Advertising and brand loyalty in the South African Solar Industry

Abstract

The South African solar market is expanding rapidly, and it is expected to grow from 5.44 GW in 2023 to 9.24 GW by 2028, driven by decreasing costs of photovoltaic modules, supportive government policies, and high electricity demand. This growth has attracted an influx of both domestic and international business-to-business solar distributors in the market leading to intense competition. It is becoming more necessary for distributors in the solar industry to develop customer brand loyalty while taking into consideration the significance of advertising, competitive advantage, commitment, trust and brand awareness. It is upon this background that the current study aimed to develop a model based on the moderated mediation effect of brand awareness on the relationship between below-the-line advertising and brand loyalty through competitive advantage, commitment, and trust in the South African business to-business solar industry. This study adopted a positivist research paradigm, employing a quantitative research methodology to achieve its objectives. Data collection was through a questionnaire distributed to a convenience sample of 427 solar installation companies subscribed to IBC SOLAR’s platforms in South Africa. SmartPLS 4 was utilised to perform data analysis, including descriptive analysis, structural equation modelling, as well as mediation and moderation analysis. The structural equation modelling results indicated that below-the-line advertising did not affect brand loyalty directly. However, competitive advantage and commitment positively influenced brand loyalty, demonstrating that companies with a stronger competitive edge and higher levels of commitment enjoy greater brand loyalty. Trust, on the other hand, was not a significant predictor of brand loyalty. Furthermore, brand awareness moderated the mediation effects of competitive advantage and commitment to the advertising-brand loyalty relationship. At higher levels of brand awareness, these mediations were statistically significant, while at lower levels, they were not. Trust did not demonstrate significant mediation at any level of brand awareness. This study has major implications for theory and practice leading to the improvement of customer brand loyalty within the business-to-business solar distributors, which is essential for achieving competitive advantage.