LUXURIOUS BRAND AND SOCIAL MEDIA Luxurious brands marketing strategies in social media BOTROS, SHADI. SAID, YACOUB. School of Business, Society & Engineering Course: Master thesis in Business Supervisor: Edward Gillmore Administration Date: 3/06/2021 Course code: FOA403 15 ECTS Abstract Date: 2021/06/03 Level: Master Thesis in Business Administration, 15 cr Institution: School of Business, Society and Engineering, Mälardalen University Authors: Shadi Botros Yacoub Said (87/07/24) (95/01/01) Title: LUXURIOUS BRAND AND SOCIAL MEDIA Tutor: Edward Gillmore Keywords: Luxury brands, Social media marketing activities, Brand perceptions, Brand awareness, Purchase intention. Research questions: What are the outcomes of social media marketing used by luxury brands, brand awareness and brand perception, on purchase attention? Purpose: The purpose of this research is to study if social media marketing can have an effect on luxuries brands perception in consumers mind and if social media can influence consumers purchase intention. Method: This study is following a quantitative approach by using statistical methods to test the hypothesis. Conclusion: Luxury brands are considered as exclusive and expensive brands. Social media is a mass communication tool that is usually used to reach a broad segment of consumers. The authors found out through the gathered data that consumers are aware about the brand and they perceive the brand as a luxury brand. However, consumers were not only relying on the official home page of the brand to obtain information. 2 Acknowledgment First and foremost, praises and thanks to God, the Almighty, for His showers of blessings throughout our research work to complete the research successfully. We would like to express our deep and sincere gratitude to our research supervisor Professor Edward Gillmore. He has taught us the methodology to carry out the research and to present the research works as clearly as possible. It was a great privilege and honor to work and study under his guidance. We are extremely grateful for what he has offered us. Special thanks to Professor Rana Mostaghel, for her help doing the survey form and questions. The biggest thanks go to Mälardalens University, for giving us the opportunity to do research and providing invaluable guidance throughout this research. We are extremely grateful to our parents (George & Nawal Botros), (Malke & Atia Said) for their love, prayers, caring and sacrifices for educating and preparing us for our future. We are very much thankful to our fiancées (Joudy Ibrahim and Carol Ayoub) for their love, understanding, prayers and continuing support to complete this research work. We would never be able to make it without you girls beside us. This paper is our marriage gifts for you and for our future kids. Thanks go to the dream team Shadi Botros & Yacoub Said. It was a pleasure doing this paper together. Finally, our thanks go to all the people who have supported us to complete the research work directly or indirectly. 3 Table of content Abstract 2 1 Introduction 7 1.1 Background 7 1.2 Problem Statement 10 1.3 Purpose 14 1.4 Research Question 15 1.5 Definitions 15 2 Literature Review 16 2.1 Marketing 16 2.1.1 Segmentation, Targeting, and Positioning. 18 2.2 Branding 19 2.2.1 Brand Identity 21 2.2.2 Brand Equity 23 2.2.3 Brand Legitimacy 25 2.3 Consumer Behaviour 26 2.4 Consumer Awareness 29 2.5 Consumers Perceptions 30 2.6 Social Media Marketing 32 2.6.1 Entertainment 33 2.6.2 Interaction 33 2.6.3 Customization 34 2.6.4 Word of mouth 34 2.6.5 Trendiness 35 3 Conceptual Framework 36 3.1 Research Hypothesis 36 4 Methodology 40 4.1 Research Approach 40 4.1.1 Epistemology 40 4.2 Data collection 41 4.2.1 Primary data 42 4.2.1.1 Instrument design 44 4 4.3 Reliability 46 4.4 Validity 46 4.5 Limitations 47 5 Findings 49 5.1 Background Demographic Data 49 5.2 Survey Analysis 53 5.2.1 Brand Awareness 55 5.2.2 Brand Perception 57 5.2.3 Purchase Intention 58 5.3 Purchase Intention Compare Means 59 5.3 Social Media Marketing Activities (SMMA) 60 5.3.1 Social Media Marketing Entertainment 62 5.3.2 Social Media Marketing Interaction 63 5.3.3 Social Media Marketing Trendiness 64 5.3.4 Social Media Marketing Customization 66 5.3.5 Social Media Marketing Word-of-Mouth 67 6 Theoretical Discussion 69 6.1 Variance in Luxury Brand Awareness 69 6.2 Variance in Luxury Brand Perception 70 6.3 Variance in Luxury Purchase Intention 72 6.4 Social media marketing activities 73 7 Conclusion 77 8 Further Research 78 9 References 79 Appendix 92 5 List of tables Table 4.2.1.1 - Variables scales and Reliability test. Table 5.2.1 - Regression analysis. Table 5.2.2 - Measurement of Variables. Table 5.3.2 - Mean and Standard Deviation. List of figures Figure 5.1.1 - Gender. Figure 5.1.2 - Age divided by generations. Figure 5.1.3 - Current Residence. Figure: 5.1.4 - Level of Education. Figure: 5.1.5 - Employment status. Figure: 5.1.6 - Level of Employment. Figure: 5.1.7 - Annual Income. Figure 5.2.1.1 - Louis Vuitton Brand Awareness. Figure 5.2.1.2 - Rolex Brand Awareness. Figure 5.2.2.1 - Louis Vuitton Brand Perception. Figure 5.2.2.2 - Rolex Brand Perception. Figure 5.2.3.1 - Louis Vuitton Purchase Intention. Figure 5.2.3.2 - Rolex Purchase Intention. Figure 5.3.1 - Following on Social Media. Figure 5.3.1.1 - Louis Vuitton Entertainment. Figure 5.3.1.2 - Rolex Entertainment. Figure 5.3.2.1 - Louis Vuitton Interaction. Figure 5.3.2.2 - Rolex Interaction. Figure 5.3.3.1 - Louis Vuitton Trendiness. Figure 5.3.3.2 - Rolex Interaction. Figure 5.3.4.1 - Louis Vuitton Customization. Figure 5.3.4.2 - Rolex Customization. Figure 5.3.5.1 - Louis Vuitton Word-of-Mouth. Figure 5.3.5.2 - Rolex Word-of-Mouth. 6 1 Introduction This part of the thesis will start with an explanation of the field chosen and give a clear understanding in which the rest of the paper will continue. It will start with a short description of some terms such as social media, social media marketing activities, and luxuries brands, then the problem raised in this study, continue with the purpose of the paper and the main question this study wants to investigate. 1.1 Background Google trends said by the year 2009, the search on Google search engine about the word “social media” had increased rapidly (Google, 2021). The social media users around the world in 2020 reached 3.6 billion users, the number will be 4.4 billion in 2025 (Statista, 2021b). In addition, the pandemic of COVID-19 was one of the factors behind the increasing use of social media platforms while billions of people were forced to stay home working or studying, so the need for socializing has increased (Statista, 2021a). Hence, the rapid growth of internet applications in the last decade appears to be a new level in the evolution of the internet. These applications provided marketers and companies suitable forms of interactive one-to-one marketing (Constantinides & Fountain, 2008). Furthermore, social networks can be effective tools for companies to raise brand awareness and reduce advertising costs (Bolotaeva & Cata, 2011). 7 Social media can be defined as “a group of internet-based applications that build on the ideological and technological foundations of Web 2.0 and that allow the creation and exchange of user- generated content” (Kaplan and Haenlein, 2010). Companies can utilize this exchange of information over the internet in terms of satisfying customers needs and to build a successful relationship with their customers which reflects on the profits (Elena, 2016). Furthermore, becoming fans when customers are involved, fans can communicate and engage with other fans on social media, increasing mutual satisfaction (Sashi, 2012). There are many studies that investigate the practices and implications of social media on branding, few of them have discussed the effect social media marketing has on luxury brands, (Godey, Manthiou, Pederzoli, Rokka, Aiello, Donvito, & Singh, 2016; Kim & Ko, 2010, 2012). Social media has been very useful for companies as they were able to build a close relationship with their consumers, additionally, social media gave companies the opportunity to expand their markets and target new segments of customers that was difficult to reach before (Rooney, 2011). Blanchard (2015) discusses the concerns of executives on social media campaigns. Executives have concerns among their budgets for social media marketing (SMM) plans, as there are no clear materials that can determine the real effectiveness of this type of campaign. For example, increase in sales, buyer & seller relationship, return on investment rate (ROI) and conversion rate they can gain from this type of marketing plans (Blanchard, 2015). 8 According to Vaynerchuk (2011) brand executives raise questions such as the real purpose of social media marketing plans to be part of the promotional tools, and its relationship with other marketing platforms or tools, such as advertising, sales, public relations. The digital revolution changed many aspects in this world and industries got influenced by the revolution in many ways, however one of these industries is luxury brands. According to Kapferer & Valette-Florence (2016) luxury brands are considered as a symbol of wealth and status, those brands are known for their scarcity and uniqueness which provide prestige to the brand and divide it from non-prestige brands. Digital channels such as social media can offer a great connection with customers, considering the high cost of renting physical stores in main cities.