Impact of Market Segmentation Strategies on Customer Loyalty: The Mediating Role of Positioning Effectiveness of Interior Design Industries within the Kumasi Metropolis

Abstract

The buying behaviour of potential customers in terms of interior designs in Ghana differs from those in the Western context. There is a relatively low patronage of interior design products or services compared to the Western context (Ogunduyile et al, 2008). Existing literature have often looked at the direct causal relationship between market segmentation strategies and customer loyalty without emphasizing the effectiveness of positioning which could drive customer loyalty (Yim et al., 1999). The paper focuses on assessing the impact of market segmentation strategies on customer loyalty of Interior Design Industries, with the mediating role of positioning effectiveness. A total of 220 customers of Interior Design Industries within the Kumasi Metropolis of which 200 responses were obtained representing 90% response rate. Convenience sampling techniques was used in selecting customer's whiles Structural Equation Model was used to analyze the data. The study revealed that, Behavioural, psychographic and demographic segmentations impacted positively on customer loyalty. Geographic segmentation variable however, impacted negatively on customer loyalty. Psychographic segmentation impacted positively on positioning effectiveness and customer loyalty. Positioning Effectiveness partially mediates between psychographic segmentation strategies and customer loyalty. Positioning Effectiveness has no mediation between geographic segmentation, behavioural segmentation, demographic segmentation and customer loyalty.