Customer needs and behaviour in Kenya
Why should I read this document?
This document aims to give specific details on customer needs and behaviour in Kenya. This document will provide a few pointers on do’s and don'ts; and what you should focus on within the various aspects of Kenyan culture to achieve your business goals.
Important!
Four most important things to know about customer needs and behaviour in Kenya (if you only read one thing, that is what you should read):
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Strong brand loyalty
Kenyans are very faithful to their preferred brands and often adopt only one brand in each industry: you are either a "champion or a challenger", never in between. Enter quickly and enjoy the first-mover advantage if you are thinking of Kenya.
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Partner with established brands
Collaborate with already established and trusted brands. For example, if you want to offer consulting services, consider teaming up with a known, successful non-competing consulting firm company in the country. This move will help Kenyans accept and trust your brand.
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Recognise the need to show status and influence
Kenyans like to appear successful and wealthy. Hence, there is still a market for exclusive brands and products in Kenya. Highlighting the exclusivity of your product or services could prove to be an effective route to market in Kenya.
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Price sensitivity
Most Kenyans are price sensitive. Conduct market research before determining the price of your goods or services. It is best to identify your target market, the customer segment that can afford your goods or service. Always give yourself room to make concessions.
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Quality
In Kenya, the price for your goods or services must match the quality. It is a big turn-off to have overpriced goods and services without comparable quality. Always balance the cost of the product and services with the quality and value you provide.
Short Introduction
Kenya is renowned for its tourism and archaeological findings (Wasike, 2021). It is the African country that Europeans and other people residing outside the continent often know about (Acacia Africa, 2020). Kenya's rapidly growing economy has also drawn the attention of global economic analysts. These analysts believe that the country could become one of Africa's success stories and a dominant regional player (The World Bank Group, 2021). The Kenyan economy grew by an average of around 5% annually pre-Covid-19. As the pandemic recedes, economists estimate that the country's gross domestic product will grow by 9.5% in the second and third quarters of 2022(?) and hoping to recover soon (Trading Economics, 2022). While these statistics would encourage most manufacturing and trading firms, it is still important to know what products and services the Kenyan people like and their purchasing habits. This article will shed more light on these areas.
Content
Brand loyalty
Kenyans are usually loyal to the brands they know. They maintain close affinity, becoming "friends" with the brands they grew up using. It is often difficult to sway them. In many cases, the name of their favourite brand becomes synonymous with the product category. For example, many Kenyans call margarine 'Blueband'(Gitonga, 2015). This situation makes it quite difficult for new entrants to penetrate the market. Gitonga (2005) surmises that Kenyans tend to adopt only one brand in each industry: you are either a "champion or a challenger", never in between. The key lesson here is this: if you are thinking of going to Kenya, ensure that you quickly enter the market. Be the first in your product or service category and enjoy the first-mover advantage.
There might be several explanations for this strong brand affinity. However, one explanation for the intense brand loyalty is the country's low score on Individualism, the second of the six dimensions in the Hofstede 6D model. This low score implies that Kenyans are collectivistic. They keep close ties with relatives and members of their various communities. They are also likely to allow the opinions of friends and relatives to influence their buying decisions. Hence, if one brand has succeeded in acquiring the group's loyalty, breaking its hold could be enormously challenging.
Despite the strong brand affinity, it is still possible for people in Kenya to switch brands. This switch can happen if they think their preferred brand is no longer their "friend" or it does not promote their preferred qualities. Wandera (2008, pp. 38-47) notes that Kenyans could switch to a challenger brand if it offers a lower price or enjoys growing popularity amongst influential members of the society. The challenge, of course, is how to compete with the established market leader on price points. Incumbent brands, over time, usually build sufficient capacity to successfully wage price wars and ward off most challengers.
Partner with established brands
New entrants could fast track brand loyalty in a collectivistic market like Kenya by partnering with other well-known (non-competing) brands. For example, if you want to offer consulting services, consider teaming up with a known, successful non-competing consulting firm company in the country. This association could indirectly bestow some of the credibility and commitment people have for the familiar brands to your business.
However, one must avoid associating with brands that Kenyan society perceives negatively. This situation could adversely affect one's brand regardless of how competitive one's product and services are. New entrants could also painstakingly begin to build brand loyalty independently by associating with the values that the society respects and promotes (e.g., family, community, education) or with famous figures in the society. As a collectivist society, Kenyan people are likely to accept businesses they perceive are concerned about them (not just profit). It is, therefore, essential to create the perception of caring for the community to gain widespread acceptance and loyalty of consumers.
Recognise the need to show status and influence
As a country that scores high on the Masculinity dimension of the Hofstede 6D model, it is essential to Kenyans that they appear successful and wealthy. They would go for products and services that would confer a status of wealth, influence, or success on them. They are also likely to buy products that their "heroes" (i.e., celebrities, influential members of society) use or endorse. Kenya has a low purchasing power, and its people pride themselves on being prudent. Yet, they still aspire to buy expensive, classy products to make them look successful, sometimes, even when they cannot afford them (Bizna Kenya, 2021; Mutanu, 2018). 'Looking Sharp' is a priority for success, not only in the business world but in Kenya's public sector too (Boyo, 2019)
The rise of the middle class, the sizeable number of expatriates and the increase of dollar millionaires in the country have enhanced the desire for luxury goods (African Business, 2020). A 2017 study also listed Kenya as Africa's 2nd largest luxury market (Wangui, 2019). Hence, there is still a market for exclusive brands and products in Kenya. Highlighting the exclusivity of your product or services could prove to be an effective route to market in Kenya. Getting influential people to endorse or represent your product would also be beneficial.
Price sensitivity
Although many Kenyans spend on impulse (Muyonga, 2017), the more significant part of the population is very price sensitive. Kenya is an economy-market (i.e., low income and price-sensitive) with little latitude for experimenting with new products (Gitonga, 2015). Although they are still aspirational, people in Kenya like to get the best deal. They would spend a long time bargaining and negotiating hard to get a lower price.
Haggling is fundamental to the Kenyan culture. People haggle on every transaction except in some supermarkets or megastores. Starting negotiations at an extremely high price may cause the customer to walk away. In other cases, they would simply look for a competitor offering the product at a lower price. However, create some room to make price concessions, especially if you want to build a lasting relationship with the customer.
Quality
Kenyans may consider themselves prudent, but they truly have an eye for quality. Many businesses have come to Kenya but failed because they overlooked this aspect. Kenyans want the best value for their money. They will reject affordable product or service options if they feel it does not have the minimum level of quality they desire. Market studies show that at least 71% of Kenyans are more willing to pay for premium products, especially clothing and footwear (Statista, 2022). Even in the lower-income markets and regions of the country, affordability is not the only criterion to choose a product or service. Kenyans are willing to go over their budgets to buy products and services of better quality rather than stick to a cheaper variant of lesser quality. Therefore, investors need to find a careful balance between quality products and services and competitive pricing. Besides the quality products, the packaging is also essential in the Kenyan consumer market, especially for the high-end consumers (middle class and above).
Short case study
Aidan runs a successful well known financial services company in Malta. He wanted to expand his business to Africa, with Kenya as his focal point. Aidan consulted with a few African business partners within his network who previously worked in Kenya to get advice on approaching the Kenyan market. The most recurring advice he got from these consultations was to find a local partner to help ease his entry and guide him on how to position and price his services in Kenya.
One of his contacts introduced him to the managing director of a renowned financial services company in Kenya. He discussed the idea of a partnership arrangement with the managing director. After finding out that Aidan ran a reliable brand, the managing director welcomed the idea. He agreed to play an advisory role for Aidan related to the business environment in Kenya and facilitate business meetings for Aidan with potential clients.
With this arrangement in place, Aidan made his first trip to Kenya. The local partner introduced Aidan to some solid business connections at a business lunch during this trip. Many of these contacts were close friends of the local partner, who were prominent in the public and private sectors. Aidan made new vital connections and scheduled many follow up meetings.
In the weeks that followed the official launch, Aidan had several meetings with the contacts he made at the event. Some even referred to other people in their network who they believed would be interested in his services. With the help of his local partner, Aidan was able to structure his proposals and presentations to be adapted for different sectors and industries he visited. He soon began to learn the various contexts in the sector and adjust his offerings to suit his prospects. In two years, the company grew significantly and began plans to expand into the entire East African region.
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