Impact of Advertisement on Brand Loyalty Using Structural Equation Modeling Approach

Abstract

Third millennium is the era of information explosion and severe competition among organizations for obtaining customer satisfaction and establishing long-term relationship with customers so as to obtain higher market share. Considering the fact that customers can have access to many products and services at a moment due to development of information technology, probability for selecting a new company for receiving services or products is very high, thus the customers may refer to the other companies for receiving service or product. To this end, it can be stated one of the main issues in marketing is making customers loyal. In fact, if companies can acquire customer satisfaction by adopting appropriate marketing strategies, they can prepare context for their loyalty and gain high profit in long term. The main aim of the current research work is investigating impact of advertisement on customer loyalty to a brand. Research data were obtained from a sample (n = 385) of students of management and accounting department in Qazvin University who are Iran cell customers through a structured questionnaire. They were analyzed using structural equations modeling techniques as well as LISREL and SPSS software. Results show that such factors as brand satisfaction and trust directly and factors such as advertisement and perceived quality, image, and brand associations indirectly through mediator variables influence customer loyalty.