The Effect of Internal Branding on Customer Loyalty the Case of Dashen Bank Share Company

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Addis Ababa University


Developing and maintaining a strong and favorable internal brand and effectively positioning it in the minds of customer is highly imperative to bring about customer loyalty, long term profitability and competitiveness. The study tries to unveil the effect of internal branding on customer loyalty. To this end, the effect of internal branding constructs dubbed perceived quality, brand equity, trust and commitment on customer loyalty is scrutinized in this study. The researcher used explanatory design accompanied by quantitative approach. 96 questionnaires were distributed to customers based on a sample size determined by statistical formula developed by (Kothari, 2004). The study passed the reliability tests scoring an alpha value of .960. Pearson correlation test reveals strong relationship between the dependent variable customer loyalty and the independent variable perceived quality, trust and commitment. The result of the regression analysis indicates existence of positive and statistically significant effect of the predictor variables dubbed commitment, trust and perceived quality on customer loyalty. Hence, the result indicates that customer loyalty can be explained by the variation of the independent variables. The study concluded that commitment, perceived quality and trust factors positively and significantly affected customer loyalty of Dashen Bank S.C. Therefore, the study reveals that with the exception of brand equity that has a moderate effect on customer loyalty all other internal branding variables under study have a positive effect on customer loyalty



Banking Industry, customer loyalty, Internal branding