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Civilekonom Uppsats Civilekonomprogrammet $*7*-&,0/0. How a fashion company can create higher brand equity - the importance of using social media Evelina Söderberg och Amanda Wissinger UPPSATS Civilekonomuppsats i Internationell marknadsföring, 30hp Halmstad, 2014-05-28 Acknowledgement We want to give great thanks to everyone who helped us make this study possible. Above all we want to thank those respondents who were willing to make our empirical studies possible, both in terms of the qualitative interviews and in the quantitative survey. We also want to thank our adviser Svante Andersson and our opponents for valuable comments and support during the thesis process. Further, we would like to thank Mikael Hilmersson who provided us with great insights regarding the statistical analysis for this research. Finally, we would like to give our sincerest gratitude to Boomerang and Peter Sjöström, and Ted Bengtsson for their support with our quantitative study. Halmstad University, May 28, 2014 __________________________ ____________________________ Evelina Söderberg Amanda Wissinger ! Abstract Purpose - With the social media's emergence in recent times, the main purpose of this study is to generate knowledge about social media communication’s impact on consumer-based brand equity, in terms of firm-created and user-generated social media communication. In order to make this possible, knowledge about customer’s perception about a specific brand is required. Furthermore, we are interested in explaining issues concerning how fashion companies can efficiently use social media, and the study’s intention is also to present recommendations of how companies can use social media as a marketing communication tool. Theory and hypothesis – This chapter deals with theory about consumer-based brand equity, where the different components of the model are presented. Also theory about social media, different social media applications and a social media strategy are described. Finally, firm- created and user-generated social media communications impact on brand equity are discussed, which leads to the study’s hypotheses. Methodology – The study has a triangulation consisting of both a qualitative and a quantitative part and has essentially a deductive approach. The study interviewed one expert in the fashion industry and one expert in the area of social media. An interview with the analysed company’s marketing manager was also made. The quantitative study was made on 624 respondents, which were all members of the company’s customer club. 97 of these 624 respondents were investigated in order to observe the impact of firm-created and user- generated social media communication on brand equity. Empirical findings and results – The findings in the study indicate that firm-created social media communication positively impact brand equity, while user-generated did not show to be significant. In this study it was shown that the majority of the respondents use social media, especially Facebook, and the content that most valuable was access to discounts and promotions as well as information about the brand and its products. Conclusion - Our study confirms the importance for companies to use social media as a marketing tool and it should be in all managers’ interest to make use of this channel. Also the importance of having high brand equity is highlighted and how the customer’s perceptions about a brand can be used as guidelines in order to increase brand equity. Keywords - Brand equity, strong brands, social media, social media strategy, firm-created social media communication, user-generated social media communication ! Table of Contents 1. Introduction 1 1.1 Problem background 1 1.2 Problem discussion 2 1.3 Purpose 3 1.4 Research questions 3 1.5 Disposition 4 2. Theory and hypotheses 5 2.1 Consumer-based brand equity 5 2.1.1 Brand awareness 6 2.1.2 Perceived quality 6 2.1.3 Brand loyalty 7 2.1.4 Brand associations 7 2.2 Social media 8 2.2.1 What is social media? 8 2.3 Social media applications 9 2.3.1 Social networking sites 9 2.3.2 Content communities 10 2.3.3 Blogs 10 2.3.4 Instagram 11 2.4 Social media strategy 11 2.5 Implications with social media 13 2.6 Firm-created and user-generated social media communication 13 3. Methodology 15 3.1 Scientific approach 15 3.2 Overall methodology 15 3.3 Choice of scientific approach 15 3.4 Research method 16 3.5 Choice of topic 17 3.6 Data collection 17 3.6.1 Secondary data 17 3.6.2 Primary data 18 3.6.3 Qualitative selection 18 3.6.3.1 Qualitative interviews 19 3.6.4 Quantitative selection 20 3.6.4.1 Survey 21 3.7 Data analysis 23 3.8 Validity and reliability 24 4. Empirical findings and results 25 4.1 Boomerang International AB 25 4.1.1 The company and Peter Sjöström 25 4.1.2 Consumer-based brand equity 25 4.1.2.1 Brand awareness 25 4.1.2.2 Perceived quality 26 4.1.2.3 Brand loyalty 26 4.1.2.4 Brand associations 26 4.1.3 Social media 27 ! 4.2 How AB 28 4.2.1 The Company and Maj-La Pizzelli 28 4.2.2 Consumer-based brand equity 28 4.2.2.1 Brand awareness 28 4.2.2.2 Perceived quality 28 4.2.2.3 Brand loyalty 29 4.2.2.4 Brand associations 29 4.3 Manifesto 29 4.3.1 The company and Michael Nilsson 29 4.3.2 Brand equity and marketing communication 29 4.3.3 Social media strategy 30 4.3.4 Implications with social media 31 4.4 Results of survey 31 4.4.1 Brand awareness 33 4.4.2 Perceived quality 33 4.4.3 Brand loyalty 33 4.4.4 Brand associations 33 4.4.5 Social media 34 4.5 Result of statistical analysis 35 5. Discussion 37 5.1 Consumer-based brand equity 37 5.1.1 Brand awareness 37 5.1.2 Perceived quality 37 5.1.3 Brand loyalty 38 5.1.4 Brand associations 38 5.2 Social media 39 5.2.1 Social media applications 39 5.2.2 Social media strategy 40 5.2.3 Implications with social media 41 5.2.4 Firm-created and user-generated social media communication 41 6. Conclusion 42 6.1 Conclusions 42 6.2 Managerial implications 44 6.3 Limitations and further research 45 References 46 Appendix 51 ! 1. Introduction This study’s initial chapter first presents a problem background of the subject, which leads to a discussion of the problem. Then we put forward the purpose of this study, which is followed by the problem questions. 1.1 Problem background According to Melin (1997), it is unclear how labelling has been set up through the centuries, however, a possible explanation for its emergence is that the labelling satisfied a fundamental human need to demonstrate objects’ belonging. The modern brand first emerged in the later 1800s and is expected to originate from the United States and Great Britain, where the industrial revolution advances led to mass production, mass distribution and mass communication in the form of advertising. This resulted in a continuously increasing range of new products for consumers (Ibid). Kotler, Armstrong, Wong and Saunders (2008) argue that today companies must be consumer oriented and understand what customers want and need to succeed in this competitive market and, further, Nilsson (2000) explains the importance of having a strong brand in order to compete effectively. Melin (1997) reflects on the growing interest in brands and how this has become a competitive advantage for companies. According to Statistiska Centralbyrån (2013), in 2013 there were 1 970 registered companies in the clothing industry in Sweden. When many companies exist in the same market, the competition is fierce between the brands (Ries & Trout, 1985). Nilsson (2000) states that a strong brand is important for companies, and Shankar, Azar and Fuller (2008) explain that a brand’s worth is closely tied to consumers’ reactions to a service or product carrying a specific brand name. According to Kotler et al. (2008, p. 985) a brand is defined as “A name, term, sign, symbol or design, or a combination of these that identifies the goods or services of one seller or group of sellers and differentiates them from those of competitors.”. However, Kotler et al. (2008) argue that a brand is seen as the major enduring asset of a company and are more than just names and symbols. Aaker (1996) presents the concept “brand equity”, which is described as a set of assets linked to the brand name and symbols that contribute to added value of a product or service. The main assets explained by Aaker (1996) are brand awareness, brand loyalty, perceived quality and brand associations. According to Yoo, Donthu and Lee (2000) brand equity can only be created in the long run through carefully planned marketing investments. Keller (2009) states that marketing communication can impact brand equity, and Mårtensson (1994) explains the importance of marketing communication in order to influence the market purchasing behaviour. Kotler et al. (2008) explain that a company's total marketing communication consists of a mix between advertising, PR1, sales promotion, personal selling, direct marketing and other tools for business communications, and companies use a mix of these tools to persuasively communicate customer value and to build customer relationships (Ibid). However, some authors (Kotler et al., 2008; Wright, Khanfar, Harrington & Kizer, 2010) declare that there has been a shift in the marketing communication models. Due to Internet, companies today have other options to market themselves, namely by posting interesting contents on the Internet (Scott, 2010). Moreover, improved information !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! ! "!According to Kotler et al.
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