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The effect of Twitter usage by brands on consumer based brand equity
Julie van der Lande Student number: 1851365 University of Groningen
Master Thesis BA Marketing Management Supervisor: Drs. W. Jager
Second Supervisor: Drs. P.S. van Eck
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The effect of Twitter usage by brands on consumer based brand equity
Author: Julie van der Lande Student Number: 1851365
Specialization: Marketing Management Date: July, 2011
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Management summary
The goal of this study was to determine the effects of Twitter usage by brands on brand equity. In the last decades, technical developments have been diminishing the effects of traditional marketing, and social media have become an important marketing tool. More and more brands are searching for ways to use social media effectively for marketing purposes; Twitter is one of those new interesting and popular social media tools that can be used by brands to reach (potential) customers.
The so-‐called dimensions of Twitter, i.e. the frequency with which brands post their tweets, the content of the tweets, and the interactivity between a follower and a brand, play an important role in this study. From a study of the literature it is found that brand equity can be approached from two different angles: a financial perspective and a consumer perspective. In this thesis, the consumer perspective will be used. In order to enable us to measure brand equity from a consumer perspective, four components are defined. These components are: brand associations, brand awareness, perceived quality and brand loyalty. Each of these components of brand equity will be investigated separately to find out how the dimensions influence brand equity. In order to determine whether the relation between those dimensions and brand equity is stronger in the case of a so-‐called influencer, the brand involvement is taken into account.
A conceptual model is developed based on existing academic literature. This model demonstrates the expected relations between the dimensions of Twitter (independent variables) and the components of brand equity (dependent variables). After constructing the conceptual model, the hypotheses are tested by conducting an independent t-‐test, an ANCOVA analysis and a regression analysis.
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different from other components of brand equity since it is narrowly connected with the experience of the follower. The results confirmed this hypothesis and show a significant effect whereby the brands that post tweets more frequently, have interesting tweets and have more interactivity with their followers show a higher degree of brand loyalty.
It is also found that an influencer has a stronger positive effect on the relation between the frequency of posting tweets, the content of tweets and the interactivity between the follower and the brand on the one hand and perceived quality and brand loyalty on the other than a non-‐influencer.
While each dimension was found to influence brand equity in a unique manner, it can be said that overall, the dimensions of Twitter have a positive effect on brand equity. It was only on brand associations/awareness that no significant effect was found. However, the dimensions of Twitter did show a significant relationship with the other components.
The fact that the frequency, content and interactivity between the brand and the follower will lead to a higher value of the brand equity, is the major academic contributions of this research. This research has managerial relevance for brands which are considering or already using Twitter. It is recommended in order to maintain or even increase the brand equity to post frequent tweets with interesting content and reply on tweets of followers in order to increase the brand equity. Targeting influencers is suggested in order to arrange higher value of the brand equity.
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Preface
The master thesis is my final project of my master degree in Business Administration at the Rijksuniversiteit Groningen. During this master degree I never thought I would really appreciate this process. The fact that I chose a subject whom I thought it would be very interesting makes the process even more motivating. I would like to thank Drs. W. Jager for all his positive support and help during my process of writing this thesis. I would also like to thank Drs. P.S. van Eck who was my second supervisor.
Of course, I would like to thank my parents and my three sisters!
I hope that this report will provide you with useful and enjoyable reading.
Kind regards,
Julie van der Lande @Julievdlande
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Table of content
1. BACKGROUND ...9
1.1. INTRODUCTION... 9
1.2. PROBLEM STATEMENT... 12
1.3. RESEARCH QUESTIONS... 12
1.3. THEORETICAL AND SOCIAL RELEVANCE... 12
1.4. STRUCTURE OF THE THESIS... 13
THEORETICAL FRAMEWORK ...14
2. TWITTER...14
2.1. TWITTER & CONSUMERS... 15
2.2. TWITTER & BRANDS... 15
2.3. BUILDING RELATIONS WITH TWITTER... 16
2.4. BRAND INVOLVEMENT... 19
2.5. THE ROLE OF FREQUENCY & CONTENT & INTERACTIVITY OF TWEETS OF CONSUMERS AND BRANDS... 22
2.6. CONCLUSION... 24
3. BRAND EQUITY...25
3.1. INTRODUCTION OF BRAND EQUITY... 25
3.2 MODELS OF BRAND EQUITY... 26
3.2.1. Brand equity model of Aaker (1991)... 26
3.2.2. Brand equity model of Keller (2003)... 27
3.2.3. Brand equity model of Yoo et al. (2001)... 28
3.3. COMPONENTS OF BRAND EQUITY... 29
3.3.1. Brand associations... 29 3.3.2. Brand awareness... 30 3.3.3. Perceived quality ... 31 3.3.4. Brand Loyalty... 31 4. CONCEPTUAL MODEL ...33 4.1. INTRODUCTION... 33 4.2. CONCEPTUAL MODEL... 33 4.3. CONCLUSION... 34 5. RESEARCH DESIGN...35 5.1. RESEARCH METHOD... 35 5.2. DATA COLLECTION... 37
5.3. PLAN OF ANALYSIS... 40
6. RESULTS ...41
6.1. CHARACTERISTICS OF PARTICIPANTS... 42
6.2. DESCRIPTIVE RESULTS... 42
6.3. RELIABILITY... 45
6.4. RESULTS HYPOTHESES... 48
6.4.1. Introduction analyses ... 48
6.4.2. Brand associations/ Brand awareness ... 50
6.4.3. Perceived quality ... 51
6.4.4. Brand loyalty ... 52
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6.4.6. Brand involvement ... 53
6.5. ADDITIONAL ANALYSES... 58
6.6. CONCLUSION... 62
7. CONCLUSIONS & RECOMMENDATION ...63
7.1. CONCLUSION... 63
7.2. DISCUSSION... 66
7.3. RECOMMENDATION... 67
7.4 LIMITATION & FUTURE RESEARCH... 68
REFERENCES ...69
APPENDICES ...75
APPENDIX A QUESTIONNAIRE... 75
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Table of figures
FIGURE 1 COMMONLY USED SOCIAL MEDIA TOOLS (STELZER, 2009) ... 10
FIGURE 2 STRUCTURE OF THE THESIS... 13
FIGURE 3 AGE DISTRIBUTION ON SOCIAL NETWORK SITES, ADOPTED BY THE PEW RESEARCH CENTER... 14
FIGURE 4 TWITTER USER INFLUENCED BY BRAND INVOLVEMENT... 21
FIGURE 5. CONCEPTUAL FRAMEWORK... 32
FIGURE 6 GRAPH OF MEAN OF THE COMPONENTS OF BRAND EQUITY BY CONDITIONS... 49
FIGURE 7 ANCOVA PLOT OF EFFECT OF INFLUENCER ON CONDITIONS AND BRAND ASSOCIATION/AWARENESS... 54
FIGURE 8 ANCOVA PLOT OF EFFECT OF INFLUENCER ON CONDITIONS AND PERCEIVED QUALITY... 56
FIGURE 9 ANCOVA PLOT OF EFFECT OF INFLUENCER ON CONDITIONS AND BRAND LOYALTY... 56
TABLE 1 TWITTER USAGE OF SEVERAL BRANDS... 37
TABLE 2 MEASUREMENTS METHODS OF THE DIMENSIONS OF TWITTER... 38
TABLE 3 DISTRIBUTION OF THE BRANDS... 38
TABLE 4 PROPOSITIONS BRAND EQUITY IN QUESTIONNAIRE BY AUTHOR... 39
TABLE 5 PROPOSITIONS IN QUESTIONNAIRE BY THE AUTHOR CONCERNING DIMENSIONS OF TWITTER... 39
TABLE 6 NUMBERS OF PARTICIPANTS PER BRAND... 42
TABLE 7 HISTOGRAM OF CREATION DATE OF PARTICIPANTS... 41
TABLE 8 DESCRIPTIVE STATISTICS OF TWITTER USAGE... 43
TABLE 9 DESCRIPTIVE OF MOTIVATIONS FOLLOWING A BRAND... 43
TABLE 10 APPRECIATION OF THE DIMENSIONS BY BRANDS... 44
TABLE 11 CONTENT WITH THE DIMENSIONS BY BRANDS... 44
TABLE 12 RESULTS OF COMPONENTS BY BRANDS... 44
TABLE 13 ROTATED COMPONENT MATRIX... 45
TABLE 14 PROPOSITIONS AND CRONBACH'S ALPHA OF COMPONENTS OF BRAND EQUITY... 46
TABLE 15 CRONBACH'S ALPHA OF THE COMPONENTS... 46
TABLE 16 CRONBACH'S ALPHA OF THE DIMENSIONS OF TWITTER... 47
TABLE 17 PROPOSITIONS AND CRONBACH'S ALPHA OF THE OVERALL BRAND EQUITY... 47
TABLE 18 APPRECIATIONS OF DIMENSIONS OF TWITTER... 48
TABLE 19 COMPONENTS BY CONDITIONS... 49
TABLE 20 BRAND ASSOCIATION/AWARENESS BY CONDITION... 50
TABLE 21 PERCEIVED QUALITY BY CONDITION... 51
TABLE 22 BRAND LOYALTY BY CONDITION... 52
TABLE 23 OVERALL BRAND EQUITY BY CONDITION... 52
TABLE 24 CORRELATION MATRIX BY INVOLVEMENT*THOSE RELATIONS ARE SIGNIFICANT... 53
TABLE 25 PARTICIPANTS BY CONDITION AND INFLUENCER... 53
TABLE 26 DESCRIPTIVE RESULTS ANCOVA OF BRAND ASSOCIATIONS/AWARENESS BY INFLUENCER AND CONDITION... 54
TABLE 27 DESCRIPTIVE RESULTS ANCOVA OF PERCEIVED QUALITY BY INFLUENCER AND CONDITION... 55
TABLE 28 DESCRIPTIVE RESULTS ANCOVA OF BRAND LOYALTY BY INFLUENCER AND CONDITION... 56
TABLE 29 CORRELATION MATRIX... 58
TABLE 30 REGRESSION ANALYSIS... 59
TABLE 31 REGRESSION ANALYSES OVERALL BRAND EQUITY BY COMPONENTS... 61
TABLE 32 REGRESSION ANALYSES ALL COMPONENTS OF BRAND EQUITY BY DIMENSIONS... 61
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1. Background
It took 38 years for the radio to attract 50 million listeners, and 13 years for television to gain the attention of 50 million viewers. The Internet took only four years to attract 50 million participants, and Twitter reached 106 million user 5 years (Nair, 2011; website-‐monitoring.com, 2011).
1.1. Introduction
Traditional marketing has been designed as a one-‐way communication between businesses and customers. Traditional marketing mainly just took place in the form of advertising and direct mail. Those were the tools most used by companies to create visibility and customer demand. Traditional marketing was used extensively; however, the response rate was quite low. Webster (2004) states that “typical response rate to their direct mail campaign is around 1 percent”. Reasons given for that low response rate are the relative ease with which such traditional form of marketing could be ignored, a lack of relevance from the perspective of a potential customers’ personal. In addition, according to Van den Bulte and Wuyts (2007), the effectiveness of mass media (newspaper, televisions, radio, magazines, billboards, etc.) is also declining. This is due to the increasing number of television channels, radio-‐ stations and resulting in new developments of marketing. Overall, communication has become less effective and it is in the interest of marketing to discover new possibilities to communicate their messages.
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products with customers, the possibility of listening to the market, connecting sellers and partners, engaging customers and serving customers through the social media are the main considerations (Kaplan and Haenlein, 2010). Social media allow companies to build and maintain interpersonal relationships with customers. With the rise of social media, the phenomenon of social complexity came to prominence; interaction between individuals in their daily lives, normative and informational influence and word of mouth cause consumer behaviour to become more complex and more difficult to predict (Gilbert et al., 2007). That social media is an enormous popular trend can be judged from the fact that 65 percent of U.S. adults are using social media (Polls, 2011); moreover, the average Internet user spends 4.6 hours using social media a week, compared to 4.4 hours using email (TNS, 2010).
According to Stelzer (2009), Twitter is the most commonly used social media tool. Twitter is a microblogging service, which forms an addition to the regular blogging practice. Kaplan (2010) described blogs, which represent the earliest form of social media, as special types of websites that usually display messages in reverse chronological order. On those blogs,
individuals can post reviews, opinions and experiences about various topics of products and services. Microblogs differ from the traditional blog in that their content is much shorter in the number of characters allowed. The most outstanding microblogging service is Twitter. Twitter is a kind of cross between a social networking site, blogging device, online consumer review and text messaging service (Miller 2008). Twitter can be defined as a regular update (tweets) of a person’s thought in the form of text messages limited to 140 characters. A highly interesting feature is the possibility of interactivity with stakeholders; Twitter offers its users the possibility to respond to each other and to give their opinions on something or someone. Twitter can be used through mobile phone, computer or other external applications. It is used for personal purposes as well as for brands to communicate with their followers.
Twitter has already reached 106 million users and is still growing; however, little is known about how companies can use Twitter in order to affect the value of a brand. One of the main questions raised
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when using Twitter as a brand is whether the usage of the social media instrument really works (Cachia, 2008). Literature shows that companies still do not very often use social media for marketing purposes. However, this percentage is growing over the years: while 14 percent of the Dutch brands was structurally present in the social media in 2009, in 2010 already 67 percent of the top 100 Dutch brands was present (Social Media Monitor, 2010). A 2009 survey aimed at better understanding why marketers use social media found that the main reasons to use social media were increase of exposure, increase of traffic and building new relations (Stelzner, 2009). The reason why certain companies do not make use of social media as a marketing strategy is that they have little confidence in their social media strategy (Kopp, 2011).
In order to examine the effect of Twitter on a brand, it is important to know what a brand is. According to Keller (2008), a strong brand has strong, relevant and unique associations in the memory of a customer. Creating a valuable brand takes time and effort from a company. Nowadays companies use different ways to create ‘brand equity’. ‘Brand equity’ is a term used in academic literature to describe the value of a brand; it can increase competitive advantages and create greater loyalty (Keller, 2008). The fact that traditional marketing became less effective and the social media development becomes more interesting makes it more important for organizations to reconsider why and how they should make use of social media tools.
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1.2. Problem statement
As mentioned earlier, brands are a highly interesting issue nowadays. This is also true for social media, especially when we focus on Twitter. However, it has not yet been examined what the impact is of the usage of Twitter on the brand equity of a brand, or why and how an organization should use Twitter and what value Twitter usage can add to a brand. In other words: why should a brand be active on Twitter and what is the effect on the brand in terms of, for example, brand awareness, brand loyalty, brand associations and perceived quality? And will it increase or decrease the value of those components of brand equity? How should brands make use of Twitter with regard to, for instance, the frequency of posting tweets? What should they write? And do they need to react to the posts of the stakeholders? Based on previous findings and questions, the following problem statement has been formulated:
What are the possible effects of Twitter usage by brands on consumer based brand equity?
1.3. Research Questions
To answer the problem statement, the following research questions have been distinguished: # What is Twitter for brands and consumers?
# What is the most appropriate model of brand equity to use in this research?
# Do influencers have a stronger effect on Twitter usage and brand equity than non-‐ influencers?
1.3. Theoretical and social relevance
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discover new ways to create value for customers”. There is interest into the phenomenon of social media; however, this is very broad and not specific. In marketing brand equity is one of the most valuable and interesting concepts (Hoeffler and Keller, 2002). If we find positive evidence that using Twitter greatly impacts brand equity, this will undoubtedly increase the interest that Twitter arouses for companies, and with it, the usage of this platform by the same. Moreover, for marketers it will be an interesting manner to create value for their brand in order to create competitive advantages and increase market share.
1.4. Structure of the thesis
In the next chapters a theoretical framework based on existing literature will be used to analyze the research problem. In the next chapter the social media tool Twitter will be introduced extensively. In the third chapter, first, the term brand equity will be discussed, next the most important models in the literature will be analyzed and finally the components of brand equity will be explained, after we will formulate the hypotheses that will be used in this research. In the fourth chapter the conceptual model and the relations will be presented. In the fifth chapter the research method, data collection and plan of analysis will be explained. The results of our research will be given in the sixth chapter. The conclusion and recommendations will be given in the seventh and last chapter.
Figure 2 Structure of the thesis Chapter 2
Twitter Brand equity Chapter 3
Chapter 4 Conceptual model Chapter 5 Research design Chapter 6 Results Chapter 7
Theoretical framework
The results of our literature review will be discussed in this part of the research. In the present chapter Twitter will be discussed; in the third chapter brand equity will be analyzed. The third chapter will also include the hypotheses. Finally, in the fourth chapter the conceptual model will be presented.
2. Twitter
Twitter is one of the fastest growing social media tools on the World Wide Web. In April 2010 Twitter had over 106 million accounts, with 640 tweets being posted every second (website-‐ monitoring.com). Twitter is a free social networking and microblogging service that allows its users to send and read other users’ updates, also known as ‘tweets’. Those tweets are text-‐based messages with a maximum of 140 characters. Twitter users follow others or are followed. Unlike other social media tools (e.g. Facebook or LinkedIn), it is not required to send a request to follow another user; each user can choose whomever she wants to follow without any permission of the user involved. When you are a follower on Twitter, you receive all the tweets posted by that user and you have the possibility to post tweets and send direct messages to this user (DM). Twitter can be used through mobile phone, computer or other external applications. In the common practice of responding to a tweet some special signs are employed: ‘RT’ stands for retweet, repeating and eventually adding to another Twitter user’s original post, ‘@’ refers to a reply at a certain user, and ‘#’ represents a hashtag: when using this sign, the associated word or phrase will be mentioned, organized, tracked or filtered by Twitter.
Twitter, each accounting for 16 percent of total tweets. The most active hour on Twitter is that between 22-‐23h, accounting for 4.8 percent of the tweets on an average day. While these may sound like days and times to avoid, it turns out that this is also the time most retweets are sent, obviously when the original tweets are posted within this time, from which it can be concluded that people pay most attention to these messages. Zarella (2011) found that men and women have almost an equal numbers of followers; however, women tend to follow and tweet more than men.
2.1. Twitter & Consumers
Individuals have several motivations to become a user on Twitter; to communicate their daily activities, to search or share information, to have small conversations and to report news (Java et al., 2007). The users of Twitter are individuals who have created a profile on Twitter’s website. According to Wu et al. (2011) they can be divided in Elite users, consisting of celebrities, bloggers, media and organizations, and ordinary users, individuals who are representing themselves. In their study, Wu et al. found that less than one percent of the (elite) users dominated half of all attention within Twitter. Kwak et al. (2010) measured the reciprocity of users of Twitter. They concluded that Twitter shows a low level of reciprocity compared with other SNS: 78 percent of the users have one-‐way communication and 22 percent have a reciprocal relationship, a two-‐way communication. In addition, 68 percent of all the users are not followed by any person they are following. The most elite users do not follow their ordinary followers back; moreover, between the elite users, the attention is highly homophilic, with celebrities following celebrities, bloggers following bloggers etc. According to Zarella (2010), 82 percent of Twitter users were found to have less than 100 followers, while 81 percent of Twitter users are following less than 100 people. Farhi (2009) found that 60 percent of the people who sign up for Twitter do not return the following month. Based on this information it can be concluded that this social media tool is used more as an information-‐seeking source than as a true SNS tool.
2.2. Twitter & Brands
Twitter can be part of the marketing communication tools available to a company. As such, it needs to fit and to be integrated with other marketing tools; it is, for instance, suggested by O’Reilly et al. (2009) that Facebook and other social media accounts be coordinated to provide consistent information). Internet presence sites (IPS), which is about the attendance of the brand on several internet-‐based networks, is an important mechanism in the marketing communication of companies; a study of Berthon et al. (1996) suggested that the level of interactivity is critical to get customers involved by the marketing communication. The study of Ghose et al. (1998) found that interactivity affects the attractiveness of IPS: it increases a company’s reputation and it is more likely to attract customers and gain competitive advantages. According to the article of Hawkins (2009), just creating a Twitter account is not enough to create a strong identity; it is necessary to be active on different online social media platforms.
Jansen et al. (2009) found that 19 percent of all tweets contain mention of a brand or product. This implies that Twitter is a medium where marketing can be used to build or maintain a relationship, or at least a tool for sharing information and experiences. More than half of the so-‐called ‘branding tweets’, i.e. tweets that mention a product or brand, contained some positive expression, while 33 percent of the sentiments expressed were negative; only 12 percent was neutral (Jansen et al., 2009). Although the positive tweets represented the largest quantity, literature has shown that negative comments have a greater impact than positive ones (Skowronski and Carlston, 1989; Park and Lee, 2009). While it is possible that companies write positive posts under a different account name as a marketing trick to create more positive tweets, this is, however, quite unlikely because of the high number of such posts and their associated accounts (Jansen et al., 2009).
2.3. Building relations with Twitter
Rybalko (2010) uses the principles of Kent and Taylor (1998) in order to identify factors that determine the success of building a relationship through Twitter.
Usefulness of information
As remarked by Taylor et al. (2001), building a relationship requires time, trust, and several other strategies. Brands prefer customers to return frequently to Twitter to build and maintain their mutual relationship; in order to stimulate this, they have to provide useful information to customers. ‘Useful information’ is defined as the availability of links to the Careers web pages, the homepage, or other pages of the company, links to other SNS, blogs of the company, phone numbers, information such as a description of the company, or information as to who is managing the profile. Factors which are identified as persuading visitors to return by Rybalko (2010) are: links with company’s events, links with news by the company, links to news items about the company in the trade or mainstream media, links to discussion sites, and a FAQ for the site. Consequently, those factors will have an added value in building and maintaining a relationship.
Conservation of return visits
In the article of Taylor et al. (2001) it is suggested that companies should try to stick to their visitors and prevent them from going to competitors’ websites. Rybalko et al. (2010) state that other SNS (e.g. Facebook, YouTube or blogs by the company) can be seen as a company’s extended social networking presence and are useful for engaging customers. By providing interesting and useful content in their Tweets, brands can make passive followers active and, moreover, can preserve their followers.
Dialogic loop
A principle called ‘dialogic loop’ occurs when the company is involved with the stakeholders by discussing with them and providing them with feedback. Dou and Krishnamurthy (2007) confirmed the importance of interactivity between stakeholders and companies. Kent and Taylor (1998) suggested that sites should be interactive enough to allow users to track further information and enter dialogic relationships with the company The study of Rybalko et al. (2010) found that of the
Fortune 500 companies using Twitter, approximately 60 percent responded to other users’
In his 2009 article, Murdough suggests the following three pillars for measuring the intensity of the use of Twitter:
1. Frequency of using Twitter
The first dimension concerns the reach of Twitter itself: what is the volume of the brand mentioning’s across Twitter? In other words, how frequently a brand is tweeted says something about the intensity of use.
2. The discussions of the tweets
The second dimension is about the content: which are the main topics of discussions, and how does the sentiment change overtime? The content of the posts on Twitter is integrated with the sentiment that is expressed in the posts. Hence, besides the fact that a brand is written about in the first place, the content of the messages is also crucial. A follower will retweet a post based on his content, which means that the content is considered as interesting by the retweeter.
3. Outcome of using Twitter
The third dimension focuses on the outcomes of the activities on Twitter: what is the level of engagement that results from the use of Twitter? The engagement between the brand and the follower can be expressed by the interactivity between them. The two-‐way communication feature of Twitter allows interacting with each other
2.4. Brand involvement
Brand Involvement is “a person’s perceived relevance of the brand based on inherent needs, values, and interests” (Zaichkowsky, 1985). Literature has shown that brands were less vulnerable to negative information if the brand or product was identified with high involvement (Korgaonkar and Moschis, 1982). Thus, high levels of brand involvement will lead to a more positive relationship between the follower of a brand and brand equity, and vice versa.
To find out whom to target to build or maintain a relationship within Twitter for a brand or product, it is recommended to look at the involvement of the Twitter users. It is quite obvious that not all individuals adopt an innovation at the same time, so not all persons have equal influence; in fact, as the traditional communication theory states, a small part of the users exceed in convincing others (Rogers, 1962). To those individuals, who have more influence, a variety of terms is applied, such as opinion leader, influencers, market mavens, early adaptors, et cetera (Van Eck et al., 2011). In this study they will be referred to simply as ‘influencers’, because these consumers influence others and are involved with the brand, whereas opinion leaders are not necessary involved, and the term ‘early adopters’ refers to a stage in the adoption process.
Targeting the right users will increase the efficiency of marketing practices (Jansen et al., 2009). The most influential users and their characteristics can be analyzed according to the Diffusion of Innovation Adoption Curve developed by Rogers (1962). In this model the customers are divided into five different types of adopters of innovations: innovators (risk takers); early adopters (opinion leaders); early majority (adopts trends just before the average member); late majority (adopts just after the average member did); and laggards (are the last to adopt a trend, and possess almost no opinion leadership).
Identifying influencers
followers have a very limited effect on the diffusion process, that the influencers may accelerate of counter the adoption of a product. However, this finding is in contrast with those of the study by Van Eck et al. (2011), which shows that opinion leaders have more relations, moreover influencers, have more accurate knowledge and expertise. Influencers play a significant role in increasing the speed of the information stream, the adoption process itself and the adoption rate.
Measures of influence
Some recent studies have gathered data on the influences and diffusion of information on Twitter (Kwak et al., 2010; Weng et al., 2010). Cha et al. (2010) measured the influence of an individual user of Twitter by looking at the number of followers, the number of retweets (i.e., the number of times others forward the tweet), and the number of mentions (the number of times a user mentions another user’s name). They found that, based on the number of followers, as top influential users should be considered the so-‐called elite users (see 2.1. above), public figures (celebrities) and news sources. With respect to the second measurement of Cha et al. (2010), the number of retweets, they suggest that retweeting in Twitter can be an influential tool for strengthening a tweet, it can increase the probability of adoption when the same message will be retweeted in a group users (Watts and Dodds, 2007). For marketers this is interesting, because the tweet will be retweeted based on his content. According to Cha et al (2010) the last measure is the number of mentions; the most mentioned users are celebrities.
Cha et al (2010) stated “the most influential users hold significant influence over a variety of topics. That means that opinion leaders could indeed be used to spread information outside their area of expertise”. Van Eck et al (2011) suggest that opinion leaders play a critical role in the adoption process and spreading information about products.
Influencers and brand involvement
Katz and Lagarsfeld (1955) suggested that mass media information is channelled through opinion leadership. Those users of Twitter who have the most access to media explain and diffuse the message to followers by personal communication; the term ‘personal influence‘ in this theory refers to the fact that the opinion leaders tend to be similar to those whom they influence in terms of interest, demographics and personality.
al. (2010) state that the success of a trend or product is not dependable on who starts it, but on how open the public is to the trend overall. For this reason, Watts and Dodds (2007) called the early adaptors ‘accidental influencers’. If an opinion leader is active on Twitter, the information spreads faster and the adoption percentage is higher. Influencers can reach many people within Twitter where they exert their normative influences.
As mentioned above, the strength of involvement from a follower is of considerable interest for brands. The strength of involvement is divided into four different phases (figure 4).
The first of these is the finder-‐phase. During this phase the involvement is the lowest and the stakeholder is curious and is searching for new information about the brand. The second stage is the following-‐phase. During this stage the stakeholder has a relationship with the brand; he is involved with and is often searching for the brand. The third stage is the supporter-‐phase, during which the stakeholder is feeling connected with the brand and will recommended it to others. The fourth and last stage is the influencer-‐phase; in this stage the stakeholder is most involved and is very active in the diffusion of information to others, which can be seen in the number of retweets and mentions.
Finder Follower Supporter Influencer
2.5. The role of Frequency & Content & Interactivity of tweets of consumers
and brands
In this paragraph the dimensions “frequency of posting tweets”, “content of the tweets” and “interactivity between followers of a brand” will be discussed.
Frequency
The term “frequency”, as used in this study, refers to the number of posts placed by a brand on Twitter. The frequency says something about the intensity with which the brand is present on Twitter (Murdough, 2009).
According to Zarella (2009), Twitter users who tweet between 10 and 50 times a day have more followers than those users who tweet either more or less frequently, in order not to overload or not being visible for them. Comm and Robbins (2009) suggest that frequently posting tweets plays a valuable role in creating a relationship. Moreover, the article of Haghirian and Dickinger (2004) suggests that the number of advertising messages received via mobile devices is of interesting value for the consumer. Ducoffe states that informativeness and entertainment value of advertising information should decline with repetition because the information will be saturated with the information by the audience, thereby decreasing its value (Ducoffe, 1995). As the amount of promotional communications growths, the positive attitude of the individual towards the promotional message will increase (Tellis, 1997). However, due to a small amount of academic literature available on the frequency of posting tweets, above finding are considered as most relevant to compare with. It can be concluded, according those articles, that frequency plays an important role in creating value for the customer. However, the number of tweets posted should be subjected to a certain limitation in order to not overload the follower with information, as this can lead to boredom on the part of the consumer (Ha, 1996; Tellis 1997).
Content
discussions. The content of a tweet affects the attitude of a consumer towards a brand (Akara et al., 2011). As mentioned in chapter 2.3, the usefulness of the information plays a substantial role in building and maintaining a relationship between a follower and a brand. Twitter users can forward a post of others by using the “Retweet” button on their Twitter page. Every time a Twitter user retweets a post, it will appear in their followers’ Twitter homepage. Therefore, a well-‐thought-‐out content can be a very effective and interesting means for spreading tweets, as the tweet will often be retweeted on the base of the usefulness of the content.
Interactivity
2.6. Conclusion
Twitter is the most popular and the fastest growing social media tool on Internet. Users of Twitter can be divided in so-‐called elite users and ordinary users. The main reasons why they go online are to communicate their daily activities, search or share information about various topics, have small conversation and report news. Several reasons are mentioned in the literature as to why online users start following a brand: they may wish to receive updates of (future) products, to stay informed about activities, or receive promotions. Brands can use Twitter to build or maintain a relationship with customers; the most important principles for them to follow are those of providing useful information, ensuring that their visitors keep returning and maintaining the dialogic loop. Twitter provides an entirely new way to engage with customers, but it is not enough to simply join the conversation. Instead, targeting the right users is necessary to increase the efficiency of marketing. Twitter can be used when a brand wants to target the influencers, who can be found by looking at the number of follower, the number of mentions and the number of retweets. When the influencers are found en convinced, they could spread the message across all areas of the Internet to attract and inform (new potential) customers.
3. Brand equity
In order to examine the effect of the dimensions of Twitter on the value of a brand, relevant academic literature about brand equity will be presented in this chapter. The theoretical issues about brand equity first need to be discussed and different models should be analyzed. In the third paragraph the components used for this research will be presented and the hypotheses for this study will be given.
3.1. Introduction of brand equity
If we are to examine the possible effect of Twitter on the brand equity of a brand, we should first establish what we mean when we use the term “brand equity”. Clearly, “brand equity” is derived from the term “brand”. According to Alsem (2005), a brand can be described as a name, symbol, letter or sign (or a combination of these) that a company uses to differentiate their product from other kinds of products or services. A strong brand can create a competitive advantage for a company. Aaker (1991) has given the following definition of “brand equity”:
“Brand equity is a set of assets (and liabilities) linked to a brand’s name and symbol that adds to (or subtracts from) the value provided by a product or service to a firm and/or that firm’s customers”.
The Marketing Science Institute has provided another definition. They define “brand equity” as: “A set of associations and behaviours on the part of a brand’s customers, channel members and Parent Corporation that permits the brand to earn a greater volume or greater margins than it could without the brand name.”
More recently, Keller (2008) has proposed to define customer based brand equity (CBBE) as:
“The differential effect that brand knowledge has on customer response to the marketing of that brand”.
In other words: after a change in the marketing mix, a brand with high brand equity will receive another reaction from the consumer than a brand with low brand equity. The consumer will more readily accept a price increase for a brand with high brand equity (e.g. Coca-‐Cola) than for a brand with low brand equity (e.g. a private label). A common element in all the definitions is the incremental value of a product due to the brand name (Srivastava and Shovker, 1991).
impact on earnings and cash flow of a company. The study of Doyle (2000) found that brand equity has added value for the long-‐term prospect of a business and can lower the cost of capital. Moreover, it has effects on consumers’ perceptions of the branded products. Consumers will pay higher prices for a product with high brand equity (Keller, 1993), products have higher quality in the eyes of consumers, and high brand equity reduces the perceived level of risk and the search costs of consumers. Finally, Keller (1993) found that brand equity generates greater loyalty, less vulnerability to competitive marketing actions, less sensitivity to marketing crises, the gain of larger margins, the creation of greater trade cooperation and support, and an increase in marketing communication effectiveness.
3.2 Models of brand equity
Due to the enormous interest and relevance of brand equity, there exist several different models of brand equity in the literature. The main difference between the models is the perspective that is used: they are written either from a financial or from a customer based perspective (Lassar et al., 1995). In this research the focus will be on the customer based brand equity: because results can be measured through the consumers, it focuses more on the early stages of the developments instead of the financial effect, which is hard to measure and only manifests itself in the long term. Therefore, the financial perspective is not appropriate for this research. First the model of brand equity by Aaker (1991) will be discussed, and next the model of Keller (2003) will be explained.
3.2.1. Brand equity model of Aaker (1991)
Aaker (1991) defines brand equity as “the set of brand assets and liabilities linked to the brand, its name and symbols, that add value to, or subtract value from, a product or service”. A consumer perceives brand equity as the value added to the product by associating it with a brand name. Aaker (1991) identifies the following five sources as components of brand equity: brand loyalty, brand awareness, perceived quality, brand associations and other proprietary brand assets.
1. Brand loyalty
Brand loyalty is the extent to which consumers feel connected or attached to a brand. 2. Brand awareness
Brand awareness is the extent to which a brand is known; it represents the ability of a consumer to recognize or recall that brand as a member of a product category. It can provide a with company durable and sustainable competitive advantage.
