A strategic communication framework to manage the effect of user-generated content on consumer-based brand equity of major retailers in the Cape Metropole

Abstract

A high degree of competitiveness exists between brands within many industries, both pre- and post-Covid-19. The retail industry in South Africa is characterised by fierce competitive behaviours between the various major retail brands as they jostle for a share of the shrinking disposable income of South African consumers, primarily due to high inflationary pressures. This has contributed to an increase in promotional and communication campaigns, at times overpromising and under-delivering, frequently resulting in poor service quality experiences. These often negative, and positive service quality encounters are subsequently shared on various social media platforms, categorised as user-generated content (UGC), predominantly damaging or enhancing the reputation of the retail brand. The ever-increasing volume of both negative and positive UGC is influencing the consumer-based brand equity of these brands, ultimately impacting on their financial performance. These major retail brands in the Cape Metropole of the Western Cape region generally lack a clear, integrated and comprehensive communication strategy that is able to manage the ever-increasing volume and influence of user-generated content, specifically, negative user-generated content on their brand equity. Previous studies have proposed models that have focused on the evaluation and monitoring of user-generated content and its corresponding effects on consumer-based brand equity. However, these were primarily focused on classifying user-generated content and its subsequent influence on brand equity but are lacking in terms of their focus on the possible response strategies to deal with user-generated content, in particular, negative user-generated content. This study endeavoured to determine whether user-generated content does influence consumer-based brand perceptions, and if so, to determine whether negative or positive UGC exerted the most influence on these perceptions. The data for the study was collected using a mono-method quantitative research approach, which included a sample of 513 Generation Y respondents who completed self-administered online questionnaires distributed using Survey Monkey. The inferential statistics used in the survey questionnaire was factor analysis and both the descriptive and inferential statistics were analysed using SPSS version 27. The first major finding of this study is that user-generated content does exert an influence on consumer-based brand equity, while positive user-generated content exerted a more significant influence than negative user-generated content. Other related findings of this study are that both positive and negative user-generated content exerted a similar influence on the elements that constitute brand equity, viz. brand credibility, brand loyalty and purchase intentions. A strategic communications framework (UG-5C Model) is proposed that could assist retail brands in dealing with the influence of negative user-generated content on consumer-based brand equity. The UG-5C model consists of five components, viz. customisation, community, consciousness, creation, and content, which if supported by both earned social media and secondary brand associations, could significantly reduce the viral effects of negative user-generated content on brand equity. The propagation of positive user-generated content, together with its integration into the overall communication strategy of the firm, supported by the UG-5C model, are the recommended strategies to manage the influence of negative user-generated content on consumer-based brand equity.