The Effect of Integrated Marketing Communication Strategies On Bank’s Performance through the Mediating Role of Brand Equity

Abstract

The research examines the effects of Integrated Marketing Communication (IMC) by mediating brand equity on selected private commercial banks’ performance in Addis Ababa, Ethiopia. The study targets private Ethiopian commercial banks operating for over 15 years, focusing on their head office Marketing and Customer Relationship Management staff. A multi-stage sampling method is used, combining purposive, probability and convenience techniques. Respondents from pertinent departments are then chosen through probability
and convenience sampling for practical data collection. Using a Structural Equation Modelling (SEM) framework, the study tests the direct effect of IMC on bank performance and brand equity (BE), and the indirect effect through the mediation of brand equity. The findings reveal that IMC significantly enhances bank performance both directly and indirectly through its positive effect on BE. Further, the analysis reveals that BE exerts a positive and significant influence on bank performance and partially mediates the IMC–performance linkage. Hypothesis testing validates the need for IMC in the development of brand equity, which leads to better operating performance. The results confirm that Integrated Marketing Communications IMC makes a significant positive contribution to both Brand Equity (BE) and banks’ performance, exerting strong direct effects (β=0.716, p<0.001 and β =0.775, p<0.001 respectively). Additionally, Brand Equity positively contributes to Bank Performance (β=0.490, p<0.001), indicating that a well-established brand equity influences financial and operating success. Furthermore, IMC has an indirect effect on Bank Performance through Brand Equity (β=0.351, p<0.001), highlighting branding as a partial mediator in the IMC-performance relationship. These findings suggest that banks should emphasize appropriate integrated marketing communication strategies to improve their brand equity and performance as a whole.