Volume 25 Issue 2 Article 4 June 2023 How Do Brand Communication and Brand Personality Shape How Do Brand Communication and Brand Personality Shape Consumer Loyalty? Consumer Loyalty? Emilija Heleta Š vrakić University of Sarajevo, School of Economics and Business, Sarajevo, Bosnia and Herzegovina, emilija.heleta.svrakic@gmail.com Maja Arslanagić -Kalajdž ić University of Sarajevo, School of Economics and Business, Sarajevo, Bosnia and Herzegovina, maja.arslanagic@efsa.unsa.ba Follow this and additional works at: https://www.ebrjournal.net/home Part of the Advertising and Promotion Management Commons, Business and Corporate Communications Commons, and the Marketing Commons Recommended Citation Recommended Citation Heleta Š vrakić , E., & Arslanagić -Kalajdž ić , M. (2023). How Do Brand Communication and Brand Personality Shape Consumer Loyalty?. Economic and Business Review, 25(2), 118-127. https://doi.org/ 10.15458/2335-4216.1321 This Original Article is brought to you for free and open access by Economic and Business Review. It has been accepted for inclusion in Economic and Business Review by an authorized editor of Economic and Business Review. ORIGINAL ARTICLE How Do Brand Communication and Brand Personality Shape Consumer Loyalty? Emilija Heleta Švraki´ c * , Maja Arslanagi´ c-Kalajdži´ c University of Sarajevo, School of Economics and Business, Sarajevo, Bosnia and Herzegovina Abstract The concept of brand personality plays a crucial role in brand literature as consumers tend to anthropomorphize brands by attributing human characteristics to them. The creation of a brand personality that resonates with consumers leads to greater customer satisfaction and loyalty over the long term. This study investigates the mediating potential of brand personality dimensions, specically Competence and Sophistication, in the relationship between brand com- munication (both controlled and uncontrolled) as an antecedent and brand loyalty as an outcome. Using a sample of 340 users of a cosmetic brand, we employed structural equation modeling to analyze the data. Our results indicate that controlled communication signicantly inuences both the Competence and Sophistication dimensions of brand personality, and that there are signicant indirect effects of both controlled and uncontrolled communication through reference groups on loyalty mediated by personality dimensions. These ndings provide valuable insights for brand managers and marketers seeking to enhance brand loyalty by developing effective communication strategies that align with the desired brand personality dimensions. Keywords: Brand personality, Brand communication, Brand loyalty, Beauty industry JEL classication: C1, C3, M3 Introduction A lthough a strong and positive brand personality has been found to be linked to customer loyalty, its importance has not been widely recognized in aca- demic literature. Specically, there has been a lack of research addressing the underlying reasons and mechanisms through which brand personalities inu- ence consumers’ loyalty towards a brand. This study addresses the different types of brand communica- tion and their effects on consumer loyalty through the dimensions of brand personality. Brand person- ality is an important concept in marketing (Aaker, 1997; Plummer, 1985) because it is based on brand anthropomorphism, a process by which consumers assign certain human symbols and characteristics (Kim, 2001). Brand personality can help improve the relationship between consumers and a brand because consumers are more likely to gravitate to brands that are consistent with their self-identication (Belk, 1988; Govers & Schoormans, 2005; Lin, 2010), so they can serve as symbols of the self and sources of self-expression (Keller, 1993). In recent academic liter- ature, the relationship between a brand’s personality and consumer attitudes towards the brand has been extensively studied (e.g., Cam et al., 2019; Cardoso et al., 2022; Kapoor & Banerjee, 2021), along with the connection between the consumer and the brand (At- tor et al., 2022; Jibril et al., 2019; Radler, 2018). To measure brand personality, most studies have em- ployed Aaker’s ve-dimension scale (e.g., Cortez & Dastidar, 2022). However, limited research has been conducted to explore the mediating role of brand personality dimensions between marketing commu- nication efforts as an antecedent and loyalty as a consequence. Therefore, further research is required Received 10 January 2023; accepted 26 April 2023. Available online 5 June 2023 * Corresponding author. E-mail addresses: emilija.heleta.svrakic@gmail.com (E. Heleta Švraki´ c), maja.arslanagic@efsa.unsa.ba (M. Arslanagi´ c-Kalajdži´ c). https://doi.org/10.15458/2335-4216.1321 2335-4216/© 2023 School of Economics and Business University of Ljubljana. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/ licenses/by-nc-nd/4.0/). ECONOMIC AND BUSINESS REVIEW 2023;25:118–127 119 to gain a deeper understanding of the complex rela- tionships among these concepts. Research on brand personality is motivated by the signicant association observed between brand personality and outcome variables such as prefer- ence (Aaker, 1997), usage (Sirgy, 1982), emotions (Biel, 1992), trust, and loyalty (Fournier, 1994). Per- ceived brand personality plays a key role in driving consumer loyalty, enhancing product differentiation, and reinforcing consumers’ active engagement with brand information (Aaker, 1992; Biel, 1992; Fournier, 1998). The presence of distinct brand personalities can foster stronger consumer–brand attachment, ul- timately leading to higher levels of loyalty (Ang & Lim, 2006; Doyle, 1990; Kim et al., 2011; Kumar et al., 2006). As a predictor of loyalty, brand personality can also lead to reduced marketing and advertising costs for retailers (Ivens & Valta, 2012). A recent study by Memon et al. (2021) further conrms the positive and signicant impact of brand personality on brand loyalty. Against this background, the focus of this study is to evaluate the potential mediating effect of brand personality dimensions between marketing commu- nication efforts as an antecedent and loyalty as a consequence. Communication in marketing includes all formal and informal conversations that lead to meaningful and timely information exchange be- tween buyers and sellers (Ranjbarian & Berari, 2009). Providing timely, accurate, and reliable information to customers, including information about new ser- vices and promises, is considered critical to building customer relationships. Open communication chan- nels between the company and customers ensure a smooth exchange of information. Therefore, commu- nication between the company and customers must be solid and predictable so that both parties are aware of the mutual benets that result from this relation- ship. In this way, both the customers and the company will be willing to commit to these relationships for the long term. It is also argued that communication increases trust between partners as well as the ability of partners to align their expectations and perceptions (Alrubaiee & Al-Nazer, 2010). Brand communication can affect consumers in choosing a brand (Afriani et al., 2019). Further on, brand communication is the strongest variable in creating a brand image (Putri et al., 2019), and in bringing about positive brand be- havior (Afriani et al., 2019), which will later lead to brand loyalty. The brand communication challenge is to harmonize customer-perceived brand personality as much as possible with the intended brand per- sonality as dened by the company (Ivens & Valta, 2012). The fact that brand image and personality work together in that they both represent non-visual methods for communication that live inside the audi- ence’s heads motivated this study to further explore the inuence of brand communication on brand personality. The results of analyses done by Ivens and Valta (2012) point to weaknesses in the brand personal- ity communication of many companies. We focus on two types of communication (Grace & O’Cass, 2004): formal and informal. Informal communication is fur- ther divided into communication through advertising and communication through word of mouth from reference groups. Advertising and promotion are a crucial marketing communication tool that reects the essence of a condent brand, and it is recognized as the main component of integrated marketing com- munication (Finne & Grönroos, 2017). “Identication, integration, and symbolism come directly through the marketing communication of the brand, its signals” (Loureiro, 2023). Well-known brands and non-brands are expected to have different ways to communicate, but brand managers benet from more research that claries the differences (Loureiro, 2023). The intended contribution of this study is twofold. First, the study addresses the lack of research on the underlying reasons and mechanisms through which brand communication and brand personality inuence consumers’ loyalty towards a brand. The study explores the potential mediating effect of brand personality dimensions between marketing commu- nication efforts as an antecedent and loyalty as a consequence. It highlights the importance of brand personality in driving consumer loyalty, enhancing product differentiation, and reinforcing consumers’ active engagement with brand information. Second, this study emphasizes the critical role of communi- cation in marketing, including formal and informal communication channels, and the need for timely, accurate, and reliable information to build customer relationships. In this way, the study also underscores the importance of harmonizing customer-perceived brand personality with the intended brand personal- ity dened and communicated by the company. 1 Literature review Brand personality is very important in building the strength of a brand (Aaker, 1997). Nowadays, cus- tomers are willing to pay any price for “their” brand, i.e., a brand with which they identify. Well-known brands invest both time and money to stabilize brand identity, maintain brand loyalty and popularity, and develop new product lines to achieve a greater market share. Studies of customer loyalty and risk aversion, as well as brand personality, enable marketers to identify factors that help stabilize customer behavior. 120 ECONOMIC AND BUSINESS REVIEW 2023;25:118–127 Fig. 1. The conceptual framework of the research. Increasing customer loyalty is very important for brands, and they use a number of strategies to achieve brand loyalty as an end goal. This study aims to investigate how different types of communication (controlled and uncontrolled) to- gether with the perception of brand personality affect brand loyalty in the branded cosmetics industry. The cosmetics industry has seen signicant growth in re- cent years, and companies are eager to understand the behavior patterns of their customers and how they can inuence their brand personality through various communication channels. The conceptual framework for this study is illustrated in Fig. 1, which provides an overview of the concepts that may contribute to brand loyalty in the cosmetics industry. The frame- work suggests that both controlled and uncontrolled communication can impact brand loyalty through the perception of brand personality, which plays a medi- ating role in this process. 1.1 Brand communication and brand personality The successful integration of marketing communi- cation tools increases sales, and communication is the primary factor that affects costumer behavior (Pur- wanto, 2023) and the only factor in which partial control is in the provider’s hands. Appropriate com- munication with the customer can be helpful, it can be positive and pleasant, and it can evoke various types of engagement (Nandan, 2005) and therefore can have important effects on customer behavior. For example, to ensure effective communication with their customers, many companies rely on customer service centers, where they can effectively engage with consumers and address their potential issues and complaints (Chandra et al., 2022). Although the concept of brand personality is not new, the consideration of its importance in brand communication practice has been increasing im- mensely since the inception of the new millennium, and many practitioners and researchers have started to view it as the core of all advertising and marketing activities. Brand personality is created by the “inten- tional behaviors” a brand shows, which are observed by consumers. Brand personality becomes a priority in creating better communication with customers, so brands strive to develop a unique and recognizable personality. Therefore, some studies believe that cre- ating brands with a personality similar to that of the target consumer group is an effective marketing strat- egy (Ling et al., 2014). A brand personality is created through any kind of communication between the brand and the con- sumer. There is usually nothing inherent in a brand that makes it young, exciting, or traditional, for ex- ample. Instead, these brand qualities are shaped by consumers’ direct or indirect contact with the brand, including the product’s user image (Aaker, 1997; Plummer, 1985). Consumers are thought to like brands with more distinct personalities, but it is also likely that consumers are more familiar with the brands they prefer. In other words, all marketing ac- tivities aim to make consumers trust and recognize the brand personality and to strengthen communi- cation between the brand and consumers (Farhat & Khan, 2011) to improve brand loyalty. A well-dened brand personality can create a stronger emotional connection with consumers and increase trust and loyalty (Ling et al., 2014). In addi- tion, consumers tend to rate a brand with a stronger personality more highly (Ling et al., 2014). If compa- nies motivate their customers to speak well of their offerings through their marketing activities, this will increase customer loyalty. Considering previous studies, we argue that brand communication shapes the brand personality per- ceived by customers and helps to create domi- nant personality dimensions in consumers’ minds. Communication interventions help consumers build brand awareness, meaning, and image, thus help- ing to identify brand personality dimensions and strengthen the connection between the brand and consumers. Despite the large amount of research deal- ing with brand personality, the relationship between personality and communication shows that a large number of practitioners rely on intuition to transmit the desired personality through message commu- nication (Vinyals-Mirabent & Koch, 2020). Clearly, this type of practice entails a lack of consistency be- tween desired and perceived personality. This opens up space for additional research into the connec- tion between these two concepts. By understanding how different types of communication inuence the perception of brand personality, brands can develop ECONOMIC AND BUSINESS REVIEW 2023;25:118–127 121 more effective communication strategies that resonate with their target audience and build stronger brand loyalty. For instance, the way a brand communicates with its customers may shape the perception of its personality. For example, a brand that uses humor- ous or playful messaging in its advertisements may be perceived as more lighthearted and fun-loving than a brand that uses more serious, straightforward messaging. Furthermore, consistent communication across different communication channels can rein- force the perception of brand personality. When a brand communicates in a consistent manner across different touchpoints, customers are more likely to develop a clear and consistent understanding of the brand’s personality. Furthermore, the type of commu- nication used by a brand can inuence the emotions and attitudes of its customers, which in turn can shape the perception of brand personality. For example, a brand that uses emotional storytelling in its advertis- ing may be perceived as more empathetic and caring than a brand that simply lists product features. There- fore, we hypothesize the following: H1. Brand communication dimensions are positively and signicantly related to brand personality. 1.2 Brand personality and brand loyalty In assessing brand personality and its effects, stud- ies typically use the ve-dimensional scale developed by Aaker (1997) to measure the concept. These dimen- sions are (1) Sincerity, (2) Excitement, (3) Competence, (4) Sophistication, and (5) Ruggedness. Accordingly, there are already several studies investigating the role of brand personality in brand loyalty. These stud- ies have mainly been conducted with real brands in various industries (ranging from high-involvement product brands to various service brands). Previous research shows that brand personality has a positive inuence on customer loyalty in the sport (Nike) and technological (Sony) industries (Mengxia, 2007), food and beverage industry (Balakrishnan et al., 2009), telecommunication industry (Alhadid, 2015; Teimouri et al., 2015; Tuzcuo˘ glu et al., 2018), banking industry (Koppalavenugopal, 2019; Nysveen & Pedersen, 2014), hotel industry (Li et al., 2019), and leasing (Jayasundara et al., 2022). Furthermore, brand personality has a direct posi- tive inuence on attitudinal loyalty (Li et al., 2019; Roustasekehravani et al., 2015; Zentes et al., 2008), behavioral loyalty (Li et al., 2019; Roustasekehravani et al., 2015; Zentes et al., 2008), and conative loy- alty (Li et al., 2019). Interestingly, previous studies have shown that brand personality explains a much smaller percentage of the variance in behavioral loy- alty compared to attitudinal loyalty (Zentes et al., 2008). Brand personality, mediated by brand love, has a signicant impact on customer loyalty among Ira- nian insurance buyers in Tehran (Sharahi & Heshmat, 2020). In addition, different dimensions of brand person- ality affect loyalty in different manners. For example, in smartphone buyers, the domain of Sophistication received the highest rank, followed by the domain of Excitement, then the domain of Ruggedness, and the Sincerity domain received the lowest rank (Al- hadid, 2015). Sincerity has a direct impact on brand personality (Jayasundara et al., 2022; Koppalavenu- gopal, 2019; Sindhu et al., 2021; Tuzcuo˘ glu et al., 2018). Competence shows direct positive impact on brand loyalty (Koppalavenugopal, 2019; Nasir et al., 2020; Sindhu et al., 2021; Tuzcuo˘ glu et al., 2018), or an im- pact through brand trust (Astono, 2021), or no effect at all (Jayasundara et al., 2022). Sophistication level has a signicant inuence on brand loyalty (Jayasun- dara et al., 2022; Koppalavenugopal, 2019). Previous research is inconclusive about the role of Excitement as a personality dimension. Some claim that there is no signicant inuence on any dimension of brand loyalty (Koppalavenugopal, 2019; Tuzcuo˘ glu et al., 2018), and others agree about direct positive effects of Excitement on brand loyalty (Jayasundara et al., 2022; Sindhu et al., 2021; Tuzcuo˘ glu et al., 2018). When all the previous ndings are considered together, we can assess that when consumers perceive a brand as having a strong and desirable personality, they are more likely to develop an emotional connection with the brand and become loyal to it. Moreover, when a brand personality is well-aligned with the values and beliefs of consumers, it can create a deeper level of en- gagement and loyalty. Astrong brand personality that resonates with consumers can be a key driver of brand loyalty. Based on these arguments, as well as previous evidence on the focal relationship, we hypothesize: H2. Brand personality is positively related to brand loy- alty. Finally, this study further assesses whether brand personality is a vehicle for transferring the effect of brand communication dimensions on brand loy- alty, by postulating that there is a mediating effect of brand personality between brand communication and brand loyalty. In fact, changes in brand commu- nication dimensions may lead to changes in brand personality perception, which in turn can affect brand loyalty. Therefore, we hypothesize: H3. Brand personality mediates the relationship between brand communication dimensions and brand loyalty. 122 ECONOMIC AND BUSINESS REVIEW 2023;25:118–127 2 Methodology To empirically test the conceptual framework, we conducted a quantitative study with a real brand from the cosmetics industry. The cosmetic brand Labeffec- tive was chosen as the target brand, and the company representatives provided their consumer database for this research. The brand has been active for ve years in Bosnia and Herzegovina (BiH), from where the re- search was conducted, and worldwide. The market in Bosnia and Herzegovina is a suitable market for con- ducting this type of study, as the cosmetics industry market does not differ from other European cosmetics industry markets, and with Labeffective a niche brand was selected; it is a current global trend that new niche cosmetic brands with different characteristics are emerging. An online survey was utilized for the study using the LimeSurvey platform. To reach consumers of the brand, invitations were sent via SMS and Viber to con- sumers in BiH and via email to consumers residing outside BiH. Respondents were offered the opportu- nity to enter personal information in order to receive a gift card for completing the survey. Previously developed measurement scales were used in this research, namely: the brand communica- tion scale was the same as in Grace and O’Cass (2004), the brand personality scale as in Aaker (1997), and the brand loyalty scale was adopted from Yoo et al. (2000). For the brand personality scale, we did not select all ve dimensions of brand personality (Aaker, 1997): Sincerity, Excitement, Competence, Sophistica- tion, and Ruggedness, but only three: Sincerity (the extent to which the brand is honest), Competence (the extent to which the brand is reliable, intelli- gent, and successful), and Sophistication (the extent to which the brand is upscale and charming). Some studies claim that there are only three general di- mensions that are universally relevant and generic for studies in specic locations (Meiske & Balqiah, 2019), and our analysis of various communication materials showed that the majority of brand com- munication focused precisely on the dimensions of Sincerity, Competence, and Sophistication (details can be found in Section 1.2). The nal sample for the analysis consisted of 340 users of the Labeffective brand who had purchased the brand at least once before lling in the survey. In the subject sample, the largest number of respondents were female (93.5%), while 32.65% were between the ages of 46 and 55. This implies a much higher number of female than male consumers. Such a large percent- age of women in the sample can be explained by the purpose of this cosmetic product. These types of treat- ments are mostly carried out by women, so this is the reason for the predominantly female share of the pop- ulation in the sample. The largest number of respon- dents in the subject sample had high school education or rst degree of higher education (39.7%) and had above-average incomes (as much as 51.5%). It is also signicant that in the subject sample, the largest num- ber of respondents had found out about the brand through TV commercials (48.80%). Slightly fewer respondents had received information using the In- ternet and social networks (32.90%). The smallest number of respondents received a recommendation for the brand from a friend/acquaintance (18.20%). 3 Results To empirically test the developed model, we have conducted the analysis by using structural equation modeling (SEM) in the Lisrel program. We have pur- sued a two-step approach (Anderson & Gerbing, 1988) in our data analysis, assessing the measurement model rst and then the structural model. The mea- surement model along with standard coefcient is shown in Table 1. Here, it is important to stress that, due to multiple items that each sub-dimension of personality dimen- sion included, we have primarily conducted a sep- arate conrmatory factor analysis with the purpose of aggregating items of personality sub-dimensions. Thus, the dimension of Sincerity was measured with the following sub-dimensions and items: down-to- earth (family-oriented, small-town, down-to-earth), honest (sincere, honest, real), wholesome (origi- nal, wholesome), cheerful (cheerful, sentimental, friendly). Competence was measured with the follow- ing sub-dimensions: reliable (reliable, hard-working, secure), intelligent (intelligent, technical, corporate), and successful (successful, leader, condent), and Sophistication with the following sub-dimensions: upper class (upper-class, glamorous, good-looking), charming (charming, feminine, smooth). We have ag- gregated the sub-dimensions after establishing the validity and reliability of items to make the model more parsimonious. Furthermore, when assessing the measurement model, the dimensions of Sincer- ity and Competence had a great overlap (rD 0.97), hence we decided to merge those two dimensions into one. It is not unusual that dimensions of the same concept are highly correlated. When it comes to Sincerity and Competence, high correlation between these two dimensions has also been found by Sung and Kim (2010), who did a whole range of model re-specications to address this issue in their work. Furthermore, in their meta-analytic study, Eisend and Stokburger-Sauer (2013) have found that Sincerity ECONOMIC AND BUSINESS REVIEW 2023;25:118–127 123 Table 1. Conrmatory factor analysis and measurement model presentation. Construct Item Loading CR AVE Controlled Communication I like the advertising and promotions of the Labeffective brand. 0.87 0.96 0.79 I react favorably to the advertising and promotions of the Labeffective brand. 0.88 I have positive feelings toward the advertising and promotions of Labeffective brand. 0.90 The advertising and promotions of the Labeffective brand are good. 0.92 The advertising and promotions of the Labeffective brand do a good job. 0.85 I am happy with the advertising and promotions of the Labeffective brand. 0.89 Uncontrolled Communication – Publicity Publicity has been signicant in affecting my views about the Labeffective brand. 0.81 0.94 0.76 Publicity revealed some things I had not considered about the Labeffective brand. 0.88 Publicity provided some different ideas about the Labeffective brand. 0.90 Publicity helped me formulate my ideas about the Labeffective brand. 0.88 Publicity inuenced my evaluation of the Labeffective brand. 0.89 Uncontrolled Communication – Reference Groups (Friends/Family) My friends/family have been signicant in affecting my views about the Labeffective brand. 0.82 0.96 0.84 My friends/family mentioned things I had not considered about the Labeffective brand. 0.90 My friends/family provided some different ideas about the Labeffective brand. 0.95 My friends/family helped me formulate my ideas about the Labeffective brand. 0.95 My friends/family inuenced my evaluation of the Labeffective brand. 0.96 The Labeffective brand is: Sincerity and Competence Down-to-Earth 0.69 0.96 0.77 Honest 0.88 Wholesome 0.89 Cheerful 0.90 Reliable 0.92 Intelligent 0.93 Successful 0.91 Sophistication Upper class 0.95 0.92 0.84 Charming 0.89 Loyalty I consider myself to be loyal to the Labeffective brand. 0.90 0.94 0.79 The Labeffective brand is my rst choice when buying cosmetics. 0.90 I will not buy other brands if the Labeffective brand is available at the store. 0.87 I will certainly continue purchasing the Labeffective brand in the future. 0.89 CFA model t: $ 2 D 1020.58; dfD 362;$ 2 /dfD 2.82; RMSEAD 0.073; NNFID 0.980; CFID 0.982; SRMRD 0.44. and Competence behaved in the same manner with regards to their antecedents and consequences across studies, being the most important among the brand personality dimensions. To justify our decision to merge these two dimensions, we rely on a similar procedure that was done in an existing study (Ling et al., 2014), where due to the different cultural context between the United States and other countries, the brand personality scale might not be suitable to be applied in other countries (Aaker et al., 2001), thus it requires some modication to the traits proposed. The brand personality dimensions dened by Aaker can be starting points when identifying a specic brand’s personality. However, there exist unique per- sonality traits that fall under each broader dimension, and the more specic one can be when identifying which traits belong to a brand, the more authentic and unique the brand’s personality will become. In order to accurately and meaningfully reect the measure- ment procedure, the decision to jointly assess these two dimensions has been made. The resulting CFA in Table 1 demonstrates a good model t ( $ 2 D 1020.58; df D 362; $ 2 /df D 2.82; RMSEAD 0.073; NNFID 0.980; CFID 0.982; SRMRD 0.44) and excellent validity and reliability properties, with all the loadings being signicant and higher than 0.69, composite reliabilities being higher than 0.92 and average variances extracted higher than 0.77. We further assessed the discriminant validity (For- nell & Larcker, 1981), to establish whether there were 124 ECONOMIC AND BUSINESS REVIEW 2023;25:118–127 Table 2. Discriminant validity assessment. # Constructs 1 2 3 4 5 6 1 Controlled communication 0.89 2 Uncontrolled communication (Publicity) 0.78 0.87 3 Uncontrolled communication (Reference groups) 0.45 0.50 0.92 4 Loyalty 0.77 0.71 0.58 0.89 5 Sincerity and Competence 0.50 0.45 0.31 0.61 0.88 6 Sophistication 0.53 0.48 0.32 0.60 0.79 0.92 Notes: Square-root AVEs are shown diagonally in bold; Correlations are shown below the original. overlaps between constructs of interest. We assessed correlation coefcients between constructs and en- sured that all square-root AVEs were higher than correlations (see Table 2). After assessing the measurement model, we pro- ceeded with testing the structural part of the model. The results are shown in Table 3. The structural model also demonstrates a good t ( $ 2 D 1203.04; df D 365; $ 2 /df D 3.29; RMSEAD 0.082; NNFID 0.974; CFID 0.977; SRMRD 0.049). We can see that the rst hypothesis is partially conrmed since there are mixed relationships between the three different dimensions of communication and two dimensions of brand personality. The analysis shows that con- trolled communication has the greatest inuence on the creation of both brand personality dimensions (Sincerity and Competence: bD 0.37, p< 0.001 and Sophistication: bD 0.41, p < 0.001). Uncontrolled communication, however, – only reference groups’ communication impacts the rst dimension of brand personality observed – affects Sincerity and Compe- tence the most. Uncontrolled communication does not shape Sophistication at all. Therefore, we can say that our Hypothesis 1 is only partially conrmed. Furthermore, communication (controlled and un- controlled) explains 27% of the Competence dimen- sion and 32% of the Sophistication dimension, while on the other hand these two dimensions explain 13% of user loyalty. Both dimensions of brand personality have a signicant positive impact on customer loyalty, which conrms Hypothesis 2. Regarding the mediating effect, our ndings in- dicate that there is a signicant indirect effect of controlled communication on loyalty through two di- mensions of brand personality (bD 0.35, p< 0.001). Additionally, there is a marginally signicant indirect effect of uncontrolled communication by reference groups on loyalty (bD 0.04, p< 0.06; one-tailed t-test). As a result, we can partially conrm Hypothesis 3. 4 Discussion and conclusions This article focuses on brand loyalty and impor- tant but neglected concepts that shape brand loyalty. Specically, we focus on two types of brand com- munication – controlled and uncontrolled – and their effect on loyalty with additional observation of brand personality as a mediation vehicle. Ultimately, two theoretical contributions to the eld of brand communication and brand personality can be derived from this research. First, we conrm that there is a mediating effect of perceived brand per- sonality dimensions between controlled brand com- munication, as well as one aspect of uncontrolled communication, and loyalty. In terms of theory, this nding is relevant for both the elds of branding and consumer behavior as it highlights the importance of integrating brand personality into communication strategies to enhance customer loyalty. Furthermore, the indirect effect of uncontrolled communication by reference groups on loyalty through perceived brand personality dimensions provides insights into Table 3. Results of hypothesis testing. Relationship b R 2 Controlled communication! Sincerity and Competence 0.37 0.27 Uncontrolled communication (Publicity)! Sincerity and Competence 0.12 Uncontrolled communication (Reference groups)! Sincerity and Competence 0.09 Controlled communication! Sophistication 0.41 0.32 Uncontrolled communication (Publicity)! Sophistication 0.14 Uncontrolled communication (Reference groups)! Sophistication 0.08 Sincerity and Competence! Loyalty 0.25 0.13 Sophistication! Loyalty 0.41 Model t: $ 2 D 1203.04; dfD 365;$ 2 /dfD 3.29; RMSEAD 0.082; NNFID 0.974; CFID 0.977; SRMRD 0.049. Notes: p< 0.001; p< 0.05. ECONOMIC AND BUSINESS REVIEW 2023;25:118–127 125 the power of social inuence in shaping consumer behavior. This nding emphasizes the relevance of considering the impact of reference groups in shaping consumer attitudes and behaviors, which can inform marketing and branding strategies targeting specic consumer segments. Our ndings regarding the rst contribution com- plement previous research (e.g., Chaudhuri & Hol- brook, 2001; Koppalavenugopal, 2019; Lin, 2010; Ling et al., 2014; Su & Tong, 2015; Sung & Kim, 2010), by adding the mediating role of personality into the pic- ture. A recognizable brand personality can enhance a relationship between consumers and the brand. Our ndings conrm and additionally demonstrate that perceived brand personalities increase consumer loyalty (Aaker, 1992; Biel, 1992; Fournier, 1998) and, by doing so, help distinguish products, and enhance the active reception of information by consumers of a specic brand. Consumers have stronger connec- tions with brands if the latter exude distinct brand personalities, which can lead to loyalty (Doyle, 1990; Fournier, 1998; Kim et al., 2011; Kumar et al., 2006). Second, we contribute to marketing theory by re- inforcing the idea that effective communication plays a crucial role in building and maintaining long-term relationships with customers. Our empirical ndings show that effective communication plays a critical role in shaping customers’ perceptions and loyalty intentions towards a brand. It is evident from the ndings that consumers shape their perceptions of brand personality and subsequently their loyalty in- tentions based mostly on controlled communications by the company. Based on these ndings, we also demonstrate that publicity has no real effect on brand personality creation, which calls for further inves- tigation. One of the possible reasons might be that consumers are unable to distinguish publicity (e.g., when a paid person such as an inuencer or a doctor advertises a brand) from controlled communication (e.g., video and radio ads). This empirical study has important strategic impli- cations for rms operating in the branded cosmetics industry. Firstly, it is crucial for companies to develop effective controlled communication methods to estab- lish a unique and appealing brand personality, as this plays a signicant role in creating and maintaining brand personality. Practitioners in the marketing eld can utilize the ndings of this study to develop com- munication strategies that align with their desired brand personality, ultimately improving customer loyalty. To create a brand personality, active commu- nication by the company is necessary, and advertising is commonly used in this process (Ouwersloot & Tu- dorica, 2001). Marketers and producers of cosmetic brands should focus on advertising and promoting their brand personality, along with recommendations, to attract a group of loyal customers through the Sin- cerity/Competence and Sophistication of their brand personality. Additionally, innovative brand loyalty programs should be implemented to create a stable group of dedicated customers. Social media platforms such as Facebook and online marketing can be used to create exciting promotional tactics and enhance the brand image. By adopting these strategies, rms can increase customer loyalty and achieve a competitive advantage in the marketplace. This study is not without its limitations. One of the shortcomings is that it investigates only one product category (cosmetic industry), so generaliza- tion to other domains is potentially limited. The study can be strengthened by increasing the num- ber of respondents and including participants from other geographical regions. 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