THE EFFECT OF INSTAGRAM ON CUSTOMER RELATIONSHIP, CUSTOMER EQUITY, AND PURCHASE INTENTION TOWARDS LUXURY FASHION BRANDS

• Main Author: Natiqa, Dewidya
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/57701
• Institution: Institut Teknologi Bandung

As the usage of online shopping platforms becomes more important for today’s society, luxury fashion brands are prompting to adopt online selling as their distribution channels, especially in adopting social media marketing on the Instagram platform. Social media gives opportunities to luxury fashion brands to reach a broader market without any distance and time and help them attract a younger generation that significantly impacts increasing profit and sales. However, social media usage brings a dilemma and hesitation to luxury fashion brands because of the different characteristics between them. Adding that, a lack of studies discusses how luxury fashion brands should use their Instagram to manage their customer relationship and customer equity. In response to this situation, this research was conducted to assess the effect of Instagram on building customer relationships and customer equity, which, in return, stimulating purchase intention. A quantitative approach through the questionnaire-survey method was performed to collect 300 online participants who have purchased luxury fashion products and follow luxury fashion Instagram of Brand Gucci, CHANEL, Louis Vuitton, and Dior. To analyze the data, the researcher used descriptive statistics, MANOVA-SPSS, and PLS-SEM. As a result, this research can answer the dilemma of using social media where two attributes of social media marketing significantly impact on building customer relationship and customer equity drivers, namely value equity, brand equity, and relationship equity. While at the same time, purchase intention is significantly influenced by customer relationship, brand equity, and relationship equity. Therefore, these findings are expected to be beneficial for luxury fashion brands to maximize their Instagram usage while delivering luxury value to the market.