Analysis of the Effect of Brand Equity on Customer Loyalty: The Case of Selected Banks in Ethiopia
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Date
2016-06
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Addis Ababa University
Abstract
It is essential for service firms, such as banking industry to understand the dimensions of service
brand equity that influence customer loyalty in order to be successful in this competitive
marketing environment. However, in Ethiopian Banking industry, various aspects of brand
building are given limited attention. The general objective of the study was to examine the
possible relationship between brand equity and customer loyalty in the banking industry in
Ethiopia. More specifically, the study tried to see the relationship of Brand awareness, Brand
meaning, Company’s presented brand, External brand communications, and Customer
experiences with customer loyalty. Primary data was obtained through structured questionnaire
from customers of three banks namely CBE, BOA and ZB. A multi stage stratified probability
sampling technique was used to sample banking firms. The researcher proportionally distributed
384 questionnaires to customers of the three selected banks and 327 of the questionnaires were
returned, properly filled. The questionnaires were analyzed using SPSS version 20. Pearson
Correlation and multiple regressions were used to establish the relationship between the
independent and dependent constructs of the research. The findings revealed that the three
independent variables (i.e. brand meaning, customer experience with company and company’s
presented brand) are statistically important determinants of customer loyalty in the banking
industry of Ethiopia whereas brand awareness and external brand communications had no
impacts on customer loyalty of banks. A conclusion was drawn to the effect that since factor
influencing customer loyalty have been established, banks should note these and emphasize them
in their marketing strategy
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Keywords
Customer loyalty, Brand awareness, Brand meaning