International Journal of Research and Innovation in Social Science (IJRISS) |Volume III, Issue XII, December 2019|ISSN 2454-6186

Influence of Market Penetration Strategy on the

Performance of Telkom Kenya Limited in Nairobi
City County
Jackson Luvusi 1, Dr. Murigi Elishiba Muthoni2
1,2
Department of Business Management, School of Business, Kenyatta University, Kenya

Abstract: The environmental conditions of many companies have its policies and programs and fulfills its strategic mission and
changed rapidly. This resulted to serious competition among vision.
telecommunication companies in Kenya, which caused Telkom
Kenya Limited to seek for effective marketing expansion Companies must be competitive to serve chosen segments
strategies that could differentiate itself from others in order to effectively by developing suitable marketing strategies in a
enhance its performance. Therefore, this study aimed at meaningful and sustainable way. Marketing strategy has
investigating the influence of market penetration strategy on the become a helpful tool in the competitive market environment
performance of Telkom Kenya Limited in Nairobi City County. for any organization in the world to remain and become
The study adopted a descriptive research design. The selected stronger (Burke & Litwin, 2012). Ambler, Kokkinaki, and
target population was Telkom Kenya Limited in Nairobi Region.
The total population was 75 respondents comprising of 5
Puntoni (2014) argue that a good marketing strategy needs
marketing managers and 70 support staff. This study carried out informing an organization where it wants to be on a long-term
a census of 75 respondents. Primary data was collected using basis, so marketing strategy is often said to be a constant
questionnaires comprising of both structured and unstructured method.
questions. Questionnaires were piloted to 10 respondents who
were not included in the final study to assess the validity and
The strategy regarding expansion of markets entails a method
reliability of the instruments. Validity was assessed using content used by the organization to attract new and more customers or
validity and reliability was tested using Cronbach Alpha test. enhancing usage of the already existing product and service
Quantitative data was analyzed using descriptive statistics such (Kotler & Keller, 2017). Gado (2013) observe that sustained
as mean and standard deviation and presented using tables, presence of businesses requires ongoing consideration of how
figures and charts. Inferential statistics were analysed using market growth approach affects performance behaviors of
correlation analysis and multiple regression analysis. The study their businesses. How coherent their market growth with the
examined that market penetration strategy had a significant performance of such businesses is anticipated to have
influence on the performance of Telkom Kenya Limited. The
consequences for their survival.
study concluded that Telkom Kenya takes advantage of low
prices to increase product demand and increase market share According to Slater and Narver (2016) market penetration
through market penetration strategy. The study recommended strategy involves organizations products and services are sold
that for effective implementation of market penetration strategy, in existing markets. Therefore, the goal of the strategy for
Telkom Kenya should keep on adjusting the price to increase
market penetration is to concentrate on increasing the current
sales as lowering prices is an effective tactic to attract potential
customers. product or service market share on the existing market.
According to Levay, Drossinos and Thiel (2017)
Keywords: Market Penetration Strategy, Organizational organizations adopt market penetration strategy to increase
Performance income from sales without altering the products or services.
I. INTRODUCTION Therefore, it is argued that the after assessing the multiple
alternatives and their intrinsic hazards, the selection of

A ccording to Bolivar-Ramos, Garcia-Morales and Garcia-

Sanchez (2012) organizations function in a global
business environment with rapid changes, developments in
penetration mode is made at company level and is therefore a
strategic decision for the company.

technology, changes in customer demands and enhanced Performance of the firm relates to the extent to which the
competition. According to Khang, Arumugam, Chong and goals of a company are or have been achieved. Organizational
Chan (2014), an organization's performance is determined by performance also relates to a measure of how well a company
the extent to which it achieves its objectives, its efficiency and uses its resources to achieve its objectives and goals (Bennett,
effectiveness in attaining its economic, operational and Lance & Woehr, 2014). Parmenter (2015) noted that an
market-oriented objectives. Therefore, it can be argued that it organization's performance is used to assess over a specified
is of paramount concern how well an organisation implements period of time the general economic and non-financial well-
being of the firm. Consequently, the accomplishment of an

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International Journal of Research and Innovation in Social Science (IJRISS) |Volume III, Issue XII, December 2019|ISSN 2454-6186

organization is evaluated by several qualitative and above 95%. However, the study used simple random sampling
quantitative indicators. These have to do with economic which is subject to sample biasness. Mutuma (2013) study
efficiency, customer satisfaction, the creation of quality goods focused on an investigation of the effects of expansion
and services, innovation and creativity, and employee strategies on performance of Commercial Banks in Kenya and
engagement. the study found out that diversification expansion strategies
had a great effect on the performance of Commercial Banks in
II. STATEMENT OF THE PROBLEM
Kenya. However, the study used convenience sampling
Kenya's telecommunications sector was recognized as method which is a non probabilistic sampling method. It is
amongst the fastest increasing industries while witnessing a due to this regard that this study sought to investigate the
high amount of rivalry in Kenya (Letangule, Letting & influence of market penetration strategy on Telkom Kenya
Nicholas, 2012). The sector saw an rise in the amount of Limited's performance in Nairobi City County, Kenya.
players at the present four and 22,6 M client base in 2012 with
III. LITERATURE REVIEW
one dealer in the 1990s (CAK, 2018 Annual Report).
Danneels (2013) observes that at the same moment clients Njomo and Margaret (2016) study investigated the influence
have become quite enlightened and request better facilities of Strategies for market penetration and organisational
than at reduced rates than before. At the same moment, the development: a soft drink case. The stratified random
regulator (CAK) did not make things easier for portable sampling technique has been used. The research randomly
players by lowering interconnectivity fees and enabling clients chosen a sample of 160 soft drink businesses. Data were
to carry numbers. collected and analyzed using both descriptive and inferential
statistical tools. Correlation analysis was used to identify the
Telkom Kenya offers integrated telecommunications solutions
authority and direction of the two variables linear relationship.
for people, small and medium-sized enterprises (SMEs),
The findings showed a connection between penetration
government and big enterprises in Kenya, using a variety of
policies and organisational development. Pricing strategy for
voices, information, mobile cash and network services.
penetration has been negative and has no powerful effect on
Despite this crucial role played by Telkom Kenya, it is faced
development of organisation. However, the study context was
with challenges arising from changing environment including
a Case of Soft Drink.
increased competition, changes in regulatory framework,
rapid advancement in technologies and globalization. This Mwiti (2011) investigated the use of market penetration
ever changing environment that the organization operate in approaches by Essar Telecom Kenya. The investigator used
has impacted on their ability to generate enough revenues for main and secondary data gathered using questionnaires and
better performance. For instance, according to the financial schedules for interviews from managers in 5 functional units.
year report of 2018, the organization reported a 3.4% profit The research also discovered that pricing strategies were used
reduction from 22.65 Billion Kshs in 2017 compared to 21.8 by the business to penetrate the market. It also found that the
Billion Kshs. in 2018. Marketing executives of Telkom Kenya business takes market segmentation as one of the ways of
therefore need to generate appropriate market expansion expanding its market share. However, The study focused on
policies to assist them to manage effectively the changes in the growth of Essar telecom Kenya.
the current market they are operating so as to increase their
Study by Chandola and Fu (2017) examined China
performance.
Smartphone Companies ' market penetration approach for
Hassan, Qureshi, Sharif and Mukhtar (2013) research India Market: A multi-case research. Following the most
concentrated on the organisational performance impact of common methodology of multi-case study methodology
marketing strategy creativity and created that efficiency is construction theories, distilled research results on the effective
maximized when a creative approach is developed by an set of marketing policies from interviews with executives of
organisation and efficient execution is achieved. However, four famous Chinese cell phone manufacturers/brands
and the findings cannot be generalized to the complete entering the Indian market. Similarities in the company's
population because it used qualitative data. Wainaina and business models were quite obvious in the results linked to
Oloko's study (2016) examined the effect of market their customer segment(s) strategy of creating innovative
penetration and organizational development policies and products that could afford them. The findings have also been
discovered a favorable and important connection between shown to a big extent resemblance in their conduct with
market penetration policy and institutional growth. The study regard to customer relationship management. However, the
was on market penetration where is a one variable of the research used a multi-case study methodology that could lead
study. The study has incorporated other variables. Tangus and to a higher restriction of the study conclusion.
Omar (2017) study investigated the effects of market
IV. RESEARCH METHODOLOGY
expansion strategies on performance of Commercial Banks in
Mombasa County and the overall finding of the study revealed The study adopted a descriptive research design. The selected
strong correlation coefficient between firm performance and target population was Telkom Kenya Limited in Nairobi
the three market expansion strategies all with a significance of Region. The total population was 75 respondents comprising

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International Journal of Research and Innovation in Social Science (IJRISS) |Volume III, Issue XII, December 2019|ISSN 2454-6186

of 5 marketing managers and 70 support staff. This study were analysed using correlation analysis and multiple
carried out a census of 75 respondents. Primary data was regression analysis.
collected using questionnaires comprising of both structured
V. FINDINGS
and unstructured questions. Questionnaires were piloted to 10
respondents who were not included in the final study to assess The study sought to find out the influence of market
the validity and reliability of the instruments. Validity was penetration strategy on the performance of Telkom Kenya
assessed using content validity and reliability was tested using Limited. The respondents were given a list of statements
Cronbach Alpha test. Quantitative data was analyzed using regarding market penetration strategy on the performance.
descriptive statistics such as mean and standard deviation and The findings are given in Table 1.
presented using tables, figures and charts. Inferential statistics

Table 1: Market Penetration Strategy

Statement SA A N D SD M Std.Dev
% % % %
Market penetration strategy allows for quick diffusion and
51.6 41.0 4.9 2.5 0.0 4.42 0.702
adoption of the organization’s product in the market
Market penetration strategy creates good will among the first
customers that purchase the product due to the aggressive pricing 44.3 33.6 8.2 5.7 8.2 4.00 1.226

Market penetration strategy takes advantage of low prices to

41.8 28.7 11.5 7.4 10.7 3.84 1.332
increase product demand and increase market share
The organization saves money on product creation costs due to
60.7 19.7 4.1 15.6 0.0 4.25 1.103
the greater volume of production
Market penetration strategy discourages competitors from entering
54.1 18.9 0.0 19.7 7.4 3.93 1.415
the market
Average Score 50.5 28.4 5.7 10.2 5.3 4.09 1.156

Source: Research Data (2019)

From the results in Table 1, the average mean of 4.09 and found that the company employed pricing strategies to
indicated that market penetration strategy influence the penetrate the market.
performance of Telkom Kenya Limited with a standard
VI. CONCLUSIONS AND RECOMMENDATIONS
deviation of 1.156. This was strongly agreed by 50.5%, 28.4%
agreed, 5.7% neutral, 10.2% disagreed and 5.3% strongly The study concluded that Telkom Kenya takes advantage of
disagreed. These findings concur with the findings of Njomo low prices to increase product demand and increase market
and Margaret (2016) study that investigated the influence of share through market penetration strategy. While the demand
market penetration strategies and organizational growth and is increasing, the organization saves money on product
the results indicated that penetration strategies have a creation costs due to the greater volume of production. Market
relationship with organizational growth. penetration strategy is also used by the organization as a
measure to determine, whether their product or a service is
The mean of 4.42 indicated that market penetration strategy
capable of capturing a fixed percentage of the market.
allows for quick diffusion and adoption of the organization’s
product in the market with a significance variance of 0.702. The study recommended that for effective implementation of
This was strongly agreed by 51.6%, 41.0% agreed, 4.9% market penetration strategy, Telkom Kenya should keep on
neutral and 2.5% disagreed. These findings agrees with adjusting the price to increase sales as lowering prices is an
findings of Chandola and Fu (2017) study examined market effective tactic to attract potential customers. Put more time
penetration strategy of Smartphone Companies from China for and strength in a promotion so as to increase brand awareness.
India Market and established similarity in their behavior with Use an effective marketing strategy that will increase product
respect to the customer relationship management to a large awareness in certain areas.
extent.
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