The Effect of Sales Promotion on Customers Loyalty: A Case Study of the Hayat Market in Mogadishu, Somalia

Abstract

This study uses the Hayat Market in Mogadishu, Somalia, as a case study to investigate the impact of sales promotion on customer loyalty. The study examines the effects of three important aspects of sales promotion—tools, frequency, and quality—on consumers' long-term loyalty and repeat purchase behavior. A structured questionnaire was used to gather data from 109 respondents as part of a quantitative research strategy. Cronbach's Alpha, Composite Reliability, and AVE reliability and validity tests verified that every construct satisfied recognized statistical thresholds. The proposed correlations were tested using structural equation modelling, or PLS-SEM. The results show that the model has significant predictive potential, explaining 77.4% of the variance in customer loyalty. Customer loyalty was most strongly and significantly impacted by sales promotion frequency (β = 0.446, p < 0.001), followed by sales promotion tools (β = 0.307, p = 0.001). The effect of sales promotion quality was positive but not statistically significant (β = 0.187, p = 0.055). These findings imply that while sales quality supports—but does not independently drive—customer retention, consistent and appealing promotional activities are crucial in fostering loyalty. According to the study's findings, increasing consumer loyalty in cutthroat retail settings requires consistent promotional involvement and a variety of marketing tactics. The study highlights the significance of strategic promotion planning to improve customer retention and market success, offering retail managers in Mogadishu and comparable markets useful insights.