The antecedents of corporate brand image and its consequences to customer loyalty of Islamic bank in Malaysia

Abstract

The increasing competition and the homogeneous nature of banking products have forced banking institutions to create differentiation. One of the ways used by banks to distinguish themselves from competitors is by adopting an Islamic financial concept. However, despite the inclusion of Islamic values, customers are unable to differentiate the Islamic banking concept from its conventional counterparts, indicating a failure in projecting the intended image. In order to understand this, improvement of corporate brand image through attributes of the brand is suggested. As such, this study is conducted to identify the brand attributes influencing the corporate brand image of Islamic banking institution and its consequence. Three attributes were examined which are functional, emotional and spiritual brand attributes and one consequence was included which is loyalty. The research methodology involved several steps that started with scale development procedure through literature review and qualitative method. The scale was then validated using exploratory factor analysis and confirmatory factor analysis. In the second stage, questionnaires were then distributed to Islamic bank customers who reside or work in Kuala Lumpur and Selangor. 503 questionnaires were analysed using partial least square-structural equation modelling. A 6-point Likert scale was used to measure the constructs. Findings of the study showed that only functional and emotional brand attributes have an impact on the overall corporate brand image and loyalty. Spiritual brand attribute on the other hand is not significant in influencing both image and loyalty. However, the study found that spiritual brand attribute is the antecedent of functional and emotional brand attribute, which is in line with the Tawhidic paradigm. In general, the study has contributed to the theory by extending the brand triangle framework with the inclusion of spiritual value. In addition, the study has also developed the measurement scale for the spiritual brand attribute. Managerially, the study provides insights on the strategy that could be adapted to position the corporate brand of Islamic bank in the customers’ minds.