Influence of Social Media on Brand Equity

I. Abstract:
Although
human have started using the internet to interact with others since the 1970s through instant messaging
applications (Greiffenstern, 2010); however, it has only really exploded in the
last 15 years with the development of social network – especially Facebook. Accordingly,
social network permits a user to create a personal profile, homepage and
connect with each other to interact (Baruah, 2012, p.4). Moreover, the social network also increases awareness of
the movements of social relationships (Baruah, 2012). Therefore, many brands
have deployed social networks as Facebook, Instagram, Twitter, etc to promote their
brand images. After connections are established between consumers and firms, social network will create two-way interaction;
from that, the firms can consider as the effective channel for the brand to
reach with their consumers that measures
based on the level of engagement through positive or negative attitudes on the
social networks. Thus, it is necessary for businesses to know the impact of social network on the building of brand equity.

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Besides
that, brand equity is also mentioned in this report. Brand management is
becoming more important to marketers today (David, 2000; Goodchild and Callow,
2001). In the framework of existing competitive environment, the brand is a critical element that concerning
goods purchase, sales as well as earnings generating. Moreover, brand equity is
a framework which is designed to indicate the natural value that a brand name
holds for the goods and services included with.
Due
to the great importance of these two topics, this report set out to determine
the impact of social networks on brand equity.
Keywords – Social media, Social networks, Brand equity, Brand awareness, Perceived quality, Brand association, Brand loyalty, Customer engagement.II. Introduction:
Nowadays, customers’ purchasing decisions are increasingly affected by communication and marketing (Alam & Khan, 2015). In 2016, the percentage of online shopping increased by 13.5% over the same period last year (MCMC, 2017). This shows that there are more and more consumers using the internet and spending more time for shopping online. While the use of social networking is a trend as today, companies and governments have also used it as a tool in communications (Kim & Ko, 2012). Alam and Khan (2015) also mentioned that many companies are using social network as an effective tool to attract potential customers and make consumers become loyal to their brands. Thus, how does the social network really affect the brand?
Furthermore,
customer engagement in social networks is
also considered as the key to promoting the brand (Patterson and Ruyter, 2012,
p. 31-34). Therefore, the role of social
network is very important that already become to be the vital thing for the
process of customer engagement and the growth and development of brand equity.
Hence, this research expands and develops a new incorporated conceptual
framework and searching for the role of customer engagement in social networks in forming brand equity.III. Literature review:
1. Social media:
In
2009, Safko and Brake defined social media as “activities, practices, and
behaviours among communities of people who gather online to share information,
knowledge, and opinions using conversational media.” (Safko & Brake, 2009).
Moreover, social media is considered as a communication tool that works on web
2.0 platform – this means that activities such as participation, exchange and
sharing of information will appear among people (Robinson, 2007). Therefore,
the main purpose of using social media is sharing information between
businesses and consumers. And, one of the noteworthy platforms related to
communication cannot be ignored is social networking. Accordingly, social
network is a platform that allow users share personal information for others to
exchange as well as communicate (Palmer & Lewis, 2009, p.162-176). In
addition, Ellison (2008) also defined social network in another way as “web-based
services that allow individuals to construct a public or semi-public profile
within a bounded system, articulate a list of other users with whom they share
a connection, and view and traverse their list of connections and those made by
others within the system”.
Nowadays,
social networks have started to become a potent networking force connecting
people from every area in the world. It reinforces the process of socialization
by being instant, cheap, and straightforward to use that having huge reach.
According to Kemp (2017), there are 2.8 billion global users use social network
at least once a month, which approximately amounts to about 37% of the world’s
residential. Moreover, the use of social networks also rose by 20% compared to
2016; especially, Facebook is still the most famous framework on the world with
strong growth (Kemp, 2017). According to Davidson (2015), each person spends 1
hour 40 minutes on social networks every day, it accounts for 28% of internet
usage. Moreover, the number of Facebook users has reached 2 billion in 2017, that
turns Facebook into the largest and most influential social network in the
world (Chaykowski, 2017).
Furthermore,
based on the post of Barker (2017), there are 74% of shoppers have made a
decision to buy based on information that they have retrieved from the social
networks sites. Accordingly, it is very necessary to create intensive
connections and participation between the consumer and the brand. However,
several enterprises are not comfortable about how exactly to improve the
customer engagement to enhance their brand equity through the use of social
networks for internal or external purposes. Social networks are nevertheless
immense among private persons (Wigmo & Wikström, 2012).
The
appearance of social networks such as Facebook, Instagram, Twitter, etc. also
re-structured the marketing landscape. It is seen as a platform to for marketer
framework (Qualman, 2010, p.28). Initially, social network is only a platform
that help people can communicate with others, but today it also considered as a
search engine for people to find out about the company as well as the products
they love. Recently, social media is a channel to distribute and transmit news
that cannot be ignored (Mitchell, 2014, p. 2-8). Based on a research of
Infographic, at least 50% of social networking users have knowledge of the
company’s products after they follow the company through social networks
(Jackson, 2011). Furthermore, social media also allows people to share their
experiences of branding products or services with friends (Stileman, 2009;
Mangold & Foulds, 2009). Accordingly, social network is a new paradigm in
marketing that has provided ample space for business organizations to maintain
a successful, long lasting and value-added relationship with their customers. It
means social networks has helped to transform business organizations from
transactional relationship to a social relationship. The upper level of use and
interaction of social networks significantly impacts on the commercial
environment which is consequently exposed to the paradigm transformation, where
hierarchies break down and the communication and interaction create larger and
larger networks for all the stakeholders of the organizations. Therefore, in a
well – designed social networks campaign, consumers will spread viral videos,
create additional brand related content, tweet about the brand and post about
their experiences. Moreover, by tapping into or rather establishing their own
online social networks, firms can have an impact on a brand community and potentially
influence consumer behaviour and consumer perception for the organizations.
2. Customer engagement in social network:
In
business, the term “engagement” was initially presented by Appelbaum in the
year 2001. In the most recent two decades, the idea of
“”engagement”” has been utilized in various fields
including marketing, psychology, sociology, political science, and
organizational behaviour (Hoffman, 2010). Shen (2014) used the term “customer
engagement” and defined it as “the level of an individual customer’s
motivational, brand-related and context-dependent state of mind characterized
by specific levels of cognitive, emotional and behavioural activity in direct
brand interactions”.  Hence, Duffyagency
(2012) emphasized that companies are now recognizing that “customer engagement”
is also a more strategic way of looking at customer and stakeholder
relationships. In addition, customer engagement is also considered as a
positive interaction of a customer with a firm, with prospects and with other
customers, whether they are transactional or non-transactional in nature, from
that, customer engagement considered a critical thing that involve in the
process of forming brand equity, particularly effect on all dimensions of brand
equity (Clark & Melancon, 2013, p.12-13). Furthermore, customer engagement
concentrates on customers and their needs with the main purpose is to provide
outstanding value relative to competitors by creating, disseminating messages
regarding customer needs and aims to build trust and commitment in
relationships with customers.
As
expressed before, with the appearance of internet, IT services and social
networks, customers are moving from traditional sources of communication and
deciding on online product reviews posted by users on social networks as basis
of their purchase decision making. Therefore, one of the factors that make the
success of social networks is customer engagement, which is particularly
relevant in social networks communication. It means customer engagement is
viewed as a dynamic interaction of a customer with a brand, product, service,
or organization which is expressed, for instance, by the creation of contents
on social networks. According to (Dessart et al., 2015), customer
engagement includes all consumer-to-firm interactions and consumer-to-consumer
communications about the brand. Even the smallest of gestures, like putting a
comment or “like” on a social networks page can also be interpreted as a form
of engagement (Constantinides, 2014).
On
the other hands, levels of customer engagement based on the types of consumers’
online brand-related activities (COBRA) identified by (Drury, 2008). Customer
engagement with brand social networks pages could be analysed by implementing
three continuous levels that corresponding to a steady involvement with a brand
on social networks, particularly consuming, contributing and creating (Golder
et al., 2012) as follow:
The first level corresponds to
consuming activities. It called “cognitive”. It refers to users who only watch,
read, or view content but never participate or create content. It means a large
number of customers are only utilizing content, but at the same time only a few
are contributors and creators of content. The contributing type is the
middle level of online brand-related activity (Hollebeek, 2011). It called
“emotional”. It includes both user-to-content and user-to-user interactions
about brands. Customers, who are contribute content, enjoy writing on brand’s
fan pages on social networks and always eager to comment on pictures, videos
and other brand – related content are permanently interested in discussing
content that others have created that related with brand (Muniz & O’Guinn,
2011).The creators are the most active
of the three levels of COBRA. These customers are a frequent producer and
publisher of brand related content that others users will probably consume and
will be able to contribute and discuss. It called “behavioural”.
Therefore,
to provide contents that engages consumers online, one of the objectives that
brands must understand consumers’ motivations for interacting with a brand
through social networks.
3. Brand equity:
Each brand is each structure that creates value for both firms and consumers through different ways. It can be said that creating brand equity, or building a strong brand, is an effective strategy for discerning a brand from other of competing brands. So, brand equity has become a vital topic in the business world, and its suitable measures can deal with a number of marketing and brand managers’ concerns. 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 a firm and/or to that firm’s customers” (Aaker, 1991). It is usually assumed to contribute to a company’s long-term profitability. Further, brand equity is “a set of perceptions, knowledge and behaviour on the part of customers that creates demand and/or a price premium for a branded product—in other words, what the brand is worth to a customer” (Siraj, 2012). It means brand equity is considered as the value that consumers associate with a brand. It is exactly the customers’ perception of the overall standards of product/service carrying that brand name when compared to other brands. Brand equity represents customers’ perception rather than any other objectives. Thus, brand equity can be regarded as a concept that forecasts that customers will have a trend to decide to choose a well-known branded product as an alternative of an unbranded one.
Figure 1. The demission of brand equity by David Aaker

On the other hand, according to (Aaker, 1991), brand equity “is a
multidimensional concept, it is composed of brand loyalty, brand awareness,
perceived quality and brand associations”. These categories are measurements
which represent the perception of the brand, from the view of the consumer.
Moreover, (Keller, 1993) identified that brand equity focuses on brand
knowledge with its two components namely brand awareness and brand image.
However, the research focus more on Aaker’s concept of brand equity because
this concept is widely and used by the researchers:
It
can be seen that a brand will have higher brand equity when brand awareness
increases to a higher level, and as consumers hold stronger, and more favourable
and unique brand associations. Companies can improve brand awareness and brand
image (an outcome of perceptions and association) through enhancing customer
engagement on social networks sites, resulting in brand loyalty reinforcement
and then forming brand equity.
4. The impact of customer engagement in social media on brand equity:
In
the business, customer engagement is seen as the key to create customer loyalty
and brand equity (Patterson et al., 2006; Passikoff & Schultz, 2007).  An effective marketing communication will help
enhance perceived brand equity, brand loyalty, brand association and brand
awareness (Yoo et al., 2000). Whereby, “watching, sharing and commenting” in
social media are activities that create brand awareness as well as brand image
(Zailskaite-Jakste & Kuvykaite, 2012). In addition, Schivinski and
Dabrowski (2015) also shown the influences of “firm-created” and
“user-generated” in social media on brand. Accordingly, the information
generated by the enterprise only has an impact on the perception; meanwhile, user-generated
content has a significant influence on brand awareness, brand loyalty and
perceived brand quality (Schivinski & Dabrowski, 2015). Hence, customer
engagement is really important to brand results.
In
the society that the internet is developing quickly as today, the concept of
customer engagement is very noticeable. According to Lea (2012), customer
engagement is “capturing customer attention emphasizing “touch
points” when marketing products or services.” Nowadays, with the diversity
of media new shopping experiences, customer engagement considered as effort of
company by relationship between consumer and company to able to achieve word of
mouth marketing and increase sale in the future (Magneto, 2015). Moreover,
Maguire (2015) emphasized that companies need to leverage media to impress
consumers instead of using it as a form of branding. Presently, there is no
denying the development of technology, especially the website that has provided
the company with interactive platform for customers. Riquelme (2001) said that
website interaction is one of the main factors, which create brand equity. Barreda
(2014) found that positive interactions on the website will improve brand
knowledge (brand image and brand awareness) as well as brand equity. For
instance, when customer satisfy a product of brand, they will give some good
comments; from that, it will generate brand knowledge among other customers.
Therefore, interactions in social media will directly affect the
customer’s perception of the brand equity. According to Tiwari (2010), “brand
association is a specific perception, maybe real or imaged, that a customer has
about a product, service or organization.” Similar to brand knowledge, customer
interactions in social media also impact on brand association. Accordingly,
positive interactions will help increase the value of intellectual property,
patents, trademarks, branding channels; because these interactions enhance the
brand image, so brand assets will also be positively affected (Siraj, 2012).
Beside
positive interactions, negative word of mouth is harmful to brand equity. When
customers are not satisfied with a product, service or company, they will share
negative experiences in social media (Van Doorn et al., 2010). Larivière et al.
(2013) also mentioned that bad values will create negative perspective for
customers. This will make customers leave the company as well as share negative
comments in social media that negative affect dimension of brand equity.
Barhemmati và Ahmad (2015) found that an existing relationship between customer and company will able to help the firm can achieve relationship marketing strategy. Whereby, the last purpose of this strategy is to convince customers to use the company’s products or services.
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