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The influence of online communication, word of mouth
and virtual community on online brand equity
Fei-Fei Cheng1, Chin-Shan Wu2, Hsiao Yen
3
Current study aims to investigate the possible factors that
influence online brand equity, which was measured by brand
awareness, perceived quality, brand association and brand
loyalty. The three predictors included in the research
framework are online communication tools (which include
online advertising and e-mail marketing), word of mouth and
virtual community. An online questionnaire survey was
conducted
and
the
results
suggested
that
online
communication tools can be used to establish brand
awareness and brand image; while virtual community is a
useful tool to create brand loyalty. Finally, word of mouth
had significant effect on perceived quality.
1. Introduction
More and more companies are establishing websites to offer a new channel for
business transactions. To be successful dot.com company must develop
feasible strategies that deliver both consumer and economic value (Porter,
2001). Aaker (1991) proposes that brand equity creates value for the firm as
well as for the customer. Although it might be very difficult to develop strong
brand equity for online companies because the competition is very intensive
and the consumers’ switching cost is quite low, brand equity is an important
source of competitive advantage for online companies. Unfortunately, there
lacks studies that investigate the determinates of online brand equity. Thus,
the objective of current study is to understand what factors will contribute to the
1
Dr. Fei-Fei Cheng, Institute of Technology Management, National Chung Hsing University, Taiwan.
E-mail: [email protected]
2
Dr. Chin-Shan Wu, Department of Information Management, Tunghai University, Taiwan.
E-mail: [email protected]
3
Miss Hsiao Yen, Institute of Technology Management, National Chung Hsing University, Taiwan.
E-mail: [email protected]
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online brand equity. The factors in this study mainly focus on the marketing
elements that include online marketing communication tools, word of mouth
and virtual community.
2. Methodology
The measurement of each construct was derived from existing literature in
which the four brand equity constructs all come from Washburn and Plank
(2002). There are three items for all the four constructs except brand
awareness which consists of two items. Measurement of the online
communication tools was adapted from Jensen (2008) which consist of six
questionnaire items. Finally, items for word of mouth were adapted from
Srinivasan, Anderson, and Ponnavolu (2002) while virtual community items
were derived from Sumeet, Kim, and Zheng (2006). All the items were
measured based on a five-point Likert scale with 1=strongly disagree and
5=strongly agree.
An online questionnaire survey was conducted to collect the necessary data.
Consumers who have ever purchased products from an well-known online
apparel store in Taiwan, Lativ, was invited to participate the survey.
3. Data analysis
3.1 Hypotheses testing
Regression analysis was conducted to test the relationships between variables.
Four independent regression with four dependent variables were conducted.
All the regression models were significant at p<0.001 level.
The results indicated that online communication tools (including online
advertising and e-mail marketing) significantly influence brand awareness and
brand image. Thus, current study provide evidence that advertisement can be
used to create the brand equity in terms of increasing brand awareness and
brand image. In addition, word of mouth had significant influence on perceived
quality, but had no effect on brand loyalty. This suggested that positive word of
mouth can enhance the online consumers’ perceived quality. However, if the
marketer wants to increase the consumers’ brand equity, establishing virtual
community to form a sense of family would be a more useful way than relying
on word of mouth.
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4. Conclusion
Most of the previous study that investigate the predictors of brand equity
mainly focus on the traditional brand. Studies on online brand are largely
ignored. Current study adopted the brand equity model to explore the possible
factors to create the online brand equity. The results suggested that online
communication tools, word of mouth and virtual community are all had
significant influence on brand equity in which online communication tools can
be used to enhance the brand awareness and brand association. Word of
mouth can result in perceived quality, while virtual community will form
perceived quality and brand loyalty.
Results from current study can provide practical implication for the online
brand marketers as different tools (e.g., advertisement, word of mouth, virtual
community) might play different role in creating brand equality. Thus, it is
suggested that the online companies should understand which part of the
brand equity they need to enhance in order to design appropriate ways to
communicate with the online consumers and establish brand equity.
Some limitations are associated with this study that provides directions for
future research. For example, the way to measure brand equity is perceptive
only from customers. If other type of data source such as financial
performance, the brand equity can be measured in a more objective way.
Second, this study only focus on one well-known online apparel brand and
thus limited the externalization of the research finding. Future studies are
suggested to compare the influence on online brand equity across different
industries in order to provide more understanding regarding the constituents of
online brand equity.
Acknowledgment
Funding of this research work is supported by the National Science Council
(grant number, NSC 99-2410-H-029 -041 -MY2), Taiwan.
References
Aaker, D. A. (1991). Managing brand equity: Capitalizing on the value of a
brand name. NY: The Free Press, Macmillan.
Jensen, M. B. (2008). Online marketing communication potential: Priorities in
danish firms and advertising agencies. European Journal of marketing,
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42(3/4), 502-525.
Porter, M. E. (2001). Strategy and the internet. HARVARD BUSINESS
REVIEW.
Srinivasan, S. S., Anderson, R., & Ponnavolu, K. (2002). Customer loyalty in
e-commerce: An exploration of its antecedents
and consequences. Journal of Retailing, 78, 41-50.
Sumeet, G., Kim, H.-W., & Zheng, R. J. (2006). Converting virtual community
members into online purchase customers. The Tenth Pacific Asia
Conference on Information Systems.
Washburn, J. H., & Plank, R. E. (2002). Measuring brand equity: An evaluation
of a consumer-based brand equity scale. Journal of Marketing Theory
and Practice, 10(winter 2002 ), 46.
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