CSR and corporate branding effect on brand loyalty: a study on Indian banking industry

Abstract

PurposeThe study aims to examine the effect of corporate social responsibility (CSR) on corporate branding (CB) and brand loyalty (BL) in the Indian Banking industry. The study further intends to examine the direct and indirect effect of CSR on BL when CSR becomes an integral part of CB.Design/methodology/approachA structured questionnaire using seven-point Likert’s scale is the instrument for data collection. Stratified random sampling is used to collect the cross-sectional data from 430 savings bank customers in India. A new scale is developed and used to measure the CB as a single construct. A multi-model path using structural equation modelling is used to test the hypotheses. Direct and indirect model path analysis is used to examine the integrated effect of CSR and CB on BL.FindingsThe results of the study show that there is a significant impact of CSR components (economic, legal, ethical and philanthropic) on CB to enhance customer BL. The study offers new insight into the relationship between CSR and BL by introducing CB as the mediating factor. However, the relationship between “legal responsibility to CB” and “philanthropy responsibility to BL” demonstrate a negative coefficient in the path analysis. Further, the result of the direct and indirect model path analysis confirms that customers’ BL can be enhanced more efficiently when CSR becomes an integral part of CB.Practical implicationsThe strategic incorporation of CSR tools as an integral part of CB strategy can help the managers in the banking industry to enhance their customers’ BL. Besides economic and legal responsibilities, managers need to give more emphasis on the ethical and philanthropic responsibilities as critical positioning tools to develop firm’s corporate brand followed by enhancing BL.Originality/valueScale development and validation of CB as a single construct is an original move in this study. Additionally, the study is a pioneer to examine the direct and indirect effect of CSR on customers’ BL using CB as a key mediating factor.