EFFECT OF SOCIAL MEDIA MARKETING ACTIVITIES ON CUSTOMER LOYALTY IN E-COMMERCE INDUSTRY

Abstract

Social media marketing (SMM) is a prominent research stream over the past decade which delineates the varying aspects of customer relationships. The prominence of social media among users could be endorsed by 2.07 billion and 1.37 billion monthly and daily active users respectively on Facebook (Facebook, 2017) as of September 2017. As the prime objective of any marketing program is to boost stakeholders’ value and to develop and sustain strong relationships with customers (Kotler & Keller, 2016), and the foundation of SMM is also relationships; hence the purpose of this study is to examine the impact of perceived social media marketing activities (SMMA) on customer loyalty in an e-commerce context with special reference to e-retailing sites in India. Also, in the extant literature, there is a paucity of investigations on the impact of perceived SMMA on customer loyalty (Nambisan & Watt, 2011; Senders et al., 2013; Yadav & Rahman; 2017a). Various studies in an e-commerce context have also acknowledged the importance of SMM but there are limited studies like Zhang et al. (2016) which links SMM with customer loyalty in the e-commerce industry. In addition to it, there is also an absence of studies in an Indian context which investigates the impact of SMMA on customer loyalty (Yadav & Rahman, 2017a). Moreover, there is no scale in the extant literature to measure perceived SMMA in e-commerce. Presently, majority of the industries have adopted SMM in their marketing communication but industries like e-commerce are highly dependent on SMMA. E-commerce is also one of the fastest growing industries around the world (Casey, 2017). As e-commerce is a different industrial context in terms of both consumer and industry characteristics, there is a need to develop a separate scale that captures the perceived SMMA in E-commerce industry with special emphasis on e-retailing sites. Also, in India e-commerce is predominantly utilized for hotel bookings, travel ticket bookings, and e-retailing (IBEF, 2017). Extensive research has been conducted in the extant literature on hospitality industry and SMM but there is a dearth of studies on SMMA in an e-retailing context. Hence, the present research seeks to examine, with the help of a proposed measurement model, the influence of perceived social media marketing activities (SMMA) on customer loyalty via customer equity drivers (CEDs) in an e-commerce context with special reference to e-retailing iv sites in India. Perceived SMMA was considered to be a multi-dimensional construct and a scale was developed for it. The study adopts a sequential mixed-method research design that combines both qualitative and quantitative research methods in two phases. Qualitative methods were utilized to identify the various dimension of SMMA in an e-commerce context. Quantitative methods (EFA, CFA, and SEM) were utilized for initial and final validation of perceived SMMA scale and validating the proposed researched model of this study. Data were collected from students of University of Delhi who were active social media users. The results reflect that perceived SMMA have a positive influence on customer equity drivers (CEDs) i.e. value, brand, and relationship equity. Also all the three CEDs have significant positive influence on customer loyalty. Hence the findings of this study proves that perceived SMMA of e-commerce sites have positive influence on customer loyalty. The prime contribution of this research is that it is the first study which seeks to conceptualize, construct, and test a 15 item multidimensional perceived SMMA scale that can be used to measure perceived SMMA of e-commerce sites with special reference to e-retailing sites in India. Second, this research also measured the effect of perceived SMMA on customer loyalty, which bridges the major gap in the extant literature related to paucity of investigations on the impact of SMMA on customer loyalty. Though previous studies have tried to find a link between perceived SMMA and purchase intention and customer equity but there is no study measuring the effect of perceived SMMA on customer loyalty via customer equity drivers in an e-commerce context. Previous studies were also weak on developing a comprehensive framework with strong theoretical support. This study tries to fill this gap by empirically examining the effect of perceived SMMA on customer loyalty via customer equity drivers in an e-commerce context with the help of stimulus-organism-response (SOR) theory. In addition to this several managerial implications are also offered.