(Sources: Antony (2009); Gitau (2009))

CHAPTER TWO

2.0 LITERATURE REVIEW

2.1 Introduction

The chapter analyzed the literature related to Sacco’s in Kenya. It briefly established the background of the Co-operative Movement market environment in which Afya Sacco Society operates and the impact of those factors that influenced on its financial capacity in service delivery. Here are some of the selected factors that were found to impact on the financial capacity of Saccos and investigated; poor corporate governance, innovation and technology, dwindling membership, competition from mainstream banks and government policies.

2.2 Theoretical background

Customer retention and customer retention marketing are key components in maintaining a profitable business. The goal of customer retention marketing is to convert first-time or occasional buyers into loyal, long term customers. And to accomplish this, a business needs to understand what it is that converts the occasional or first-time buyer into a loyal customer. Through customer retention marketing, businesses are able to uncover what it is that makes this conversion happen.
Customer retention marketing is more than just an important consideration; it is often the difference between loyalty and defection. Businesses and in this case Afya must have the most up-to-date and useful information on customer retention marketing (Duggan 2006). For any organization to compete favorable it must constantly reinvent itself and also adopt new ways and technology of doing things. Innovation could be in the form of new products which are friendly to the targeted groups while technology is through the adaption of new methods and faster equipments of doing business. Good governance involves adhering to good corporate practices and managing of an organization through directing, controlling, leading,