Online Brand Community

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Table of contents 1. Online brand community response to negative brand events: the role of group eWOM.............................. 1 Bibliography...................................................................................................................................................... 17

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Online brand community response to negative brand events: the role of group eWOM Author: Chang, Aihwa; Hsieh, Sara H; Tseng, Timmy H ProQuest document link Abstract: Purpose - Brand communities now play a significant role in building brand loyalty. Past researches focus on how brand community facilitates brand loyalty under normal market situations. Yet, limited research examines consumer responses to negative events within the brand community context. Drawing from social identity theory and the theory of involvement, the present study aims to reveal the role that group eWOM plays in influencing brand community members' evaluation on negative brand decisions. Design/methodology/approach - By using an experimental study, the current research adopts far brand extension as the empirical testing ground. Findings - This research illustrates that group eWOM's influence on brand community member's attitude toward the negative brand information is affected by member's level of brand community identification and brand involvement. When the group eWOM opposes far extension, high brand community identified members are driven by social creativity to resist negative impacts to the brand. However, when the group eWOM supports far extension, high brand involved members are strengthened by group eWOM to promote favorable brand evaluations and attenuate negative impacts to the brand. Practical implications - Firms should leverage the ingrained associations between brand community identification, brand involvement and group eWOM in affecting brand community's responses to insulate brand community from the impacts of negative events. Originality/value - The present study extends prior research on customer loyalty from an individual perspective to reveal the significance of group dynamics in influencing brand community's response to negative events. Full text: 1. Introduction Brand community as a social aggregate has drawn the attention of brand fans and has become increasingly prevalent. Marketers who recognize the value of brand community have begun to either build or facilitate developing offline brand communities and online brand communities (OBC) to encourage customer engagement and foster greater brand loyalty. Previous research on brand community has primarily focussed on how brand community facilitates brand loyalty under a normal market situation ([53] McAlexander et al. , 2002; [70] Schouten et al. , 2007), yet limited research investigated the influence of community on member brand attitude under negative events. However, as the business environment becomes more competitive, firms have greater chances to become exposed to negative events that may threaten customer-brand relationship. Crisis management has become increasingly challenging because the internet-facilitated word-of-mouth (eWOM) allows consumers to obtain information from widely dispersed groups of people ([52] Lee et al. , 2006; [65] Ratchford et al. , 2001). This easily accessible information could greatly affect consumer consumption decisions and brand attitudes. Whereas the power of eWOM is heavily studied, most researchers focus on eWOM from anonymous sources, in which the connection among senders and receivers are nonexistent ([31] Godes and Mayzlin, 2004; [71] Shang et al. , 2006; [29] Duan et al. , 2008), with limited research investigating the influence of eWOM generated from OBC, in which the relationships can be developed over time ([21] Brown et al. , 2007). Previous studies have asserted that the strength of relationship within OBC create a profound influence on the persuasion value of information ([74] Steffes and Burgee, 2009; [22] Brown and Reingen, 1987). However, OBC member response to group-generated eWOM is not well understood, thus a knowledge gap exists. This study attempts to contribute to the eWOM marketing literature by explaining the effect of group-generated eWOM on consumer decisions. Past research indicated that with a lack of social ties, consumers evaluate the persuasiveness of eWOM primarily on content characteristics ([80] Walther, 1996). We suggest that consumer 19 March 2015

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response to group-generated eWOM is affected by both group-level factors and individual-level factors. The rationale is as follows. Consumers join a brand community for the purpose of not only accessing information about the brand, but also enjoying the communal relationship with other brand admirers ([10] Bagozzi and Dholakia, 2006). As [24] Carlson et al. (2008) contend that consumers who join a brand community may "feel a sense of community as a result of identifying with the desirable characteristics of a particular brand and/or the characteristics of other consumers who purchase the brand." Therefore, consumers may develop two types of identification through brand community, one at the group level, which is identification with the community and the other at individual level which is identification with the brand. Brand community identification (BCI) marks the strength of the social relationship within the community. In addition, members develop a psychological sense of brand community, even when no social interaction exists between brand users ([24] Carlson et al. , 2008). The brand, and not the communal relations among brand users, is the key to facilitating consumers' sense of community, and brand involvement (BI) marks the strength of this type of identification. Because a group exerts social influence on members by providing various functions such as perceived risk reduction, expertise reference, and provision of individual need for approval ([14] Bearden and Etzel, 1982), we propose that OBC member attitude toward brands is affected by group generated eWOM, and this influence varies with the level of BCI and BI. Drawing from social identity theory ([77] Tajfel and Turner, 1979; [76] Tajfel, 1982) and the theory of involvement ([63] Park and Mittal, 1985), the objective of this research is aimed to contribute in revealing both group-level factors and individual-level factors that influence group eWOM within OBC on individual response to negative brand events. This research adopts far brand extension as the empirical testing ground because as competition intensifies in the marketplace, brand extensions are increasingly used as an important strategy for firms to gain growth ([3] Aaker, 1997). Brand extension occurs when a firm uses an established brand name to enter a completely different product class ([2] Aaker and Keller, 1990). For example, Oral-B extends from toothbrush to toothpaste. For brands with strong loyalty, the temptation is to exploit that loyalty by stretching the brand to other product categories. Brand extension entering a product category that fits lowly with the original product classes are mostly considered far extensions ([13] Barone et al. , 2000; [87] Zhang and Sood, 2002). Far brand extensions (e.g. Harley Davidson Perfume) may generate a negative image that can damage evaluations of the brand extension and parent brand ([4] Ahluwalia, 2008; [27] DelVecchio and Smith, 2005). [1] Aaker (2002) also contended that the introduction of extensions far from the core business makes the parent brand lose credibility. The relevance of the scenario makes it an ideal testing ground; we thus propose that the implications of an OBC response to far brand extension be examined to shed light on the dynamics of group eWOM. 2. Literature review To address our research questions, we review the relevant literature. We first summarize the extant research related to the brand community, laying out the functions of online and offline brand community. Then we survey the research on BCI and BI, the two key constructs in our investigation of consumer's responses to the communication within the OBC. Following is the literature review about the recipient's responses to negative eWOM, which highlights major impacts on consumer's decision making. 2.1 OBC Online community is defined as an aggregation of self-selected people who share a common interest and communicate through computer-mediated mechanism ([71] Shang et al. , 2006; [36] Hennig-Thurau et al. , 2004). Common interests such as brands drive the social interaction among online community members ([81] Wang et al. , 2012), resulting in booming of OBC. [60] Nambisan and Baron (2010) contended that the difference between an online forum and an offline brand community may differ in the mode and frequency of customer-company interaction. Social interactions in offline brand communities are face to face, whereas social interactions in an OBC are mediated by electronic devices. Although OBC takes the social network of brand community onto the internet platform, the nature of OBC and offline brand community is similar; that is, "they 19 March 2015

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are both groups of consumers with a shared enthusiasm for the brand and a well-developed social identity, with members who engage jointly in group actions to accomplish collective goals and/or express mutual sentiments and commitments" ([10] Bagozzi and Dholakia, 2006, p. 45). Thus, brand communities, irrespective of whether they are found in offline or online environments, both demonstrate the principles of community: shared consciousness, rituals and traditions, and a sense of moral responsibility ([59] Muniz and O'Guinn, 2001). [62] Peris et al. , (2002) indicated that online relationships complement face-to-face relationships, but they do not substitute them. Therefore, marketers recognizing the power of shared customer experiences ([53] McAlexander et al. , 2002) often leverage event-marketing activities (e.g. jeep camps) to foster relationships in an offline brand community. Because OBC enjoys the superiority of the internet platform to interactive communication, it is an effective tool for strengthening relationships and fostering brand loyalty ([69] Schau et

al. , 2009). [88] Zhou (2011) and [54] McWilliam (2000) also find that OBC plays a greater role in helping firms build brand loyalty, increase market penetration, and create positive word-of-mouth. 2.2 BCI BCI signals the strength of consumer connection with the brand community and represents the individual construes himself or herself to be a member (i.e. "belonging" to the brand community; [7] Algesheimer et al. , 2005). Identification with a brand community induces consumers to agree with the norms, tradition, rituals, and objectives, and promotes its well-being ([18] Bhattacharya et al. , 1995). OBC identification indicates the strength of perceived closeness and emotional involvement with the OBC. Identification with OBC can be established through community engagement practices such as consumers retelling and sharing milestone memories of the brand and grooming practices dictating the appropriate way to care for the brand ([69] Schau

et al. , 2009). The sharing of meaningful consumption experience strengthens interpersonal ties and enhances mutual appreciation for the brand; thus, virtual ties become real ties, and weak ties become stronger. Nutella is a good example, in which passionate personal consumption experience is shared through the symbols and rituals related to the brand, thereby strengthening the connectedness between Nutella lovers and reinforcing identification with the OBC ([26] Cova and Pace, 2006). Social identity theory ([77] Tajfel and Turner, 1979) shed light on how BCI is formed. The theory asserts that people define their self-concept using their connections with social groups. Group members distinguish between themselves and those who do not share such affiliations through a categorization process, whereby the consumer formulates and maintains a self-awareness of his or her membership within the community, emphasizing the perceived similarities with other community members and dissimilarities with nonmembers. This captures the consciousness-of-kind aspect of brand communities ([59] Muniz and O'Guinn, 2001). According to social identity theory, people exhibit need for positive social identity and tend to enhance the group superiority, therefore, in-group bias may thus occur; which is defined as situations that go beyond the objective evidence of the situation to show biased in-group favoritism over the out-group that is unjustifiable ([19] Brewer, 1979; [20] Brown, 2000). When social identity is threatened (i.e. negatively perceived), in-group members are likely react with three strategies: individual mobility - involves members leaving or dissociating themselves from their group; social creativity - involves altering one's perceptions rather than taking direct action; and social competition - refers to engagement in social action to promote changes in the status quo ([75] Tajfel, 1978; [78] Tajfel and Turner, 1986). The two most crucial factors that affect people's choices among strategies are the strength of group identification and their perceptions of the likelihood of individual mobility ([77] Tajfel and Turner, 1979; [83] Wright et al. , 1990). If people are highly identified with a group, they tend to adopt social creativity or social competition and tend not to use individual mobility ([73] Smith and Mackie, 2007, p. 223). Because high community-identifiers have their self-concept largely more embedded in the group than low communityidentifiers, the barrier to leave one's group for high community-identifiers is stronger than for low communityidentifiers ([77] Tajfel and Turner, 1979, p. 44). [77] Tajfel and Turner (1979) indicate social competition occurs 19 March 2015

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when group members hold a belief system of social change. Social competition occurs only when absolutely no mobility is possible ([73] Smith and Mackie, 2007, p. 223). The impossibility of getting out on one's own as an individual indicates the high impermeability between groups, and such example could be seen in between racial groups ([77] Tajfel and Turner, 1979). An OBC usually does not set limits for members to leave; hence, social competition is less likely to occur in our research context. Furthermore, social competition involves collective action such as strikes and protest marches from group members ([45] Kelly and Kelly, 1994). It may cost members high if they initiate group activity to fight against the brand's decision. As in the case of Nutella, many members suffer high emotional distress when Nutella prohibits members' action to set up online communities. A long fight between community members and the brand continues before the brand allows members to set up OBCs ([26] Cova and Pace, 2006). This example indicates that if members adopt social competition, it may cost them much effort and resources. Therefore, a social competition strategy is less likely to occur in our research context. Compared to social competition, social creativity is more likely to be adopted when individual mobility is not possible because the cost is relatively lower ([73] Smith and Mackie, 2007). For members with high BCI, changing thoughts incurs less cost than initiating collective action to fight brand decision. Based on the aforementioned discussion, we think social creativity is the most probable strategy used by members with high BCI to confront the identity threat resulting from the negative brand event. 2.3 BI Involvement is defined as a person's perceived relevance of the object based on intrinsic needs, values, and interests ([48] Krugman, 1966). [42] Johnson and Eagly (1989) defined involvement as a motivational state induced by an association between an activated attitude and a self-concept. BI indicates the consumer's perceived relevancy of a brand ([3] Aaker, 1997). Consumer involvement with an object (product or brand) is the consequence of multiple factors such as risk perception, importance of the object to consumers, and its capability to improve their lifestyle and self-image ([72] Sirgy, 1982). Thus, BI may also relate to brand identification, as [17] Bhattacharya and Sen (2003) postulated by stating that brand identification exists when consumers identify with and associate themselves with brands that reflect and reinforce their self-identities. High brand-involved consumers are more difficult to persuade to modify their enduring brand values ([42] Johnson and Eagly, 1989). Thus, high BI is accompanied by high brand commitment and brand loyalty ([50] Lastovicka and Gardner, 1979; [85] Zaichkowsky, 1985). Under low BI, consumers lack particular preference to a brand, perceive similarity among different brands, and see low personal relevance with the brand. 2.4 Negative eWOM An eWOM communication refers to any positive or negative statement made by potential, actual, or previous customers about a product or company, which is made accessible to an assembly of people and institutions through the internet ([36] Hennig-Thurau et al. , 2004). Past studies on eWOM have indicated that WOM influence is asymmetrical because a negative WOM has a stronger effect than a positive WOM on the brand evaluations of consumers ([9] Arndt, 1967; [58] Mizerski, 1982; [6] Ahluwalia et al. , 2000). Compared to positive information, negative information is perceived to provide more diagnostic information in assisting judgments ([5] Ahluwalia and Shiv, 2002), and it is perceived as more provocative ([68] Rozin and Royzman, 2001). Furthermore, evidence shows that dissatisfied consumers are involved in considerably more WOM behavior than satisfied consumers ([35] Halstead, 2002). As the amount of negative online consumer reviews increases, the product attitude becomes less favorable; in addition, high-quality negative online consumer reviews influence consumers more than low-quality negative online consumer reviews ([51] Lee et al. , 2008). The negative eWOM effect is also found on purchase intentions ([22] Brown and Reingen, 1987; [82] Weinberger et

al. , 1981). 3. Research hypotheses Group members develop a sense of moral responsibility ([59] Muniz and O'Guinn, 2001), which induces members to help each other and promote group well-being. When the brand adopts a far extension, which is a 19 March 2015

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potentially negative event due to difficulty in transfer of the original advantage to the new category ([43] Keller, 2008), the results may damage the brand equity and the status of the OBC. Thus, group members may perceive negative social identity. To cope with identity threat, they may act social creativity to avoid the derogation of OBC. The high brand community identified members (high community-identifiers hereafter), having strong connection with the OBC, are especially prone to react with social creativity, that is, they distort information to respond in favor of the brand to support brand decision. In contrast, low community-identifiers perceive less threat and are unlikely to induce social creativity. We therefore propose H1 as follows:

H1. In far brand extension situations, the extension evaluations of high community-identifiers are higher than those of low community-identifiers. People often follow group opinions when members of the group endorse these opinions. The phenomenon that members act in conformance to group opinion demonstrates group identity. Group compliance becomes embedded through socialization because new group members find benefit in observing the group norm ([12] Bandura, 1977). Adhering to such group consensus not only provides legitimacy in proper actions, but also makes people feel respected by others whose opinions they value. When the brand adopts a far extension that is likely to damage the brand image, yet if this decision receives support from the group, the group opinion insulates the negative effects to OBC members. Because the brand is the center of OBC, members basically hold a positive attitude toward the brand; thus, when they perceive a group consensus (in the form of eWOM) supporting a brand move, their reactions are likely to be similar - to support the brand. In this situation, the perceived identity threat caused by the negative event for members is likely to be lower. Both high communityidentifiers and low community-identifiers are likely to act congruently. In contrast, when group consensus is against the brand far extension, the higher community-identifiers are prone to conform to the group decision and agree with the group, thus have an even lower brand extension evaluation than the lower community-identifiers. We thus propose H2a and H2b :

H2a. When group eWOM supports far brand extension, the extension evaluations of high community-identifiers are non-significantly different from those of low community-identifiers.

H2b. When group eWOM opposes far brand extension, the extension evaluations of high community-identifiers are significantly lower than those of low community-identifiers. BI indicates the consumer-perceived relevancy of a brand ([3] Aaker, 1997). Consumers are highly involved when they sense that the attitude is highly associated with their self-concepts ([42] Johnson and Eagly, 1989). Self-enhancement theory ([66] Rogers, 1961) asserts that people are motivated in enhancing self-esteem and increasing their feelings of personal worth. This motive becomes especially prominent in situations that threaten one's self-esteem. For high brand-involved members, because the brand is a part of their self-concept, they tend to evaluate the brand in a more positive manner than low brand-involved members. We therefore propose

H3 : H3. In far brand extension situations, the extension evaluations of high brand-involved members are higher than those of low brand-involved members. Based on the heuristic-systematic model, people employ two types of information processing: heuristic processing and systematic processing ([23] Chaiken, 1980). Heuristic processing consumes little effort and infers or judges by relying on accessible information. Systematic processing expends comprehensive, effortful consideration to a wide range of information relevant to judgments. Systematic processing requires motivation and ability. Only highly involved people are motivated to undertake systematic processing ([23] Chaiken, 1980; [32] Griffin et al. , 2002). Mainstream thinking, which is represented by group eWOM, is likely to be processed systematically by highly involved members; thus, group eWOM exerts considerable influence over highly involved members. Therefore, when group eWOM supports brand extension strategy, the brand evaluation of highly involved members is likely to be upheld by group eWOM opinion and may take a positive attitude toward far brand extension. In group eWOM-opposing situations they are likely to be influenced by the group to adopt a 19 March 2015

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negative attitude toward far brand extension. Consequently, the evaluations of high-involvement members show a significant difference between the two situations. In contrast, low-involvement members who do not perceive self-relevance to the brand are less likely to process group eWOM systematically, and may even pay little attention to group opinion because BI in OBC is more related to the brand instead of to the group ([24] Carlson

et al. , 2008). Therefore, we hypothesize that their brand extension evaluations under the two group opinion situations have no significant difference:

H4a. High brand-involved member evaluations of the far extension are significantly higher in group eWOMsupport brand situation than in a group eWOM-opposing brand situation.

H4b. Low brand-involved member evaluations of the far extension are non-significantly different in both group eWOM-support and opposing situations. 4. Methodology 4.1 Design and measurements The experimental design of this research adopts far brand extension as the empirical testing ground because brand extensions are used as an important strategy for firms to obtain growth ([3] Aaker, 1997). We conducted an experimental study using a 2 (group eWOM: support, not support)×2 (product fit: low fit, moderate fit)×2 (BCI: high, low)×2 (BI: high, low) between-subjects design. We manipulated group eWOM and far brand extensions. BCI and BI are measured independent variables. The measured dependent variable is the extension evaluation. Perceived fit was measured for manipulation check purposes. All constructs were mostly adopted from previous research; the reference sources and items are listed in Tables I and II [Figure omitted. See Article Image.], respectively. All items were measured using seven-point scales. 4.2 Stimuli A pretest was conducted to select poor brand extensions from Starbucks. After a discussion with two brand researchers, ten potential brand extensions were selected. In all 62 valid questionnaires were obtained from undergraduate students in a Taiwan university responding to the perceived fit of the ten potential brand extensions. The result of the pretest indicated that perceived fit was the lowest for shampoo ( M =1.84, S =0.95) and moderate for watch (M =3.12, S =1.38). Therefore, shampoo was selected as the low fit extension experimental stimulus and watch as the moderate low fit extension experimental stimulus. The reasons to use two levels of low fit extension are for the replications (more than one low fit condition) and exploration purposeto see if there is difference of responses and hypotheses test results in two situations. 4.3 Subject OBCs of Starbucks in Taiwan were selected because of their numerous members, frequent interactions among members, and long membership duration. There are two major Starbucks OBCs in Taiwan, by using the coffee board of the biggest bulletin board system in Taiwan (PTT) to recruit participants we were able to reach members belonging to Starbucks' two OBCs (i.e. Starbucks BBS and Starbucks Fans Club Facebook). In total, 273 members participated in this study and had the opportunity to win cash gifts worth NT$100, NT$300, and NT$500. Nonmembers and incomplete questionnaires were dropped from the sample, and 263 usable questionnaires were obtained. For membership duration, more than half of the members belonged to the community for more than six months (60.8 percent). For frequency of visiting a community, more than half of the members came to the community over seven times in a month (57.8 percent). The sampling characteristics were as follows: 68.1 percent of members were women, 79.4 percent were from 20 to 40 years of age, and 81 percent of members were less than or equal to college age. The demographic statistics of respondents is shown in Table III [Figure omitted. See Article Image.]. There are 194 members in the Starbucks BBS and 69 members in Starbucks Fans Club Facebook. A series of χ2 -tests were conducted to determine if associations between the type of OBC and demographic variables exist. The results indicated that the type of OBC has no significant association with all demographic variables (p -values >0.10), except education (p 0.7; [61] Nunnally, 1994). To ensure measurement validity, confirmatory factor analysis (CFA) was conducted for the main research constructs: BCI, BI, brand extension evaluation, and perceived fit. The model fit was acceptable (CFI=0.92, NNFI=0.92, NFI=0.90, all >0.90; SRMR=0.07