THE IMPACT OF SOCIAL MEDIA MARKETING ON INSTAGRAM TOWARDS BRAND EQUITY OF FASHION MICRO, SMALL AND MEDIUM ENTERPRISES: A QUANTITATIVE STUDY OF PARIRA CLAY

• Main Author: Chelsea, Karen
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/57363
• Institution: Institut Teknologi Bandung

Parira Clay is a local fashion Micro, Small and Medium Enterprise based in Bali, specialized in handmade polymer clay earrings. As an online based business, Parira Clay utilizes social media, specifically Instagram in implementing marketing activities. Parira Clay’s marketing purpose is aimed at better performance of its brand. However, with its rapid growth of market size and dynamic nature, fashion industry has developed a highly competitive environment which is an obstacle for businesses of this industry in achieving positive brand equity, Parira Clay is no exception. In this context, brand equity is defined as assets and liabilities that a brand produced to develop competitive advantage. Brand equity as competitive advantage is needed for businesses to be favoured and well-perceived by consumers. With the growing usage of social media for business purposes, social media marketing has become a medium that a lot of businesses, including Micro, Small and Medium Enterprises (MSMEs) rely on to communicate their brands to the consumers. More importantly, the purchase of goods online is specially dominated by fashion in Indonesia. For that reason, social media marketing has a potential to play an important role in determining one’s brand equity in the segment of fashion MSMEs, especially considering Parira Clay’s constant usage of Instagram in marketing its brand. Therefore, this research aims to analyze the impact of social media marketing on brand equity. Specifically, this research evaluates whether the current social media marketing of Parira Clay is effective enough to play an important role in determining its brand equity. Social media marketing of Parira Clay is assessed through six dimensions of Smith’s (2007) Honeycomb model, namely: identity, conversations, sharing, presence, reputation, and relationship. The dimensions represent important forces that act as the use and functionalities of social media marketing. Brand equity is assessed with Aaker’s (1991) customer-based brand equity (CBBE), consisting: brand awareness, brand associations, perceived quality, and brand loyalty. The relationship between social media marketing and brand equity is explained by Keller’s (2001) four step CBBE model, in which awareness towards a brand is achieved through exposing identity and partaking in conversations, brand associations are built through sharing brand-related contents and strong presence, perceived quality of a brand is affected by its reputation, and brand loyalty as a result of well-maintained relationships with customers. To test whether there is a significant impact of social media marketing on brand equity, a quantitative study was carried out as methodology. Data collection was done through online survey distribution to 103 respondents who followed Parira Clay on Instagram and have purchased its product. Data processing methods used were validity and reliability test, proceeded with assumption test based on Ordinary Least Square requirements, while the method to analyze the data was simple and multiple linear regression through Adjusted R-Squared, F-test, and t-test. The result of this research finds a significant impact of social media marketing towards brand equity of Parira Clay in four major ways: (1.) Parira Clay’s identity and conversation simultaneously impact brand awareness, but only its conversation individually impacts brand awareness; (2.) Parira Clay’s sharing and presence simultaneously and individually impact brand associations; (3.) Parira Clay’s reputation impacts its perceived quality; and (4.) Parira Clay’s relationships impacts its brand loyalty. Based on that, the result suggests that Parira Clay can strongly rely on its social media marketing use and functionalites in strengthening its brand equity. Parira Clay should see social media as a noteworthy medium in implementing its marketing when it attempts to achieve brand-related objectives. Social media marketing is strongly recommended to be taken into account and considered an important tool when building strong and positive brand equity