Social media marketing, competitive dynamics, product Innovation and firm performance among star rated Hotels in Kenya

Abstract

irm performance among the hotel industry is a complex concept because of the presence of many factors that are affecting hotels day to day operations. The implementation of social media (SMM) as marketing tool is one critical way hotels are handling their daily operations and SMM is being adopted by hotels as vital component of their overall marketing strategy. The performance of hotels in Kenya has been on the decline due to stiff competition, turbulent economic and the impact of Covid-19 pandemic. This has resulted into generally low profits, shrinking market size and unsatisfied customers. The various social media platforms provide avenues through which hotels can promote, market their products and interact and share with their customers for innovative purposes. The purpose of this study was to investigate the moderated mediation effect of competitive dynamics on the link between social media marketing, product innovation and firm performance among star rated hotels in Kenya. The specific objectives of the study were to determine the effect of social media marketing, product innovation (PI), competitive dynamics (CDS) on the performance of star rated hotels in Kenya. The study further determined the mediating role of PI, moderating role CDS on the relationship between SMM and performance of star rated hotels. This study employed the use of social media integration theory, dynamic capability theory and social exchange theory to test the relationship between the variables. Explanatory research design was adopted and the targeted population was 215 star rated hotels listed on the Tourism Regulatory Authority. Census survey was adopted for the study. Total of 198 hotels were studied with a response rate of 92.09 percent. Multivariate linear regression was used to analyze the relationship between the variables. Factor analysis was done using principal components analysis. Regression results indicated that social media marketing significantly influenced firm performance positively (p=0.004<0.05). Competitive dynamics on the other hand did not show significant influence on firm performance (p=0.152>0.05). Moderating role of competitive dynamics was significant on the relationship between SMM and FP (p=0.009<0.05). Social media marketing influenced product innovation (p=0.000<0.05) while product innovation showed a significant mediation effect (p=0.01<0.05), respectively. Moderated mediation of CDS had significant effect on the relationship between SMM and firm performance (p=0.000<0.05). It was concluded that the use of social media as marketing tool has positive significant effect on firm performance in terms of customer satisfaction, market share growth and realized profits. The results are of great importance to the hotel industry as they can be able to access wide global client reach due to advancement in social technological interactions. The findings recommend that hotels adopt the use of SMM for performance improvement and product innovation. Furthermore, it is vital for hotels to consider social media sites not just as advertising/marketing tools, but also as an avenue for customer interaction and sharing of information. It is possible to do so by reacting to comments in real time. Hotel industry needs to focus social product innovation to enhance their performance, and to obtain customer satisfaction because innovation aids in gaining a competitive advantage. This study contributes to knowledge by looking at the implementation and use of Social Media Marketing by star rated in Kenya with Competitive Dynamics as a moderator and Product innovation as a mediator.