The Effect of Electronic Word of Mouth and subjective norms on brand equity

Document Type : Research Paper

Authors

1 Master of Business Administration, Faculty of Economics and Management, University of Tabriz, Iran

2 Associate Professor, Department of Management Faculty of Economics and Management, Tabriz University, Iran

3 Ph.D of Strategic Management, Faculty of Economics and Management, University of Tabriz, Iran

10.22034/jbar.2023.19744.4286

Abstract

Introduction: People's increasing use of social media has made customers communicate with each other without any time or place restrictions, and word-of-mouth electronic advertising is becoming more and more pervasive. word-of-mouth electronic advertising
(e-WOM) advertising has played an important role in influencing consumer brand perception. As the increasing globalization of markets, consumer oriented tendencies have become an important issue for multi- national companies outside their domestic market. Adjusting for globalization, increasing ethnicity, and increasing interregional competition also pose challenges for international marketing actors and policymakers. While domestic social media executives are eager to understand how to protect their brand, their foreign counterparts are eager to reduce consumerism and gain a foothold in another market. This research, using a marketing strategy framework, creates a new perspective for the study, the impact of word of mouth electronic advertising and subjective norms on brand equity through the mediation of consumer ethnocentrism
Methodology: The current research is practical in terms of its purpose, and its data collection method is also descriptive-survey. The research population consisted of all consumers of household appliances in Tabriz city. The data was collected through a standard questionnaire and from 384 consumers of home appliances in Tabriz city by random sampling method. Data analysis was also done through the structural equation modeling method and with Smart pls software and SPSS.
Results and Discussion: The findings of the research are manifold. The first hypothesis states that positive electronic word-of-mouth advertising has a positive and significant effect on consumer ethnocentrism. According to the obtained results, the path coefficient is equal to 0.019 and the significance T-value is equal to 0.315, which is smaller than 1.96, which indicates the non-significance of the effect of positive electronic word-of-mouth advertising on consumer ethnocentrism. The second hypothesis states that negative electronic word-of-mouth advertising has a positive and significant effect on consumer ethnocentrism. According to the obtained results, the path coefficient is equal to 0.230 and the significance T-value is equal to 3.796, which is greater than 1.96, which indicates the significance of the negative effect of electronic word-of-mouth advertising on consumer ethnocentrism. The third hypothesis states that positive electronic word-of-mouth advertising has a positive and significant effect on brand equity. According to the obtained results, the path coefficient is equal to 0.289 and the significance T-value is equal to 4.987, which is greater than 1.96, which indicates the significance of the positive effect of electronic word-of-mouth advertising on brand equity. The fourth hypothesis states that negative electronic word-of-mouth advertising has a positive and significant effect on brand equity. According to the obtained results, the path coefficient is equal to 0.045 and the significance T-value is equal to 0.601, which is smaller than 1.96, which confirms the null hypothesis and the effect of electronic word-of-mouth advertising on brand equity is not significant. The fifth hypothesis states that consumer ethnocentrism has a positive and significant effect on brand equity. According to the obtained results, the path coefficient is equal to 0.266 and the significance T-value is equal to 4.362, which is greater than 1.96, which indicates the significant effect of consumer ethnocentrism on brand equity. The null hypothesis of this hypothesis is not confirmed. The sixth hypothesis is that consumer subjective norms have a positive and significant effect on consumer ethnocentrism. According to the obtained results, the path coefficient is equal to 0.37 and the significance T-value is equal to 5.439, which is greater than 1.96, which indicates the significance of the influence of consumer subjective norms on consumer ethnocentrism. The seventh hypothesis states that the consumer subjective norms has a positive and significant effect on brand equity. According to the obtained results, the path coefficient is equal to the number 0.315 and the significance T-value is equal to the number 3.424, which is greater than the number 1.96, which indicates the significance of the influence of the consumer subjective norms on brand equity.
 Conclusion: This study suggests that companies try to identify and investigate the factors that cause positive word of mouth electronic advertising by managing the flow of electronic word of mouth, turning negative electronic word of mouth into positive word of mouth advertising, which in turn increases brand equity. Advertising has a very important role in influencing the way consumers perceive, which in turn affects consumer ethnocentrism. Negative electronic word of mouth reduces consumer ethnocentrism in that negative comments can reduce consumer trust, which in turn can reduce consumer ethnocentric tendencies. Positive electronic word-of-mouth advertising will further increase consumer belief in brand credibility and performance, which will result in increased brand equity.

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