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Customer loyalty towards brands within Botswana's petroleum industry
Author(s)
Mokabiri, Goabaone
Date Issued
2009
Type
Thesis
Publisher
Cape Peninsula University of Technology
Abstract
The retail and distribution industry in Botswana's deregulated economy is one of
the largest and most difficult sectors in which to operate, mainly because of
levels of competition amongst Botswana companies and the global competitive
industry, in general. Hill (2000:539) postulates that competition in free market
economies generally tends to be tense depending on differences between
distribution systems such as retail concentration, channel length and channel
exclusivity. At the same time the retail industry grapples with other complex
social and structural problems as they face ever increasing marketing problems
that relate to attracting and maintaining customers (Luh, 2006:1). In view of the
intense competition, it is more expensive to obtain a new customer than to retain
and maintain an existing customer. Consequently, retailers should develop
competitive and sustainable ways to maintain the customers that they have and
should develop strategies to retain any new customers that the business
acquires (Naylor and Frank, 2000:37).
Botswana practices a free market and a heavily deregulated economy, which
causes an increase in competition (Luh, 2006:1) and creates greater
expectations from customers in pursuit of satisfaction and value (Peter and
Donnelly, 2007:179) for their money. In Botswana, petrol and diesel prices are
regulated by government, there is therefore no competition between the rivals
based on prices. The competition landscape therefore shifts to amongst others,
namely; service provision, location of the petrol station, and fuel brand in general.
Petrol and diesel retail outlets should focus on areas of operations that will give
them a sustainable competitive advantage over their competitors without altering
the price of products. Mehta, Lalwani and Li Han (2000:21) posit that increased
competition between retail businesses forces rivals to focus on good customer service as the only critical factor in the operation of their business (Zairi, 2000:
332).
Customer loyalty is therefore, the most effective way to keep customers and to
maintain profitability through repeated purchases (Luh, 2006:2). Loyalty is used
to describe the behaviour of repeat customers, their ratings of the business,
positive testimonials, and business from existing customers, as well as overall
perception, about the business from the existing customers.
The study focuses on the petroleum industry in an environment where there are
several competitors, relative .to the size of the country, offering goods and
services that are close substitutes. The industry in Botswana is characterised by
five competitors that offer heavily substitutable products (BP Report, 2006:1-4).
These rivals are BP, Shell, Caltex, Engen and Total.
the largest and most difficult sectors in which to operate, mainly because of
levels of competition amongst Botswana companies and the global competitive
industry, in general. Hill (2000:539) postulates that competition in free market
economies generally tends to be tense depending on differences between
distribution systems such as retail concentration, channel length and channel
exclusivity. At the same time the retail industry grapples with other complex
social and structural problems as they face ever increasing marketing problems
that relate to attracting and maintaining customers (Luh, 2006:1). In view of the
intense competition, it is more expensive to obtain a new customer than to retain
and maintain an existing customer. Consequently, retailers should develop
competitive and sustainable ways to maintain the customers that they have and
should develop strategies to retain any new customers that the business
acquires (Naylor and Frank, 2000:37).
Botswana practices a free market and a heavily deregulated economy, which
causes an increase in competition (Luh, 2006:1) and creates greater
expectations from customers in pursuit of satisfaction and value (Peter and
Donnelly, 2007:179) for their money. In Botswana, petrol and diesel prices are
regulated by government, there is therefore no competition between the rivals
based on prices. The competition landscape therefore shifts to amongst others,
namely; service provision, location of the petrol station, and fuel brand in general.
Petrol and diesel retail outlets should focus on areas of operations that will give
them a sustainable competitive advantage over their competitors without altering
the price of products. Mehta, Lalwani and Li Han (2000:21) posit that increased
competition between retail businesses forces rivals to focus on good customer service as the only critical factor in the operation of their business (Zairi, 2000:
332).
Customer loyalty is therefore, the most effective way to keep customers and to
maintain profitability through repeated purchases (Luh, 2006:2). Loyalty is used
to describe the behaviour of repeat customers, their ratings of the business,
positive testimonials, and business from existing customers, as well as overall
perception, about the business from the existing customers.
The study focuses on the petroleum industry in an environment where there are
several competitors, relative .to the size of the country, offering goods and
services that are close substitutes. The industry in Botswana is characterised by
five competitors that offer heavily substitutable products (BP Report, 2006:1-4).
These rivals are BP, Shell, Caltex, Engen and Total.
Additional information
Thesis (MTech(Business Administration)--Cape Peninsula University of Technology, 2009.
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