INTERNATIONAL JOURNAL OF RESEARCH AND SCIENTIFIC INNOVATION (IJRSI)
ISSN No. 2321-2705 | DOI: 10.51244/IJRSI |Volume XII Issue VIII August 2025
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Relationship Marketing and Customer Loyalty in the Fast-Moving
Consumer Goods (FMCG) Industry in Nairobi County
Raiton Sababe Mulima
Kenya Methodist University, School of Business and Economics, Kenya
DOI: https://doi.org/10.51244/IJRSI.2025.120800113
Received: 07 Aug 2025; Accepted: 14 Aug 2025; Published: 11 September2025
ABSTRACT
Customer loyalty remains a major challenge for Fast-Moving Consumer Goods (FMCG) companies in Kenya.
This study examined the influence of relationship marketing dimensions— trust, perceived value, switching
cost, and empathy—on customer loyalty among FMCG firms in Nairobi County. Grounded on Social
Exchange Theory, Relationship Marketing Theory, and Customer Relationship Management Theory, the study
employed a descriptive research design. The target population comprised 794 marketing and public relations
employees in 45 FMCG companies, with a stratified random sample of 267 respondents. Data were collected
through self-administered questionnaires and analyzed using SPSS 24, applying both descriptive and
inferential statistics at a 95% confidence level.
Results revealed that trust (β = 0.595, p = 0.001), switching cost (β = 0.261, p = 0.001), perceived value (β =
0.210, p = 0.001), and empathy (β = 0.401, p = 0.001) had a positive and significant influence on customer
loyalty. The study concludes that relationship marketing significantly enhances loyalty in FMCG companies. It
recommends that firms uphold high product and service quality to maintain trust, leverage financial incentives
to reduce switching tendencies, and train employees in empathy and communication to improve customer
experiences. Regulators should also periodically review policies to strengthen FMCG competitiveness and
customer retention in Nairobi County.
INTRODUCTION
Customer loyalty is a critical determinant of success in the Fast-Moving Consumer Goods (FMCG) sector. In
an intensely competitive market, loyalty ensures sustained market share, profitability, and business growth by
fostering repeat purchases and reducing customer churn (Khairawati, 2020). Relationship marketing has
emerged as a vital strategy to cultivate long-term bonds with customers, moving beyond transactional
interactions to personalized engagement and after-sales service (Vilkaite-Vaitone & Skackauskiene, 2020).
Loyal customers provide numerous benefits, including increased revenue, reduced marketing and acquisition
costs, and positive word-of-mouth promotion that enhances brand reputation (Milan et al., 2018). Factors
influencing customer loyalty in FMCG companies include product quality, brand reputation, pricing strategy,
convenience, service quality, and emotional connections formed through effective marketing campaigns (Agha
et al., 2021).
Relationship marketing enhances loyalty by creating trust, emotional attachment, and tailored experiences
along the customer journey. Loyal customers are more likely to purchase repeatedly, explore a broader range
of products, and remain less price-sensitive, providing stable revenue streams (Galvão et al., 2018). However,
FMCG companies face challenges such as dynamic consumer preferences, high price sensitivity, and the need
for continuous innovation. Firms adopt strategies like customer segmentation, loyalty programs, targeted
promotions, and feedback systems to strengthen retention and engagement (Park & Kim, 2019).
In this context, customer loyalty remains a pivotal driver of competitive advantage, and relationship marketing
plays an essential role in sustaining it. FMCG companies that invest in customer-centric, trust-based, and
adaptive marketing approaches are better positioned for long- term success in the evolving Kenyan market
(Setiawati et al., 2019).
INTERNATIONAL JOURNAL OF RESEARCH AND SCIENTIFIC INNOVATION (IJRSI)
ISSN No. 2321-2705 | DOI: 10.51244/IJRSI |Volume XII Issue VIII August 2025
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Statement of the Problem
Relationship marketing offers significant benefits to organizations, including enhanced market value, improved
performance, and strengthened customer relationships (Baker, 2014). In today’s dynamic business
environment, characterized by highly volatile customer preferences, firms must go beyond transactional
interactions to build deeper, long-term relationships. This approach enables organizations to anticipate and
respond effectively to evolving market needs.
Despite its benefits, maintaining customer loyalty remains a major challenge for Fast-Moving Consumer
Goods (FMCG) companies. In Kenya, FMCG firms are experiencing declining customer retention and loyalty,
with customer referrals reportedly decreasing by 47% over the last decade. Furthermore, many loyal customers
are switching to alternative brands, intensifying competition and threatening long-term profitability (KPMG,
2022).
Previous studies have examined the role of relationship marketing in various sectors. For instance, Kahora
(2022) analyzed its impact on customer loyalty at Safaricom, Mwangi (2020) explored its influence on
commercial banks’ performance, and Kinoti and Kibeh (2022) studied its role in telecommunication firms.
Similarly, Maina (2020) and Njagi (2021) assessed its effect in the banking and beauty sectors, respectively.
However, these studies present contextual, conceptual, and methodological gaps, as few have focused on the
FMCG sector in Nairobi County.
This study therefore addresses these gaps by investigating the influence of relationship marketing
dimensions—trust, perceived value, switching cost, and empathy—on customer loyalty in FMCG companies
in Nairobi County.
Research Objectives
The study sought to examine the influence of relationship marketing on customer loyalty in the Fast-Moving
Consumer Goods (FMCG) industry in Nairobi County.
General Objective
To determine the effect of relationship marketing on customer loyalty in FMCG companies in Nairobi County.
Specific Objectives
1. To assess the influence of trust on customer loyalty in FMCG companies in Nairobi County.
2. To examine the influence of perceived value on customer loyalty in FMCG companies in Nairobi
County.
3. To evaluate the influence of switching cost on customer loyalty in FMCG companies in Nairobi
County.
4. To determine the influence of empathy on customer loyalty in FMCG companies in Nairobi Count
Research Hypotheses
HO
1:
Trust do not have a significant influence in FMCG industry in Nairobi County. HO
2:
Perceived Value
do not have a significant influence in FMCG industry in Nairobi
County.
HO
3:
Switching Cost do not have a significant influence in FMCG industry in Nairobi
County.
SHO
4:
Empathy do not have a significant influence in FMCG industry in Nairobi County
Significance of the Study
INTERNATIONAL JOURNAL OF RESEARCH AND SCIENTIFIC INNOVATION (IJRSI)
ISSN No. 2321-2705 | DOI: 10.51244/IJRSI |Volume XII Issue VIII August 2025
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This study provides value to multiple stakeholders:
1. Management of FMCG Firms:
The findings enable managers to make data-driven decisions in evaluating customer loyalty programs. Insights
from the study can guide the development of strategic models that enhance customer retention and overall firm
performance.
2. FMCG Companies:
The study identifies key challenges that affect the success of relationship marketing. The results provide
practical guidance for designing and implementing customer loyalty strategies that improve competitiveness in
the FMCG sector.
3. Policy Makers:
Findings inform policy formulation by highlighting the interventions needed to strengthen customer loyalty
within FMCG companies. Policymakers can use these insights to create supportive regulatory frameworks for
market stability.
4. Academicians and Researchers:
The study contributes to existing literature on relationship marketing and customer loyalty. It provides a
foundation for future research and empirical studies in the FMCG sector and related fields.
Scope of the Study
The study focused on the influence of relationship marketing on customer loyalty in 45 FMCG companies in
Nairobi County. It examined four key dimensions—trust, perceived value, switching cost, and empathy—as
predictors of customer loyalty. The target respondents were marketing and public relations managers, and the
study was conducted over a period of six months. The research was anchored on Social Exchange Theory,
Relational Dialectics Theory, and Social Network Theory to provide a theoretical basis for the analysis.
Limitations of the Study
Some respondents were initially reluctant to participate due to confidentiality concerns. To mitigate this, the
study assured respondents of anonymity, protected their personal information, and presented an official
university authorization letter. This approach enhanced trust and encouraged voluntary participation, ensuring
reliable data collection.
LITERATURE REVIEW INTRODUCTION
This section presents the theoretical foundation, empirical review, and conceptual framework guiding the
study. It explores how relationship marketing dimensions—trust, perceived value, switching cost, and
empathy—relate to customer loyalty in the FMCG industry.
Theoretical Review
1. Social Exchange Theory (SET)
Proposed by Homans in the 1950s, SET explains that relationships are built and sustained when perceived
benefits outweigh costs. It emphasizes reciprocity, trust, and mutual value as key factors in long-term
interactions (Scheepers & Ellemers, 2019). In marketing, SET suggests that customer loyalty is
strengthened when firms deliver consistent value, incentives, and positive experiences (Liao et al., 2020).
INTERNATIONAL JOURNAL OF RESEARCH AND SCIENTIFIC INNOVATION (IJRSI)
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2. Relational Dialectics Theory (RDT)
Developed by Baxter and Montgomery, RDT posits that relationships are dynamic and characterized by
opposing tensions, such as autonomy versus connection or predictability versus novelty (Cronin-Fisher &
Parcell, 2019). In relationship marketing, businesses must balance personalization with efficiency and
transparency with privacy to sustain customer loyalty (Hintz & Brown, 2020).
3. Social Network Theory (SNT)
Pioneered by Barnes and White, SNT views individuals as interconnected nodes within networks, where
relationships and influence flow through ties and interactions (Soltis & Lepak, 2018). In FMCG marketing,
leveraging social networks helps identify opinion leaders and stimulate word-of-mouth engagement, ultimately
enhancing loyalty (Cote, 2019).
Anchor Theory: Social Exchange Theory
The study is anchored on Social Exchange Theory (SET), introduced by Homans in the 1950s. SET posits
that relationships are maintained when the perceived benefits outweigh the costs and when mutual value and
trust exist between parties (Scheepers & Ellemers, 2019).
In the context of relationship marketing in FMCG companies:
Trust fosters ongoing relationships because customers expect consistent value.
Perceived Value reflects the benefit-cost assessment customers make.
Switching Cost represents the potential loss customers incur when leaving a brand.
Empathy enhances emotional satisfaction, encouraging loyalty.
Thus, SET provides the theoretical foundation for understanding how relationship marketing dimensions
translate into customer loyalty in the FMCG sector.
Empirical Literature Review
Empirical studies have explored the relationship between relationship marketing and customer loyalty across
different industries, highlighting key dimensions such as trust, perceived value, switching cost, and empathy.
Trust and Customer Loyalty
Trust is widely recognized as a fundamental driver of customer loyalty. Kahora (2022) found that trust
significantly influences customer retention at Safaricom, where customers who perceive brands as reliable are
more likely to remain loyal. Similarly, Maina (2020) demonstrated that trust enhances loyalty in the banking
sector, emphasizing that consistent service delivery builds customer confidence.
Perceived Value and Customer Loyalty
Perceived value reflects the balance between the benefits customers receive and the costs they incur. Mwangi
(2020) observed that banks with superior value propositions experienced higher customer loyalty. In the
FMCG sector, Agha et al. (2021) noted that products offering better perceived value foster repeat purchases
and reduce price sensitivity.
Switching Cost and Customer Loyalty
Switching cost discourages customers from leaving a brand due to financial, psychological, or time-related
expenses. Kinoti and Kibeh (2022) reported that telecommunication firms with high switching costs
experienced stronger customer retention. Similarly, studies in the FMCG industry indicate that loyalty
INTERNATIONAL JOURNAL OF RESEARCH AND SCIENTIFIC INNOVATION (IJRSI)
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programs and exclusive offers effectively raise switching costs, thus enhancing loyalty (KPMG, 2022).
Empathy and Customer Loyalty
Empathy, reflected in a firm’s ability to understand and respond to customer needs, is a strong predictor of
loyalty. Njagi (2021) found that service-oriented firms that train employees to communicate empathetically
achieve higher customer satisfaction and long-term loyalty. In the FMCG context, personalized services and
attentive customer care foster positive emotional bonds that enhance retention.
Expected Relationship
The conceptual framework posits that higher levels of trust, perceived value, and empathy, along with higher
switching cost, will positively influence customer loyalty in FMCG companies.
Conversely, lower switching costs may reduce loyalty, as customers can easily move to competitors.
Figure 1.1: Conceptual Framework.
Relationship Summary:
1. Increased Trust → Greater Customer Loyalty
2. Higher Perceived Value → Greater Customer Loyalty
3. Higher Switching Cost → Greater Customer Loyalty
4. Greater Empathy → Greater Customer Loyalty
These relationships align with Social Exchange Theory, which suggests that customers maintain relationships
when the perceived benefits outweigh the costs.
Research Gaps
While prior studies confirm that relationship marketing dimensions influence loyalty, most research in Kenya
has focused on banking, telecommunication, and service sectors (Mwangi, 2020; Kahora, 2022; Njagi, 2021).
Limited studies have examined FMCG companies, creating contextual and methodological gaps that this study
addresses by investigating trust, perceived value, switching cost, and empathy as predictors of customer
loyalty in Nairobi County.
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RESEARCH METHODOLOGY RESEARCH DESIGN
The study adopted a descriptive research design to investigate the effect of relationship marketing on customer
loyalty in FMCG companies in Nairobi County. A descriptive approach was appropriate as it allowed the
researcher to collect and analyze data without manipulating variables, answering the questions of “what,”
“how,” and “why” regarding customer loyalty (Harris, 2019).
Target Population and Sampling
The study targeted 794 employees (Marketing, Public Relations, and Communication Officers) across 45
FMCG companies in Nairobi County (Deloitte, 2023). Using stratified random sampling, a sample of 267
respondents was drawn to ensure representativeness across seven product categories, including food &
beverages, personal care, and household products.
Data Collection Instruments and Procedures
Primary data were collected using self-administered questionnaires containing both open and closed-ended
questions. Questionnaires were preferred for their ability to gather comprehensive data efficiently (Saunders et
al., 2009).
Pilot Testing, Validity, and Reliability
A pilot study involving 10% of the sample size was conducted to test the instrument. Validity was assessed
through expert review, face validity, and construct validity using Kaiser-Meyer- Olkin (KMO) and Bartlett’s
tests, with thresholds of KMO ≥ 0.7 and p < 0.05. Reliability was tested using Cronbach’s alpha, with
coefficients ≥ 0.7 considered acceptable (Bolarinwa, 2015).
Data Analysis
Data were analyzed using SPSS version 23.
Descriptive statistics: Mean, standard deviation, frequencies, and percentages.
Inferential statistics: Correlation and multiple regression analyses were performed at 5% significance level
(p < 0.05) to test the study hypotheses.
The regression model was specified as:
Y=β0+β1X1+β2X2+β3X3+β4X4+εY = β_0 + β_1X_1 + β_2X_2 + β_3X_3 + β_4X_4 + εY=β0
+β1X1+β2X2+β3X3+β4X4+ε
Where:
Y = Customer loyalty
X₁ = Trust, X₂ = Switching cost, X₃ = Perceived value, X₄ = Empathy
Diagnostic Tests
Prior to regression, diagnostic tests were conducted to ensure model validity:
Normality and linearity were checked through residual plots.
Multicollinearity was assessed using Variance Inflation Factor (VIF).
Autocorrelation was tested using the Durbin-Watson statistic, with a value close to 2 indicating no
INTERNATIONAL JOURNAL OF RESEARCH AND SCIENTIFIC INNOVATION (IJRSI)
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autocorrelation (Duarte & Saraiva, 2019).
Ethical Considerations
The study adhered to established research ethics to ensure the integrity of the process and the protection of
participants (Hudson et al., 2019). Key ethical principles observed included:
1. No Harm to Respondents – Participants were protected from any physical or psychological harm, with all
risks minimized.
2. Voluntary Participation and Informed Consent – Respondents participated willingly after the study
purpose, potential risks, and benefits were explained. Research authorization and a NACOSTI permit were
presented to ensure credibility.
3. Confidentiality and Anonymity – Respondents’ identities were not disclosed, and all data were handled
exclusively for academic purposes. No personally identifiable information was linked to the responses.
4. Protection of Intellectual Property – All external sources and prior research were properly acknowledged
and referenced.
These measures ensured that the study complied with ethical research standards and safeguarded the rights and
privacy of all participants.
RESULTS AND DISCUSSION INTRODUCTION
This section presents the findings of the study and their discussion, organized around the four research
objectives:
1. Influence of trust on customer loyalty
2. Influence of perceived value on customer loyalty
3. Influence of switching cost on customer loyalty
4. Influence of empathy on customer loyalty
Response Rate
Out of 267 questionnaires distributed, 239 were returned, representing an 89.5% response rate, which is
considered highly reliable for analysis.
Validity and Reliability
Construct validity was confirmed with KMO values ranging from 0.745 to 0.799 and Bartlett’s test p <
0.001, indicating sampling adequacy.
Reliability tests showed Cronbach’s alpha values between 0.708 and 0.807, confirming that all constructs
were reliable (Bujang et al., 2018).
Descriptive Statistics
1. Trust
Respondents generally agreed that FMCG brands delivered on promises and were committed to long-term
relationships (Mean = 3.86–3.95). Trust emerged as a critical factor in maintaining loyalty through confidence
and positive experiences.
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2. Switching Cost
Switching cost was high among respondents, with financial, emotional, and learning barriers averaging Mean =
3.99–4.04. This indicates that higher switching costs discourage customers from moving to competitors,
aligning with Social Exchange Theory.
3. Perceived Value
Respondents confirmed that they remained loyal when they perceived greater benefits than costs, reflecting the
importance of competitive pricing, quality, and customer satisfaction.
4. Empathy
Findings showed that personalized engagement, proactive support, and employee empathy foster strong
emotional connections, which translate into higher loyalty.
Inferential Analysis
Multiple regression analysis revealed the following relationships with customer loyalty:
Table 1: Inferential Analysis
Variable
β
p-value
Significance
Trust
0.595
0.001
Significant
Switching Cost
0.261
0.001
Significant
Perceived Value
0.210
0.001
Significant
Empathy
0.401
0.001
Significant
CONCLUSION
This study examined the influence of relationship marketing dimensions—trust, perceived value, switching
cost, and empathy—on customer loyalty in FMCG companies in Nairobi County. The findings revealed that
all four dimensions positively and significantly affect customer loyalty, with trust being the strongest predictor,
followed by empathy, switching cost, and perceived value.
The results align with Social Exchange Theory, which suggests that customers remain loyal when the
perceived benefits of a relationship outweigh the costs. FMCG companies that build trust, deliver superior
value, create emotional connections, and increase the cost of switching are more likely to retain loyal
customers and achieve sustainable market performance.
RECOMMENDATIONS
1. Enhance Trust and Transparency
o
FMCG companies should consistently deliver on product and service promises, maintain quality standards,
and engage in transparent communication to strengthen customer trust.
2. Increase Perceived Value
o
Firms should offer competitive pricing, high-quality products, and loyalty programs that provide tangible
rewards to enhance customers’ perceived value.
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3. Leverage Switching Costs
o
Introduce loyalty programs, exclusive deals, and long-term incentives that make it less appealing for
customers to switch to competitors.
4. Foster Empathy and Customer Engagement
o
Train employees in customer service and communication skills to ensure personalized, empathetic
interactions that build emotional loyalty.
5. Policy and Regulatory Recommendations
o
Regulators should periodically review FMCG policies to promote fair competition while supporting
initiatives that enhance customer loyalty and brand integrity.
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