To be or not to be in social media: How brand loyalty is affected by social media?

Abstract

There is an ongoing debate over the activities of brands and companies in social media. Some researchers believe social media provide a unique opportunity for brands to foster their relationships with customers, while others believe the contrary. Taking the perspective of the brand community building plus the brand trust and loyalty literatures, our goal is to show how brand communities based on social media influence elements of the customer centric model (i.e., the relationships among focal customer and brand, product, company, and other customers) and brand loyalty. A survey-based empirical study with 441 respondents was conducted. The results of structural equation modeling show that brand communities established on social media have positive effects on customer/product, customer/brand, customer/company and customer/other customers relationships, which in turn have positive effects on brand trust, and trust has positive effects on brand loyalty. We find that brand trust has a fully mediating role in converting the effects of enhanced relationships in brand community to brand loyalty. The implications for marketing practice and future research are discussed.

Introduction

There is an ongoing debate over the issue of branding in social media. Facebook alone, a hallmark of social media, has over 955 million active users, who log on at least once every 30 days. Half of these active users actually log on every day.² On average, consumers devote almost one third of their time to consumption of online social media (Lang, 2010). Due to the popularity and ability of virtual communities to connect different likeminded people and businesses (Hagel and Armstrong, 1997, Wellman and Gulia, 1999), some industry sages and researchers enthusiastically encourage businesses to be present in social media and to take advantage of it if they are to survive (Kaplan & Haenlein, 2010). On the other hand, others call brands “uninvited crashers” of social media (Fournier & Avery, 2011, p. 193) implying that social media are for connecting people not brands. So, the issues of if and how social media is the place for branding activities has remained unresolved.

Despite the importance of branding and the high adoption rate of social media, very few specific, empirical studies (e.g., Hsu & Tsou, 2011) have dealt with these issues. Most studies concerning marketing and branding in social media include descriptive narratives of social media, its definition, characteristics and consequently some advice and strategies for marketers and businesses in taking advantage of its opportunities and overcoming its challenges (Edelman, 2010, Hanna et al., 2011, Kaplan and Haenlein, 2010, Kietzmann et al., 2011). So there is an important need in the literature to explore the effects of branding on marketing variables related to social media.

In taking the perspective of brand community building (McAlexander et al., 2002, Muniz and O’Guinn, 2001), our goal is to show how brand communities based on social media influence elements of the customer centric model (i.e., relationships between focal customer and brand, product, company, and other customers) and brand loyalty. Furthermore, we study how the effects of brand community translate to brand loyalty. In doing so, we believe that brand trust has a key role, which has been neglected in previous studies.

We first develop a model to show how social media based brand communities could cement relationships among customers, marketers, product, brand, and other customers, and how these relationships could enhance brand trust and loyalty. Then, we test the model and hypotheses quantitatively using structural equations modeling with survey data from a sample of social media website users who are members of different brand communities on the social media websites. We conclude with a discussion of marketing significance, theoretical and practical implications, limitations, and avenues for future research.