The Influence of Marketing Strategies on Consumer Preference of Digital Taxis in Nairobi Central Business District

Abstract

The purpose of this study was to establish the influence of marketing strategies on consumer preference of digital taxis in Nairobi’s Central Business District (CBD). The study was guided by the following specific objectives: to determine the influence of pricing strategy on consumer preference of digital taxis in Nairobi’s CBD, to determine the influence of service quality on consumer preference of digital taxis in Nairobi’s CBD and lastly to determine the influence of promotional strategies on consumer preference of digital taxis in Nairobi’s CBD. Descriptive research design guided the research. The target population was 33,990 passengers who routinely use mobile applications-based taxi service providers. A sample size of 396 passengers was then obtained from the target population. The survey method of data collection was used to collect the data using a semi-structured questionnaire. After the data collection, the questionnaires were coded and the analysis of data was done using Statistical Packages for Social Sciences (SPSS) version 23. The findings on the first specific objective showed that pricing strategy had a significant influence on consumer preference. Most of the respondents agreed that their preferred digital taxi service's prices are fair and that they are price-conscious of new digital taxi services in the market. The statistical finding of r = 0.284, p < 0.01 showed that there is a significant positive correlation between pricing strategy and consumer preference. Inferential statistics of β = .0.262, t (265) = 5.529, p < .00 show that pricing strategy significantly influences consumer preference in a positive way. The correlation coefficient of 0.284 also suggests a positive relationship between pricing strategy and consumer preference for the digital taxi services. The study also found that the digital taxi services that offer both affordable prices and good quality services are more likely to be preferred by consumers. Moreover, the respondents agreed that they are likely to switch to a lower priced digital taxi service if it matches the quality of their current preferred brand. Regarding service quality strategy, the study found that availability of rides, method of payment, and customer care all had an impact on consumer preference. The statistical finding of β = -0.074, t (265) = -2.009, p < .04. shows that respondents agreed to the importance of service quality on consumer preference in digital taxis. The average mean score was 4.02. The statistical finding stated above indicates that respondents agreed on the significant influence of service quality on their consumer preference. Moreover, they considered the method of payment as a crucial factor in their purchasing decision. The study also found that the respondents perceived their preferred digital taxi service to have the best customer care and to be the most reliable when providing services. The findings on the third specific objective revealed that promotions and incentives played a significant role in consumer preference of digital taxi services. The statistical finding of r = 0.397, p < 0.01 indicated that many of the respondents agreed that their preferred digital taxi service promotions and adverts are clear and precise. Regression analysis of β = -0.295, t (265) = 7.609, p < .00 showed that promotion strategy also significantly influenced consumer preference of digital taxi, in a positive way. This showed that there is a significant positive correlation between promotion strategy and consumer preference. This indicates that there is a strong association between the two variables. The correlation coefficient of 0.397 suggests a moderate positive relationship between promotion strategy and consumer preference for the digital taxi services. The findings also showed that public relations materials such as newsletters are readily available for reference and that their preferred digital taxi service offers frequent incentives. It was established that the independent variables (Promotion Strategy, Pricing Strategy, and Service Strategy) attributed to 25.3% of the variance in consumer preference of digital taxis. This indicates that there was a statistical positive linear relationship between promotion strategy and consumer preference of digital taxis. In conclusion, the study revealed that pricing, service quality, and promotion all have an impact on consumer preference for digital taxis in Nairobi's CBD. Digital taxi providers should carefully consider these marketing strategies to increase their consumer preference and gain a competitive edge in the market. This study offers several recommendations to enhance consumer preference for digital taxis in Nairobi. Firstly, digital taxi providers should focus on developing a robust pricing strategy that is fair, affordable, and considers factors such as inflation and taxation. Secondly, service quality should be prioritized by providing timely and reliable services, offering a range of vehicle options, implementing quality control measures, and personalizing the customer experience. Lastly, promotional strategies should be improved through the availability of promotional materials, partnerships with other businesses, leveraging social media, and creating a positive customer experience. These recommendations can help digital taxi providers attract and retain more customers in Nairobi's competitive market.