The Mediating Effect of Customer Satisfaction on Product Differentiation and Customer Loyalty: The Case of Habesha Brewery
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Date
2024-06-03
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A.A,U
Abstract
The study aim to examine the Mediating effect of customer satisfaction between product
differentiation and customer loyalty: The case of Habesha Breweries. Descriptive and
explanatory design were employed and mixed research approach of quantitative and qualitative
research approach was used. Hence, questionnaire were distributed to sample of 384 randomly
selected customers of Habesha breweries shared company. The data types were both primary and
secondary data types and the result were analyzed by both descriptive and inferential analysis.
Hence the result the analysis of the data revealed several key findings. The overall positive
sentiment towards the products provided by Habesha Breweries, as indicated by the aggregate
mean score of 3.69 for customer satisfaction, suggests a strong foundation for customer loyalty.
Correlation analysis demonstrated significant positive relationships between product
differentiation factors and customer satisfaction and loyalty. Additionally, the mediation models
involving customer loyalty as the outcome, product price and product delivery as predictors, and
customer satisfaction as the mediator revealed that customer satisfaction plays a crucial
mediating role in shaping customer loyalty in response to product pricing and delivery
strategies. The estimated structural equation model demonstrates a good fit to the data,
highlighting the positive relationships between customer satisfaction, loyalty, and product
differentiation. The path coefficients reveal the significant impact of customer satisfaction and
product differentiation on customer loyalty, with satisfaction with the product strongly
influencing overall satisfaction with service. Finally, it is recommended that the positive
relationship between product differentiation and customer loyalty suggests the importance of
offering unique and distinctive products or services. Therefore, it is recommended to explore
strategies to differentiate the offerings from competitors in ways that are meaningful to
customers.