See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/329686602

Instagram as a Marketing Tool for Luxury Brands

Article · June 2018

CITATIONS READS
3 5,538

1 author:

Saima Khan
University of Business and Technology
17 PUBLICATIONS   16 CITATIONS   

SEE PROFILE

Some of the authors of this publication are also working on these related projects:

Customer Lifetime Value View project

Consumer Loyalty View project

All content following this page was uploaded by Saima Khan on 15 December 2018.

The user has requested enhancement of the downloaded file.

 Int. J. Manag. Bus. Res., 8 (2), 120-126, June 2018

Instagram as a Marketing Tool for Luxury Brands

S. Khan
Assistant Professor, Department of Marketing, College of Business, Effat
University, Kingdom of Saudi Arabia

Received: 29 April 2018 Accepted: 22 May 2018

Abstract - Instagram is one of the fastest-growing online photo social web services
where users share their life images with other users, however the academic research
related to this media is limited. This study aims to measure the relationships between
Instagram marketing, brand equity, and customer behavior towards brand. The
research attempts to evaluate the relative importance of the components of Instagram
marketing regarding creating brand value and consumer preferences. Also, it tries to
analyze the main components of brand equity creation through Instagram marketing
and understand the effect of Instagram marketing and brand equity in creating brand
loyalty, brand preference, and on brands' possibility to ask a premium price for their
products.
Keywords – Brand Awareness, Brand Equity Brand Image, Brand Loyalty, Brand
Preference, Consumer Responses, Instagram Marketing, Price Premium

1. INTRODUCTION 2. Conceptuel Framework

Individuals spend more time on Instagram

than other similar sites, suggesting it is of The conceptual model of the study is as
importance to research this media type [1]. follows as shown in Figure 1.
Often, just the brand hashtag itself is Instagram Marketing
enough to have loads of engagement.
Luxury brands have already begun taking This study examines the Instagram
advantage of this highly visual medium. marketing efforts of different luxury
They have a large and devoted following brands from [2] five perspectives;
who are active on social networks. These entertainment, interaction, trendiness,
brands have big budgets for quality and customization and word of mouth.
creative photography and videography.
Entertainment is the result of the fun and
Their target audience is connected - 3 out
play emerging from the social media
of 4 luxury shoppers have a smartphone
experience [3]. [4] find that social media
which heavily influences their buying
users consume brand related content for
decisions. Gucci, the most popular brand
enjoyment, relaxation, and as a pastime.
on Instagram, post images that are simple
This study uses a survey to assess whether
and bright, always keeping in mind that
consumers find luxury brands' social media
most viewers are checking the site from
fun and interesting, and to subsequently
their smartphones. Their mix of celebrities,
measure entertainment.
products and conceptual images keep their
feed fresh and fun. Social media provide the latest news and
hot discussion topics and are also core

120
 Int. J. Manag. Bus. Res., 8 (2), 120-126, June 2018
product search channels. Consumers more customers are willing to pay for their brand
frequently turn to various types of social rather than another.
media to obtain information, as they
perceive them as a more trustworthy Brand loyalty
source of information than corporate- [15] describes brand loyalty as a decision-
sponsored communication through making unit's biased (non-random)
traditional promotional activities [5; 6]. behavioral response (purchase) over time
regarding one or more alternative brands
The level of customization describes the
out of a set of brands and as a function of
degree to which a service is customized to
psychological processes.
satisfy an individual's preferences [7] By
personalizing their site, brands can
customize and express individuality,
building stronger brand affinity and loyalty 3. Methodology
[8] In the social media world,
customization refers to the intended The objective of this study is to investigate
audience of the posted messages. the influence of Instagram marketing
efforts on brand equity creation and
Social media are ideal tools for eWOM,
consumer behavior towards a brand.
because consumers generate and spread
Designing a quantitative survey targeting
brand related information to their friends,
consumers and followers of prominent
peers, and other acquaintances without
luxury brands with significant presence on
constraints [2; 6].
Instagram. In addition to four established
Brand Equity social media brands:

The model of brand equity that [9] Chanel- 27.1 million followers; Louis
proposes is dominant, providing the link Vuitton- 22.8 million followers; Gucci-
between its two dimensions: Brand 22.7 million followers; Dior- 18.9 million
Awareness is the likelihood that a brand followers. One brand that more recently
name will occur to consumers as well as starting appearing in social media was also
the ease with which it does so. Brand chosen Hermes- 6.4 million followers as in
Image is the perception about a brand Figure 2.
which the brand associations in consumers'
Consumers who had made luxury brand
memory reflect. [10; 9, 11]; [12] support
purchases during the last year and who
that strong brand equity contributes to:
follow the brand on Instagram platforms,
increased brand preference willingness to
were approached for the survey. The
pay a premium price customer loyalty.
approximate time spent on Instagram per
This study therefore focuses on the
week by each respondent was also
influence of brand equity on three
recorded. Consumers from two main cities
important customer responses.
of Saudi Arabia: Riyadh and Jeddah were
Brand preference targeted for this study. The questionnaire
was translated into Arabic.
Brand preference is commonly measured
by asking consumers to indicate their The demographic profile of the
favorite brands from a category or respondents is as follows as in Figure 3
selection of brands. Previous studies on
luxury brands used specific brand
preference scales [13; 14]. 4. Analysis and Result

Price Premium Hypothesis 1. : Marketing efforts on

Instagram have a positive and direct
Price premium can be defined willingness
influence on consumer-based brand equity
to pay a premium price as the amount
(CBBE).

121
 Int. J. Manag. Bus. Res., 8 (2), 120-126, June 2018
H1 is tested with a structural equation between Consumer Responses and
model linking Instagram marketing efforts Instagram Marketing which led to the
to brand equity. The impact of Instagram testing of a comprehensive model
marketing on CBBE is significant at p < introducing brand equity mediation to the
0.001 level and accounts for 37.3% of the initial relationship as in Figure 5.
explanation of the brand equity variance in
Hypothesis 3: Brand equity (CBBE) has a
the tested luxury brands. The components
mediating effect on the relation between
of Instagram Marketing efforts are all
marketing efforts on Instagram and
statistically significant. The effect on brand
consumer response (CR).
equity is more on the luxury brand image
than on its awareness. The impact of As the model fit was acceptable, estimates
Instagram Marketing on Brand Equity is of the standardized regression weights,
significant at p < 0.001 level and accounts coefficients, and squared multiple
for 37.3% of the explanation of the brand correlations of the dependent variables
equity variance in the tested luxury brands. were calculated. The results highlight the
The components of the Instagram existence and relative importance of the
marketing are all statistically significant. link between Instagram Marketing efforts
The effect on brand equity is more on the and brand equity with a coefficient of
luxury brand image than on its awareness determination (R2 = 0.362) significant at
as in Figure. 4 p<0.05 level. Instagram marketing efforts
explain 79.8% variance in consumer
Hypothesis 2: Marketing efforts on
responses when mediated by brand equity
Instagram have a positive and direct
(CBBE) at p< 0.001 level as in Figure 6.
influence on the consumer preference,
willingness to pay a premium price, and In this model of relationship between
brand loyalty. Instagram marketing and consumer
responses in terms of preference,
The study verifies Instagram marketing
willingness to pay a premium price, and
efforts direct influence on consumer
loyalty with the mediation of CBBE, an
preference, loyalty, and willingness to pay
Instagram marketing strategy explains
a premium price, and this influence is
consumers' positive behavioral intentions
statistically significant (p <
towards luxury brands. The influence is
0.001).However, the coefficient of
mostly indirect and involves the prior
determination explains just 21.6 % of the
formation of a CBBE for luxury brands.
consequences of consumers' positive
The two components of brand equity are
behavior towards luxury brands .The
almost equally affected by the tested
findings raised the question of whether
luxury brands' Instagram marketing.
there was a mediating effect in the
relationship between CR and SMMEs [16], 5. Research Implications
which led to the testing of a This result means that Instagram marketing
comprehensive model introducing brand should not only be thought of as a means
equity mediation to the initial relationship of raising brand awareness and reaching
new customers, but also as an increasingly
The study verifies Instagram Marketing’s
important and serious brand image
direct influence on consumer preference,
building tool. Investments in brand equity
loyalty, and willingness to pay a premium
(online as well as offline) would strengthen
price, and this influence is statistically
Instagram marketing effects on customer
significant (p < 0.001). However, the
responses.
coefficient of determination explains just
more than 21.6% of the consequences of 6. Research Limitations
consumers ‘positive behavior towards
luxury brands. The main limitation of this study is its
generalizability beyond the luxury sector
The findings prompted us to test a and Saudi Arabia. While the results are
mediating effect in the relationship
122
 Int. J. Manag. Bus. Res., 8 (2), 120-126, June 2018
likely to be useful in the luxury sector, Era of Consumer Control, New York:
they may not be directly applicable to McGraw Hill, 2008
R. W. Schmenner, “How can service
other industries. The general nature of the
businesses survive and prosper,” Sloan
findings therefore needs to be confirmed in Management Review, Vol. 27, pp. 21-32,
other contexts. The study employed brand 1986, Issue 3.
awareness and brand image as dimensions K. Martin and I. Todorov, “How Will Digital
of brand equity. Future research could also Platforms Be Harnessed In 2010, And
incorporate other dimensions, such as How Will They Change The Way People
Interact With Brands?” Journal of
brand quality and brand associations, and Interactive Advertising, vol. 10, pp.61-66,
re-evaluate the brand equity creation 2010, Issue 2.
process. Lastly socio-demographic K. L. Keller, "Conceptualizing, Measuring, and
variables such as gender, age, income, and Managing Customer-Based Brand Equity,"
education, might have a significant Journal of Marketing, vol. 57, pp. 1-22,
January. 1993.
influence, or a moderating effect, on the D. Aaker, Managing Brand Equity:
conceptual model and could be included in Capitalizing on the Value of a Brand
future analyses for a more thorough Name. New York: The Free Press, 1991.
understanding of the studied phenomenon. K. L. Keller, “Brand Synthesis: The Multi-
Dimensionality of Brand Knowledge,”
Journal of Consumer Research, vol. 29, pp.
595-600, 2003, Issue 4
References K. L. Keller and D. Lehmann, “Brands and
Branding: Research Findings and Future
P. Sheldon and K. Bryant, “Instagram: Motives Priorities”, Marketing Science, vol. 25, pp.
for its use and relationship to narcissism 740-759, 2006, Issue 6
and contextual age. Computers in Human Y. Truong, R. McColl and P.J. Kitchen,
Behavior”, vol. 58, pp. 89-97, 2016. “Uncovering the relationship between
A. J. Kim and E. Ko, “Do social media aspirations and luxury brand preference”.
marketing activities enhance customer Journal of Product and Brand
equity? An empirical study of luxury Management. vol. 19, pp. 346-355, 2010,
fashion brand”, Journal of Business Issue 5
Research, vol. 65, pp.1480−1486, 2012. F. Vigneron and L. W. Johnson, "Measuring
E. Agichtein, C. Castillo, D. Donato, A. Gionis Perceptions of Brand Luxury'," The
and G. Mishne, Finding High-Quality Journal of Brand Management, vol.11, pp.
Content in Social Media. Proceedings 484-508, July. 2004
WDSM’08, 2008. J. Jacoby, “A model of multi-brand loyalty”,
D. G. Muntinga, M. Moorman and E. G. Smit, Journal of Advertising Research, vol. 11,
“Introducing COBRA’s: exploring pp. 25–30, 1971
motivations for brand-related social media R.M. Baron and Kenny, D. A., “The
use”, International Journal Advertising, moderator-mediator variable distinction in
vol.30, pp.13–46, 2011, Issue 1. social psychological research: Conceptual,
W. G. Mangold and D. J. Faulds, “Social strategic, and statistical considerations”,
media: The new hybrid element of the Journal of Personality and Social
promotion mix”, Business Horizons, vol. Psychology, vol.51, pp.1173-1182, 1986
52, pp. 357-365, 2009, Issue 4
C. Vollmer and P. Geoffrey, Always On:
Advertising, Marketing, and Media in an

123
Int. J. Manag. Bus. Res., 8 (2), 120-126, June 2018

Figure 1: Conceptual Model

Figure 2: Brand Responses

124
Int. J. Manag. Bus. Res., 8 (2), 120-126, June 2018

Figure 3: Demographic Details of Respondents

Figure 4: Test of Hypothesis 1

125
View publication stats

Int. J. Manag. Bus. Res., 8 (2), 120-126, June 2018

Figure 5: Test of Hypothesis 2

Figure 6: Test of Hypothesis 3

126