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The Effect of Advertising Spending on Brand Loyalty Mediated by Store Image, Perceived Quality and Customer Satisfaction: A Case of Hypermarkets

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Author(s): Farhina Hameed

Journal: Asian Journal of Business Management
ISSN 2041-8744

Volume: 5;
Issue: 1;
Start page: 181;
Date: 2013;
Original page

Keywords: Advertising spending | brand loyalty | customer satisfaction | mediation | Pakistan | perceived quality | retailing | store image

ABSTRACT
First, the study aims to investigate the effect of advertising spending on brand loyalty. Second, to test the mediating role of store image, perceived quality and customer satisfaction in above mentioned relationship. A quantitative approach was employed, using 15-item, 5-point Likert scale questionnaire administered to 360 participants. Data from the departmental stores are used to examine the direct and indirect impact of advertising spending on brand loyalty. Confirmatory Factor Analysis and Structural Equation Modeling were carried out using Amos-18 to evaluate the results. The study found complex results of advertising spending on brand loyalty. The results showed insignificant direct impact of advertising spending on perceived quality and brand loyalty where as significant direct impact on customer satisfaction and store image. However, store image and perceived quality are confirmed as mediators in the relationship between advertising spending and brand loyalty. The inclusion of brand trust variable can better describe the relationship of advertising spending with brand loyalty. The results of the study highlights the value of advertising spending in building brand loyalty that suggests managers of the departmental stores should give emphasis on advertising spending and on store image that lead towards brand loyalty. It contributes to the current body of knowledge by improving the understanding of advertising spending and brand loyalty. The major contribution of this study is the comparison of theoretical model with mediating model to evaluate the effect of advertising spending on brand loyalty along store image, perceived quality and customer satisfaction.

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