Abstract: An enterprise organization need good brand equity to survive in a fiercely competitive market. Marketing communication plays an important role in establishing brand equity. The study aims to analyze the effect of Marketing Communication that consists of advertising, sales promotion, and eWOM on brand equity with brand image, brand trust, and brand loyalty as the intervening variables. This study employs a quantitative method with a sample of 314 respondents, who are consumers of smartphones. The data is analyzed with SEM technique with Amos 21 application. Results of the study indicate a significantly positive effect of advertising and eWOM on brand image. eWOM exerts a larger effect on brand image than advertising. However, sales promotion does not affect brand image. Sales Promotion and eWOM have a significantly positive effect on brand trust, while advertising has a significantly negative effect on brand trust. Brand trust has a significantly positive effect on brand loyalty. Nevertheless, the brand image does not affect brand loyalty. Meanwhile, brand loyalty has a significantly positive effect on the brand equity of smartphone products purchased by consumers. Of the three variables of marketing communication studied, eWOM has the largest indirect effect on brand equit. Show 1.IntroductionRapid globalization has resulted in the phenomenon in which people rely very much on
technology. This phenomenon has changed how people interact with others. Information has no longer been delivered verbally. Communication is made possible using technologically advanced communication tools that transfer and receive information quickly and easily. Technological advancement has contributed to the development of the smartphone trend in Indonesia. Currently, a smartphone is no longer a mere communication tool, but rather it is a tool for business, work, storage, and
entertainment. The continuous development of smartphones has led consumers to consequently update their smartphone. Thus, many teenagers make a repeated purchase to get the newest version of the smartphone with various rationales that range from meeting the scholastic need to merely earning a high prestige (Ahmed et al., 2011). 2. Literature ReviewMarketing communication is an important aspect of the whole mission of marketing and the determinant of the success of marketing (Shimp, 2003). According to Fill and Jamieson (2016), marketing communication provides information and makes potential customers realize the
products offered by enterprises. Marketing communication provides knowledge and comprehension about a brand. Communication can be used to persuade customers and potential customers about the benefits of making an exchange. Marketing communication can also strengthen the experience by reminding people about their needs or reminding them about the benefit of the transaction in the past by ensuring the consumers that they have to have other exchanges. Besides that, marketing communication is used
to ensure or make potential consumers or consumers feel comfortable before they make exchanges more frequently after purchase. With that in mind, we could propose that: 3. MethodIn the hypothesis testing, we surveyed by distributing the questionnaires to
respondents. Samples were collected with the purposive sampling technique. Totally 314 respondents were collected. The questionnaires were distributed online through Google form to the respondents who were the consumers who purchase a smartphone in Indonesia. The mean age of the respondents is 29 years. It means that most of the respondents belong to the millennial generation. On average, they use social media 2.5 days per week. In the hypothesis testing, the researchers employed the Structural
Equation Modeling (SEM) analysis. Table 2: Confirmatory Factor Analysis Data analysis suggests that each indicator or dimension that forms each latent variable indicates good results. They have a high loading factor, where each indicator is higher than 0.5. The score of the loading factor has to be higher than 0.50 (Hair et al., 2010). Figure 1: Path Analysis of SEM Model The significance of the parameter of each correlation in the SEM model was tested by confirmatory factor analysis (CFA). The correlation between the observed variables and the latent variables is presented in
Figure 1. According to Hair et al (2010), a good factor loading should be higher than 0.5 and ideally, it should be higher than 0.7. Based on the results of output goodness of fit statistics from the software of Amos 22 and the discussion about the goodness of fit, it can be said that SEM model with the software of AMOS 22 developed in this research is a good model as we can see in Table 3. The ratio of χ2/df is 2.375, normed fit index (NFI) with the value of 0.863, Relative fit index (RFI) 0.854. The incremental fit index (IFI), Tucker-Lewis index (TLI), and comparative fit index (CFI) all have a value above 0.9, which means they have a good fit. The root mean square error of approximation (RMSEA) with the value of 0.66, which is 0.05 ≤ RMSEA ≤ 0.08 indicates a good fit (Brown & Cudeck, 1993). Therefore, it can be said that the model developed to test the effect of social media usage and eWOM on purchase decisions mediated by perceived usefulness and trust are all Good Fit.The structural model, including the research hypotheses and paths, was examined using the maximum likelihood estimation procedure. The structural model reveals adequate goodness of fit with the data as presented in Table 4. Table 4: Results of Hypothesis The effect of Advertising on Brand Image Table 4 presents the results of the testing of the first hypothesis. They indicate that the correlation between advertising and brand image has shown a P-value of ***, and a regression coefficient of 0.37. the results imply that advertising has a significantly positive effect on brand image, where a higher rate of advertising will lead to a higher brand image of smartphone. Or in other words, hypothesis one (H1) that predicts the effect of advertising on brand image is accepted.Advertising is an effective driving power for a brand to deliver messages from marketers to consumers. Frequent display of creatively and attractively prepared advertising in different media will be more likely to be easier to remember and thus will create a positive perception of the smartphone brand. advertising as one of marketing communications can be used by marketers to develop dialog and relationship with consumers, as well as deliver a new identity of brand through the product appearance, name, symbol, etc. brand identity is closely associated with the brand image since brand image refers to consumers’ perception on a brand. The results of this study are in line with the studies conducted by Fard and Farahani (2015), Ahmad (2016), Thaichon et al (2013), and Martin (2017).The effect of Sales Promotion on Brand Image Results of the testing of the second hypothesis indicate that the correlation between sales promotion and brand image has a P value of 0.164 and a regression coefficient of 0.09. this result implies that sales promotion does not have any significant positive effect on brand image, where sales promotion for smartphone products does not improve brand image. Or in other words hypothesis two (H2) predicting that there is an effect of sales promotion on brand image, is rejected. this study indicates that enterprises that offer promotion programs to encourage customers to purchase as soon as possible, offer special promotion at a particular time (such as giving a discount and prize, launching a special edition, practicing interest-free credit purchase), does not have any effect on the brand image of smartphone. In this study, because the age of the respondents belongs to generation Z, they are more likely to be fanatics involving a particular smartphone brand and accordingly will purchase without expecting a special program of sales promotion. This is in line with the study conducted by Ahmad (2016) that indicates that among the variables of marketing communication only sales promotion does not affect brand image, different from the results of the studies conducted by Thaichon et al (2013), Fard and Farahani (2015), Martin (2017) that indicate the significant effect of all variables of marketing communication on brand image.The effect of eWOM on Brand Image Results of the testing of the third hypothesis indicate that the correlation between the electronic word of mouth (eWOM) and brand image has a p-value of ***, and regression coefficient of 0.39. this implies that eWOM has a significant effect on brand image. A higher rate of positive eWOM information will improve the good image of the brand of smartphone. Or in other words, hypothesis three (H3) predicting that there is an effect of eWOM on brand image is accepted. Among the three variables of marketing communication, the variable of eWOM has the largest effect on brand image.This study indicates that online good and positive talk that recommend and review the brands of the products of Smartphone will affect the brand image of the smartphone. This is in line with the study conducted by Jalilvand (2012) Thaichon et al (2013), Fard and Farahani (2015), Ahmad (2016), and Martin (2017).The effect of Advertising on Brand Trust Results of the testing of the fourth hypothesis indicate that the correlation between Advertising and brand trust has a P-value of 0.018, and a regression coefficient of -0.12. this result implies that advertising has a significantly negative effect on brand trust, where a higher rate of advertising will decrease the level of brand trust in the smartphone. Or in other words, hypothesis four (H4) predicting that there is an effect of advertising on brand trust is accepted.this study indicates that larger expense and intensity of advertising of the smartphone products will decrease public trust in the smartphone brand. This is because trust is developed with the expectation that other parties will behave to meet the need and desires of consumers. High expenditure on advertising in consumers’ perception implies that the brand fails to meet their needs and intentions. Consumers perceive how much the brand can meet the promise delivered in the advertisement. Although marketers intensely advertise the products, consumers’ trust declines. The finding is in contrast to the finding of the previous studies conducted by Torlak et al. (2014), Fard and Farahani (2015), Sadek and Tantawi (2016), Bakator, et al (2017) all of which suggested the presence of the positive and significant effect of advertising on brand trust. The effect of Sales Promotion on Brand Trust Results of testing of the fifth hypothesis indicate that the correlation between sales promotion and brand trust has a p-value of ***, and regression coefficient of 0.19. This result implies that sales promotion has a significant effect on brand trust. sales promotion for smartphone products may improve brand trust. Or in other words hypothesis five (H5) suggesting the correlation between sales promotion and brand image, is accepted.this study indicates that enterprises that offer promotion programs to encourage customers to purchase as soon as possible, provide special offers at a particular moment (such as discount, prize, launching of a limited and special edition, interest-free credit purchase), affect consumers’ trust in the smartphone brand. Of the three variables of marketing communication, sales promotion has the largest effect on brand trust. A short-term promotion program is more likely to improve consumers’ trust in the smartphone brand because, in reality, the promotion can directly be proven. This finding is in line with the studies conducted by Thaichon et al (2013), Fard and Farahani (2015).The effect of eWOM on Brand Trust Results of testing of the sixth hypothesis indicate that the correlation between the electronic word of mouth (eWOM) and brand trust has a P-value of 0.003, and a regression coefficient of 0.15. This result implies that eWOM has a significant effect on brand trust, where higher eWOM will result in a higher brand image of smartphone. Or in other words, hypothesis six (H6) predicting the effect of eWOM on brand trust is accepted. eWOM is the media to deliver various kinds of information and talk to many people through the web or blog. Good and online positive talks that recommend and review products or brands of smartphones will affect brand trust smartphone because consumers have got information from the web and feel sure and trust the review of the people who have tried the products. therefore, positive eWOM improves Brand Trust. This is in line with the studies conducted by Thaichon et al (2013), Fard and Farahani (2015). The Effect of Brand Image on Brand Trust The effect of Brand Image on Brand Loyalty this study indicates that the association in the mind of consumers when recalling the smartphone brand has no effect on consumers’ trust in the brand. In this study consumers’ association to the good reputation, attractive appearance, sophisticated technology, abundant benefits, good quality, a unique feature, good impression, prestigious use, easy recalling, and pronunciation do not have a direct effect on consumers’ loyalty to the smartphone brand. this study indicates that consumers’ perception about a brand has no direct effect on consumers’ loyalty to the brand through consumers’ brand trust to the purchased smart hone. This result is in contrast to the results of the studies conducted by Jian (2004), Anwar, A., et al. (2011). The effect of Brand trust on Brand Loyalty Brand trust is a key variable in the development of wants and maintenance of brand relationships in the long term with the consumers. this study indicates that improvement of brand trust in consumers with the belief that the brand is reliable, sell products as promised, the brand quality is consistently maintained, the brand that helps consumers solve their problems, the brand that meets the need of consumers, the brand ensures customers’ value and satisfaction, have an effect on the improvement of consumers’ loyalty to the smartphone brand. The large value of regression coefficient (0.983) between brand trust and brand loyalty implies that higher consumers’ trust in the smartphone brand will lead to higher consumers’ loyalty to the brand. Loyal behavior is reflected in the willingness of consumers to pay a higher price, making the brand the primary preference, and consistent reliance on the brand. Results of this study strengthen previous studies conducted by Berry (1983), Delgado et al, (2001), Chaudhuri & Holbrook, (2002). Jian (2004), Wu et al., (2008); and Anwar, et al (2011), all of which indicate a positive and significant association between brand trust and brand loyalty. The effect of Brand Loyalty on Brand Equity this study indicates that improvement of loyalty consumers shown by the brand preference, wiliness to pay a higher price than that of other brands, unwillingness to purchase other brands when the brand is absent on the shop shelf, heavy consideration before purchasing other similarly wanted brands of the smartphone, and
willingness to pay at any price to purchase the favorite smartphone brand, will affect the improvement of brand equity of the smartphone. 5. ConclusionAdvertising and eWOM have significantly positive effects on brand image. However, sales promotion has no effect on brand image. eWOM has the largest effect on brand image. It means that positive information delivered through eWOM will further improve the good image of the smartphone brand. Advertising has a negative and significant effect on brand trust. Higher advertising intensity will result in lower brand trust. Sales promotion and eWOM have a positive effect and significant on brand trust. Sales Promotion has the largest effect on brand image. Marketing communication with short-term incentives provides direct incentives to the consumers of smartphone. Therefore, the brand trust gets stronger. Brand image has a positive and significant effect on brand trust. Improvement
of positive association to a smartphone brand can improve consumers’ trust in the smartphone. Better association or brand image perceived with strength, uniqueness, and reliability of products will improve consumers’ trust in the smartphone brand. Brand trust has a significantly positive effect on brand loyalty. Improvement of consumers’ trust in brand shown by the belief that the sold products meet the promise, the brand quality is consistently maintained, and consumers’ satisfaction is
well addressed will improve consumers’ loyalty to the smartphone brand. Meanwhile, the Brand image has no direct effect on brand loyalty. However, brand image constitutes consumers’ brand trust. the brand trust further has an effect on consumers’ loyalty to the smartphone brand. ReferencesAaker, David . A . (1991), Managing Brand Equity : Capitalizing On The Value Of A Brand Name, Mc Graw Hill, Inc, New York. How does marketing communication contribute to brand equity?Marketing communications can contribute to brand equity in a number of different ways: by creating awareness of the brand; linking points-of-parity and points-of-difference associations to the brand in consumers' memory; eliciting positive brand judgments or feelings; and facilitating a stronger consumer–brand ...
What is brand equity in marketing communication?In marketing, brand equity means the worth of a popular brand that evokes a positive emotion in the customers when they see or hear about a brand. Brand equity influences the choice of marketing strategies that are adopted by a company.
What role does market communication play in the growth of a brand?Marketing communication helps move products, services, and ideas from manufacturers to end users and builds and maintains relationships with customers, prospects, and other important stakeholders in the company. Communication is vital to marketing because it brings everyone on the same page.
Will marketing communication effect the position of brand?Marketing communication plays a vital role in overall branding strategy of a marketer. Effective communication helps marketers to maintain an enduring link with consumers and in turn may enhance value and relationship capacity of their brands.
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