ADVERTISING SPEND: ADOPTION OF ISLAMIC BANKING IN THE BOTTOM OF THE PYRAMID MARKET OF PAKISTAN

Abstract

The study investigated to remedy the research gap of measuring the moderating effect of advertising spend on consumer adoption behavior of Islamic banking at the bottom of the pyramid (BOP) market of Pakistan. Cross-sectional research data collected from a total of 300 respondents of which 267 (89%) were useful to analyze the test on the framework of the research. SEM approach was used to test the hypothesized relationship of the framework in two sequential steps wherein the 1st step the reliability and validity analysis was performed and in the 2nd step sequential structural analysis among the variables were conducted with and without moderation. The empirical analysis confirmed a positive direct relationship of Perceived Usefulness (PU), Perceived Ease of Use (PEOU), and Advertising Spend (AS) on the adoption of Islamic banking (AIB) in the Bottom of the Pyramid Market. AS further confirmed the hypothesized relationships of the variables through increased individual predicting power of the PU and PEOU on the AIB with an overall effect size of f 2 value of 0.565. The overall adoption value of the r2 increased from simple moderation of 0.482 to moderating r2 value of 0.669 thus depicting 18.7 percent interaction effect of the AS. The study suggests that the advertising spends on marketing communication practices should be well-focused by the managers to penetrate in the BOP market of Pakistan. Moreover, future research can eliminate the limitation of the cross-sectional analysis and generalizability of the results as a functional probability in the other regional settings and industrial sectors by adding more variables to predict the adoption behavior with different roles. The consumer adoption behavior of the low-income markets has not yet been examined for Islamic banking in Pakistan. The research is useful for the industry to keep pace with the competition by focusing on the advertising and communication practices in this industry