Impact of internal branding on customer-based brand equity with mediating effect of organizational loyalty An empirical evidence from retail sector

Purpose Branding has become a permanent source of competitive advantage for any leading business. Predominantly, it is execution inside the organization for employees. The purpose of this paper is to measure the influence of internal branding (IB) on customers-based brand equity (CBBE) and the mediating effect of organizational loyalty (OL) between two retail store chains of an under developing country (e.g. Pakistan). Design/methodology/approach This paper draws on primary data. Data were collected from frontline officers and customers of selected retail stores. Descriptive analysis, mediation analysis and independent sample t-test data analysis techniques were applied through smart PLS and SPSS. Findings The results of the study revealed that IB influences OL and CBBE. The outcomes showed the mediation effect of OL on the relationship between IB and CBBE partially. Furthermore, results of this papers also disclosed a difference in the levels of IB and OL in both organizations. But, there was no difference in the level of brand equity among customers of both retail stores. Practical implications The retail store sector is growing at fast pace with new innovations in all dimensions of the sector. These results could help the retail industry with empirical pieces of evidence to implement IB in their organizations to make the strong relationship between store and customer through efficient and well-trained frontline officers. Originality/value The study's noteworthy contribution to the industry and academic world is the empirical support for the relationship between IB and CBBE. This study has explored the IB in the service sector (i.e. the retail store) from the non-western and under developing context.