CONSUMERS’ LOYALTY TOWARD ISLAMIC BANKING SYSTEM: DOES ḤALA̅L BRAND AWARENESS MATTER?
DOI:
https://doi.org/10.31436/ijema.v24i2.376Abstract
In a competitive market structure, brand awareness helps to create a basis of trust and acceptance. Brand awareness is the first step to creating brand equity, an asset that provides companies with sustainable competitive advantages. However, in the Islamic banking context, the majority of consumers are still unable to distinguish between Islamic and conventional banks despite their awareness of the Islamic banking existence. This concern is critical to be addressed particularly in a dual banking environment such as in Malaysia, where consumers have choices between the Islamic and the conventional banking systems. Accordingly, this paper aims at investigating the influence of ḥalāl brand awareness on consumer loyalty toward the Islamic banking system. The model also includes brand loyalty as it is the core asset of brand equity. Using survey method, data of 454 respondents have been analyzed using PLS-SEM. The findings reveal that ḥalāl brand awareness shows greater influence on consumer loyalty toward the Islamic banking system than brand loyalty. Thus, Islamic bank managers must operationalize effective marketing communication strategies by promoting the Islamic banking products with simplicity to facilitate greater consumer understanding. This is not merely for enhancing organizational competitiveness, but more importantly is to ensure long term Islamic banking industry resilience.
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_______, and _______. “Evolving to a New Dominant Logic of Marketing.†Journal of Marketing 68, (2004): 1-17.
Warde, Ibrahim. Islamic Finance in the Global Economy. Edinburgh: Edinburgh University Press, 2010.
Wan Ahmad, Wan Marhaini, Asmak Ab Rahman, Nor Aini Ali, and Azizi Che Seman. “Religiousity and Banking Selection Criteria among Malays in Lembah Klang.†Sharī‘ah Journal 16, no. 2 (2008): 279-304.
Wilson, Rodney. “Challenges and Opportunities for Islamic Banking and Finance in the West: The United Kingdom Experience.†Islamic Economic Studies 7, no. 1&2 (2000): 35-59.
Yoo, Boonghee, and Naveen Donthu. “Developing and Validating a Multidimensional Consumer-Based Brand Equity Scale.†Journal of Business Research 52, no. 1 (2001): 1-14.
_______, _______, and Sungho Lee. “An Examination of Selected Marketing Mix Elements and Brand Equity.†Journal of the Academy of Marketing Science 28, no. 2 (2000), 195-211.
_______. “The Value of Brand Equity.†Journal of Business Strategy 13, no. 4 (1993): 27-32.
_______. Building Strong Brands. New York: Free Press, 1996.
Alba, Joseph W., and J. Wesley Hutchinson. “Dimensions of Consumer Expertise.†Journal of Consumers Research 13, no. 4 (1987): 411-54.
Asutay, Mehmet. “Conceptualisation of the Second Best Solution in Overcoming the Social Failure of Islamic Banking and Finance: Examining the Overpowering of Homoislamicus by Homoeconomicus.†IIUM Journal of Economics and Management 15, no. 2 (2007): 167-96.
Babakus, Emin, Sevgin Eroglu, and Ugur Yavas. “Modeling Consumers’ Choice Behavior: An Application in Banking.†Journal of Services Marketing 18, no. 6 (2004): 462-70.
Bauer, Hans H., Nicola E. Sauer, and Philipp Schmitt. “Customer Based Brand Equity in the Team Sport Industry.†European Journal of Marketing 39, no. 56 (2005): 496-513.
Berry, Leornard L. “Cultivating Service Brand Equity.†Journal of the Academy of Marketing Science 28, no. 1 (2000): 128-37.
Billah, Mohd. Ma’asum. “Islamic Banking and the Growth of Takaful in M.K. & Lewis, M.K. (ed.).†Handbook of Islamic Banking (2007): 401-32.
Chin, Wayne W. “How To Write Up and Report PLS Analyses.†In Handbook of Partial Least Squares: Concepts, Methods and Applications, edited by V.E. Vinzi, W.W. Chin, J. Henseler, and H. Wang, 655-690. New York: Springer, 2010.
De Chernatony, Leslie, and Susan Cottam. “Internal Brand Factors Driving Successful Services Brands.†European Journal of Marketing 40, no. 5/6 (2006): 611-33.
Dusuki, Asyraf Wajdi. “What Does Islam Say About Corporate Social Responsibility?†Review of Islamic Economics 12, no. 1 (2008a): 5-28.
_______, and Nurdianawati Irwani Abdullah. “Why Do Malaysian Customers Patronise Islamic Banks?†International Journal of Bank Marketing 25, no. 3 (2007): 142-60.
El Gamal, Mahmoud Amin. “A Basic Guide to Contemporary Islamic Banking and Finance.†Houston: Rice University, 2000.
Ernst and Young. “The World Islamic Banking Competitiveness Report 2012-2013.†2013.
http://www.mifc.com/index.php?ch=28&pg=72&ac=21&bb=upload.pdf.
Gait, Alsadek, and Andrew Worthington. “An Empirical Survey of Individual Consumer, Business Firm and Financial Institution Attitudes towards Islamic Methods of Finance.†International Journal of Social Economics 35, no. 11 (2008): 783-808.
Gerrard, Philip, and J. Barton Cunningham. “Consumer Switching Behaviour in the Asian Banking Market.†Journal of Services Marketing 18, no. 3 (2004): 215-23.
Gil R.Bravo, Andres, E. Fraj, and Salinaz E. Martinez. “Family as a source of consumer brand equity.†Journal of Product and Brand Management 16, no. 3 (2007): 188-99.
Handelman, Jay M., and Stephen J. Arnold. “The Role of Marketing Actions with a Social Dimension: Appeals to the Institutional Environment.†Journal of Marketing 63, no. 3 (1999): 33.
Haron, Sudin. The Changing Face of Islamic Banking. Working Papers Series 011, (2007) http://www.klib.com.my [19 January 2010].
Hair, Joseph F. Jr., G. Thomas M. Hult, Christian M. Ringle, and Marko Sarstedt. A Primer on Partial Least Squares Structural Equations Modeling (PLS-SEM). Los Angeles: SAGE, 2014.
_______, William C. Black, Barry J. Babin, Rolph E. Anderson, and Ronald L. Tatham. Multivariate Data Analysis. Upper Saddle River, N.J.: Pearson Education, 2010.
ICD Thomson Reuters. “Islamic Finance Development Report 2014â€. (2014). http://www.tkbb.org.tr/documents/arastirmaveraporlar/Islamic_Finance_Development_Report_2014.pdf
Jones, Tim, and Shirley F. Taylor. “The Conceptual Domain of Service Loyalty: How Many Dimensions?†Journal of Services Marketing 21, no. 1 (2007): 36-51.
Kamarulzaman, Yusniza, and Azian Madun. “Marketing Islamic Banking Products: Malaysian Perspective.†Business Strategy Series 14, no. 23 (2013): 60-6.
Keller, Kevin Lane. “Strategic Brand Management: Building, Measuring and Managing Brand Equity.†New Jersey: Prentice Hall. 2003.
______. “Conceptualizing, Measuring, and Managing Customer-Based Brand Equity.†Journal of Marketing 57, no. 1 (1993): 1-22.
Khan, Mansoor and M. Ishaq Bhatti. “Islamic Banking and Finance: On its Way to Globalization.†Managerial Finance 34, no. 10 (2008): 708-725.
Kumar, Ravi Shekhar, Satyabhusan Dash, and Prem Chandra Purwar. “The Nature and Antecedents of Brand Equity and its Dimensions.†Marketing Intelligence & Planning 31, no. 2 (2013): 141-59.
Loo, Mark. “Attitudes and Perceptions towards Islamic Banking among Muslims and Non-Muslims in Malaysia: Implication for Marketing to Baby Boomers and X-Generations.†International Journal of Arts and Sciences 3, no. 13 (2010): 453-85.
Maio Mackay, Marisa. “Application of Brand Equity Measures in Service Markets.†Journal of Services Marketing 15, no. 3 (2001): 210-21.
Muslim, Amin and Zaidi, Isa. “An Examination of the Relationship between Service Quality Perception and Customer Satisfaction: A SEM Approach towards Malaysian Islamic Banking.†International Journal of Islamic and Middle Eastern Finance and Management 1, no. 3 (2008): 191-209.
O'Loughlin, Deirdre, and Isabelle Szmigin. “Customer Perspectives on the Role and Importance of Branding in Irish Retail Financial Services.†International Journal of Bank Marketing 23, no. 1 (2004): 8-27.
Omar, Nor Asiah. “The Antecedents and Consequences of Relationship Quality of Retail Loyalty Programme.†PhD Thesis, Universiti Teknologi Mara, 2008.
Osman, Ismah. “The Impact of Corporate Image on Customer Loyalty of Islamic Banks in Malaysia: Integrating Resource Based and Institutional Theory.†PhD Thesis, International Islamic University Malaysia, 2011.
Othman, Mohd Yusof. Isu-Isu Dalam Ilmu dan Pemikiran. Kajang: Aras Mega (M) Sdn. Bhd., 1998.
Ringle, Christian M., Sven Wende, and Alexander Will. “SmartPLS†Hamburg: SmartPLS. (2005) http://www.SmartPLS2.0 (beta), Smartpls.de
Vargo, Stephen L., and Robert F. Lusch. “From Repeat Patronage to Value-Co-Creation in Services Ecosystems: A Transcending Conceptualisation of Relationship.†Journal of Business Marketing Management 4 (2010): 169-79.
_______, and _______. “Evolving to a New Dominant Logic of Marketing.†Journal of Marketing 68, (2004): 1-17.
Warde, Ibrahim. Islamic Finance in the Global Economy. Edinburgh: Edinburgh University Press, 2010.
Wan Ahmad, Wan Marhaini, Asmak Ab Rahman, Nor Aini Ali, and Azizi Che Seman. “Religiousity and Banking Selection Criteria among Malays in Lembah Klang.†Sharī‘ah Journal 16, no. 2 (2008): 279-304.
Wilson, Rodney. “Challenges and Opportunities for Islamic Banking and Finance in the West: The United Kingdom Experience.†Islamic Economic Studies 7, no. 1&2 (2000): 35-59.
Yoo, Boonghee, and Naveen Donthu. “Developing and Validating a Multidimensional Consumer-Based Brand Equity Scale.†Journal of Business Research 52, no. 1 (2001): 1-14.
_______, _______, and Sungho Lee. “An Examination of Selected Marketing Mix Elements and Brand Equity.†Journal of the Academy of Marketing Science 28, no. 2 (2000), 195-211.
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Published
2016-11-29
How to Cite
Maulan, S. (2016). CONSUMERS’ LOYALTY TOWARD ISLAMIC BANKING SYSTEM: DOES HÌ£ALAÌ…L BRAND AWARENESS MATTER?. International Journal of Economics, Management and Accounting, 24(2), 209–226. https://doi.org/10.31436/ijema.v24i2.376
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