Academy of Strategic Management Journal (Print ISSN: 1544-1458; Online ISSN: 1939-6104)

Research Article: 2018 Vol: 17 Issue: 1

Revisiting Antecedents of Brand Loyalty: Impact of Perceived Social Media Communication with Brand Trust and Brand Equity as Mediators

Rizwan Ali Khadim, University of Lahore

Mian Ahmad Hanan, University of Management and Technology

Arooj Arshad, University of Lahore

Noshina Saleem, University of Punjab

Noman Ali Khadim, University of Lahore

Keywords

Social Media, Marketing Communication Tools, Garment Brands, Consumer Behaviour, Brand Loyalty.

Introduction And Background

The rapid growth of information technology has brought revolution in social media communications. Moreover, it has replaced traditional media in corporate communications (Coulter, Bruhn, Schoenmueller & Schäfer, 2012; Khadim, Zafar & Younis, 2015). Since, the advent of social media networks, it is building and expanding significant ways to attract users all over the globe. Social networking sites not only give an opportunity for consumers to connect with others, rather, it provides users to interact with their target audience better thus making a brand community where brand managers and marketers can communicate more efficiently regarding their brands (Dutta, 2013; Ismail, 2017). On the other hand, these social media communication strategies also provide opportunities for learning customer's perceptions and opinions, so making it a two-way flow of branding. As Kaplan & Haenlein (2012) rightly stated that brands are using social media networks for sponsorship and advertising of their products and services. For example, Coca-Cola is using Twitter, Instagram and other social mediums for the communication enhancement and preserving a sustaining relationship with the users.

Likewise, as in the contemporary world, social media platforms such as Twitter, Flickr, Facebook and YouTube have usually changed interaction approaches among people because people like to spend more time on social media platforms. Similarly, brand managers have also been utilizing different intermediates to create brand awareness, brand perception and to promote brands for many years and now the most popular intermediate is social media content, which is either generated by users or firms towards a specific brand and company related messages (Berthon et al., 2008). Now, social media channels encourage the value of trusting associations between brand and consumer, making it important intermediate to develop brand loyalty. Hence, it is interesting to explore the contribution of both firm created and user generated social media communication in enhancing and maintaining relationships with the customers. Moreover, investigating the possible mediating role of BT (Brand Trust) and BE (Brand Equity) in the relationship between social media communication (Firm Created & User-Generated) and BL (Brand Loyalty) makes a holistic model that is of more assets and values for the e-marketers. The empirical testing of the current model makes a unique contribution to the brand loyalty literature by not only highlighting the role of FCSMC (Firm Created Social Media Communication) and UGSMC (User-Generated Social Media Communication) in building sustained relationships with customers, but also give shared importance to brand trust and equity as mediating variables that were not explored till now in the existing marketing literature.

Theoretical Background

Due to the swift evolution of social media communication in the development of brand communities, the brand scholars over the period gradually motivate brand owners to participate in more social media branding to make loyal customers. These suppositions are in line with the Technology Acceptance Model (TAM) that explains user's behaviour regarding the use of computer and other technologies to facilitate customer behaviour intentions. This theory focuses on the explanation of plan to employ a particular service or technology. It points out that two variables influence an individual's attitude regarding the use of technology; perception of usefulness and other one is the use of technology. Where former defined as how useful a particular system is to improve his or her job performance, while, the latter one refers to as the rate to which the individual thinks that the utilization of the system is both physically and mentally free of effort (Ami-narh & Williams, 2012). As the principal aim of current research is to identify the factors that likely increase the brand loyalty of the customers, it is thus explicit from this theory which argues that the more the individual perceives the usefulness of the social media communication technologies the more he/she will likely to adopt these technologies. It then leads to more purchase intention of that particular brand, thus gradually enhances brand loyalty.

On the other hand, the Theory of Planned Behaviour (TPB) explains that besides social factors (technologies adoption and perception of its usefulness) increases brand loyalty. Still, personal factors like brand trust and brand equity are equally important for customer purchase intentions (Vallerand, Pelletier, Deshaies, Cuerrier & Mongeau, 2000). Both of these frameworks provide the basis for the current study supposition about assessing the mediating role of personal factors because brand trust and brand equity maintain a time order relationship with social media communication. As obviously, firm or users had to create social media communication first regarding their brand followed by the development of trust and equity among customers. In any case, the theory refers to a final behaviour that in this paper is the development of brand loyalty among clients who increases the likelihood of purchasing a specific garment brand (Ami-narh & Williams, 2012).

The next section provides literature review, theoretical underpinning and research hypotheses and suggests the theoretical model of this investigation. Furthermore, the next section provides the methodology used in this study, including sample and data collection source, measurement and instrumentation and procedure for data analysis. Finally, last two parts present results and findings of the study in the light of previous studies. The final section shows conclusion, research limitations and future research recommendations for brand managers and advertisers.

Literature Review

Perceived Social Media Communication and Brand Trust

Social media is a group of web based application which constructs on the ultimate and basic tools of network 2.0 that allows people to communicate and share their opinions and knowledge (Kaplan & Haenlein, 2010) hence, social media communication can be grouped as either firm created or users generated. Moreover, Brand Trust can be defined as feelings of satisfaction and trustworthiness held by the consumers in their communication with the firm which is now days commonly done by social media (Delgado-Ballester, Munuera-Aleman & Yague-Guillen, 2003). One of the primary purposes to build a brand trust is to attain a competitive edge and thus develop a company's performance. Brand trust is very significant for growing customers' satisfaction and loyalty of the brands on the Web (Ha, 2004) and it is governed by truthfulness and sincerity from social media communities stemmed either form firm created or user generated communication tools. These social media communities have become spaces for users to post their views and ideas, as according to a survey from e-Marketer (2014), 77% of purchasers said that they are more probable to purchase from a brand if the Chief Executive of the brand or firm uses social media and 82% will trust the brand more. (Carroll & Ahuvia, 2006; Zhou, Zhang, Su & Zhou, 2012) agree that online social communication builds up close associations and draw values from their long term interactions, which makes them trustworthy and love with the brand.

Perceived Social Media Communication and Brand Equity

According to Aaker (1991), brand equity can be defined as “A set of brand assets and liabilities linked to a brand, its name and symbol that add to or subtract from the value provided by a product or service to firm and/or to that firm’s customers”. Brand equity is the premium that a customer would pay for the branded service or product compared to unbranded product or service. Berthon et al. (2008) argued that consumers rely on both firms created and user generated social media communities for getting information, therefore both of these forms of social media communication have the direct influence on brand equity as highlighted by the study findings of Yoo, Donthu & Lee (2000), revealing that there is a positive association between brand communication and brand equity. Moreover, the study of Hanna, Rohm & Crittenden (2011) about social media campaigns, emphasized the features that call to consumers, can create brand benefits. So, firm-created social media communication should be supposed by individuals as publicity to touch brand perception and brand awareness. Hence, these previous research findings urge the researcher to formulate the following hypotheses.

Additionally, the level of personal significance and importance of a user-generated social media communication both influence the degree of association with a particular brand (Christodoulides, Jevons & Bonhomme, 2012). As user-generated communication can be supposed with brands in the form of involvement because the brand related user generated content is a form of consumption-related activity (Muntinga, Smit & Moorman, 2012). Also, regarding the effect of UGSMC on brand equity, it acknowledges that UGSMC is not usually directed by company control (Ghannam, 2011).

Brand Trust and Brand Equity-1

Many scholars (Buil, De Chernatony & Martínez, 2008; Chaudhuri & Holbrook, 2001) stated that brand trust is a different brand framework, but it has a direct impact on brand equity. Brand trust has direct benefits for a brand, as (Aaker, Kumar & Day, 2007; Zhou et al., 2012) had pointed out in their model that "enhancing customer's confidence" is directly linked to the brand equity dimensions, which finally leads to brand equity. They highlighted that a worldwide brand might attempt to overcome on the other local brands by acting local valued. For instance, Coca-Cola has invested in the infrastructure to produce clean water in many developing countries. It is beneficial for both, the company and the local population (Alden, Steenkamp & Batra, 2006). So the trust will have a positive impact on brand equity.

Brand Trust and Brand Loyalty-2

Many scholars (Chaudhuri & Holbrook, 2001; Chiu, Huang & Yen, 2010; Harris & Goode, 2004; Hong & Cho, 2011; Kang, Lee, Kim & Lee, 2011) argued that trust is one of the backgrounds of loyalty. A number of meanings have been recognized after the idea of BL which was generated by Copeland (1923). Loyalty basically consists of a repeated purchasing of a product from the same brand or company. A consumer’s attitude towards a brand is multidimensional that relies upon a cognition and an affective component (Oliver, 1999). Lau & Lee (1999) argued that BT contributes to the behavioural intention of BL. Brand expectations; brand capability and brand repute appear to be important in developing consumer's trust in the brand. Hartmann & Ibáñez (2007) hold that BL is influenced by customer satisfaction and BT. Also, BT affects directly and positively on BL, according to Delgado-Ballester & Luis Munuera-Alemán (2005).

Brand Equity and Brand Loyalty-3

There is a critical role of brand equity in the development of BL that is based on consumer perception. Companies should try to build and fix the brand equity in the customer's mind (Yoo, Donthu & Lee, 2000) as it is positively related to brand association and BL. Keller, Heckler & Houston (1998) stated that BE is distinct from BL. They said that a brand acquires positive customer-based BE when customers responded more positively for a product. This situation becomes steadier with the statement of Aaker, Kumar & Day (2007), who argued that BL can be measured as an outcome and a dimension of BE.

Hypotheses of the Study

The above given theory and literature provides the basis for following research hypotheses which is shown in Figure 1:

strategic-management-Theoretical-Framework

Figure 1.Proposed Theoretical Framework Of The Study.

H1: Firm Created Social Media Communication (FCSMC) and User Generated Social Media Communication (UGMC) positively and significantly predict Brand Loyalty.

H2: Firm Created Social Media Communication (FCSMC) and User Generated Social Media Communication (UGMC) are positively associated with Brand Trust.

H3: Firm Created Social Media Communication (FCSMC) and User Generated Social Media Communication (UGMC) are found to be positively associated with Brand equity.

H4: Brand Loyalty and Brand Equity increases with the increase in the level of Brand Trust for a product.

H5: Brand Trust mediates the relationship of FCSMC and UGMC with Brand Loyalty.

H6: Brand Equity mediates the relationship of FCSMC and UGMC with Brand Loyalty.

Sample and Design

This study requires the methodology to be quantitative to empirically test the mediating role of personal factors (BE & BT) in increasing brand loyalty among social media user's community, hence quantitative survey was employed for data collection as previously, Schivinski & D?browski (2016) also choose online quantitative research for their study on social media communication through Facebook. The researcher recruited 800 customers of different top garment brands of South Asia region (Uniworth, Outfitters, Levi’s) initially through social networking sites (Facebook, twitter and My Space) using the questionnaire link that was available for approximately three weeks, from 15th March 2016 to 5th April 2016. Every questionnaire was enclosed with a cover letter. The cover letter tinted the objectives of the study, research process and statement for secrecy of the data. Only 519 were responding out of which 11 questionnaires were discarded due to missing data in initial screening thus making final N=508 participants of the study that filled the survey, so the response rate was 63.20%.

Out of almost 30 million internet users in South Asia Region, Pakistan, 9 million of them are on Facebook making it the top most visited website of Pakistan, leaving even Google one step behind. Considering that that the social network reached 5 million users in 2011, it’s definitely a strong growth, mainly driven by male users, representing about 70% (www.digitalintheround.com/social-media-pakistan/southasia) which roughly accounts for the highest penetration rate in the South Asian region.

The respondents included male (n=79%) and female (n=21%) respondents which also depict the low participation by females. Moreover, 61.5% respondents are 18-30 years of age, 23% between 31-40 years, 10% between 41-50 years and 50+ years only 7%, most of the respondents are between 18 to 30-year ages. The sample composition in education presents 4% respondents are from high school; 10% and 29% are having the diploma and bachelor education, whereas 49% and 8% are having postgraduate or other professional qualifications respectively. As far as income level is concerned, 5%, respondents have USD 300 or less than USD 300 as monthly income, 37% between USD 310 to 500 and 27% having USD 510 to 999, 31% respondents having USD 1000 or more which is showing highest Number of respondents' participation. 2% of total respondents spent 0 hours on social media mediums. 21%, 15% and 17% are spending 1-3 hours, 4-6 hours and 7-9 hours respectively on social media channels. 47% respondents are spending more than 10 hours on social media of total respondents. Respondents are using different social media modalities for their usages. 79% of total respondents are using Social Networking site (Facebook), but on the other hand, only 21% are using other social media modes.

Measures

Multiple item scales were used to measures the study constructs. Both domains of social media communication (FCSMC & UGSMC) are measured using 4 items index each adapted from previous studies (Mägi, 2003; Tsiros, Mittal & Ross, 2004). Moreover, 3 items are used for assessing Brand Trust also adapted from Chaudhuri & Holbrook (2001) study. Brand Equity is measured by using 4-item scale adopted from Yoo & Donthu (2001) study and three items of Brand Loyalty were derived from Delgado-Ballester et al. (2003). All the items of different variables are assessed using a 5-point Likert scale ranging from 1 for "strongly disagree" to 5 for "strongly agree".

Common Method Bias

As the study employed survey method for data collection on both the independent and dependent variables, where the same respondents responded at one point in time, thus raising potential common method variance as false internal consistency might be present in the data (Podsakoff, MacKenzie, Lee & Podsakoff, 2003). To rule out this possible bias called as Common Method Bias (CMB) is through Harman's single factor score, in which all items (measuring latent variables) are loaded into one common factor was employed and if the total variance for a single factor is less than 50%, it suggests that CMB does not affect the study data (Podsakoff, MacKenzie, Lee & Podsakoff, 2003). For this purpose, Principle Component Factor analysis was conducted and the % of the variance (Table 1) highlighted that none of the variance % is below 50 thus indicating the absence of CMB in the data.

Table 1: Showing Reliability Coefficients And Factor Loadings From Confirmatory Factor Analysis
Construct Factor Loadings
Company-generated Communication (α=0.88)  
“I am satisfied with the company’s social media communications for [brand]” 0.92
“The level of the company’s social media communications for [brand] meets my expectations” 0.83
“The company’s social media communications for [brand] are very attractive” 0.79
“This company’s social media communications for [brand] perform well, when compared with the social media communications of other companies” 0.78
Overall% of Variance 70.72%
User-generated Communication (α=0.78)  
“I am satisfied with the social media communications expressed by other users about [brand]” 0.77
“The level of the content generated on social media sites by other users about [brand] meets my expectations” 0.81
“The content generated by other users about [brand] is very attractive” 0.70
“The content generated on social media sites by other users about [brand] performs well, when compared with other brands” 0.76
Overall% of Variance 62.66%
Brand Trust (α=0.86)  
“I trust my brand to give me everything, I expect out of it” 0.72
“I rely on my brand” 0.89
“My brand never disappoints me” 0.91
Overall% of Variance 71.29%
Brand Equity (α=0.77)  
“It makes sense to buy [brand] instead of any other brand, even if they are the same” 0.72
“Even if another brand has the same feature as [brand], I would prefer to buy [brand]” 0.69
“If there is another brand as good as [brand], I prefer to buy [brand]” 0.75
“If another brand is not different from [brand] in any way, it seems smarter to purchase [brand]” 0.88
Overall% of Variance 58.73%
Brand Loyalty (α=0.81)  
“Consider myself to be loyal to the brand” 0.74
“If the brand is not available at the store, I would buy the same brand from some other store” 0.70
“I am willing to pay more for my brand” 0.86
Overall% of Variance 65.43%

Note: CMIN=16.571; AGFI=0.99; df=5; CFI=0.88; NFI=0.93; CMIN/df=4.485; RMSEA=0.01; RMR=0.071.

Data Analysis

Reliability and Validity Analysis

Reliability and validity analysis was done through SPSS 17. The internal consistency was assessed using Cronbach's alphas reliability coefficients. They were FCSMC, UGSMC, BE, BT and BL were 0.88, 0.78, 0.86, 0.77 and 0.81 respectively, which shows the reliability of all scales were adequate (α<0.60); (Burns & Burns, 2008) to carry out further analysis. The validity analysis was done through Confirmatory Factor Analysis (CFA) for checking the validity of the instrument and the findings were presented in Table 1. All the items of the questionnaire were having factor loading more than 0.60, which demonstrates good factor loading and validity for all the items in this study.

Table 2: Showing Mean, Standard Deviation And Results Of Correlation Between Fcsmc, Ugsmc, Bt, Be And Bl Among Garment Customers (N=508)
S.No Variables M SD 1 2 3 4 5
1 FCSMC 3.64 0.63 -        
2 UGSMC 3.44 0.73 0.605** -      
3 BT 3.66 0.92 0.511** 0.610** -    
4 BE 3.05 1.08 0.478** 0.519** 0.680** -  
5 BL 3.56 0.67 0.533** 0.535** 0.618** 0.691** -

Note: FCSMCT=Firm-Created Social Media Communication; UCSMCT=User-Generated Social Media Communication; BT=Brand Trust; BE=Brand Equity; BL=Brand Loyalty; **p<0.01

Correlation Analysis

The study hypothesized that FCSMC and UGSMC are positively related to brand loyalty and the findings from the Pearson Product Moment correlation analysis revealed a significant positive association between the study variables. These findings further indicated that the increase in social media communication either through firm-created or user generated means increases the loyalty of customer's towards a particular brand. Furthermore, the study also hypothesized that BT, BE and BL are positively associated with each other and the findings also provide support for the significant positive association that also highlighted that increase in brand trust and brand equity among customers likely increases the chances for enhancing loyalty among customers. Also, the study hypothesized that FCSMC and UGSMC are positively associated with BT and BE and the results efficiently revealed the significant positive association of firm created and user generated social media communication with brand trust and brand equity, so these findings provide support for the acceptance of study hypotheses.

Main Analysis

Structural Equation Modelling using Path analysis with the help of AMOS graphical software was used to access the mediational model of the study. The hypotheses are tested based on 2000 bootstrap samples using bias-corrected bootstrap 90% CI for the standardized effects (Preacher & Hayes, 2008). The fit indices show an overall good fit of the model with a good fit of CMIN=5.165, df=2, CMIN/df=2.582, (≤ 3), (Kline, 2011). With respect to full model, the significant value of the Chi-square (χ²=5.165, p=0.023) and various fit indices (CFI=0.997; GFI=996, RMSEA=0.08), provides a comprehensive indication of excellent fit of the data with the tested model (Kline, 2011). The paths drawn in the Final Model are shown in Figure 2 below.

strategic-management-Validated-Model

Figure 2.Showing Structural Equation Model (Validated Model).

The above Figure 2 (a) clearly indicated that there are significant direct effects of FCSMC (β=0.31, p<0.001) and UGSMC (β=0.35, p<0.001) on brand loyalty. So in Figure 2 (b), only indirect effects using bootstrap confidence interval were accessed to test the mediation model. The results indicated that there were five significant direct paths; FCSMC-BT and BE; UCSMC-BT and BE and BT to BE.

Moreover, the finding reveals the existence of four indirect effects, thus providing support for the meditational model which is shown in Table 3. As the indirect effect of FCSMC with BL through BT (β=0.30, p<0.001) and BE (β=0.13, p<0.01) were significant; also the indirect effect of UGSMC with BL through BT (β=0.27, p<0.001) and BE (β=0.17, p<0.01) were also significant thus indicated that brand loyalty was not only predicted by FCSMC and UGSMC rather BE and BT were revealed to be significant third variables that explains that association better, however, as the direct effects of FCSMC and UGSMC on BL were also significant, so it provides the support for the partial mediating role of BT and BE in the relationship between FCSMC and UGSMC with BL.

Table 3: Summary For Paths Estimates And Decisions
Paths (Direct Effects) Estimates p Decision
FCSMC-BL 0.312 0.00 Supported
UGSMC-BL 0.351 0.00 Supported
FCSMC-BT 0.239 0.00 Supported
UGSMC-BT 0.356 0.00 Supported
FCSMC-BE 0.081 0.01 Supported
UGSMC-BE 0.274 0.00 Supported
BT-BE 0.435 0.00 Supported
BT-BL 0.475 0.00 Supported
BE-BL 0.230 0.00 Supported
Path (Indirect Effects)
FCSMC-BT-BL 0.13 0.01 Supported
UGSMC-BT-BL 0.17 0.01 Supported
FCSMC-BE-BL 0.30 0.00 Supported
UGSMC-BE-BL 0.27 0.01 Supported

Discussion

The current study tested the much-needed model for the brand scholar’s literature, where it supports that both personal and social factors are important for making customers loyal towards particular garment brands. So besides social media communication either through firm created or user generated means; trust and equity regarding an individual brand are also found to be related positively to brand loyalty. As expected, these findings are consistent with the previous research findings of Bruhn, Schäfer & Schoenmüller (2012) highlighting the significant positive effect of social media communication on the customers and therefore the communication perception of the client about brand affect positively. Moreover, previous researchers (Khadim, Younis, Mahmood & Khalid, 2015; Schivinski & Dabrowski, 2016; Schivinski & D?browski, 2013) hold that social media communication has a solid relationship with BL and it is beneficial to increase customer loyalty to brand.

Furthermore, most of the previous studies (Chaudhuri & Holbrook, 2001; Kang et al., 2011) found that creating and enhancing trust can make the customers more loyal to the brand. The significant positive association regarding BE and BL are also aligned with the findings of (Yoo, Donthu & Lee, 2000; Aaker, 2007) that empirically revealed that BE is positively associated with the BL. The role of mediation variables BT and BE are also critical and they were also found positively significant. BT and BE have positive significance with BL, FCSMC and USMC. They play a vital role to support the independent variables to the dependent variable. The findings of this study are well backed by previous studies.

As far as the mediation model is concerned; the current study significant mediating findings of BT and BE in between social media communication (FCSMC & UGSMC) and brand loyalty are in line with the previously highlighted suppositions from the TAM and TPB models. As they postulated about user friendly adoption of technology and personal factors collectively explain more variance in customers brand loyalty compared to only social media communication in increasing customers buying and purchase intention of specific garment brand.

Conclusions and Managerial Implications

Social media is a very well-built platform and it has substantial and significant impact on BL. It becomes an apparent tool for consumers. They can very easily get in touch with others at any time. Everything goes on social media much faster as compared to traditional media. Users can respond quickly to every comment and praise. Social media communication works from both sides and consumers can send their suggestions very quickly. With social media, a brand can send their messages to a lot of audiences and collect a lot of recommendations after the conversation of users. Now the world is going very fast and everything is changing very quickly. Social media is a forum where a brand can judge how consumers think and what they want from a brand. It helps the customers to build a trust on a brand. Once the trust develops, it makes a good reputation in the eye of consumers. After this, it makes sense of brand awareness and then a standard and superior brand gives perceived quality as their customers want. With this activity, consumers become loyal to their brand. Social media communication offers full and dark brand perception measurement that also gives a path for brand performance over time. It also creates greatest and maximum opportunities for prospective improvement. This model makes the consumers loyal to their brand. Also, this model helps the companies and brand managers to think forward. It gives an understanding of positive brand perception towards the forward-thinking.

Research Limitations and Future Research

There is no doubt that this research plays a significant role in the contribution of social media communication, consumer brand perception and behaviour literature. There are some limitations of the current study that can provide guidelines for future research, first, as the study targeted only a single industry that limits study generalization so future studies should recruit the broader range of industries. Secondly, besides Facebook and twitter other leading SNSs should also be investigated to gain a more in depth exploration of the impact of social media communication strategies on consumer's behaviours and attitudes.

Furthermore, other organizational variables that can influence brand loyalty of companies particular customers like financial performance indicators and competitive, sustainable advantage, the size of the organization and consumer purchase intention will also be controlled for a broader understanding of the benefits that social media brand communication can have on brand loyalty. Also, future researchers should conduct experimental studies by incorporate comparison group to evaluate better the influence of social media communication tools in enhancing brand loyalty compared to traditional media in a single study to assess more precisely the importance of the advent of social networking sites as a more pronounced tool. Additionally, one should consider controlling effect of gender, age and typology of internet users to demonstrate a pertinent influence of social media as a brand communication tool. Lastly, the use of online surveys for assessing causal relationships among variables should be addressed explicitly in future studies because online survey mostly leads to missing and incomplete responses and thus lessens the overall response rate.

References