The role of electronic word-of-mouth on customer-based brand equity and purchase intention by Millennials in South African
Date
2020
Authors
Kgonare, Boitumelo
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Abstract
This paper examines the effects of negative electronic word of mouth (eWOM) performed on social network sites towards customer-based brand equity and ultimately, the effect this may have on purchase intention by South African Millennials in the specific industry of telecommunications.
Customer-based brand equity is a widely referred marketing concept used as insight in understanding customer value and the relevance of brands in the marketplace. As organisations embark on building strong brand equity, ultimately it is the customer that decides how significant the brand is to them and gauges the success of the brand. The main variables of the study that make up customer-based brand equity are brand loyalty, perceived quality, brand awareness and the strength of brand association outlined by (Aaker, 1991; Keller, 1993). This study embarked on testing the unfavourable situation of negative electronic word of mouth shared on social network sites and the impact on the antecedents of customer-based brand equity which would evidently discourage purchase intention. The exponential growth and adoption of social network sites as we embrace the digital era has offered marketers an opportunity to advertise their brands online and to engage their target audience with a more relevant, instantaneous content. This study focused specifically on Millennials, a generational cohort of wide interest in marketing and business in general, because of their sheer size in South Africa and their purchasing power, a cohort that is highly invested in brands and is the driving force of social media adoption (Rodney & Wakeham, 2016). The study also focuses on the telecommunications industry and the top mobile carrier brands (Vodacom, MTN, Cell C & Telkom) that possess the strongest brand equity in the market according to (BrandSA, 2017). The research methodology adopted an online cross-sectional survey where they completed a questionnaire adapted from previous studies was used. The results of the empirical study supported some of the hypothesised statements, however dispelled two of the constructs. The findings are that negative electronic word of mouth has detrimental effects on brand loyalty, perceived quality and ultimately, purchase intention. However, the results did not hold the same premise in that negative word of mouth had a negligible impact on the strength of brand association that Millennials hold towards telecommunication brands.
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The managerial implications of this study is for telecommunication companies to proactively monitor and track negative eWOM diligently by investing in the technology and social media tools that allow this level of tracking; this data builds invaluable customer insights that will allow them to implement mitigating brand marketing campaigns to regain trust with Millennials and reinstate the brand loyalty levels and tainted perceived quality. Through this, they will be able to continue to dominate brand resonance amongst Millennials who need this service. The theoretical implications are the addition to the study of negative electronic word of mouth which is underdeveloped in South Africa, albeit the growing adoption of social network sites, and the impact these have on the broad construct of customer-based brand equity reflecting a negative relationship. The study further contributes to the study of purchase intention, however it is extended because we look at the negative impact of the spread of negative eWOM towards brand loyalty, perceived quality, brand awareness and the brand association.
Description
A research report submitted in partial fulfilment of the requirements for the degree of Master of Management in Strategic Marketing to the Faculty of Commerce, Law and Management, University of the Witwatersrand, Johannesburg, 2020
Keywords
Customer-based brand loyalty, Negative electronic word of mouth (eWOM), Millennials, Social network sites (SNS), social media