Investigating the Mediating Role of Organizational Loyalty in the Effect of Internal Branding on Customer-Based Brand Equity (Case Study: Asia Insurance in South Khorasan Province)

Abstract

Customer-based brand equity occurs when the consumer is familiar with the brand and keeps favorable, strong, and unique brand associations in his or her memory. Meanwhile, in services, due to the close relationship between employees and customers, the attitudinal, emotional, and behavioral patterns of employees play an important role in this familiarity and favorable association. In this regard, the present study seeks to investigate the effect of internal branding on customer-based brand equity through organizational loyalty. The statistical population consisted of two groups: the first group included employees working in supervision and agencies of Asia Insurance in South Khorasan Province, and the second group included customers who had been covered by one of Asia Insurance's plans for at least 3 consecutive years. Based on the Morgan table, the sample size was determined as 63 for employees and 384 for customers, and they were selected using simple random sampling. Three questionnaires were used to collect data, including the internal branding questionnaire of Ponjaysri and Wilson (2009), the customer-based brand equity questionnaire of Mita and Sharma (1995), and the organizational loyalty questionnaire of Savariklin et al. (1998). Convergent and divergent validity methods were used to measure validity, and Cronbach's alpha method was used to measure reliability, the coefficient of which for all variables was greater than the specified threshold, i.e. 0.7. Smart PLS3 software and structural equation testing were used to test the hypotheses. The research findings showed that at a 95% confidence level, internal branding and organizational loyalty have a positive and significant effect on customer-based brand equity, but the extent of its effect through the mediating variable of organizational loyalty is greater than its direct effect.

Keywords: internal branding, organizational loyalty, customer-based brand equity, Asia Insurance Company