BUS631: Brand Management

Digital Customer Engagement

According to the existing literature, customer engagement is a complex concept with cognitive, emotional and behavioral dimensions. Brodie et al.  define customer engagement as "a psychological state that arises from diverse experiences". Subsequently, Cheung et al.  conceptualize customer engagement as "the voluntary engagement of customers in interactions with brand," centering on specific levels of cognitive, emotional, and behavioral dimensions that occur in consumer-brand interactions. In addition, customer engagement reflects the motivational state of the consumer and appears as "motivated non-transactional behavior". Chen et al. and Chen et al. distinguish two CE orientations - rational and emotional CE, which lead to different behavior patterns, and indicate firms in the online market especially strive to increase customer engagement. Customer engagement is built on the development of digital technologies and social media, and its characteristics have changed subtly. What we focus on is how consumers perform in the online environment, i.e., digital customer engagement. The main features of digital customer engagement are specific online contexts, conversational interactions, and exchanges that go beyond the purchases or consumption of products or services. Mollen and Wilson describe online engagement as "a cognitive and affective commitment to an active relationship with the brand as personified by the website or other computer-mediated entities designed to communicate brand value. It is characterized by the dimensions of dynamic and sustained cognitive processing and the satisfying of instrumental value (utility and relevance) and experiential value (emotional congruence with the narrative schema encountered in computer-mediated entities)". Gavilanes et al. considers digital customer engagement as the interaction between consumers and brands in the online environment. Hollebeek and Macky  define digital content marketing's engagement as the dynamic process of brand engagement, namely cognitive engagement (i.e., a consumer's level of brand-related thought processing and elaboration), emotional engagement (i.e., a consumer's level of positive brand-related affect in the interactive process of digital content marketing), and behavioral engagement (i.e., a consumer's level of energy, effort and time consumers spend on using a brand). Eigenraam et al. classifies digital customer engagement practices into five distinct types based on a taxonomy of consumers, namely, fun practices, learning practices, customer feedback, work for a brand, and talk about a brand. The digital customer engagement research is increasingly segmented. Given these definitions, this study defines digital customer engagement as "the cumulative process by which consumers engage in diverse voluntary inputs to a brand in an online environment, which goes beyond the core transaction to build or maintain a long-term stable brand relationship".

Regarding the operationalized aspects of digital customer engagement, digital customer engagement is regarded as a continuum of brand-related activities from high to low, exhibiting different levels. Existing research confirms the impact of brand observable social media behaviors on digital customer engagement and that metrics such as likes, comments and shares can represent different levels of engagement . For example, Thompson and Brouthers divide digital customer engagement into share engagement behavior and click engagement behavior, arguing that the two have completely different characteristics. Share engagement behavior refers to advertising brand, product or service information through the sharing options provided by digital platforms; whereas click engagement behavior is where focal consumers measure corporate-generated content to improve their experience with a specific product or brand. Dhaoui and Webster divide customer engagement behavior on social media into five constructs, namely endorsement, feedback, recommendation, conversation, and consensus; while Kim and Yang and Srivastava et al. point out that each engagement behavior differs in value and commitment of resources. Like-level engagement is the simplest level. The digital value of comment-level engagement is higher than like, owing to comment is a behavior of interactive relationship and is related to the specific rhetorical context. Sharing-level engagement related to self-presentation as the highest level. Synthesizing approaches widely used by several scholars in the field, we consider it as a continuum of high and low levels, constructing digital customer engagement as a three-level structure on the DCE model proposed by Gavilanes et al., with (1) positive filtering: reactions to content showing positive emotional states (likes); (2) cognitive and affective processing: collaborative creation of content in the brand environment (comments); and (3) advocacy: stronger cognitive and emotional investment, value co-creation, publishing, and self-expression (shares).

Brand Social Media Strategies

Social media strategies have evolved based on web 2.0 thinking and digital technologies. Several category frameworks exist to classify social media strategies, all involving dimensions such as content arrangement, conversation. In subsequent work, Effing and Spil defines social media strategy as "a goal-directed planning process for creating user generated content, driven by a group of Internet applications, to create a unique and valuable competitive position". The key elements of a social media strategy include target audience, channel selection, goals, resources, policies, monitoring, and content activities. In light of the above research, we define brand social media strategy as "the process of developing and executing a set of activities by which a brand uses social resources to create distinct brand value". Brand content and brand response are core components of brand social media strategy. Therefore, we understand the effectiveness of brand social media strategy from the dimensions of content strategy and response strategy, based on the comparison of three content categories and three response categories.

Brand Social Media Content Strategies

According to Firm-Generated Content theory, firm-generated content (FGC) is a multidimensional construct. In terms of content characteristics, firm-generated content are divided into informative and persuasive content, which mainly reflect entertainment value and information value. Marketers divide social media content into information, entertainment, social and remuneration content, and argue that user interaction (e.g., likes, shares) varies according to the type of content. We adapt the definition of firm-generated content by Kumar et al. to the context of our study. We define brand social media content strategy as "brand-related content created by a brand on its official social media page, but also any cue that is intentionally designed to convey the brand's tone of voice and personality".

Lovejoy and Saxton proposed the ICA framework applying to social media functions: Information, Community and Action, which is also the mainstream social media content classification framework at present. In this paper, we combine the relevant content features of FGC and choose ICA framework as the brand social media content strategy classification. (1) Information, which mainly contains content that conveys brand-related information, focused events or news, facts, reports or industry knowledge relevant to the organization's stakeholders. This strategy favors a simple one-way exchange of information; (2) Community, which encourages stakeholder interaction, sharing and conversation. Community involves two main categories, acknowledgment of current and local events (e.g., holiday greetings) and recognition and appreciation to the consumers, which are primarily related to the "community building" element; "responding to public messages" and "collecting responses" are more directly related to "conversation"; (3) Action, which consists mainly of consumer appeals for product promotion, event promotion, and participatory promotions, such as contests, quizzes or competitions, rewards, and asking followers to do something specific to help the firm achieve its goals.

Previous research has shown that the amount and category of brand content published have an influence or interaction on customer engagement. The extent to which brand social media content strategies affect digital customer engagement varies. First of all, not all content strategies stimulate the same level of customer engagement. Chandrasekaran et al. state that the level of customer engagement varies by content category, with remuneration and social content category showing significant differential effects in the number of likes and shares. In the research by Dolan et al., informational content positively influenced the number of likes and shares, however, there was no evidence that informational content influenced the comments, while neither entertainment nor relational content, in the form of comment or share, demonstrated a relationship with digital customer engagement. Therefore, we assume that the different levels of digital customer engagement vary by content type.

H1: Community (vs. Information) has stronger effects on positive filtering (a), cognitive and affective processing (b) and advocacy (c).

H2: Action (vs. Information) has stronger effects on positive filtering (a), cognitive and affective processing (b) and advocacy (c).

Brand Social Media Response Strategies

Based on social presence theory, mediated communication is social in nature. Social presence is defined as "the degree of salience of the other person in the communication and the consequent salience of the interpersonal relationships". Short et al. put forward "the significance of the other when using communication medium of social presence and the significance of the resulting interpersonal interaction" from the perspectives of media. Social presence captures the interpersonal nature and relational orientation of communication. Social presence is an important perception in the media environment that provides a way to enhance communication or interaction between enterprises and consumers. Social presence theory considers advertisers presenting brands as "real" and positions them as the "contacts" in relation to consumers by actively and strategically enhancing social presence to facilitate online interaction and conversation. With the brands being the messengers, response strategies can be defined as "the communication process by which brands generate non-verbal and verbal cues in order to enhance intimacy with (potential) consumers". The social presence dimension involving interpersonal relationships is also particularly relevant to the study of brand information.

The three response strategies of social presence involve non-verbal and verbal cues generated or created by enterprises on social media. Response strategies consist of three categories: (1)Affective response identified with emojis, humor, and self-expression as key features that facilitate social interactions; (2)Interactive response involving asking questions, agreeing, showing appreciation, or supporting others in ways that help form a personalized impression of the interlocutor; (3)Cohesive response, which serves to maintain or build a sense of community or group commitment, reduce social distance, and enhance brand consensus. Previous research argues that social presence is related to consumer engagement. For Algharabat et al., social presence positively impact consumer brand engagement. Men et al.  and Yue et al. further identify response strategies as important factors that may facilitate or influence digital customer engagement and as the basis for explaining the relationship between brand social media response strategies and digital customer engagement. Yue et al. found that three response strategies have differential effects on different levels of consumer behavior. Among them, affective strategy is positively related to the number of likes and comments and negatively related to the number of sharing. To gain insight into the impact of brand social media response strategies on digital customer engagement, we take a brand behavior perspective, instead of a consumer perspective, focusing on how companies construct conversations, which differs from the existing information literature. We apply the framework proposed by Rourke et al. , using voluntary disclosures in place of the self-disclosure dimension of affective response to better reflect the characteristics that define them in this study. Voluntary brand disclosure, which includes a firm's ability to provide useful information that is attractive to stakeholders, transparency and openness are key aspects of disclosure. Information posted by enterprises on their social media pages, e.g., financial transaction disclosures, management decisions such as job appointments, social responsibility disclosures, environmental disclosures and brand crisis disclosures, may enhance stakeholders' sense of belonging. Given the above research, the level of digital customer engagement will also vary depending on the categories of response strategies. Therefore, we make the following hypotheses:

H3: Affective response positively influences positive filtering (a), cognitive and affective processing (b) and advocacy (c).

H4: Interactive response positively influences positive filtering (a), cognitive and affective processing (b) and advocacy (c).

H5: Cohesive response positively influences positive filtering (a), cognitive and affective processing (b) and advocacy (c).

Brand Image

In the field of branding research, Keller defines brand image from the Consumer-Brand Perception Framework as "the perception of a brand as reflected by the brand associations in the consumer's mind, which are those information points in the consumer's mind that are connected to the brand's information points and that contain the brand meaning to the consumer". Focusing on the social media context, the stereotype content model is interpreted as an appropriate element of brand image when brands reflect their interpersonal or social relationships and actively construct consumer brand relationships through social media. The mixed stereotype content model proposed by Fiske et al. assumes qualitative differences in stereotypes and prejudices of different groups, while arguing that how people perceive social groups are distinguished by two main dimensions, namely "warmth" and "competence". "Warmth" is defined as the perceived intentions of the social group / individual, and "competence" is the capability to pursue it. Various studies have tested and validated stereotype content model, applying them to a variety of social goals or social objects, e.g., from individual perceptions to national perceptions, and have shown that the two core dimensions (competence and warmth) guide people's decisions and interactions with other people and social groups. Kervyn et al. applied the stereotype content model to brand perceptions, where different perceptions of brands would be valuable predictors of how consumers behave toward different brands. On the one hand, when presenting both abstract and concrete information about a brand, "warmth" focuses on expressing the brand message at a more abstract level than "competence," meaning that the "competence" brand image is likely to drive people to look more at the performance characteristics of the brand, and consumers influenced by "warmth" will focus on information about the overall brand benefits, such as brand love or brand passion. Therefore, based on the mature social perception approach: the stereotype content model, the brand image framework is jointly interpreted in terms of two fundamental dimensions: "competence" and "warmth". "Competence" can be seen as an assessment of the "functionality" of a brand, related to objective benefits such as efficiency or reliability, as well as to the inherent characteristics of brand attributes (such as price, design, and quality), which are defined as "competence". Brand image is defined as "warmth" when the brand acts as a relationship builder, highlighting the symbolic benefits, quasi-human and self-expressive values of the brand, and attracting (potential) consumers in non-traditional ways or through quasi-social interactions. Therefore, we expect the impact on digital customer engagement to vary across image frameworks, with the effectiveness of warmth (compared to competence) expected to be more prominent on digital customer engagement.

H6: "Warmth" image (vs. "Competence" image) has stronger effect on positive filtering (a), cognitive and affective processing (b) and advocacy (c).

From the above discussion, even though brand social media response strategies may have some impact on digital customer engagement, this process may be moderated by brand image. The level of brand responsiveness in the "warmth" image framework is likely to be higher than that of "competence," as it conveys and presents a need to expect social recognition and acceptance, with a primary focus on the "voice of the customer" to bring up brand preference of consumer. "Competence," on the other hand, places more emphasis on the specialization of a product or service or the ability to highlight the strength of a brand in order to reinforce mutually beneficial values, for example, the company's global success or industry leadership, the implementation of the company's quality control program. As a result, "competence" is more informing in style, with fewer communication skills and lower levels of responsiveness. Previous literature has not identified how various types of brand image adapt on social media to promote digital customer engagement. We expect that brand social media response strategies that effectively drive digital customer engagement may vary by brand image, with "warmth" more likely to result in higher levels of digital customer engagement from brand social media response strategy.

H7: Brand image (warmth vs. competence) has a moderating effect on the relationship between brand social media response strategy and digital customer engagement.

Discretionary Purchases

Distinguishing from research perspectives that focus on product categories and functional attributes, this paper frames the types of discretionary purchases as experiential purchases and material purchases. The main purpose of experiential purchases is the acquisition of a life experience: an event or a series of events, a person's life experiences; material purchases refers to purchases made with the main purpose of acquiring material goods: tangible items that one can own. Several empirical studies have successfully demonstrated the differential performance of these two classifications of discretionary purchases in predicting the outcomes of various types of social and psychological experiments. For example, people derive more pleasure or happiness from freely chosen experiential purchases than from freely chosen material purchases. Furthermore, people tend to be more willing to share socially about experience-based consumption than material-based consumption, a difference that stems from users' perceived social approval of the purchase. Current research has extended to a new area primarily relevant to business, namely consumer effort, suggesting that consumers are more willing to make an effort to obtain experience-based consumption rather than material-based consumption. Additional views suggest that experiences offer consumers greater conversational potential than objects, and are closer to the self and more symbolic and socially significant than material things, considering over 70% of the daily conversations and posts on social media are about the self. Following this logic, the strategies adopted by brands on social media are seen as unique ways to connect experiential or material types of purchases. Discretionary purchases also reflect the consumer's purchase intention which in turn affects the strength of customer engagement for the brand. One of the main views of digital customer engagement is that "the participant conveys his/her personal perceptions or preferences to the brand or to others". Compared with material purchases, experiential purchases seems to be more conducive to digital customer engagement, as experiences are more unique than material. Thus, discretionary purchases is a key factor in conveying the brand messaging. After comprehensive consideration, these theoretical frameworks and findings do support the prediction that consumers generate more digital customer engagement and have a positive impact on experiential purchases, and that the greater exchanging potential between experiential and material purchases would explain this effect. Therefore, this study makes the following hypotheses:

H8: Experiential purchases (vs. Material purchases) has stronger effects on positive filtering (a), cognitive and affective processing (b) and advocacy (c).

H9: Discretionary purchases (Experiential purchases vs. Material purchases) have a moderating effect in the relationship between brand social media response strategy and digital customer engagement.