Contemporary Marketing Review Vol. 1(9) pp , November, 2011 Available online at

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1 DOES FAMILY AND VIRAL MARKETING HAVE ANY EFFECT ON BRAND EQUITY? ABSTRACT Norjaya Mohd. Yasin (corresponding author) UKM-Graduate School of Business Universiti Kebangsaan Malaysia Bangi, 43600, Selangor, MALAYSIA Abdul Rahman Zahari UKM-Graduate School of Business Universiti Kebangsaan Malaysia Bangi, 43600, Selangor, MALAYSIA The purpose of this study is to analyze the significance of family and viral marketing on the formation of customer-based brand equity. In the proposed model, the roles played by both family and viral marketing were examined as factors contributing to brand equity. This study focuses on four dimensions of customer-based brand equity that have been suggested by Aaker (1991). An empirical study was conducted among young adults (18 to 32 years old) in the Malaysian market. Data were collected from consumers of mobile phone and personal computer using non probability (mall intercept) method. The data was tested for its construct validity and reliability and multiple regression was conducted to test the hypotheses. The findings indicate that only viral marketing has a significant and positive influence on all dimensions of brand equity. Family recommendation was found to have a significant influence on two of the dimensions of brand equity i.e. perceived quality and brand loyalty. Meanwhile, all dimensions of brand equity namely perceived quality, brand loyalty and brand awareness/association were found to have a significant influence on brand equity. Keywords: Family influence, viral marketing, Brand awareness, Brand loyalty, Perceived quality, Brand associations, Brand Equity 1. INTRODUCTION Since its appearance in the 1980s, brand equity has been one of the main priorities in marketing research (Marketing Science Institute, 2002). Since then the marketers and firms have realized that brand equity is the important stem for the firms to create a strong brand in order to achieve product or service differentiation and competitive advantage. In consumer decision-making process, the family has always been the centre of getting information and advice. As such, the family has been considered as the main dominant influencer in consumer behavior especially in a country that has a tradition of collectivism as part of its existing culture. In Malaysia, living with family is something that is commonly practiced by all races and it is important for marketers to consider family as an important factor in developing their marketing strategies. Not many studies try to explore the roles of family on customer based brand equity and in fact only Moore et al., (2002), has directly addressed such effects. He claims that families may have a considerable influence on the customer brand relationship, and this may result in the formation of customer-based brand equity. This is why this study would like to explore more about the roles of family that enable to develop customer-based brand equity. In contrast, individuals who leave home especially the young adults may be involved directly or indirectly with viral marketing. Viral marketing is the alternative use of traditional word of mouth, in which the only difference between the two relates to the medium used to disperse the information. Viral marketing is applicable when someone using online communication, distributes the positive or negative comments or information with regard to certain product or brand names. When the information technology boom out in year 2000, many marketers felt that viral marketing could help them create brand equity by monitoring the firm-administered blogs and online chat forum. Since the internet is globally used, marketers may consider the internet as well as viral marketing as sources of customer-based brand equity. Due to the extensive use of internet in sharing information among young adults, marketers should focus on viral marketing as one of the new sources of customer-based brand equity. 19

2 Considering the importance of family influence and viral marketing, the main purpose of this study is to analyze the roles played by these two factors in the development of customer-based brand equity particularly in the context of consumer purchase of mobile phones and personal computer. 2. BRAND EQUITY AND ITS DIMENSIONS Brand equity from the financial perspective, is the total value of a brand which is a separable asset such as when it is sold, or included in a balance sheet (Feldwick, 1996). It can also be considered as the incremental cash flows which accrue to branded products over unbranded products (Simon & Sullivan, 1993). However, when marketing practitioners use the term brand equity, they tend to mean brand description or brand strength, referred to as customer brand equity to distinguish it from the asset valuation meaning (Wood, 2000). Aaker (1991, p. 15) defined brand equity as a set of brand assets and liabilities linked to a brand, its name and symbol, that add to or subtract from the value provided by a product or service to a firm and or to that firm s customers. He further suggests that brand equity consists of five dimensions: brand awareness, brand association, perceived quality, brand loyalty and patent and trademark. Brand equity has many positive effects to the firms and the stakeholders in term of customer loyalty and firm s performance. In his conceptualization, Aaker (1991) proposes that brand equity creates value for the firm as well as for the customer. This proposition has been well supported. For example, brand equity affects merger and acquisition decision making (Mahajan et al., 1994) and stock market responses (Lane & Jacobson 1995; Simon & Sullivan 1993) and determines the extendibility of a brand name (Rangaswamy et al., 1993). It also increases the probability of brand choice, willingness to pay premium prices, marketing communication effectiveness, and brand licensing opportunities, and decreases vulnerability to competitive marketing actions and elastic responses to price increases (Barwise 1993; Farquhar et al., 1991; Keller 1993; Simon & Sullivan 1993; Smith & Park 1992). In summary, from a managerial perspective, brand equity provides sustainable competitive advantages to the firm (Bharadwaj, Varadarajan, & Fahy 1993). From consumer s perspective high brand equity implies that consumers have a stronger association with the brand, perceive the brand to be of higher quality and are more loyal towards the brand (Chattopadyay, Dutta & Sivani, 2010). The customer-based brand equity definitions approach the subject from the perspective of the individual consumer. Researchers contend that for a brand to have value it must be valued by consumers. Then, the power of a brand lies in what consumers have learned, felt, seen, and heard about the brand as a result of their experiences over time (Keller, 2003). If the brand has no meaning to the consumer, none of the other definitions is meaningful (Keller, 1993; Cobb-Walgren & Ruble, 1995; Rio et al., 2001a). Brand names like Levi s, Manchester United, Nike, Nestle, KFC, MacDonald s and Kodak are examples of strong brands that have had incremental utility as a result of its brand name. As mentioned earlier, Aaker built his model of brand equity on five dimensions. For the purpose of this study, only four dimensions are briefly reviewed. The first dimension is brand awareness. Aaker (1991, p. 61) defines brand awareness as the ability of the potential buyer to recognize and recall that a brand is a member of a certain product category. Brand awareness plays an important role in consumer decision making by bringing three advantages: learning, consideration and choice advantages. Customer-based brand equity occurs when the consumer has a high level of awareness and familiarity with the brand and holds some strong, favorable, and unique brand associations in memory (Keller, 2003). The second dimension is brand loyalty. Javalgi & Moberg (1997) defined brand loyalty according to behavioral, attitudinal, and choice perspectives. While behavioral perspective is based on the amount of purchases for a particular brand, attitudinal perspective incorporates consumer preferences and dispositions towards brands. Definitions regarding the choice perspective focus on the reasons for purchases or the factors that may influence choices. These brand loyalty definitions were empirically researched into three major categories: multi domain approach, behavioral approach, and attitudinal approach (Rundle-Thiele & Bennett, 2001). Aaker (1991) defines brand loyalty as a situation which reflects how likely a customer will be to switch to another brand, especially when that brand makes a change, either in price or in product features. On the 20

3 contrary, Keller (2003), examines brand loyalty under the term brand resonance which refers to the nature of customer-brand relationship and the extent to which customers feel that they are in sync with the brand. Customers, with true brand resonance, have a high degree of loyalty, actively seeking means to interact with the brand and share their experiences with others. The third dimension is perceived quality which is defined as the customer s perception of the overall quality or superiority of a product or service with respect to its intended purpose, relative to alternatives (Zeithaml, 1988). It is a competitive necessity and many companies today have turned customer-driven quality into a potent strategic weapon. They create customer satisfaction and value by consistently and profitably meeting customer s needs and preferences for quality. According to Parasuraman et al., (1985) there are several factors to be considered in order to analyze and measure perceived quality, such as reliability, serviceability, appearance, performance, durability etc. The fourth dimension is brand association which is defined as anything linked in memory to a brand (Aaker, 1991, p. 109). Besides that, brand associations may be seen in all forms and reflect characteristics of the product or aspects independent of the product itself (Chen, 2001). The importance of brand name associations, for instance, is emphasized by Rio et al. (2001a) in obtaining differential advantages. Product associations and organizational associations are taken as the two mostly referred categories according to Chen s (2001) brand association typology. 3. SOURCES OF BRAND EQUITY Most companies utilize the marketing mix variables such as product, price, place and promotions as sources of brand equity. According to Norjaya, Noor & Osman (2007), brand equity cannot be fully understood without carefully examining its sources, that is, the contributing factors to the formation of brand equity in the consumer s mind. Although researchers have found several sources of brand equity such as advertising frequency (Chattopadyay, Dutta & Sivani, 2010), advertising intensity, price, intensive distribution, store image (Yoo, Donthu & Lee 2000), country-of-origin image (Norjaya et al., 2007), manufacturer s reputation (Norjaya, 2006). As consumer s decision making process is affected by many factors, marketers need to identify new sources that contribute and facilitate brand building. It is very important for marketers to identify these sources of brand equity so that they are able to effectively manage and sustain their brands. Managing these sources will make marketers succeed in developing high brand equity as well as generating financial gain. 3.1 Family Influence Traditionally, family is defined as two or more persons related by blood, marriage, or adoption who reside together (Schiffman & Kanuk 2010, p. 318). All such people including related subfamily members are considered as members of one family. The members of a household unit live together and interact to satisfy their personal and mutual needs. A family can also be considered as a central or dominant institution in providing welfare for its members. Besides, it provides a major influence on its members development to function as consumers particularly impacting the dynamics of decision-making. Other basic functions of a family includes economic well-being, emotional support, and suitable family lifestyles (Schiffman & Kanuk, 2010). Many marketers have realized the importance of family as the basic consumer decision-making unit and the roles played by the family members in the decision-making process. Family members are perceived to be a credible source of information. When the source is well respected and referred by the individual, the information that is passed through is more likely to be believable. Moreover, the immediate family is considered as the normative reference group for a child, in shaping the child s consumer values and behavior. In the context of brand equity, a previous study conducted by Gil et al., (2007), indicated that family as a source of customer-based brand equity. Family can give useful information before the purchase decision takes place. A family has been identified as the most important decision making and consumption unit (Assael, 1998); therefore, how a family makes decisions as a consumption unit has attracted the interest of marketers and marketing research over the years (e.g. Kim & Lee, 1997; Moore et al., 2002). 21

4 3.2 Viral Marketing In a developing e-commerce economy like Malaysia, word-of-mouth (WOM) has been said to be more influential on consumer behavior than other forms of marketing communications such as advertising and publicity. WOM has been shown to influence awareness, expectations, perceptions, attitudes, behavioral intentions and behavior (Ha, 2004) However, viral marketing is different from the traditional word of mouth. Generally, traditional word of mouth has been conceptualized and explored as interpersonal informational exchange between individuals familiar to each other (Brown & Reingen, 1987). An implicit assumption is that the receiver has inherent belief in the value of the WOM provider's information, either due to perceived similarities (Gilly et al., 1998) or perceived product or service category knowledge (Bansal & Voyer, 2000). In contrast, from the perspective of online context, there is typically no familiarity between senders and receivers of e-wom. This lack of familiarity between e-wom receivers and senders may heighten the potential for posting and use of fraudulent e-wom as well. Moreover, viral marketing or e-wom is a name applied to a group of family resembling marketing strategies that fully utilized the impact of Internet bubble economy in the mid of 90 s. This is why viral marketing has gained tremendous popularity with the introduction of electronic media, as these outlets dramatically facilitate interconnections between companies and potential buyers (De Bruyn & Lilien, 2004). The term viral marketing was developed by Juvertson and Draper in year It was first to explain the free service provided by Hotmail, beginning with its launch in Furthermore, viral marketing can be defined as making into a form of advocacy or word-of-mouth referral endorsement from one client to other prospective clients. Viral marketing is like a virus, information about the company and its brand message, goods or services is spread to potential buyers, who then pass the information along to other potential buyers such that a huge network is created rapidly (Dobele et al., 2005). In addition, it consists of encouraging individuals to pass on an message to others, thus creating the potential for exponential growth in the message s exposure and influence (Schiffman & Kanuk, 2010, p. 285). Viral marketing uses e- mail as the main tool because so many people routinely communicate with others through s. 3.3 Other sources of brand equity According to Keller (2008, p ), brand equity can be build up through the integrated marketing communication (IMC) namely media advertising, direct response advertising, online advertising, place advertising, point-of-purchase advertising, trade promotions, consumer promotions, event marketing and sponsorship, publicity and public relations and personal selling. In addition, Keller (2008, p. 280), had discussed about the leveraging secondary brand associations to build brand equity. According to him, the secondary brand knowledge may be quite important to create strong, favorable and unique associations if existing brand associations are deficient in some way. One of the elements that can be linked to secondary brand knowledge to the brand is country of origin. Previous research by Norjaya et al., (2007) revealed that country of origin positively influenced brand equity. 4. CONCEPTUAL FRAMEWORK Consumer decision making is being influenced by many factors encompassing the marketing mix and non marketing mix variables. In the information search stage of a decision-making process, a consumer obtains information from various sources including family and friends. In many important purchases consumers consult their close family members first before making any decisions. Similarly, many consumers also rely on the information obtain through social media over the internet including s in which information are being spread out widely which is commonly known as viral marketing. In this study we try to look closely whether both family influence and viral marketing do contribute to the development of customer-based brand equity. The conceptual framework of brand equity that guides this study appears in Figure 1. This framework is built upon the conceptual framework for brand equity presented by Yoo et al. (2000) by incorporating family influence and viral marketing as the antecedents of brand equity. In this model, family influence and viral marketing are treated as the independent variables, the dimensions of brand equity as the mediating variables and brand equity as the dependent variable. The brand equity construct shows how individual dimensions of brand equity are related to brand equity. The antecedents of brand equity are related to brand equity through the mediation of the dimensions of brand equity. Therefore, to create, to manage, and to exploit brand equity, the 22

5 relationship between the dimensions of brand equity and brand equity, and the relationships between the antecedents and brand equity dimensions must be determined. Family Influence Brand loyalty Brand awareness Brand Equity Perceived quality Viral marketing Brand associations Figure 1: Conceptual framework From Figure 1 shown, this study will test on the effects of both family influence and viral marketing on dimensions of brand equity and eventually leads to the formation of brand equity. These two factors are identified from an extensive review of literature which indicates that they are relevant to the development of brand equity of a product. 5. METHOD 5.1 Data Collection This research focuses on Generation Y as targeted respondents. This segment of consumers are young and generally approach their opinions leaders for advice. It uses the mall intercept method of data collection and the respondents were captured at shopping malls in one of the major cities in the Klang Valley, Malaysia. Respondents were selected from the visitors of the shopping complex who were willing to complete the questionnaire. A small token was given to those respondents who participated in the study. The participants were real consumers who reported their consumption experience with one or two different product categories: mobile phones and personal computer. These products were chosen because they are commonly used by the respondents and most of them are very well-versed about these products. A questionnaire was developed for each focal product with similar questions. However, respondents were only required to answer one set of questionnaire pertaining to one product. The questionnaires were personally administered and the respondents answered in the presence of the researcher. The questionnaire includes some qualifying questions about the product (mobile phones and personal computer). The second part consists of items measuring the dimensions of brand equity and sources of customer-based brand equity: family and viral marketing. The third part consists of questions about brand equity and the last part contains items relating to demographic profile of respondents. 5.2 Measures This study utilizes multiple measures for each construct in the conceptual model in Figure 1. using five-point Likert Scale. Independent variables in this study are family influence and viral marketing. The measurement for family influence is adapted from previous study by Gil et al., (2007) which consists of six items. Five items were used to measure viral marketing which were adopted from the scale developed by Citrin (2001), Wixom and Todd (2005) and also from Wu and Shaffer (1987). Brand equity dimensions consist of four dimensions as suggested by Aaker (1991) that is, brand loyalty, brand awareness, perceived quality, and brand associations. Twenty one items were used in measuring brand equity dimensions while seven items were used to measure brand equity. The measurements were adapted from previous study conducted by Yoo et al., (2000). Data obtained was analyzed using some statistical tools contained in the statistical software. i.e., Statistical Package 23

6 of Social Science (SPSS) 16.0 for Windows. Descriptive analysis, factor analysis, reliability test and regression analysis were conducted. 6. PROFILE OF RESPONDENTS The study sample comprises of 300 respondents who vary on such demographic characteristics such as gender, age, ethnic, education level, job position level, income level and marital status. In spite of various demographic characteristics, all respondents are Generation Y aged between 18 to 32 years old. The detailed descriptions of the respondents are shown in Table 1. Table 1: Description of respondents Item Description Frequency n = 300 Percentage Gender Male Female Age 18 to 22 years old to 27 years old to 32 years old Ethnic Malay Chinese Indian Others Level of Education SPM/MCE STPM/HSE Diploma Degree Others Job Position Professionals Top Management Middle Management Lower Management Admin and Technical Support Student Others Income Level Below to to to and above Marital Status Never married Married RESULTS 7.1 Exploratory Factor Analysis At first, factor analysis was used to categorize the large set of variables into a smaller and manageable number of dimensions or factors. Exploratory factor analysis was conducted in order to examine whether the items produce proposed factors and whether the individual items are loaded on their appropriate factors as intended. This analysis was conducted on all variables by running rotation matrix of direct oblimin. The items for every variable were grouped together and principle component analysis (PCA) using SPSS version 16.0 was executed on it. 24

7 From Table 2 shown below, the overall Kaiser-Meyer-Oklin (KMO) value for all variables is 0.924, which exceeded the recommended value of 0.6 (Kaiser 1970, 1974) and the Bartlett s Test of Sphericity (BTOS) reached the statistical significance, which is supporting the factorability of the correlation matrix. Furthermore, from Table 2 below, the communalities value or the estimates of shared variance among nineteen items of brand dimensions, five items of viral marketing, six items of family influence and seven items for brand equity are shown to be greater than 0.5. The factor analysis for all variables revealed the presence of eight components of eigenvalues exceeding 1 and contributed per cent to item variance. Two items were deleted during the process due to non existence value. All factors are labeled as brand loyalty, perceived quality, brand awareness/association and brand association pertaining to quality, viral marketing, brand equity, family buying frequency and family recommendation. Since the reliability coefficient for brand association pertaining to quality is below the acceptable level as suggested by Pallant.J (2007), where the values above 0.7 are considered acceptable and values above 0.8 are considered preferable, the variable is dropped from subsequent analysis. Table 2: Result of Exploratory Factor Analysis Loading TVE KMO BTOS Reliability Brand Loyalty I consider myself to be loyal.621 X would be my first choice.701 I will not buy other brand if X in the store.603 I will buy pc or hp regardless of price.633 X s brand comes first in my mind Brand Awareness/Association I know what X look like.667 I can recognize X among other brands.593 Some characteristics of X come to my mind quickly.630 I can quickly recall the symbol or logo of X.579 X has strong personality.633 I associate X with high technology Perceived Quality The likely quality of X is extremely high.641 The likelihood of X would be functioning is very high.693 The likelihood of X reliable is very high.726 X must be of very good quality.557 X is high quality.648 I am aware of X Viral Marketing Information about X are relevant.703 Data about X are up to date.666 Sources about X are accurate.759 Information about X are comprehensive and informative.769 Data and information about X are source credible and trustworthy Family Buying Frequency My parents/siblings have bought X for a long time.727 My parents/siblings buying X in many occasions

8 X has been at home since I was child Family Recommendation My parent's/siblings opinion is that X is a good brand.773 My parents/siblings recommended me to use X.798 When I left home, parents/siblings recommended me to buy X Brand Equity It make sense to buy X instead other brands, even if they are the same I would prefer to buy X even X's features are same with other brands If there is another brand as good as X, I prefer to buy X.678 It seems smarter to buy X compared with other brands.648 I would still buy X even the other brands have the same price.665 X is definitely my choice.711 I plan to buy X even though there other brands as goods as X Notes: TVE = total variance explained, KMO = Keyser-Meyer-Olkin, BTOS = Bartlett s Test of Spherecity Based on the results of exploratory factor analyses the hypotheses were stated as follows: H1: In the purchase of mobile phones and personal computers, family recommendation has a positive relationship with (a) perceived quality, (b) brand loyalty, (c) brand awareness/associations of these products. H2: In the purchase of mobile phones and personal computers, family buying frequency has a positive relationship with (a) perceived quality, (b) brand loyalty, (c) brand awareness/associations of these products. H3: The higher usage of viral marketing among young adults, the higher the (a) perceived quality, (b) brand loyalty, (c) brand awareness/associations linked to mobile phones and personal computers. H4: The higher the (a) perceived quality, (b) brand loyalty, (c) brand awareness/associations of mobile phones and personal computers, the higher the overall brand equity of these products. The reliability analysis was conducted to test the reliability of the variables. The results are also shown in Table 2 and indicates the variables namely brand loyalty, brand awareness/associations, perceived quality, viral marketing, family buying frquency, family recommendation and brand equity have good internal consistency with a Cronbach Alpha coefficient reported 0.820, 0.803, 0.859, 0.881,0.778, 0.861, and respectively. These coefficients are considered very good where all the variables has a reliability coefficient or above 0.7. Values of Cronbach Alpha above 0.7 are considered acceptable and above 0.8 are considered preferable as suggested by Pallant J. (2007). 7.2 Testing of Hypotheses The regression analysis was employed to test the relationships posited in the research model. Based on the conceptual model, the brand equity dimensions, treated as intervening variables that should have a significant influence on brand equity. Table 3 below summarizes the result of regression analysis of viral marketing, family buying frequency and family recommendation on perceived quality. The adjusted R 2 is 32.9 per cent which means that only 32.9 per cent variations of perceived quality is explained by the predictor variables viral marketing, family buying frequency and family recommendation. The adjusted R 2 value or the coefficient 26

9 determination measures the degree of predictive accuracy of the regression model in explaining the variation in the dependent variable. Only two independent variables namely viral marketing and family recommendation have shown a significant effect on perceived quality. Additionally, only viral marketing is significantly contributing to the prediction with F (3, 296) = , p < on perceived quality, while family recommendation is significantly contributing to the prediction with F (3, 296) = , p < 0.1. Viral marketing is found to have significant positive relationship with perceived quality at 99 per cent confidence level, while family recommendation has significant positive relationship with perceived quality at 90 per cent confidence level. From the results of regression analysis, there is enough evidence to conclude that family recommendation and viral marketing have significant influence on perceived quality and this support hypotheses 1a and 3a. Table 3: The predictive value of viral marketing, family buying frequency and family recommendation on perceived quality. Variables Beta Sig Tolerance VIF (Constant) Viral Marketing Family buying frequency Family Recommendation R Adjusted R F Statistics Significance Table 4: The predictive value of viral marketing, family buying frequency and family recommendation on brand loyalty. Variables Beta Sig Tolerance VIF (Constant) Viral Marketing Family buying frequency Family Recommendation R Adjusted R F Statistics Significance As indicated in Table 4, the adjusted R 2 for the regression model is 29.5 percent which means that only 29.5 per cent variations of brand loyalty is explained by the predictors viral marketing, family buying frequency and family recommendation. Viral marketing and family recommendation are found to have a positive and significant relationship with brand loyalty with F (3, 296) = , p < Thus, the results support hypotheses 1b and 3b. Table 5: The predictive value of viral marketing, family buying frequency and family recommendation on brand awareness/association. Variables Beta Sig Tolerance VIF (Constant) Viral Marketing Family buying frequency Family Recommendation

10 R Adjusted R F Statistics Significance Table 5 shows the result of the regression analysis of viral marketing, family buying frequency and family recommendation on brand awareness/association. The adjusted R 2 for the model is 27.5 per cent indicating 27.5 per cent variations of brand awareness/association is explained by the variations of viral marketing, family buying frequency and family recommendation as predictors. The result also shows that only viral marketing has a positive and significant relationship with brand awareness/associations. The model is significant at p = indicating 99 percent confidence in explaining the dependent variable, brand awareness/association with F (3, 296) = This finding substantively support H3c. In addition, from the results of all regression analyses above, the multicollinearity problem was minimal based on the variance inflation factor (VIF). The VIF included in the tables above shows the scores below two with the largest number of Multicollinearity problem may exist if VIF value is 5.0 or more (Judge et al., 1998). In addition, according to Neter et al., 1983; and Gujarati, 1995, collinearity is considered as a problem only if VIF exceeds 10. Since all the results reported in this study is below than 5.0 respectively, this shows that there is no serious problem of multicollinearity. Table 6: The predictive value of dimensions of brand equity on brand equity Variables Beta Sig Tolerance VIF (Constant) Perceived Quality Brand Loyalty Brand Awareness/ Association R Adjusted R F Statistics Significance The result of regression analysis of brand equity dimensions on brand equity is depicted in Table 6 above. Result shows that 52.7 per cent variations of brand equity is explained by the model using brand awareness/association, perceived quality and brand loyalty as predictors. The remainder 47.3 percent remains unexplained. It may be due to other predictors which are related to brand equity. Based on the result of regression analysis, there is enough evidence to conclude that variables perceived quality, brand loyalty, and brand awareness/association have significant influence on brand equity with brand loyalty as the largest contributor with a beta coefficient of DISCUSSION This study examines the role played by family and viral marketing on the formation of brand equity specifically the brand equity of personal computers and mobile phones. Based on the results of factor analysis, family influence consists of two variables namely family recommendation and family buying frequency. The relationship between these variables and the dimensions of brand equity is observed. From the results of regression analyses, there is enough evidence to conclude that family recommendation and viral marketing have significant relationship on perceived quality and brand loyalty. However, in determining the relationship between the independent variables and brand awareness/associations, only viral marketing has a positive and significant influence on brand awareness/associations. Family buying frequency, however does not seem to play an important role in the development of brand equity particularly in influencing those dimensions of brand equity. 28

11 The relationship between family and perceived quality is consistent with previous study by Gil et al., (2007) which revealed the positive association between perceived quality and family. These findings indicate that many consumers particularly the young generation refer to their family members and communications through the internet in determining the quality of product before actually purchasing them. Their decision to purchase is very much influenced by the recommendations made by their family members and virtual friends who serve as their opinion leaders or reference group. This statement is supported by past research by Chu Mei-Liu (2002), who indicates that teenagers in Philippines make discussions or share information through online before making a decision to purchase a mobile phone. Thus, the family remains the central or dominant institution in providing information for its members to function as consumers particularly in making purchase decisions. The recommendation from family and information from the internet and social media certainly influence young consumers in their perception of quality of products which may ultimately develop brand loyalty. Also, since young consumers today are very much involved in the usage and communication through the Internet, they obtain so much information which enhance their brand awareness and develop brand associations about products or brands. In testing the relationship between the dimensions of brand equity and brand equity, results shows that all the dimensions of brand equity which comprises of perceived quality, brand loyalty and brand awareness/associations have a significant and positive impact on brand equity as predicted. This finding further confirmed that the three dimensions of brand equity actually formed brand equity as suggested by Aaker (1991) and Yoo, Donthu and Lee (2000). In fact, brand equity is reflected in its dimensions. If a product s quality is perceived to be high, then the brand equity is high. Similarly, a high degree of awareness and loyalty among consumers towards a particular brand will lead to a higher brand equity of that brand. The results is consistent with the previous studies by Norjaya et al., (2007), Gil et al., (2007), Atilgan et al., (2005) and Yoo, Donthu and Lee (2000) which found that there is a positive relationship between brand equity dimensions and brand equity. Among these three dimensions, brand loyalty was found to be the main contributor to the development of brand equity. This is also consistent with previous research such as Yoo et al (2000) 9. CONCLUSION AND IMPLICATIONS This study clearly indicates that family and viral marketing to be among the major influencers in consumer decision making particularly in the purchase of mobile phones and personal computers among young consumers. Thus, the role played by family and viral marketing and the information from these sources would certainly have an impact on the brand equity of such goods. This study provides an empirical evidence that these two factors actually influence the formation of brand equity of mobile phones and personal computers. Results show that family recommendation and viral marketing has a positive and significant relationship with brand equity dimensions which in turn, influence brand equity. These findings has implications on marketing communications particularly the importance of the informal source of communications. Family and viral marketing are considered as informal sources of information. Very often, informal sources of information such as family, friends, neighbors, and relatives are perceived to be more trustworthy and thus have a strong influence on consumers consumption behavior. Moreover, these people have nothing to loose or gain in their purchase recommendations. They also serve as the frame of reference for shaping consumers values and behavior. Many consumers rely on informal sources and WOM communications in their purchase decisions such as selecting restaurants, travel destinations, hotels and many other products and services. Since these sources are seen to be credible source of communications whose information and advice are often sought after, marketers should treat them as the target audience in their advertising campaign. They have to ensure that their marketing communications reach these target audience who will then act as opinion leaders to the young consumers. With the widespread usage of the internet, informal sources also include people who influence one s consumption via online social networks and other Web forums (Schiffman & Kanuk, 2010). Marketers have long realized the power of word-of-mouth (WOM) communications among consumers because of its persuasive impact in influencing consumers. However, with the emergence of the Web and e-wom communications, the influence is even greater and information is spread even wider. From this study, both the traditional WOM and 29

12 e-wom prove to be a powerful marketing tool. Thus, marketers should consider using the social media in their advertising campaign in order to have a higher impact in their marketing communications. The social media mix such as blogs, feeds, social networking, Wikis, Facebook, Twitter can be utilized to enhance the impact of marketing communications. Marketers should also not only focus on developing brand awareness and positive associations of their brands through online but also managing the viral marketing carefully because electronic word of mouth has both positive and negative impacts. For this reason, the company also needs to caution about the impact of viral marketing and to develop viral marketing management (VRM) department which will control the impacts of viral marketing. Both WOM and e-wom can either hurt a company s reputation or enhance it. 10. LIMITATIONS AND DIRECTIONS FOR FUTURE RESEARCH There are several limitations to this study that can be addressed in future research. First, only two products were studied, that is, personal computers and mobile phone. Second, only two independent variables, family influence and viral marketing were examined. Third, the targeted respondents are only the Generation Y consumers. Future research may consider other products and services which are relevant to this segment of consumers such as sports items and education services. Future studies may also look into other possible sources of brand equity impacting various product categories. Similar studies can also be conducted on other consumer segments. REFERENCES Aaker, D (1991), Managing Brand Equity: Capitalizing on the Value of a Brand Name, Free Press, New York, NY. Aaker, D (1993), ``Are brand equity investments really worthwhile?'', in Aaker D.A. and Biel, A. (Eds), Brand Equity and Advertising; Advertising's Role in Building Strong Brands, Erlbaum, Hillsdale, NJ, pp Aaker, D (1996), Building Strong Brands, Free Press, New York, NY, p Atilgan, E., Aksoy, S. and Akinci, S. (2005), Determinants of the brand equity. A verification approach in the beverage industry in Turkey, Marketing Intelligence and Planning, Vol. 23 No. 3, pp Chaudhuri, A. and Holbrook, M. B. (2001) The Chain of Effects from Brand Trust and Brand Effect to Brand Performance: The Role of Brand Loyalty, Journal of Marketing, 65, Chattopadhyay, Tanmay, Dutta, R. N. and Sivani, Shradha. (2010). Media mix elements affecting brand equity: A study of the Indian passenger car market. IIMB Management Revie, 22, Citrin, A.V. (2001), Information quality perceptions: the role of communication media characteristics, Information and Learning, Vol. 17, pp Cobb-Walgren, C.J., Ruble, C.A. and Donthu, N. (1995), Brand equity, brand preference and purchase intent, Journal of Advertising, Vol. 24 No. 3, pp Diem G. N. (1997), The Definition of Family in a Free Society Libertarian Nation Foundation. Dobele, A., Toleman, D., & Beverland, M. (2005). Controlled infection! Spreading the brand message through viral marketing. Business Horizons, 48(2), pp Dobele, A., Lindgreen A., Beverland M., Vanhamme J. And Wijk R. (2007), Why pass on viral messages? Because they connect emotionally, Business Horizons, 50, pp Delgado-Ballester, E. and Munuera-Aleman, J. (2005), Does brand trust matter to brand equity?, Journal of Product & Brand Management, Vol. 14 No. 3, pp Farquhar, P.H. (1989), ``Managing brand equity'', Marketing Research, Vol. 1 pp Farquhar, Peter H., Julia Y. Han, and Yuji Ijiri. (1991). "Recognizing and Measuring Brand Assets" Marketing Science Institute Working Paper Series. Report No Cambridge,/VIA: Marketing Science Institute. Ha, H.Y, Factors influencing consumer perceptions of brand trust online, Journal of Product & Brand Management, Vol. 13 no. 5, pp , Hennig-Thurau T, Gwinner KP, Walsh G, Gremler DD. (2004) Electronic word-of-mouth via consumer opinion platforms: what motivates consumers to articulate themselves on the internet? Journal of Interact Market, 18: Hodgson R. and Birks S. (2002), Statistics New Zealand s definition of family, its implications for the accuracy of data and effectiveness of policy targeting, Centre for Public Policy Evaluation, Massey University. 30

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