Mediation role of brand preference on bank advertising and customer loyalty

Abstract

Purpose The purpose of this paper is to investigate the mediating role of brand preference on the relationship between bank advertising and customer loyalty in Ghana’s banking industry. Design/methodology/approach A total number of 600 respondents participated in the study. Convenient sampling technique was employed to select a cross-section of customers from the universal banks currently operating in Ghana. Structural equation modeling technique of PLS was used to test the nature of relationships in the research hypotheses. Findings The study found a significant positive relationship between advertising effectiveness and brand preference. Also, there is a significant positive relationship between advertising and customer loyalty. Again, there is a significant positive relationship between brand preference and customer loyalty. Finally, brand preference positive mediates the relationships between advertising and customer loyalty. Practical implications The study provides a useful guide to strategy and policy formulation in marketing communication by establishing the potential viability of advertising strategy in bank marketing and its potential to generate brand preference and customer loyalty. Originality/value The study has practical implication for, and relevance not only to the banking industry communication strategy but also the entire financial services industry.