How Social Media Affects Brand Loyalty And Its Impact On Branding

Social Media and Branding 1

HOW SOCIAL MEDIA AFFECTS BRAND LOYALTY AND ITS IMPACT ON

BRANDING

by (Name)

Marketing

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City and State

Date

Social Media and Branding 2

HOW SOCIAL MEDIA AFFECTS BRAND LOYALTY AND ITS IMPACT ON

BRANDING

Literature review

The purpose of this chapter is to provide a critical analysis of existing literature on the

theoretical basis of how social media affects brand loyalty and its impact on branding. It

seeks to answer the question of how does the social media influence brand loyalty. And what

are the effects of social media on branding? The subsequent subheadings demonstrate the

various themes that are in existing literature. They include the creation of virtual brand

communities, consumer motivations, and attitudes and consumer-generated content. A

conclusion will then follow.

Social media

Social media is a non-specific term that is used to refer to various forms of digital

communication that use computer technology. It includes chat rooms, video and audio

streaming, email, websites, online forums and communities, web marketing, virtual reality

environments, mobile computing, DVD and CD-ROM media, internet telephony and digital

cameras.

According to Logan (2010), social media is a term referring to those digital media that

are interactive, incorporate two-way communication, and involve some form of computing as

opposed to “old media” for instance telephones, radios, and TV. Edwards (2004) defines new

media as “a vast array of technologies: the internet and the World Wide Web, Satellite

Broadcasting, Digital and CGI effects, computer graphics, CDs and DVDs, Cell phones and

personal data assistants (PDAs), video and cinema.” He also says that new media is a form of

communicating in the digital world, which includes CD-ROM and DVD media, digital TV

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and mostly the internet. It involves using portable computers and desktops and other wireless

mobile devices.

Most of the modern companies are involved in the use of new media in one form or

the other that makes communication more efficient and faster. Social media started out as

blogs and has been around ever since. The internet over the past few years has seen the

growth and evolution of social media into social networking platforms. For instance

Facebook, internet communities, podcasts, Twitter, Linked In, Instagram ad wikis (Wright

and Hinson 2009).

Due to the increase in popularity of social media in the past decade, some of the old

traditional media have decreased in both usage and business. According to research

conducted by Palmer and Lewis (2009), they observed that most mainstream media providers

had faced a lot of challenges that have led to the decline in their businesses and profits.

The reason for this decline according to the researchers was the high increase in social

media advertising and brand management. Because of the cut-throat competition and high

volatile economic environment, advertising agencies have cut down their budgets by moving

to more affordable online channels.

Research by Cooperstein et al., (2011), showed that most companies were aligning

their advertising and marketing strategies with the modern day consumers. Current day

consumers are highly tech-savvy and deeply rooted into their social networking platforms. As

such, brands or companies must take advantage of these media platforms as soon as they

arise.

According to Khan and Khan (2012), many businesses from large corporations to

retail companies are shifting to social media as part of their advertising strategies and

enterprises. They see social media as the most cost-effective and efficient way of

Social Media and Branding 4

communicating with their customers about their brands, new businesses, services, products,

and events. The authors are of the view that information conveyed through social networks

creates some multiplier effect because loyal customers pass on information to their circles

which in turn pass on to their other rings.

Through social media customers and potential customers have the opportunity of

marketing among themselves through content creation. Consumers create marketing content

by doing reviews about products or specific brands talking about their experiences with the

products or brands. In other cases, the consumers may also make create their advertisements

about the products. Customers can communicate about what their preferences are in the real

time that creates an opportunity for businesses to take advantage of this information and

create a more personalized customer experience (Khan and Khan 2012).

Sashi (2012) argues that because of the interactive nature that social media creates

among various communities and buyers and its ability to create content, most businesses are

now able to serve their customers better and satisfy their needs. Sashi (2012) adds that social

media's unique ability to create live content has captured the attention of most marketing

strategists who are now using these technologies to their advantage.

According to Ballester and Deglado (2001), brand loyalty comes from the ability of

companies to react to competitive threats, more substantial sales revenue and loyal customer

base who are insensitive to other competitor's promotion efforts. Social consumers "expect

information to be available to them on demand and at the same time have the tools and desire

to share that information with their trusted peers –whether they know them or not."

(Greenberg 2010). They require some affirmation that the brands they are using or the

companies they are dealing with are authentic.

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Moon and Hadley (2014) argued that the people expect that a particular brand or

company react to complaints or positive feedbacks that are created online. He says that the

key to making their consumers happy and contented is providing a useful response that will

quickly demonstrate that they care about their customer's opinions. This strategy gives the

customer the feeling that they were a part of the company and made a contribution to the

brand.

Companies and brands that have not tapped into social media platforms are not able to

know some of the driving factors of their consumers purchase decisions (Henschen 2012).

Customers are always looking for better and more comfortable ways to communicate with

companies, and it is, therefore, necessary for businesses to integrate social media into their

strategy.

Sousa (2012) argues that traditional forms of marketing communication are incapable

of providing precious information about customer's preferences. By using conventional forms

of marketing in the modern market, the environment is seen as trying to isolate the

consumer's from the comforts of their social groups. Most purchasing decisions that

consumers make are partly influenced by other people's opinions about a specific brand and

their experiences.

Online service and product reviews according to Smith (2011) are continually

becoming more significant which influence most buying decisions. Nowadays, before a buyer

decides to purchase a specific product, they will first go online to search for any reviews

concerning that product or ask their friends about the product. After the product has been

endorsed by a third party that is when the purchasing decision is made.

Lawson et al. (2001) defined Consumers’ Sentiment toward Marketing (CSM) as a

notion referring to the overall emotions that customer’s exhibit for a particular advertising

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strategy or marketplace. CSM is a concept that most marketing researchers put into

consideration when measuring the extent of consumer's perception of social media

advertising. The person's perception of the market environment is a significant factor in

deciding whether or not they will get involved in consumption actions (Mady 2011).

For companies to establish their brands on social media platforms, they have to look

at customers are willing to embrace technology (Parasurman 2000). Embracing technology

ensures the achievement of the right target. The company can establish what form of

advertising channel to use for optimum effect.

Another practical aspect that marketing strategists use is the Innovation Adoption

Process (IAP). IAP gives information about the level of technology acceptance by consumers

(Mady 2011). According to Mady (2011), the process contains five stages: innovation

awareness, the formation of an attitude towards the innovation, deciding on whether or not to

adopt the technology, implementation and lastly, confirming the decision. The knowledge of

this process by marketing agencies is significant in determining which marketing strategy to

take.

A new concept that has emerged due to the rise in social media use is the shopper

marketing concept. Shanker et al., (2011, 29) define it as "the planning and execution of all

marketing activities that influence a shopper along, and beyond, the entire path of purchase,

from the point at which the motivation to shop first emerges through purchase, consumption,

repurchase, and recommendation." An essential factor in shopper marketing is perceived fit.

This the level of similarity that a product category has to other already existing products of

the brand (Smith 2011). The more the buyers see online shopping as easy and efficient the

more they are likely to purchase products online (Cha 2009).

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Online shopping services could mean an increase in sales because of the diversity of

consumers that are present on the social networks. This diversification ensures that all target

markets are reached which makes it an ideal platform to find new customers and promotion

of the brand. Shankar et al., (2011) posits that a combination of shoppers marketing and the

shoppers themselves may help in improving products, identifying promoters, creating explicit

messages and also act as a link to in-store activities. Social media platforms have given rise

to a new breed of shopping communities that are providing new ways of consumer and brand

interaction. For instance, virtual brand communities enable the creation of online spaces that

allow the communication of shoppers and sellers through marketing.

Creation of virtual brand communities

Virtual Brand Communities (VBCs) are online generated communities that come

together due to their interest in a particular brand (Muniz and O'Guinn 2012). It is therefore

worth noting that the more open a consumer is towards a VBC, the more they are likely to

participate in their discussions, and the more likely their experience on a particular brand will

increase. Hence the creation of customer brand loyalty. Trust is the paramount aspect in a

VBC.

For consumers to be able to trust a VBC, according to Cha (2009), they must be able

to feel secure. Security on particular social networks is a significant issue that can affect the

participation and opinion of consumer's. Therefore, unity within the groups and a sense of

togetherness can help solidify users' engagement and satisfaction with the VBC.

Studies show that most of the people who participate in VBCs are there because of

interacting with their peers and retailers of the specific brands. These social interactions are

known as Electronic Consumer to Consumer Interaction (eCCI). These are interactions that

occur among the e-services consumers (George and Mink 2012). The ultimate consumer

Social Media and Branding 8

experience in these communications is the opportunity to mingle with each other and

producers. The eCCI provides a platform where the shoppers can influence each other’s

purchase decisions. When consumers can give some feedback about products, they feel more

involved and are more likely to participate more. Brands should, therefore, be aware of

factors affecting presence on social media, for instance, social identity online.

Some VBC researchers have emphasized on concepts such as social identity and

community norms in their research. They have found that these ideas are quite significant

factors when it comes to the purchasing decisions of the group online. The culture and beliefs

of particular online community groups influence the way members of the team find meaning

in product brands and advertisements (Muniz and JSchau 2007).

Culture and group norms represent the community's set of shared goals that the

members adhere to. Therefore social identity means those specific goals, values, and beliefs

that may influence group decisions. Shoppers that belong to a high social group are more

likely to accept some advertisements in their social communities (Zeng, Dou and Huang

2009). For example, a group in Facebook whose central theme is luxury watches would

accept advertisements that are related to luxury watches.

Consumer motivations and attitudes

Marketing strategists should be aware of factors that affect the motives and beliefs of

consumers. Nowadays consumers are becoming more engaging in the process of creating

content for particular brands. Previous studies have been made relating to factors affecting

consumer's attitudes and motives. Chu (2011) conducted a survey and found that people that

belong to a particular group on Facebook were more likely to give out personal information

than those that were not.

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Chu (2011) continues by explaining that participating and engaging in online group

adverts requires the members to give a lot of personal information since members reveal their

connections with Facebook groups and brand promotion as they pass on advertisements to

their peers. According to him, groups on Facebook provide a useful platform when members

are seeking self-status in product categories and the transmitting of viral content about

products to their social contacts. He also found that members of such groups are more

welcoming to the idea of social media advertising. Therefore the individuals are more likely

to join and subscribe to particular brand's promotional messages. Based on these findings, the

author established that a connection exists amid shoppers’ use of social media sites and

engaging in the group applications.

As Chu (2011) continues to observe, the use of social media and engagement in the

groups' applications has a significant influence on the effectiveness and rate of advertising on

social media. He argues that most of Facebook student users who are most welcoming to

social media advertising and are largest in number are useful for companies that have a

younger target market.

Consumer activities such as participation, production and consumption are a result of a mix

of different motives (Heinonen 2011). The author argues that the traditional idea that sees

shoppers as mere consumers is obsolete. In this modern age, the consumer should be seen as

active contributors and creators of corporate value because of the content they generate

through an online presence. The knowledge of what drives the consumer motive is essential

in understanding why consumers create content about brands or companies.

Consumer-generated content

Consumer-generated content is the social proof that a brand requires being accepted

or rejected by consumers. It is a form of social currency for marketers because it helps in

Social Media and Branding 10

defining their name. Kaplan and Haenlein (2010) describe consumer-generated content as all

the different ways that individuals utilize the social media to generate media content. Social

currency is therefore created when data about a particular product is shared (Zinnbauer and

Honer, 2011). Social currency is an essential factor and has a significant effect on the

performance of a brand. This concept is analogous to Bourdieu’s (1977) and Coleman’s

(1988) notion of social capital. Social capital can be measured by some connections that an

individual has and can organize (Bourdieu 1977). Bordieu (1977) stated that a person's social

relationships could help in the developing of brands through social platforms. By putting this

theory into today's context, social currency is the potential and actual resources available to a

particular brand because of its existence in social systems and groups (Zinnbauer and Honer

2011).

Consumer Generated Advertising (CGA) is one form of user-generated content. It is

where consumers create a brand by creating focused messages aimed at persuading,

informing and reminding their colleagues (Campbell et al. 2011). It is a kind of consumer

initiative where brand loyalists undertake an unpaid advertising campaign to promote their

favorite brand. The consumers are involved in various activities such as discussions,

knowledge sharing, and content consumption.

Conclusion

The existing literature shows that more and more consumers are increasing their

social media presence and as such marketers should come up with strategies for harnessing

this opportunity. Marketing strategists can be able to improve their brand's awareness through

the social media. Many of the consumers rely on this social media platforms to make

purchasing decisions and therefore using the platforms in promoting brands is a competitive

advantage (Shankar et al. 2011).

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The use of social media platforms according to Hill, Provost and Volinsky (2006) to

promote brands has certain advantages such as being able to know buyers intentions, whether

they are likely to buy the product or not. Data created on social media platforms can be

analyzed to determine the motives, attitudes of purchase decisions.

Social Media and Branding 12

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