Abstract:
The banking industry is undertaking extensive promotional activities to attain customers’ preference. The competition in Ethiopian banks is paramount and commercial banks in the country surpassed eighteen from five banks before sixteen years. Most banks engage in promotional activities without assurance of developing long term relationships. The purpose of this study is to analyze the relationship among advertising effectiveness, customer perceived value and customer loyalty in the Ethiopian banking sector, particularly in commercial bank of Ethiopia. The study was conducted at the five branches of the bank located in Bahir Dar city. Quantitative research approach was implemented and the study is explanatory research and the researcher used both primary and secondary sources of data. The sample consists of 400 respondents’ selected based on convenience sampling procedure. The questionnaire was distributed to selected branches customers. The result implies that there is a positive and significant relationship between advertising effectiveness and customer loyalty. Customer perceived value partially mediate with the relationship between advertising effectiveness and customer loyalty. Finding indicated that effective advertising contributed to develop loyal customers. To improve loyalty the Bank should work on performance marketing strategies that improve effectiveness of advertising.
