The Importance of Ethics in Branding: Mediating Effects of Ethical Branding on Company Reputation and Brand Loyalty

Abstract

This study aims to develop an ethical branding framework that determines whether a corporate brand’s functional and emotional values, that is, product, service quality and perceived price (antecedents), influence ethical branding, and, consequently, company reputation and brand loyalty (consequences) among industrial buyers of electronic office equipment in Malaysia. Using structural equation modelling, the paper demonstrates the effects of perceived price, quality of product and service on ethical branding, company reputation and brand loyalty. The results reveal that product quality directly influences ethical brand perceptions, and, consequently, company reputation. Perceived price and service quality do not directly affect company reputation; instead, they affect its identification through ethical branding. The findings thus demonstrate that product quality, perceived price, and service quality affect company reputation through the mediation of ethical branding. This highlights that an ethical brand is effective for companies to maintain their reputation among industrial buyers.