
strategies employed by the SACCO and their effects on membership, customer satisfaction
and corporate identity. The results were as shown in the following tables.
The researcher evaluated the preferred rebranding strategies undertaken by SACCOs as
relates to corporate identity. The following table shows the results from both rebranded
and non rebranded SACCOs.
26
Table 4.2: Rebranding Strategies relating to corporate identity
Rebranding
Not at
To a low
To some
To a
To a very
status
all
extent
extent
great
great
extent
extent
Internal
Rebranded
8.3%(1
0
0
41.7%(5)
50.0%(6)
marketing
Non rebranded
0
33.3%(6)
16.7% (3)
22.2%(4)
27.8%(5)
Promotions
Rebranded
16.7%(2
33.3%(4)
25.0%(3)
0
25.0%((3)
Non rebranded
27.8%(5
55.6%10
0
0
16.7%(3)
Public
Rebranded
16.7%(2
25.0%(3)
33.3%(4)
8.3%(1)
16.7%(2)
relations
Non rebranded
5.6%(1)
72.2%(13
5.6%(1)
16.6%(3)
Direct
Rebranded
33.3%(4
0
0
0
66.7%(8)
Marketing
Non rebranded
16.7%(3
33.3%(6)
0
27.8%(5)
22.2%(4)
Advertising
Rebranded
0
0
25.0%(3)
25.0%(3) 50.0%(6)
Non rebranded
16.7%(3
16.7%(3)
33.3%(6) 33.3%(6)
As indicated in the table above internal marketing and advertising rebranding strategies
were noted as the most prefered rebranding strategies used to promote corporate
identity.For instance, from rebranded SACCOs 50% (6) noted that internal marketing was
the rebranding strategy to use to a very great extent and 50% (6) indicated that advertising
was being used to a very great extent .
27
Table 4.3: Rebranding strategy as relates to its effect on improved relevance,
competitiveness and diversification.
The effect of rebranding on relevance, competitivess and diversification was evaluated.
The results are analysed in the following table.
Rebranding
Not
status
all
at To
a To some Toa great To
low
extent
extent
extent
a
very
great
extent
Rebranded
0
0
25.0%(3)
0
75.0(9)
Not rebranded
11.1%(2
61.1(10
11.1(2)
11.1%(2)
15.6%(3)
Competitive-
Rebranded
0
0
25.0%(3)
16.7%(2)
58.3%(7)
ness
Not rebranded
33.3%(6
55.6%10
0
0
11.1%(2
8.3%(1)
58.3%(7
0
0
33.3%(4)
5.6%(1)
88.9( 6)
5.5%(1)
0
0
Relevance
Diversification Rebranded
Not rebranded
As indicated above both rebranded and non rebranded SACCOs were in agreement that
rebranding increases SACCO relevance improves competitiveness and helps the SACCO
to diversify. In rebranded SACCOs 75% (9) respondents noted that rebranding increases
SACCO relevance to a very great extent. 88.9% (6) noted that rebranding improves
diversification to a low extent.
28
Table 4.4: Rebranding strategies related to customer satisfaction
Various rebranding strategies were evaluated to find out the SACCO preference of use of
various rebranding strategies to improve customer satisfaction. The analysis was as shown
in the following table.
Rebranding
Not
Status
all
at To a low To
extent
some To a great To
extent
extent
a
very
great
extent
Brand
Rebranded
0
awareness
Non rebranded
0
0
66.7%(8)
33.3%(4)
38.9%(7 38.9%(7)
11.1%(2)
0
11.1%(2)
Perception Rebranded
0
0
0
66.7%(8)
33.3%(4)
of quality
Non rebranded
5.6%(1)
72.2%(13)
0
11.5%(2)
5.6%(1)
Customer
Rebranded
8.3%(1)
8.3%(1)
0
58.3%(7)
25%(3)
attitude
Non rebranded
27.8%(5 61.1%(11)
11.1%(2)
Brand
Rebranded
8.3%(1)
0
0
58.3%(7)
33.3%(4)
loyalty
Non rebranded
29.4%(5)
41.2%(8)
11.8%(2)
17.6%(3)
4.5 To determine the effect of rebranding on membership
The survey evaluated the position of various respondents from branded and non-branded
SACCOs on the effect of branding on membership (whether rebranding increases
membership).
4. 5.1 To establish the effects of rebranding on new members
The following table illustrates the results as pertains to effect of rebranding on increase in
membership.
29
Table 4.5: Rebranding versus increase in membership
From the analysis 33.3% (6) of respondents from non-branded SACCOs espoused the
Rebranding status of
SACCOs and count
Total
Rebranding increases membership
Not at
To a
To
To a
To a
all
low
some
greater
very
extent
extent
extent
great
extent
Non
Count
6
5
0
3
4
18
rebranded
%
33.3%
27.8%
0.0%
16.7%
22.2%
100.0%
% of
20.0%
16.7%
0.0%
10.0%
13.3%
60.0%
0
0
3
0
9
12
%
0.0%
0.0%
25.0%
0.0%
75.0%
100.0%
% of
0.0%
0.0%
10.0%
0.0%
30.0%
40.0%
6
5
3
3
13
30
20.0%
16.7%
10.0%
10.0%
43.3%
100.0%
Total
Rebranded
Count
Total
TOTAL
Count
%
proposition that rebranding has no effect on membership while 27.8% (5) noted that it has
effect but to a low extent. Similarly, 16.7% (3) took the view that re-branding increases
membership to a great extent while 22.2% (4) noted that its effect on branding to a very
great extent. On the other hand, 25% (3) of respondents in rebranded companies noted
that rebranding can increase membership to some extent while 75% (9) noted that it can
increase membership to a large extent. A significant relationship was observed between
30
rebranded and rebranded companies on whether rebranding can increase SACCO
membership.
4.5.2 The effects of Rebranding on Membership Retention
The relationship between rebranding and membership retention was evaluated and the
following table shows the results.
Table 4. 6: Effect of rebranding status on membership retention
Total
Rebranding increases membership retention
Not
To a
To
To a
To a
at all
low
some
great
very
extent
extent
extent
great
extent
Not
Count
1
7
4
6
0
18
rebranded
%
5.6%
38.9%
22.2%
33.3%
0.0%
100.0%
% of
3.3%
23.3%
13.3%
20.0%
0.0%
60.0%
0
0
2
7
3
12
%
0.0%
0.0%
16.7%
58.3%
25.0%
100.0%
% of
0.0%
0.0%
6.7%
23.3%
10.0%
40.0%
1
7
6
13
3
30
3.3%
23.3%
20.0%
43.3%
10.0%
100.0%
total
Rebranded
Count
Total
Total
Count
%
In non branded SACCOs, 5.6% (1) of the respondents noted that rebranding has no effect
on membership retention, while 38.9% (7) noted that it has a limited effect. Further, 22.2%
31
(4) respondents within this group noted that it contributes to some extent to membership
retention while 33.3% (6) noted that the effect is very great. In branded SACCOs, 16.7%
(2) of the respondents noted that rebranding has some effect on membership retention,
58.3% (7) noted that the effect can be great with 25% (3) it has a very great effect on
membership retention. A significant relationship was observed between branding and
SACCO membership retention.
4.5.3 Effect of rebranding on shareholding
The effect of rebranding on shareholding in branded and non-branded SACCOs was
evaluated in this survey.
Table 4. 7: Effect of rebranding on shareholding
Rebranding Status of
SACCOs and count
Total
Rebranding increases shareholding
Not at
To a
To some
To a
To a
all
low
extent
great
very
extent
great
extent
extent
Not
Count
1
8
3
6
0
18
rebranded
%
5.6%
44.4%
16.7%
33.3%
0.0%
100.0%
% of
3.3%
26.7%
10.0%
20.0%
0.0%
60.0%
Count
0
0
0
6
6
12
%
0.0%
0.0%
0.0%
50.0%
50.0%
100.0%
% of
0.0%
0.0%
0.0%
20.0%
20.0%
40.0%
Total
Rebranded
32
Total
Total
Count
1
8
3
12
6
30
%
3.3%
26.7%
10.0%
40.0%
20.0%
100.0
According to the results obtained, 5.6% (1) of the respondents in non-branded SACCOs
noted that it has no effect on the number of shareholders. However, 44.4% (8) of the
respondents noted that it has an effect to a low extent. Similarly, 16.7% (3) of the
respondents noted that it has an effect to some extent, with 33.3% (6) supporting the
proposition that its impact on shareholding may be great. On the other hand, 50% (6) of
the respondents from branded SACCOs noted that rebranding can increase shareholding to
a great extent with a similar proportion noting that the effect is very great. A significant
relationship was observed between branding and increase in shareholding.
4.5.4 Effects of rebranding on member savings
The study evaluated the effects of rebranding on member savings and the results were as
shown in the table below.
33
Table 4.8 Rebranding and member savings
SACCO s and count
Total
Rebranding increases savings
Rebranding status of
Not at
To a low
To some
To a great
To a
all
extent
extent
extent
very
great
extent
Not
Count
4
3
7
4
0
18
rebranded
%
22.2%
16.7%
38.9%
22.2%
0.0%
100.0%
% of
13.3%
10.0%
23.3%
13.3%
0.0%
60.0%
0
0
7
1
4
12
%
0.0%
0.0%
58.3%
8.3%
33.3%
100.0%
% of
0.0%
0.0%
23.3%
3.3%
13.3%
40.0%
4
3
14
5
4
30
%
13.3%
10.0%
46.7%
16.7%
13.3%
100.0%
% of
13.3%
10.0%
46.7%
16.7%
13.3%
100.0%
Total
Rebranded Count
Total
Total
Count
Total
As indicated above,the effect of rebranding on SACCO savings was evaluated. 22.2% (4)
of the respondents from non-rebranded companies noted that rebranding cannot increase
savings, 16.7% (3) indicated that it can increase savings but to low extent, similarly,
38.9% (7) of the respondents indicated that it may increase savings to some extent while
22.2% (4) noted that it might increase savings to a great extent.
On the other hand, 58.3% (7) of the respondents from rebranded SACCOs indicated that
rebranding increases savings to some extent, 8.3% (1) of the respondents within that
34
group noted that it might increase savings to a great extent with 33.3% (4) indicating that
the effect are very great.
4.5.5 Pearson Correlation Matrix for the factors Associating Rebranding and
SACCO Membership
The correlation between the various factors associating rebranding with SACCO
membership was evaluated using Pearson correlation Matrix and the result was as follows.
Table 4. 9: Correlation Matrix on rebranding and membership components
1
P. Correlation
1
2
3
4
5
6
-.133
-.287
.485
7
8
.084
-.126
.383*
.213
-.178
.124
.664
.507
.037
.257
.346
.382* .488** .555**
.309
Name change
Sig. (2-tailed)
Company
P. Correlation
-.133
1 .718**
.465*
Image
Sig. (2-tailed)
.485
.000
.011
.037
1
.401*
.436*
.031
.016
.012
1
.356
.389*
.058
.037
.020
.001
1
.306
.452*
.443*
.100
.012
.014
P. Correlation
-.287 .718**
.006
.001
.096
.453* .493**
.401*
Logo
Sig. (2-tailed)
.124
.000
.006
.028
P. Correlation
.084
.465*
.401*
Sig. (2-tailed)
.664
.011
.031
P. Correlation
-.126
.382*
.436*
.356
Sig. (2-tailed)
.507
.037
.016
.058
.383* .488**
.453*
.389*
.306
1 .785**
.125
.012
.037
.100
.000
.512
.429* .594**
Brand loyalty
Rebranding
increases
membership
Rebranding
P. Correlation
increases
Sig. (2-tailed)
.037
.006
savings
35
Rebranding
P. Correlation
.213 .555** .493**
Sig. (2-tailed)
.257
.001
P. Correlation
-.178
.309
Sig. (2-tailed)
.346
.096
.429*
.452* .785**
1
.417*
increases
membership
.006
.020
.012
.000
.022
.401* .594**
.443*
.125
.417*
.014
.512
.022
retention
Rebranding
1
increases
.028
.001
shareholding
As indicated in the table above there exists high correlation among the various rebranding
strategies and their effects on membership components. Most of the respondents felt that
name change does not have major effect on SACCO performance. On the other hand Both
rebranded and non rebranded SACCO s were in agreement that rebranding membership
retention, enhances increase in savings and shareholding levels as shown in the table
above. The correlation between the various factors associating rebranding with SACCO
membership was evaluated. Analysis demonstrates that Rebranding was significant
correlated with all the factors evaluated. Strong correlations at 99% confidence intervals
were also noted.
4.6 To establish the effect of rebranding on customer satisfaction
The effects of rebranding on customer satisfaction were evaluated. Various components of
customer satisfaction was taken into consideration, the results were as shown below.
36
4.6.1 Effect of Rebranding on customer attitudes
The effect of rebranding on customers attitudes was evaluate in both rebranded and nonrebranded SACCOs.
Table 4.10: Rebranding and customer attitude
In non branded SACCOs, 16.7% (3) of the respondents noted it has no effect on customer
Rebranding status and
count
Not
Count
rebranded
Not at
To a
To
To a
To a very
all
low
some
great
great extent
extent
extent
extent
3
11
1
0
3
18
%
16.7%
61.1%
5.6%
0.0%
16.7%
100.0%
% of Total
10.0%
36.7%
3.3%
0.0%
10.0%
60.0%
0
0
2
3
7
12
%
0.0%
0.0%
16.7%
25.0%
58.3%
100.0%
% of Total
0.0%
0.0%
6.7%
10.0%
23.3%
40.0%
3
11
3
3
10
30
%
10.0%
36.7%
10.0%
10.0%
33.3%
100.0%
% of Total
10.0%
36.7%
10.0%
10.0%
33.3%
100.0%
Rebranded Count
Total
Total
Rebranding affects customer attitudes
Count
attitudes, with 61.1% (11) noting that it has an effect but to a low extent, 5.6% (1)
indicated the effect is to some extent while 16.7% (3) noted that the effect was to a very
great extent. In branded SACCOs, 16.7% (2) noted that rebranding has effect on customer
attitude but to some extent, 25% (3) noted that the effect is great while 58.3% (7) noted
37
that the effect is very great. A significant variation was observed between respondents
from branded and non-branded SACCOs in this issue.
4.6.2 Effect of Rebranding on Customer Behavior
The effect of rebranding on customer behavior was evaluated. The table below shows the
results from both rebranded and non rebranded SACCOs
Table 4. 11: Effect of rebranding on customer behavior
The analysis of SACCO rebranding and change of customer behavior was evaluated. The
Rebranding changes customer behaviour
Rebranding status
and count
Not at
To a
To some
To a very great
all
low
extent
extent
Total
extent
Not
Count
3
3
10
2
18
rebranded
%
16.7%
16.7%
55.6%
11.1%
100.0%
% of
10.0%
10.0%
33.3%
6.7%
60.0%
Count
0
0
5
7
12
%
0.0%
0.0%
41.7%
58.3%
100.0%
% of
0.0%
0.0%
16.7%
23.3%
40.0%
Count
3
3
15
9
30
% of
10.0%
10.0%
50.0%
30.0%
100.0%
Total
Rebranded
Total
Total
Total
results are as follows.
38
As indicated in the table above, 16.7% (3) of the respondents in non-branded SACCOs
noted that it has no effect on customer behaviour with 16.7% (3) noting that an effect is
present but to a low extent. However, 55.6% (10) and 11.1% (2) noted that the effect
exists to some extent and to a great extent respectively. On the other hand, 41.7% (5) and
58.3% (7) of the respondents also noted that the effect exists to some extent and to a great
extent respectively. A significant relationship was observed between branding and
increase in shareholding.
4.6.3 Effect of Rebranding on Customer Preference
The question pertaining to the effect of rebranding on customer preference was also
evaluated in this study.
Table 4. 12: Effect of rebranding on customer preference
Not at
all
Not
rebranded
Rebranded
Total
Count
%
% of
Total
Count
%
% of
Total
Count
%
Total
Rebranding affects customer preference
Rebranding status
and count
To a low
extent
To some extent
To a very great
extent
1
5.6%
3.3%
11
61.1%
36.7%
6
33.3%
20.0%
0
0.0%
0.0%
18
100.0%
60.0%
0
0.0%
0.0%
0
0.0%
0.0%
3
25.0%
10.0%
9
75.0%
30.0%
12
100.0%
40.0%
1
3.3%
11
36.7%
9
30.0%
9
30.0%
30
100.0%
As indicated above, non-rebranded SACCOS, 5.6% (1) of the respondents noted that it has
no effect at all,
with 61.1% (11) noting that it has an effect but to a low extent. Similarly, 33.3% (6) noted
that it has some effect on customer preference. On the other hand, respondents in branded
SACCOs noted that 25% (3) has considerable extent on customer preference while 75%
39
(9) noted that it has a great effect on customer preference. A significant relationship was
observed between branded and non branded SACCOs on the issue of how rebranding
affects customer preference.
4.6.4 Rebranding effects on Customer Loyalty
The study evaluated effect of rebranding on customer loyalty.
Table 4.13: effect of Rebranding on customer loyalty
Rebranding status
and count
Not
Count
rebranded
Total
Rebranding affects customer loyalty
To a
To
To a greater
To a very great
low
some
extent
extent
extent
extent
7
6
3
2
18
%
38.9%
33.3%
16.7%
11.1%
100.0%
% of
23.3%
20.0%
10.0%
6.7%
60.0%
2
0
3
7
12
16.7%
0.0%
25.0%
58.3%
100.0%
6.7%
0.0%
10.0%
23.3%
40.0%
9
6
6
9
30
30.0%
20.0%
20.0%
30.0%
100.0%
Total
Rebranded Count
%
% of
Total
Total
Count
% of
Total
As indicated above, in non rebranded SACCOs, a majority 38.9 (7)) of the respondents
noted the effect is low. 33.3% (6) noted that the effect exists to some extent. On the other
40
hand, 16.7% (3) and 11.1% (2) noted that the effect exists to a great extent and to a very
great extent respectively.
On the other hand, 16.7 % (2) of respondents from branded companies noted the effect
exists to a low extent. While 25% (3) and 58.3% (7) noted that it exists to a great extent
and to a very great extent respectively. A significant variation was noted in responses
4.6.5 Pearson Correlation Matrix for the factors Associating Rebranding and
Customer Satisfaction
Table 4. 14: Correlation factors associating rebranding and components of customer
satisfaction
** .correlation is significant at the 0.01 level (1-tailed)
As indicated above the various factors associating rebranding with customer satisfaction
was analysed. Results demonstrate that rebranding has a significant correlation with all the
factors evaluated. Creation of brand loyalty, brand awareness and improved perception of
quality would lead to increased customer satisfaction. The table shows that rebranding
41
affects customer attitude positively, it improves customer loyalty and improves member’s
preference on the offers from the SACCO. Strong correlation at 99% confidence intervals
was noted between the variables.
4.7 To investigate the effect of rebranding on corporate identity.
The effect of rebranding on corporate logo was evaluated
4.7.1 Rebranding effect on Logo
The effect of rebranding on SACCO logo was evaluated. The researcher got the following
information from the respondents.
Table 4.15: Rebranding and Sacco Logo
Rebranding status and
count
Not
Count
rebranded
Total
Logo
Not at
To a low
all
extent
To some To a greater
extent
extent
5
12
1
0
18
%
27.8%
66.7%
5.6%
0.0%
100.0%
% of
16.7%
40.0%
3.3%
0.0%
60.0%
4
5
2
1
12
%
33.3%
41.7%
16.7%
8.3%
100.0%
% of
13.3%
16.7%
6.7%
3.3%
40.0%
9
17
3
1
30
%
30.0%
56.7%
10.0%
3.3%
100.0%
% of
30.0%
56.7%
10.0%
3.3%
100.0%
Total
Rebranded
Count
Total
Total
Count
Total
42
As indicated in the table above, in non branded SACCOs, 27.8% (5) of the respondents
noted that rebranding has no effect on corporate logo, while 66.7% (12) noted that it has a
limited effect. However, 5.6% (1) noted that it has some effect.
On the other hand, 33.3% of the respondents noted that rebranding has a no effect on
SACCO’s logo. Similarly, 41.7% (5) and 16.7% (2) noted that it has some and a great
effect respectively. 8.3% (1) noted that it effect to a great effect. A non significant
variation was observed between branded and non-branded companies on the effect of
rebranding of SACCO logo.
4.7.2 Effect of rebranding on SACCO image
The effect of rebranding on SACCO image was also evaluated.
Table 4. 16: Effect of rebranding on SACCO image
Rebranding Status and
count
Total
Company Image
Not at
To a low
To
To a
To a
all
extent
some
greater
very
extent
extent
great
extent
Count
Not
rebranded
2
10
0
6
0
18
11.1
55.6%
0.0%
33.3%
0.0%
100.0%
6.7%
33.3%
0.0%
20.0%
0.0%
60.0%
Count
1
0
2
3
6
12
%
8.3%
0.0%
16.7%
25.0%
50.0%
100.0%
%
%
% of
Total
Rebranded
43
% of
3.3%
0.0%
6.7%
10.0%
20.0%
40.0%
Count
3
10
2
9
6
30
% of
10.0
33.3%
6.7%
30.0%
20.0%
100.0%
Total
%
Total
Total
As indicated in the table above, in non branded SACCOs, 11.1% (2) of the respondents
noted that rebranding has no effect on SACCO image, while 55.6% (10) noted that it has
limited effect. Further, 33.3% (6) respondents within this group noted that it has a great
effect on SACCO image.
In branded companies, 8.3% (1) noted that rebranding has no effect on company image.
However, 16.7 (2) noted that the effect was limited while 25% (3) noted that the effect is
great. Similarly, 50% (6) of the respondents noted that the effect is very great. Significant
variation was observed between branded and non-branded companies on the effect of
rebranding of SACCO logo.
4.7.3 Rebranding effect on SACCO name
The relationship between rebranding and name change was evaluated
44
Table 4. 17: Effect of rebranding and name change
Total
Name change
Not to all
To a low
To some
To a greater
To a
extent
extent
extent
very
great
extent
Not
Count
rebranded
%
4
7
1
1
5
18
22.2%
38.9%
5.6%
5.6%
27.8%
100.0
%
% of
13.3%
23.3%
3.3%
3.3%
16.7%
60.0%
4
5
1
2
0
12
33.3%
41.7%
8.3%
16.7%
0.0%
100.0
Total
Rebranded
Count
%
%
% of
13.3%
16.7%
3.3%
6.7%
0.0%
40.0%
8
12
2
3
5
30
26.7%
40.0%
6.7%
10.0%
16.7%
100.0
Total
Count
% of
Total
%
As indicated in the table above, in non branded SACCOs, 22.2% (4) of the respondents
noted that rebranding has no effect on name change while 38.9% (7) noted that it has a
limited effect. On the other hand 5.6% (1) noted that rebranding has effect on SACCO
name but to some extent while another 5.6% (1) has effect to a great extent, and 27.8% (5)
has effect to a very great extent. In branded companies, 33.3% (4) of the respondents
noted that rebranding has no effect on name change while 41.7% (5) noted that it has a
limited effect. On the other hand, 8.3% (1) noted that the effect is to some extent and
45
16.7% (2) of the respondents noted that it has effect to a great extent. A non significant
variation was observed between branded and non-branded companies on the effect of
rebranding of SACCO name change.
4.7.4 Pearson Correlation Matrix for the factors Associating Rebranding and
Corporate Identity
The correlation between the various factors associating rebranding with company identity
was evaluated
Table 4. 18: Pearson Correlational matrix associating rebranding and components of
corporate identity
1
2
Rebranding improves
P. Correlation
1
corporate identity
Sig. (1-tailed)
Advertising is the most
P. Correlation
-.015
effective branding strategy
Sig. (1-tailed)
.470
3
4
5
6
-.015
.051
-.088
.200
.458**
.470
.394
.322
.144
.005
.729** .526**
.368*
.385*
.023
.018
1 .667** .478**
.353*
1
.000
.001
Direct marketing is the best P. Correlation
.051 .729**
strategy for rebranding
Sig. (1-tailed)
.394
Public relations is the most
P. Correlation
appropriate for rebranding
Sig. (1-tailed)
.322
.001
Promotion is the most
P. Correlation
.200
.368*
appropriate for rebranding
Sig. (1-tailed)
.144
.023
.004
.000
P. Correlation
.458**
.385*
.353*
.161
.407*
Sig. (1-tailed)
.005
.018
.028
.198
.013
.000
-.088 .526**
.000
.004
.028
.667**
1 .792**
.161
.000
.000
.198
1
.407*
.478** .792**
.013
Internal Marketing is
necessary for rebranding
46
1
**. Correlation is significant at the 0.01 level (1-tailed).
*. Correlation is significant at the 0.05 level (1-tailed).
As indicated in the table above, Analysis demonstrates that rebranding has significant
correlation to all factors. It was noted that the best way to improve corporate identity is
through promotion. Advertising, direct marketing and promotion has significant
correlation with improvement on corporate identity. The correlation between corporate
identity and internal marketing was .458** which is significant. A strong correlation at
99% confidence intervals was noted between rebranding and corporate image.
47
CHAPTER FIVE: SUMMARY, DISCUSSION, CONCLUSION, LIMITATIONS
AND RECOMMENDATION
5.1 Introduction
In this section, the results generated are discussed. The findings/results from the survey are
discussed in the first subsection. In the subsequent section, the conclusion and
recommendation will be presented.
5.2 Summary of the findings
To summarize the findings, it can be argued that re-branding can improve
competitiveness, improve diversity and SACCO’s relevance. At the same time,
respondents from branded companies felt that branding can have an effect on brand equity
greatly by improving brand loyalty, customer attitude, and perception of quality and brand
awareness. They also noted that branding can have a positive effect on SACCO
membership via enhanced membership retention, increase in membership and increase in
shareholding and savings. These expectations are consistent with studies which
demonstrate that re-branding can serve to re-introduce a firm/corporation to the public
(See reviews by Brown and Dacin, 1997). This argument also appears to echo the widely
held view that re-branding can serve to re-establish a new marker for the offerings/ or
services provided by a firm (Sim, Mak & Jones, 2006).
In summary, the impact of rebranding is generally manifested in three primary levelcustomer - market, product-market and financial – market (brand equity). To investigate
some of the positions highlighted in the foregoing paragraph, the study also explored the
relationship between re-branding and customer satisfaction and retention. The importance
of re-branding on customer loyalty, hence customer retention, is backed by studies which
noted that achieving customer satisfaction and customer loyalty is a critical factor for
48
success given the fact that the cost of soliciting new customers can be five to seven times
higher than that of retaining existing ones (Sim, Mak & Jones, 2006). Indeed, this study
established that rebranding can have a considerable effect (and positively so) on customer
attitude, behaviour, preference and loyalty (Keller and Aaker, 1998).
A strong correlation was also observed between these variables. These positions are
backed by several empirical studies which have evaluated the effect of rebranding on the
relationship between corporations/firms and customers. Brown and Dacin (1997) argue
that re-branding can help communicate information about a firms newly acquired ability
(distinguish between corporate associations related to corporate ability (i.e., expertise in
producing and delivering product and/or service). Re-enforcing this argument, Keller and
Aaker (1998) have argued that successfully re-branding can lead to enhanced perceptions
of corporate credibility and improved evaluations. Other studies have also established a
link between branding and customer satisfaction. Mazanec (1995) found that a desirable
image (a construct of brand equity) can lead to customer satisfaction and customer
preference (a dimension of customer loyalty). Getty and Thompson (2004) studied the
relationships between quality of service, satisfaction, and the effect on customer’s
intentions to recommend to others. They concluded that customers’ intention to
recommend is a function of their perception of service quality. According to Frederick and
Salter (1995), rebranding can affect customer loyalty because it can support or undermine
the value that customers feel they are getting.
The study also examined the relationship between rebranding and SACCO membership.
The survey established that rebranding can have a great effect on specific factors
associated with SACCO membership viz. effect rebranding can increase membership,
49
savings, members retention and shareholding. Indeed, the strong correlation found
between these variables appears to corroborate the fact that these factors are selfreinforcing. The link between rebranding and SACCOs membership should not be overly
belabored as it has a link to the connection between rebranding and specific components
of customer satisfaction discussed earlier. On the link between rebranding and savings, the
study findings appear to corroborate the findings by Kim, Kim and An (2003) which
uncovered a positive relationship between brand equity characteristics and the firms’
revenue. Other studies have also shown that a positive association between brand value
and security prices (which can be a proxy for increase in the number of shareholders).
Similarly, a study by Aaker and Jacobson (1994) established a positive and economically
significant association between rebranding and share holding.
5.3 Discussion
Rebranding is defined as a strategic approach of firms to create new and differentiated
positions and images in the minds of customers by adopting new brand elements such as
new name, slogan, logo, design or a combination of them for their own established brands
(Muzellec and Lambkin, 2006). In recent decades, rebranding has emerged as a top
management priority, especially in companies/organizations which are striving for
competitive hedge. Indeed, Kenyan corporations have taken to the rebranding craze in
recent years. In this survey, we evaluated the effect of rebranding on a range factors. The
data obtained reveals that SACCOs in Meru rebrand to improve competitiveness, make the
SACCOS more relevant and improve diversity. These expectations are consistent with
studies which demonstrate that re-branding can serve to re-introduce a firm/corporation to
the public (See reviews by Brown and Dacin, 1997). This argument also appears to echo
the widely held view that re-branding can serve to re-establish a new marker for the
50
offerings/ or services provided by a firm (Sim, Mak & Jones, 2006). To explicate this
position, researchers have noted that brands can simplify choice, promise a particular
quality level, reduce risk, and/or engender trust. In summary, the impact of rebranding is
generally manifested in three primary level- customer - market, product-market and
financial – market (brand equity).
To investigate some of the positions highlighted in the foregoing paragraph, the study also
explored the relationship between re-branding and customer satisfaction and retention. The
importance of re-branding on customer loyalty, hence customer retention, is backed by
studies which noted that achieving customer satisfaction and customer loyalty is a critical
factor for success given the fact that the cost of soliciting new customers can be five to
seven times higher than that of retaining existing ones (Sim, Mak & Jones, 2006). Indeed,
this study established that rebranding can have a considerable effect (and positively so) on
customer attitude, behaviour, preference and loyalty (Keller and Aaker, 1998). A strong
correlation was also observed between these variables. These positions are backed by
several empirical studies which have evaluated the effect of rebranding on the relationship
between corporations/firms and customers. Brown and Dacin (1997) argue that rebranding can help communicate information about a firms newly acquired ability
(distinguish between corporate associations related to corporate ability (i.e., expertise in
producing and delivering product and/or service). Re-enforcing this argument, Keller and
Aaker (1998) have argued that successfully re-branding can lead to enhanced perceptions
of corporate credibility and improved evaluations. Other studies have also established a
link between branding and customer satisfaction. Mazanec (1995) found that a desirable
image (a construct of brand equity) can lead to customer satisfaction and customer
preference (a dimension of customer loyalty). Getty and Thompson (2004) studied the
51
relationships between quality of service, satisfaction, and the effect on customer’s
intentions to recommend to others. They concluded that customers’ intention to
recommend is a function of their perception of service quality. According to Frederick and
Salter (1995), rebranding can affect customer loyalty because it can support or undermine
the value that customers feel they are getting.
Indeed, several studies have demonstrated that there is a strong connection between
customer relationship and rebranding. In general, scholars have argued that the link
between customer and brand loyalty exists because favorable perception about the brand
quality leads to more and more brand loyal customers (Bolton and Drew, 1991; Anton,
Camarero, & Carrero, 2007; Bell, Auh & Smalley, 2005). Among others, Jones et al.
(2002) found a significant relationship between perceived quality and customer loyalty. To
report the direct relation between perceived service quality and brand loyalty, existence of
a significant and positive relationship between the perceptions of customers related to
service quality and their intentions to buy and, subsequently, willingness to recommend
the company (positive word of mouth) is very much evident in various studies
(Parasuraman et al., 1991).
The study also examined the relationship between rebranding and SACCO membership.
The survey established that rebranding can have a great effect on specific factors
associated with SACCO membership viz. effect rebranding can increase membership,
savings, members retention and shareholding. Indeed, the strong correlation found
between these variables appears to corroborate the fact that these factors are selfreinforcing. The link between rebranding and SACCO’s membership should not be overly
belabored as it has a link to the connection between rebranding and specific components
52
of customer satisfaction discussed earlier. On the link between rebranding and savings, the
study findings appear to corroborate the findings by Kim, Kim and An (2003) which
uncovered a positive relationship between brand equity characteristics and the firms’
revenue. Other studies have also shown that a positive association between brand value
and security prices (which can be a proxy for increase in the number of shareholders).
Similarly, a study by Aaker and Jacobson (1994) established a positive and economically
significant association between rebranding and share holding.
While the study provided evidence which indicate that rebranding has an effect on
company image, majority of the respondents in this survey noted that it has no effect on
company logo and company name. This finding suggests that rebranding of SACCOs in
Meru while directed at image change rely to a very limited extent on name change and
change of logos. This position may be explained with reference to the rebranding can be a
risky venture especially if it involves a radical change to the company name or other
identities. Indeed, Melewar and Saunders (1999) state that corporate visual identity (CVI)
is part of the corporate identity that organizations can use to project their quality, prestige
and style to stakeholders, and is composed of name, slogan and graphics. From these
arguments, it can be asserted that any activity which alters existing names and identities
might have unintended consequences.
5.4 Conclusion
From the results obtained, the following conclusion can be drawn. Rebranding affects
brand equity greatly by improving brand loyalty, customer attitude, perception of quality
and brand awareness. Through rebranding SACCOs have opened up the common bond
and given them (SACCOs) a national appeal hence increase in membership, improved
53
image and customer satisfaction. Rebranding has a positive effect on SACCO
membership. This is affected via enhanced membership retention, increase in membership
and increases in shareholding and savings. Rebranding enhance customer satisfaction by
enhancing customer attitudes, customer behavior, preference and loyalty. Consequently it
leads to higher financial performance .Since SACCO s encourage members to save a
certain amount of money monthly, rebranding may improve the liquidity of SACCOs.
Rebranding can help in firm diversification, improvement of competitiveness and SACCO
relevance. When rebranding, a SACCO may employ various strategies depending on the
desired results. Communication plays a vital role in enhancing rebranding process,
therefore SACCOs must employ various modes of communication to reach out to
members and the general public; advertising, direct marketing, public relations,
promotional activities and internet marketing would be useful for this purpose. The
researcher concluded that corporate brand identity gives a SACCO an upper hand in
competition especially now that SACCOs are facing stiff competition from other financial
institutions. Rebranding is important for repositioning of SACCOs in the market which
may lead to high performance of SACCOs.
5.5 Limitations
Time constraint was a limiting factor because the researcher had formal employment that
requires her to be in the office during week days and it’s within the same time that
SACCO officials were available. Availability of funds was also a limitation to the study
since the researcher was self sponsored. The size of Meru County was a limiting factor
because SACCOs are dispersed hence the researcher had to walk long distances to get to
the SACCO. The questionnaires disbursed to the SACCOs were not returned all of them
54
and some of the SACCOs took a lot of time before returning them which led to more time
being spent in data collection.
5.6.1 Recommendation on policy implications
Based on the findings of this study, the researcher came up with several
recommendations. Foremost, the study found that Rebranding is a viable alternative for
SACCOS seeking to build a new image and improve its market share; therefore the
researcher recommends that SACCOs wishing to improve performance can use rebranding
strategy. Further, the SACCO management should carry out thorough market research
before rebranding; this would help them to know the preferred changes by the Members
hence improve their confidence in the SACCO. The researcher noted that rebranding can
be an expensive undertaking, therefore it is important to carry out rebranding in a planned
manner to ensure that the desired end results are achieved. The researcher recommends
that the government should provide framework that SACCOs wishing to rebrand can
follow to ensure that the member’s savings are secure. The government should provide
training for SACCO management for capacity building to enhance prudence in SACCO
management. The researcher recommends that SACCO members needs training prior to
rebranding to enable members appreciate the whole rebranding exercise.
5.6.2: Recommendation for further studies
Finally, the researcher recommends that further research should be carried out to definitely
clarify the specifics of rebranding and its effect on SACCO membership, corporate
identity and customer satisfaction among other variables. Such studies should evaluate a
large number of SACCOs and should preferably be longitudinal. More research on
rebranding and performance should be carried out even in other sectors of the economy;
55
this would enable researchers to more confidently relate rebranding and its effects on
performance of various organizations. As noted in this study, various rebranding strategies
may be employed when rebranding, therefore the researcher recommends that further
research should be carried out to investigate the best strategies to employ when
rebranding. This would help organizations to reduce the rebranding cost and get the best
results after rebranding.
56
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APPENDICES
Appendix 1: EFFECTS OF REBRANDING STRATEGRY ON PERFORMANCE
OF SAVINGS AND CREDIT CO-OPERATIVES:
A SURVEY OF MERU COUNTY, KENYA
INSTRUCTIONS
Please answer all the questions honestly and exhaustively. All the information given will
strictly be used for academic purpose/ research only and will be treated with the utmost
confidentiality.
A. SACCO’S BACKGROUND INFORMATION
1. Organization’s
Name………………………………………………………………………..
2. Rebranding
Status…………………………………………………………………………..
3. Title/Designation of the respondent………………………………………..
4. Sex of Respondent:
Male
Female.
5. Number of years worked: …………………………………..
6. Highest level of education attained (Please tick in the appropriate box below)
A levels (form
KCPE
KCSE
Diploma
Graduate
Postgraduate
6)
7. Other professional qualifications attained (Please tick in the appropriate boxes below)
CPA (Certified Public CISA
ACCA
Any
Accountant)
(Certified
(Association of
specify)
Information
Certified Chartered
61
other
(
Please
System Audit)
Accountants )
B. REBRANDING STRATEGIES
8. Indicate the extent to which rebranding affected the Sacco in terms of the following
To some extent
To a greater
2
3
4
extent
To a low Extent
1
extent
To a very great
Not at all
variables.
5
8.1 To what extent did rebranding affect Corporate Brand Identity in terms of the
following:
Name Change
Image
Logo
8.2 To what extent did re-branding affect Brand Equity in terms of the following:
Brand Loyalty
Customer Attitude
Perception of Quality
Brand Awareness
8.3 Indicate the extent to which you agree with the following statement on Rebranding
and Corporate Strategy.
Rebranding helps in diversification
Rebranding
improves
62
competitiveness
Rebranding
makes the Saccos
relevant
8.4 Indicate the extent to which you agree with the following statements in on
Rebranding Strategy.
Advertising is the most effective
rebranding strategy
Direct Marketing is the best strategy
for rebranding
Public Relations is appropriate for
rebranding
Promotion is the most appropriate
for rebranding
Internal Marketing is necessary in
rebranding
C. Rebranding on performance
9. Indicate the extent to which you agree or disagree with the following statements
concerning rebranding effects on Performance of SACCOs.
63
To some extent
To a greater
3
4
extent
To a low Extent
2
extent
To a very great
Not at all
1
5
9.1 To what extent do you agree with the following statements on effects of rebranding
on Saccos performance measured in terms of Membership and Shareholding?
Rebranding increases membership
Rebranding increases Savings
Rebranding
increases
members
retention
Rebranding increases shareholding
9.2 To what extent does rebranding affects Customer Satisfaction? Indicate your
agreement with the following statements.
Rebranding
affects
Customers
attitudes
Rebranding
changes
customer
behaviour
Rebranding
affects
customers’
preference
Rebranding affects Customers loyalty
64
D. MODERATING VARIABLES
10.1 Regulation
Regulations motivates SACCOs to rebrand
Regulations require SACCOs to rebrand
10.2 Governance Structure
Size of the board has influence on
rebranding
Quality of the Board influence rebranding
Composition of the board will influence
rebranding
65
4
extent
3
To a very great
To some extent
2
extent
To a low Extent
1
To a greater
Not at all
10. What extent does the use of Government Regulations influence the following?
5
11. REBRANDED SACCOS
Explain the reasons for rebranding
…………………………………………………………………………………..…………
…………………………………………………………………………………..………
12. What are the implications of rebranding on the SACCO’s
operations/performance?………………………………………………………………………
…………………………………………………………………………………………………
…………………………………………………………………………………………………
THE END
66