Chapter

The Intersection of Social Media and Customer Retention in the Luxury Beauty Industry

Authors:
  • University of Cumbria and University of Warwick
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Abstract

Debates regarding the ontological relationship between Social Media and customer retention have attracted considerable attention, particularly in the luxury beauty industry. The use of Social Media in the luxury beauty industry has caused many heated debates as it is seen as a form of interference in the exclusivity of luxury brands by limiting the physical and sensual contact between brand and customer. The purpose of this chapter is to provide some insights into how social media impacts on the cosmetics industry. Further, we provide evidence that the effective application of social media in the luxury beauty industry could lead to wider market share, and customer retention. The chapter concludes with some strategies that practitioners and researchers can adopt to develop effective marketing communication strategies, using social media platforms.

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Previous researchers have explained how offline word of mouth (WOM) influences consumer behaviour. Increasingly, however, consumers are turning to online WOM, especially online forums. In an online context, the research discussed in this article replicates the approaches taken to studying offline WOM. Grounded in social comparison theory, social network analysis and the theory of reasoned action, a mall intercept survey of consumers in Hong Kong showed that both similarity between a user's interests and a forum's topic and user attitudes towards the forum strongly predict purchase intentions as well as having an indirect effect through helping determine the forum's persuasiveness. Theoretical implications are discussed as well as practical implications for marketers and recommendations for further research. [ABSTRACT FROM AUTHOR] Copyright of International Journal of Advertising is the property of Warc LTD and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)
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With the emergence of participative social media, the ways in which stakeholders may interact with companies are changing. Social media and Web 2.0 technologies change gatekeeping mechanisms and the distribution of information. In consequence, organizations must realize that they are structurally embedded in online networks of interconnected and equitable actors. In this paper, we analyze how this change in today’s information and communication technologies may affect Corporate Social Responsibility (CSR) action. We utilize social network analysis to investigate the CSR blogs of three IT firms: Google, Hewlett-Packard, and Intel. The analysis reveals that their Internet-enabled social networks exhibit patterns of power law distribution and an uneven distribution of structural social capital among the actors involved, especially on the corporate side, which fails to fully engage with the network. We conclude by indicating the research implications of shifting social capital dynamics and by deriving implications for management and practice.
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There is an ongoing debate over the activities of brands and companies in social media. Some researchers believe social media provide a unique opportunity for brands to foster their relationships with customers, while others believe the contrary. Taking the perspective of the brand community building plus the brand trust and loyalty literatures, our goal is to show how brand communities based on social media influence elements of the customer centric model (i.e., the relationships among focal customer and brand, product, company, and other customers) and brand loyalty. A survey-based empirical study with 441 respondents was conducted. The results of structural equation modeling show that brand communities established on social media have positive effects on customer/product, customer/brand, customer/company and customer/other customers relationships, which in turn have positive effects on brand trust, and trust has positive effects on brand loyalty. We find that brand trust has a fully mediating role in converting the effects of enhanced relationships in brand community to brand loyalty. The implications for marketing practice and future research are discussed.
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In light of a growing interest in the use of social media marketing (SMM) among luxury fashion brands, this study set out to identify attributes of SMM activities and examine the relationships among those perceived activities, value equity, relationship equity, brand equity, customer equity, and purchase intention through a structural equation model. Five constructs of perceived SSM activities of luxury fashion brands are entertainment, interaction, trendiness, customization, and word of mouth. Their effects on value equity, relationship equity, and brand equity are significantly positive. For the relationship between customer equity drivers and customer equity, brand equity has significant negative effect on customer equity while value equity and relationship equity show no significant effect. As for purchase intention, value equity and relationship equity had significant positive effects, while relationship equity had no significant influence. Finally, the relationship between purchase intention and customer equity has significance. The findings of this study can enable luxury brands to forecast the future purchasing behavior of their customers more accurately and provide a guide to managing their assets and marketing activities as well.
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Traditional measures of customer satisfaction have been criticized for failing to capture the depth of customer responses to service performance. This study seeks to redirect satisfaction research toward an approach that encompasses an understanding of the role of commitment, involvement, and trust in the creation of engaged and loyal customers. A conceptual framework for segmenting customer-brand relationships based on the extent to which customers are either new or repeat purchase customers of a specific service brand is proposed. The approach provides a deeper and more complete understanding of the nature of customer-brand relationships and the processes by which engagement may be developed and fostered among differing customer segments.
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Although the definition of a ‘luxury’ brand is open for debate, the natural evolution of luxury, with luxury brands first being adopted by the affluent and wealthy before inevitably being translated and reinterpreted down to mass markets, raises new challenges for marketing strategists. Luxury brands need to stay in front of luxury consumers, through the discovery of new and different ways to give expression to their desires. This paper discusses the fundamental difference between communication and connection, and identifies a means of assuring the greatest long-term success for luxury marketers by connecting with the luxury consumer using brand-related experiences.
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Salespeople involved in the marketing of complex services often perform the role of "relationship manager." It is, in part, the quality of the relationship between the salesperson and the customer that determines the probability of continued interchange between those parties in the future. A relationship quality model is advanced and tested that examines the nature, consequences, and antecedents of relationship quality, as perceived by the customer. The findings suggest that future sales opportunities depend mostly on relationship quality (i. e., trust and satisfaction), whereas the ability to convert those opportunities into sales hinges more on conventional source characteristics of similarity and expertise. Relational selling behaviors such as cooperative intentions, mutual disclosure, and intensive followup contact generally produce a strong buyer-seller bond.
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Purpose – Customer engagement is a concept that has emerged recently to capture customers' total set of behavioral activities toward a firm. The purpose of this paper is to study the effect of customer engagement behaviors on perceived relationship benefits and relationship outcomes. Design/methodology/approach – An online survey of members of a gaming Facebook brand community, resulting in 276 usable responses from gaming customers. Findings – Customer engagement was divided into “Community Engagement Behaviors” (CEB) and “Transactional Engagement Behaviors” (TEB). In addition, three relationship benefits were identified: social benefits, entertainment benefits and economic benefits. The engagement behaviors largely influenced the benefits received. Furthermore, the mediation analysis results show that the influence of CEB on satisfaction is partially mediated by social benefits and entertainment benefits, while the effect of TEB on satisfaction is fully mediated through the same benefits. The effect of CEB on loyalty is mediated through entertainment benefits. Research limitations/implications – The findings are limited to one brand community. The findings have implications for further research on customer engagement. Practical implications – The paper's findings give ideas about how firms can utilize Facebook communities to enhance satisfaction and loyalty by offering the right kinds of relationship benefits. Managers are encouraged to study customer engagement behaviors on, and perceptions of, all channels and to utilize this information for the development of their social media strategies. Originality/value – Customer engagement is a newly introduced concept on which scarce empirical research exists, and there is very little evidence of its effect on customer relationships. This is the first paper to study customer engagement empirically on a Facebook brand community, and to relate customer engagement to relationship constructs.
Purpose – The purpose of this paper is twofold. In its initial stages it undertakes a review of the key fashion industry‐related themes emerging from the IJRDM. Subsequently, it reflects upon these themes in the context of luxury fashion brand Prada and in so doing identifies four key change phases in the evolution of the brand. Design/methodology/approach – Review of literature spanning 20 years. Findings – The paper identifies five overarching general themes. These comprise fashion retailer brands, the internationalisation of fashion retailing, the emergence and challenges of on‐line fashion retailing, changes in the supply chain and changes in consumption. Originality/value – The paper provides a valuable overview of the main research themes within the context of fashion retailing. In addition, it provides a critical insight into the changing nature of Italian luxury fashion brand Prada.