Archive | 2019
The impact of social media marketing on brand equity - A perspective of the telecommunication industry in Ghana
Abstract
Purpose As the digital version of word-of-mouth, social media represents the materialization, storage, and retrieval of word-of-mouth content online. The study examined the social media marketing activities of Vodafone and MTN Ghana’s Facebook pages and the objectives set for this purpose were to determine whether social media marketing activities enhance brand equity, identify the kind of social media marketing activities that enhance brand equity and investigate the effects of social media marketing on brand equity. Design/Methodology The study used 203 valid responses out of 300 questionnaires that were distributed. The study used the quantitative research method; and the quantitative data was analysed using the PLS approach of the Structural Equation Model (SEM). Results/Findings Results showed that social media marketing contributed more to the brand association, loyalty and perceived quality dimensions on brand equity. Practical Implications Individually, the Facebook interaction activities assessed in the study proved relevant in attaining brand equity at MTN and Vodafone Ghana. Whilst picture interaction with consumers generated significant improvements in all dimensions of brand equity; liking a brand’s page is only a significant contributor to brand awareness and association with video interaction also contributing significantly only to brand loyalty and perceived quality. This goes to show that the social media marketing activities should not be pursued in isolation, but should be done so together to obtain optimum benefits Originality – The presence of social media is exploding in Ghana however there is little to show for whether this presence actually generates any form of return on investment or brand equity. The study is original since it revealed that there is a positive and significant relationship between social media marketing activities and brand equity. The study recommends that marketing or brand managers should concentrate their efforts largely on brand loyalty, which has high importance in the construct of brand equity, and will further contribute positively to the organization’s brand equity. Corresponding author: George K Amoako Email addresses for the corresponding author: [email protected] First submission received: 2nd March 2018 Revised submission received: 30th June 2018 Accepted: 25th September 2018 1.0 Introduction The advent of social media has created a new digital space and grid of connections that enable brands and consumers to communicate without restrictions in time, place and medium. Generally, social media is a collection of online social platforms that enable users to share information, ideas and interests and to interact via the internet or mobile systems such as smartphones (Ates, 2013; Neti, 2011; Richter & Koch, 2007). The online social platforms include chat rooms, discussion forums, location services, social networking, social guides, social bookmarking, social status networks, weblogs, blogs, podcasts, video casts and wikis. Keller (2009) notes that social media facilitates more rapid and effective information dissemination to consumers than traditional media such as TV, radio and print advertisements. This is Journal of Business and Retail Management Research (JBRMR), Vol. 13 Issue 3 April 2019 www.jbrmr.com A Journal of the Academy of Business and Retail Management (ABRM) 114 because brand communication is created and disseminated through user-generated social media communication by consumers themselves. More importantly, their reviews or comments about brands quickly generate a buzz and have the tendency to affect consumer buying behaviour (Wolny & Mueller, 2013; Genseler et al., 2013). For instance, Facebook fan pages have become a credible information source for consumer reviews of brands and their products and services (Obal, Burch, & Kunz, 2011). In fact, about 70% of internet users trust the evaluations of consumers on social media platforms (Nielsen, 2009) and these online reviews have been shown to impact firm performance (Genseler et al., 2013). Brand equity is an important concept for understanding the objectives, mechanisms and the net impact of marketing efforts (Reynold & Philips, 2005). Aaker (1991) defines brand equity 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. According to Yoo and Donthu (2001), brand equity marks the difference in consumer choice between the focal branded product and an unbranded product given the same level of product features. Hence, brand equity generates value for consumers and helps brands create defensible competitive positions that cannot be easily transferred to other brands (Pitta & Kastsanis, 1995). Brands have resorted to several strategies including advertising, sales force, public relations, slogans and symbols in the attempt to develop brand equity (Aaker, 1991). Yazdanparast et al. (2015) opine that social media-based marketing activities tend to be an effective marketing strategy to build brand equity in this digital era. Consequently, brands have incorporated social media marketing into their marketing strategies to build lasting relationships and connections with consumers (Erdogmus & Cicek, 2012). Social media marketing is the process of promoting products and services via online social channels and platforms (Weinberg, 2009) through content generation, communication, outreach and referrals to increase web traffic, awareness and popularity of brands (Kim & Ko, 2012). As noted earlier, social media is fast becoming the preferred source of information about products, services and brands for consumers. Consequently, Ha (2015) reports that there are over 40 million active small business pages on Facebook. Moreover, social media forms a key component of the marketing and brand management strategies of global companies with strong brand identities, such as Coca-Cola, Starbucks, JP Morgan Chase etc. (Morrissey, 2007). Developing economies have witnessed phenomenal growth in social media presence, and Issaka (2015) reports that the most visited website in Ghana is Facebook, ahead of local news sites and even the search engine giant, Google. It is not surprising, therefore, that telecommunication network operators in Ghana have created Facebook pages to provide consumers with up-to-date information on their products, services, promotions and values with the intent to promote positive word-of-mouth as consumers are able to share their experiences with the brand in their immediate online social communities. But does the strong social media presence and associated social media marketing activities of the network operators generate any form of return on investment or brand equity? It is important, therefore, to examine the nature of consumer engagement within interactive online social settings on a brand’s ability to generate equity (Yazdanparast et al., 2015) in Ghana’s telecommunications sector. Facebook fan pages have become a credible information source for customer reviews of brands and their products (Obal et al., 2011). Hence, this paper investigates the social media marketing effect on brand equity of network operators using Facebook to answer the following questions: (i) does social media marketing create brand equity in Ghana’s telecommunications sector? and (ii) which social media marketing activities create brand equity in Ghana’s telecommunication sector? 2.0 Literature Review 2.1 Social Media and Marketing In recent years, the rise of a new generation of information and communication technologies, which are collectively referred to as Web 2.0 or social media, has been phenomenal. They are propelling a new wave of fostering innovation and creating intellectual capital creation (Faraj, Jarvenpaa & Majchrzak, 2011). Kaplan and Haenlein (2010) define Web 2.0 as a new way in which end users use the World Wide Web; a place where content is continuously altered by all operators in a sharing and collaborative way. Web 2.0 has evolved from simple information retrieval to include interactivity, interoperability, and collaboration (Campbell et al., 2011). Social media thus comprises of Internet based applications that build Journal of Business and Retail Management Research (JBRMR), Vol. 13 Issue 3 April 2019 www.jbrmr.com A Journal of the Academy of Business and Retail Management (ABRM) 115 on the ideological and technological foundations of Web 2.0 and allows the creation and exchange of user generated content (Kaplan & Haenlein, 2010). To meet the requirements as a social network platform, a site must contain user profiles, permit users to connect with others and post comments on each other’s pages, and join virtual groups based on common interests (Gross & Acquisti, 2005; Ellison, Steinfield & Lampe, 2007; Lenhart & Madden, 2007; Winder, 2007; Boyd & Ellison, 2007 as cited in Cox, 2010). The emergence of social media platforms facilitates consumer-to-consumer communication and accelerates communication especially between unknown consumers (Duan, Gu & Whinston, 2008). In a study conducted by Nielsen (2009), it was noted that 70% of internet users trust the evaluations of consumers on social media platforms. As a result, marketers can expect that brand communication will cease to be generated solely by the company, but increasingly by the consumers themselves through usergenerated social media communication. As a result, social media enables word-of-mouth communication from consumer to consumer in the online environment. Considering that consumers are increasingly reliant on their social networks when making purchase decisions (Hinz, Skiera, Barrot, & Becker 2011), social media word-of-mouth among consumers is crucial for brands as it is faster and more far-reaching than traditional word-of-mouth. Social media is increasingly becoming both a communication and m