Social Media CRM For Brand Loyalty. (Dissertation Thesis)

Master of Arts in Marketing Dissertation
Middlesex University Business School Academic Year: 2010-2011 MANZIL MADHWANI

M00291693
Social Media CRM/ CRM 2.0 for Brand Loyalty? A case of UK Smartphone Market and Middlesex University Students.
Supervisor: Dr Fawaz Baddar January 2011
Project submitted in part fulfilment of the Degree of Master of Arts in Marketing Management.
EXECUTIVE SUMMARY: The research began with an aim to study brand loyalty concept in the social media age. In the social media age, a customer is a social customer and traditional rules of brand loyalty are not applicable and they keep on changing with technology. Social CRM / CRM2.0 emerged as a new concept in social media and CRM sectors in 2010 and as name suggests it is a combination of both social media and CRM and was conceptual till 2009. It is identified to be most closely linked concept with brand loyalty, in the current time frame and as it is very a fresh concept, there is hardly any research done on Social CRM and its probable effects on brand loyalty. This report makes an attempt to establish the effect of introduction of Social CRM system on the brand loyalty. The UK Smartphone market is selected as its current brand loyalty dynamics make it very much relevant to have predictions about brand loyalty in that market. For setting a reference of research, Facebook is considered as the social media on which Social CRM is proposed to be introduced in form of a Facebook Applicaiton. The e-loyalty framework was adapted and a new model that had Social CRM system/ Facebook CRM Application as a part of it was formed for research purpose. The effects of introduction of Facebook CRM Application on the components of e-loyalty model were explored to determine the effect of Social CRM on brand loyalty. Online and self administered survey methods were used to collect data from a sample that was representative of all Middlesex University students and 413 responses were collected. The questions were aimed precisely to find out
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answers to the research objectives. Descriptive, correlation and multiple regression techniques of data analysis were used. It was found that introduction of Social CRM had a positive effect on most of the constructs of e-loyalty framework like perceived usefulness of the service delivered by the brand, brand image and satisfaction. So introducing a Social CRM system contributes positively towards brand loyalty and
recommendations were made to the Smartphone brands in UK that they should look forward to invest in developing Social CRM systems as they could prove vital in 2011 by increasing a chance of making customers loyal to their brand.
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ACKNOWLEDGEMENTS: I would like to thank my supervisor Dr Fawaz Baddar, whose critical feedbacks always gave me a reason to do get better and improve the quality of work during the course of dissertation. He has a significant contribution towards my learned research skills, and ability of critical thinking the outcome of which is high quality and standards of the academic research. Further I am thankful to all the 413 respondents who spent time online and in campus for participating in the survey and made it possible to have a big sample size within just 3 days. Also thanks to my part time employers for their cooperation as they gave me required days off from work so that I could concentrate on writing the project. It would not have been possible without either of them.
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TABLE OF CONTENTS: i Iii Iv vii Viii
EXECUTIVE SUMMARY ACKNOWLEDGEMENTS TABLE OF CONTENTS LIST OF FIGURES LIST OF TABLES
CHAPTER 1: INTRODUCTION TO THE RESEARCH PROBLEM 1.1 Introduction 1.2 Investigation Sector 1.3 The Research Problem 1.4 Importance and Relevance of the Study in current times 1.5 Structure of Dissertation 1.6 Summary of Chapter 1
1 1 2 13 17 19 20
CHAPTER 2: LITERATURE REVIEW 2.1 Introduction 2.2 Brand Equity and Brand Loyalty. 2.3 CRM Systems for Relationship building and Brand Loyalty. 2.4 Web 2.0 and Social Media.
21 21 22 27 28
2.5 Brand Loyalty in Digital age/ e-loyalty framework and its 34 components. 2.6 Social Media CRM.
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37
2.7 Modified Model of e-loyalty/ Model of Social CRM and Brand 42 Loyalty. 2.8 Summary of Chapter 2 44
CHAPTER 3: RESEARCH METHODOLOGY 3.1 Introduction 3.2 Research Philosophy 3.3 Research Design 3.4 Research Method 3.5 Target Population 3.6 Sample Size 3.7 Sampling Method 3.8 Data collection equipment- Questionnaire Design. 3.9Ethical Issues 3.10 Summary of Chapter 3
45 45 45 46 47 49 49 49 50 51 52
CHAPTER 4: RESEARCH RESULTS AND ANALYSIS 4.1 Introduction 4.2 Reliability Analysis 4.3 Profile of Respondents 4.4 Descriptive Analysis 4.5 Correlation Analysis 4.6 Multiple Regression Analysis 4.7 Summary of Chapter 4
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53 53 53 55 56 61 62 64
CHAPTER 5: CONCLUSIONS AND RECOMMENDATIONS 5.1 Introduction 5.2 Conclusion to Descriptive, Correlation and Hypotheses testing 5.3 Conclusion to Study Aim 5.4 Implications 5.5 Limitations 5.6 Directions for future Research 5.7 Summary of Chapter 5
65 65 65 70 70 71 71 72
APPENDIX 1 REFERENCES
73 76
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LIST OF TABLES: Table 1.1 Handset Manufacturing Brands (international) and models 2010 3 Table 1.2 Facebook Statistics Table 1.3 Website used for social marketing Dec09/Jan2010 Table 1.4 How Facebook is used for social marketing Dec09/Jan2010 Table 3.1 Research philosophy and approaches Table 4.1 Reliability Analysis Level of activity Table 4.2 Reliability Analysis Attitude and effect scales Table 4.3 Profile of respondents Table 4.4 Brand Experience- Problems and Service website visits. Table 4.5 Descriptive Statistics of other variables Table 4.6 Pearson correlation factors Table 4.7 Pearson correlation factors Table 4.8 Regression analysis for hypotheses 1-3 Table 4.9 Regression analysis for hypotheses 4-5 Table 5.1 Conclusions to correlation tests Table 5.2 Conclusions to hypothesis testing 8 10 11 45 54 54 55 58 59 61 62 63 63 68 69
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LIST OF FIGURES: Figure 2.1 Brand equity and its components Figure 2.2 Levels of Brand Loyalty Figure 2.3 Model of e-loyalty Framework Figure 2.4 The collaborative platform for Social Media CRM Figure 2.5 Social Media CRM System Figure 2.6 Model of Social CRM and Brand Loyalty Figure 4.1 Range of number of Facebook Profile Friends and Likes Figure 4.2 Interaction with friends and brands Figure 4.3 Attitude towards socialising with the brand Figure 4.4 Switching probability 23 26 34 39 40 43 57 57 59 59
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Chapter 1: Introduction to the Research Problem
CHAPTER 1: INTRODUCTION TO THE RESEARCH PROBLEM 1.1 Introduction to topic: Brand loyalty has been considered as a central construct for obtaining sustainable advantages for brands and businesses in branding literature. Previous research on brand loyalty focuses on the components of brand loyalty and explores the relationship with the driving constructs like satisfaction, trust and loyalty. With introduction of web technologies in customer relationship management (CRM) and online services and support delivery led to research in e-CRM and how it can drive brand loyalty. Facebook within 5 years of formation reached its 500 million user mark in 2010 and is the highest visited website of 2010, which gives the marketers a platform to reach a huge target market on the social media.1 Further, social media stormed the world of internet and web 2.0 shifted the paradigm in internet marketing and has its own implications for marketers in reaching the interactive customer. Technology for computer mediated communications and social media upgrades at a rapid pace and the marketing constructs need to be revised with technology. Latest developments in e-CRM and social media, is an application formed by combining both technologies and is called Social Media CRM or CRM 2.0. An attempt has been made to explore how the Social Media CRM/ CRM 2.0 systems will affect the overall brand equity. Also research attempts to the effect of Social Media CRM on the formation of brand loyalty in the mobile phone market of young UK customers. Facebook is considered as a sample
Facebook (2010) Statistics | Facebook (online) Available from: http://www.facebook.com/press/info.php?statistics (Accessed on 14-12-2010).
social media. Similar research can be applied in parallel to other markets and other social media platforms as an expansion of the study. 1.2 Investigation Sector: 1.2.1 UK Smartphone Market: Globally the sales of mobile phones in 2010 increased by 43% and reached 417 million GBP at the end of September 2010 and the demand for smartphones is very high.2 There are 72.1 million mobile phones in UK which is 10 million more than the population. The mobile phones industry in the UK has grown rapidly in recent years. This market now accounts for approximately 40.3% of the revenue accrued by the entire
telecommunications market and the proportion of voice minutes on cellular networks is now a third of the telecommunications total. (Keynote, 2010). Smartphones represent 73.5% of the contract market in UK according to the monthly data recorded in June 2010.3 The report of Nielsen Wire also affirms by declaring that the highest numbers of smartphone users in Europe are from Britain.4 Market size of UK mobile phones determined from the Ofcom UK (2010) report says that the total retail sales of mobile phones was 16.9 billion GBP in 2009 and is projected to be 19 billion in 2013. Mobile phone operators revenues recorded in 2009 are, 11.6 billion GBP for voice calls, 2.9 billion GBP for texting and 0.9 billion GBP for data usage (Keynote, 2010).
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The Telegraph (2010) Mobile phone sale soar to 43 pc to 417m (online). 11th Nov, Available from: http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/electronics/8124008/Mobile-phonesales-soar-43pc-to-417m.html (Accessed on 14-12-2010).
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Gfk Retail and Technology (2010) Android Phones go from Strength to Strength in UK Contract Market 26th July, Available from: http://www.gfkrt.com/news_events/market_news/single_sites/006252/index.en.html (Accessed on 1412-2010).
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Neilsen Wire (2009) Brits increasingly wise to use smartphones as 10m+ browse mobile web (online). 16 th Nov, Available from: http://blog.nielsen.com/nielsenwire/global/brits-increasingly-wise-to-smartphones-as-10-millionbrowse-the-mobile-web/ (Accessed on 14-12-2010).
Classification: of mobile phone brands can be done by the Operating System as follows (Ofcom, 2010): Some mobile operating platforms are closed source like the one of Apples iOS and the other is Blackberrys RIM OS. The open source platform is used by Google for form its Android OS that is used by large handset manufacturers like Sony Ericsson, Samsung and small manufacturers like HTC, ZTE. Nokia uses its own OS called Symbian and Palm mobiles too own the Palm OS. Market share by operators: 27% for O2, 27% for Vodafone, 22% for Orange and 17% for T mobile (Keynote, 2010). Market share by handset manufacturers: The largest handset makers all with global operations and strong UK positions are listed in Table 1.1 (Keynote, 2010). Market shares are not included in the report deliberately for two reasons: Volume shares are usually quoted as the easiest market
measurement, but these belie the shift in the market towards highervalue handsets such as the iPhone and market shares, having been fairly steady in earlier years, were fluctuating dramatically in late 2009 and early 2010 due to the launch of more smartphones and Android phones (Ofcom, 2010).
Table 1.1: Handset Manufacturing Brands (international) and models 2010 Brand Apple HTC Models iPhone 3GS, iPhone4 Magic, Hero, Touch, Diamond2
LG Motorola Nokia Palm RIM Samsung Sony Ericsson
Cookie, Chocolate, Arena, Viewty Smart Dext, Aura N900, Xpress Music, E7, C7, E6 Pre Blackberry Bolt, Pearl, Curve, Torch Tocco, Genio, Jet, Omnia, Pixon W Series, Anio, Satio, Xperia Series
Source: Keynote (2010) Mobile Phone Market Report, 2010
If present growth sustained, Samsung and Nokia a market share of more than 60% of UK handsets in volume share. Motorola a former top there brand is under 10%. Sony Ericsson lost market share in 2009, and was overtaken in volume terms by LG a brand aimed at younger consumers (Keynote, 2010). Nokia already began its smartphone comeback with their new smartphone models, the success is very uncertain.5 Apple iPhone, holds less than 10% of volume sales, has a very high value share of both handset sales and total expenditure on mobile and usage (Keynote, 2010). GfK Retail and Technology in its report said that Android's share of the UK mobile contract market has grown from 3% in Q1 2010 to reach 13.2% in Q2 2010 with a staggering growth of 350%.6 1.2.2 Brand loyalty dynamics in the UK smartphone market: The news from intriguingnews.com7, realwire.com8, techreviews.com9 has referred to a report from WDS Global10 saying Mobile phone brand loyalty is
5
Fildes, J. (2010) Nokia begins smartphone comeback with new handsets BBC News (online). Sep 12th, Available from: http://www.bbc.co.uk/news/technology-11294363 (Accessed on 12-12-2010)
6
Gfk Retail and Technology (2010) Android Phones go from Strength to Strength in UK Contract Market 26th July, Available from: http://www.gfkrt.com/news_events/market_news/single_sites/006252/index.en.html (Accessed on 1412-2010).
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http://intriguingnews.com/wdsglobal-research-finds-mobile-phone-brand-loyalty-is-weak/ http://blogit.realwire.com/?ReleaseID=18817
very weak (Smith, 2010). The report details that 49% people said that price is a very important factor for purchase decision, 34% said that the applications and data systems in smartphones are very important to them, 24% have a problem on setting up emails, 17% face problems in setting up internet, 10% select on basis of design, 8% customers give up on a service without trying to find a resolution and 29% think the provided services support is ineffective (Smith, 2010). The key in the improvement of brand loyalty is that OEMs need to focus on all the point of contacts that influence the users brand experience, like retail experience, setup and accessibility of services and post sale support (Smith, 2010). The news from WAC.com11, moneyforyourphone.com12, itportal.com13 and many other mobile phone review websites of UK published an article about the brand loyalty in smartphone market and all referred to the research outcome of a research of leading firm GfK NOP.14 GfK NOP has published a Mobile Ecosystems - UK report for 2011 (Garner, 2010). All manufacturers face a huge potential to capture market share primarily because of two reasons. 37% of mobile phone owners in key global markets are looking to upgrade to smartphones on their next upgrade cycle. The majority of smartphone users (56% globally) are keeping their options open on
9
http://techviews.5idd.com/2010/11/ http://www.wds.co/
10
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http://www.warc.com/News/TopNews.asp?ID=27569 http://www.moneyforyourphone.com/News/index.php/2010/12/smartphone-market-subject-to-low-brand-loyalty/ http://www.itproportal.com/2010/11/29/little-brand-loyalty-smartphone-market-survey-shows/ http://www.gfknop.com/pressinfo/releases/singlearticles/006951/index.en.html
12
13
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their next upgrade with very few people declaring loyalty to their current smartphone ecosystem (Garner, 2010). Following is the list of on OS brands in high to low order of consideration of purchase. It shows the % of people who will consider the brand during next purchase.15 Apple (53%) Android (51%) Blackberry (33%) Windows Mobile (29%) Symbian (24%) Clearly Apple and Android are at advantage but things are rapidly changing at end of 2010 and the market share and brand loyalty is predicted to settle in 2011 with balance in mobile ecosystem. 1.2.3 Facebook: Facebook.com originated in 2004 to facilitate social interaction exclusively among college students. The site now includes more than 500 million users and is available for use by anyone with a valid email address. 16 Facebook operates by allowing users to select one or more networks to which they will belong, such as a specific high school or university, a geographical area or city, or a company (Pemptek et al., 2009). In marketing context, features that
15
Garner, (2010). The smartphone market is there to be won (online). Available from: http://www.gfktechtalk.com/2010/11/30/the-smartphone-market-is-there-to-be-won-in-2011-the-mobile-ecosystemwill-be-critical-to-driving-loyalty/ (Accessed on 14-12-2010).
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(Facebook, 2010). Statistics (online). Available from: http://www.facebook.com/press/info.php?statistics (Accessed on 14-12-2010).
Facebook brings on the user side and on the brand side is described in the following paragraphs. User Side: There may be thousands of members on the networks which people join, like a university, school, urban area and people within a professional organisation. Every user has to maintain a profile, which is a webpage that contains all the basic information like the graduation year of the person, home town, as well as personal information, like name and relationship status (single, married, committed) (Pemptek et al., 2009). A current status message
appears on the top of a profile and users may use this feature to inform others about what they are doing at that time. Users can designate their own friends and the person who is invited to become a members Facebook friend may accept or reject the request and in this way the user can have a control over his/her contacts on Facebook. It is suggested for security reasons by Facebook that it is very necessary that a user knows the person individually before he/she friends them on Facebook. The user has a control over what and how much information to post and visibility of that information by editable privacy settings. Limited access can be granted to specific people or networks by editing the privacy settings (Pemptek et al., 2009). Members of Facebook can upload pictures into a digital photo album and other users can be tagged (labelled by their name) in the photos. If the picture is not found relevant then the person can also untagg it and remove their names. It is also possible to do the same with videos by posting links of the videos (Pamptek et al., 2009). The members who can see the posts of pictures and videos can post comments below them. There are other options
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too for communication with other members like private messages which are similar to emails. The public message boards on the profile are called as wall and the friends can post public messages on them. Facebook members can create and join to groups that are formed on various topics (e.g., MA Marketing Management, Jan 2010). Events can be created on Facebook for inviting people to offline real interactions like meetings, parties, social gatherings etc. Users can also post notes about anything on their profile pages (Pemptek et al., 2009). Every user gets news feed, which appears on the user's homepage upon log-in, provides a list of actions that friends have recently undertaken, such as posting on walls or changing their relationship status. Also each user's list of actions on Facebook appears in his/her profile. Users may restrict the types of stories broadcast about them by these applications (Pemptek et al., 2009). Every user has an option to express his connection with a brand and can give Like to pages of brands and companies and join them on Facebook which is covered in following section. Table 1.2 shows some vital statistics of Facebook adapted from the latest statistics provided on the website in 2011.
Table 1.2: Facebook Statistics More than 500 million active users People on FB 50% of active users log in everyday 700 billion minutes per month
>900 million objects like pages, groups, events and community pages Activity on FB Average users connected with 80 pages, groups and events Average users creates 90 pieces of content each month Total more than 30 billion pieces of content share each month. Global Reach
More than 70 translations available on FB.
About 70 % of FB users outside US >300,000 users helped the translation of site thorough translate application.
2.5 million developers from 190 countries build platform 20 million applications installed every day. Platform External website diversion of 250 million people every month After launch of social plugins 10,000 new websites integrate with FB/day.
>2million websites integrated with FB, which includes 80 from Comsocre's US Top 100 websites and 50 from comScore's Global Top 100 websites
Source: Facebook (2010) Statistics17
Brand Side: A Facebook Page is a public Profile that enables brands to share their business and products with Facebook users. When a user gives Like to a page, he/she is connected with the brand and will get news feeds about the brands activity on Facebook just as they get information about their other connected friends. When the brands fans interact with their Facebook Page, stories linking to brands Page can go to their friends via News Feed. When these friends interact with the Page, News Feed keeps driving word-of-mouth to a wider circle of friends.18
17
(Facebook, 2010). Statistics (online). Available from: http://www.facebook.com/press/info.php?statistics (Accessed on 14-12-2010).

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(Facebook, 2010). Facebook Pages (online). Available from: http://www.facebook.com/advertising/?pages (Accessed on 14-12-2010).
Brands can use the advertisement feature of Facebook. Adverts can also be used to spread word of mouth. Brands have to choose their graphic, text and target audience. Information about their friends interaction with the advertised brands page can also be made available to the targeted user.19 Facebook fans can be turned into customers and vice versa and the following examples given by Facebook will make it clear how it is possible. If there is a restaurant or bar wanting to communicate through Facebook, detailed info like address and opening hours will help. A band or a film, adding songs and videos is a key. A brand or product, photos of your offering and hyperlinks independent reviews and diverting traffic on their own website will make an impact.20 Brands can upload an unlimited number of photos and detailed information. The Brands Profile picture can be seen by Facebook users (as a thumbnail which can also be a brand logo) in News Feed when their friends interact with the brand. Table 1.3 shows the favourability of various social media websites that can be used for marketing and Facebook naturally being at the top of the chart.
Table 1.3: Websites used for Social Marketing Dec 2009/Jan2010 Company% Facebook Twitter LinkedIn YouTube Digg Wikipedia Delicious
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Agency% 85 77 58 49 14 13 12 94 90 71 62 10 9 12
Facebook, (2010). Ads on facebook.com (online). Available at: http://www.facebook.com/advertising/ (Accessed on 14-12-2010).
20
(Facebook, 2010). Facebook Pages (online). Available from: http://www.facebook.com/advertising/?pages (Accessed on 14-12-2010).
10
MySpace StumbleUpon Yahoo! Answers Other
9 9 4 16
17 11 2 13
Base: 199 companies and 126 agencies

Source: Keynote (2010) Social Media Marketing 201021
The Page can be customised to a good extent by adding tabs for info, photos, applications, discussion boards, outside developers applications, videos. The more rich and engaging design of the Page, the more the possibility of connection with the customer. Following examples will make it further clear. The restaurant can add Table Reservations application and a film can add Movie Tickets application and make more sense of their presence on Facebook.22 Facebook Applications are the most interactive form of engaging with fans and customers. Building an application on Facebook gives the brands an opportunity to deeply integrate into the core Facebook experience.23 By leveraging Facebook's integration points brands can make their application feel native to the Facebook site; creating a seamless experience as users browse Facebook. A brands application can integrate with all aspects of the Facebook user experience, from the profile page to bookmarks and the news feed. When a user interacts with a brands application, the application can access the details of users from Facebook to create unique and customised experience of the user. Brands application can be integrated into Facebook by just following simple guidelines set by
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Keynote (2010) Social Media Marketing, 2010 (online). Available from: https://www.keynote.co.uk/marketintelligence/view/product/2387/social-media-marketing?utm_source=kn.reports.browse. (Accessed on 14-12-2010).
22
Facebook, (2010). Facebook Pages (online). Available from: http://www.facebook.com/advertising/?pages (Accessed on 14-12-2010).
23
Facebook, (2010). Facebook Applications (online). Available from: http://developers.facebook.com/docs/guides/canvas/ (Accessed on 14-12-2010).
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Facebook in different ways like streamline publishing, Like Button, Requests and Profile Tabs.24 The brands have their websites and most of them host the campaigns on their own website along with Facebook. The websites of brands are syndicated to Facebook. Syndication means they can deploy one or a combination of more social plugins of Facebook. The social plugin can be any of a Like Button, Activity Feed, Recommendations, Like Box, Login Button, Facepile, Comments or Live Stream.25 As already shown in Table 1.2, the traffic diversion to external websites is very high (250 million people per month). These diversions are mostly generated by the Social Plugins of Facebook and also a Facebook Page, Facebook Share, Facebook Connect and Facebook Advertisement give other options for diversion of syndication. From diversion and syndication, the latest technical efforts direct towards Integration if other websites in Facebook and specially the integration of CRM software of brands into Applications. Table 1.4 shows an example, for
which activities do companies use Facebook.

How Facebook is used for Social marketing Dec 2009/Jan2010 Agency Company% % Improving brand awareness and report Marketing Channel To publicise new content Brand Monitoring Gathering customer feedback Reacting to customer service issues Sales channel Marketing Intelligence
24
55 47 46 37 32 25 16 16
53 58 51 40 36 27 18 20
Ibidem.
25
Facebook (2010) Facebook Developers Social Plugins (online). Available from: http://developers.facebook.com/docs/reference/plugins/ (Accessed on 14-12-2010)
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HR None of above Other Base: 199 companies and 124 agencies

Source: Keynote (2010) Social Media Marketing 201026
9 18 4
11 7 2
For setting a platform of research, Facebook will be considered as a case of social media where the brand marketing campaigns of selected Smartphone brands are deployed. 1.3 The Research problem: There is a huge reserve of literature on brand equity and brand loyalty in various market segments since beginning of marketing science. The research of brand loyalty has been carried out at various time scales and on different market segments and each has its own implication. There is also recent literature on social media that converted web space into web2.0 and that internet is a very new environment where the marketers have to be present to reach the target market. Initial literature of social media concentrates on the issues about how social media increases the exposure of a brand. There are many strategic literatures for brands and companies showing them the ways how to have a successful social media presence and how to deploy social media campaigns. The concepts mainly cover brand building on web2.0. Brand loyalty is a novel concept in branding and organisations look to have a sustainable strategy for maintaining continuous growth. There is academic literature that shows the effects of social media on brand equity and also academic literature that investigates the models of e-loyalty. There is significant coverage of brand loyalty formation and enhancement in the field of
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Keynote (2010) Social Media Marketing, 2010 (online). Available from: https://www.keynote.co.uk/marketintelligence/view/product/2387/social-media-marketing?utm_source=kn.reports.browse. (Accessed on 14-12-2010).
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CRM. The latest technical development in both areas is Social Media CRM. It is a very contemporary area of research with very few insights for companies and brands at present. Further statistical data are made available from legitimate research agencies for mobile phone market in UK and projected trends and motivating factors within customers for making a purchase decision in favour of a particular brand. There is no investigation into what role a Social Media CRM system can play in a low loyalty mobile phone market of UK. The research here will be carried out in young UK consumer market (Middlesex University Students) who interact through Facebook Pages and Applications, to predict how the introduction of a Social Media CRM (Facebook CRM) by smartphone manufacturers will affect brand loyalty. 1.3.1 The Aim of Study and Research Questions: The aim of this study is to find out the extent to which the introduction of a Facebook CRM Application will affect the brand loyalty. By the same results, mobile manufacturing companies serving the UK customers can decide whether or not, to invest in a Social Media CRM / CRM2.0 system for establishing and maintaining brand loyalty. Objective 1: To evaluate the level of activity in the social media considered in this study (i.e. Facebook.com) and attitude towards participation in virtual community for their smartphone brand. (The motivation behind the participation could be for any of post evaluation of purchased brand or sense of belonging or for getting further information. An obvious possibility is that higher the activity on Facebook, greater the possibility of affecting the users by engaging them).
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Objective 2: To know the brand experience and CRM experience of their smartphone brand. (Because brand experience is directly linked to brand loyalty) Objective 3: To determine the perceived usefulness of the brand
service delivered through Facebook CRM application. Objective 4: To determine the effect of Facebook CRM Application on brand image of their smartphone brand. Objective 5: To determine the effect of introduction of Facebook CRM Application on the perceived social presence. Objective 6: To determine the effect of introduction of Facebook CRM system on Satisfaction and Trust in the smartphone market for youngsters. Following is the set of questions relating to each of the 6 objectives. Questions for objective 1: What is the range of personal and brand contacts of Middlesex University students on Facebook? (Determined by the number of friends and likes respectively) What is the level of interaction with friends and brands? (Determined by the frequency of communication) What is their attitude towards subscribing to the brand Page of their smartphone brand on Facebook? Questions for objective 2:
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Which brands smartphone does respondent own? What is the level of satisfaction with their smartphone brand? What is the frequency of problems faced after purchase of the smartphone, if any did occur? How many times did they visit the service website of the brand for any reason/problem/ dispute/ service, if they did visit? Question for objective 3: How useful will they consider it when a brands service website is delivered to them on Facebook Application? Question for objective 4: What will be the impression of their smartphone brand if it delivers service through Facebook CRM Application? Questions for objective 5: How does the respondent like the ability of the application that allows them to share your transactions with their brand and straight away discuss with friends? Does it make them feel more connected? Questions for objective 6: Will the service delivered through Facebook CRM Application increase their satisfaction with their smartphone brand? Will the service delivered through Facebook CRM Application increase their trust on their smartphone brand?
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1.4 Importance and relevance of study in current times: HubSpot (2010) reports the online marketing platforms on which the conversations occur for 33 different sectors of industry. The answer is split into 3 options. Search engine, Blog and Social Media. Each sector from the listed 33 sectors has a different ratio of activities split into these 3 online platforms. We will consider the investigation sector of cellphones, 35% activity is on social media, 50% is on search engines and 15% activity is on Blogs (HubSpot, 2010). Further the split-up of 40% Social Media activity is made for each sector into Facebook, Twitter, LinkedIn and YouTube. The relative activity on social media for cell phone sector is 22% on Twitter, 20% on YouTube, 48% on Facebook and 8% on LinkedIn. The fans on Facebook of 10 most relevant pages are 3,188,505 with millions of keywords that can be found (HubSpot, 2010). This indicates that Facebook as a combination of interactive advertisement hosting services, social media and virtual communities, should not be neglected by the companies to engage with customers at the various levels of brand loyalty ladder of the smart phone market. The demographics of facebook.com show that out of 28,663,900 UK users, 17,958,420 belong to the age group of 18-34, and the figure is total of 75% for young population of UK27. The Nielsen Company (2010) in its report of Mobile phones and youth around the world says that 80% of UK population in the age group of 18-24 selects their own mobile phone and the rest have it from work, parents or friends. These data validate the research being carried out in Middlesex University (sample population) where the age group is similar and it has nearly direct
27
(Facebook, 2010). AdsMarketing (online). Available at: http://www.facebook.com/adsmarketing/index.php?sk=targeting_filters. (Accessed on 14-12-2010).
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implications for the other population within the same age group. A sustainable brand strategy in competitive environment, will be the one in which the brands aim to achieve the core of brand loyalty. Effect on brand loyalty by introduction of Social Media CRM (Facebook CRM here), will be under a scrutiny in this research. So as the smartphone market is taken as a reference market, this research will also have some partial implications for the smartphone manufacturing companies about using social media for targeting brand loyalty, but the research is preliminarily about exploring the effect of introduction of Social Media CRM on the brand loyalty.
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1.5 Structure of Dissertation:

1. Introduction to the Research Problem 2. Literature Review 3. Research Methodology 4. Research Results and Analysis 5. Conclusions and Recommendations Introduction Investigation Sector The Research Problem Importance and Relevance of the Study in current times Structure of Dissertation Summary of Chapter 1 Introduction Brand Equity and Brand Loyalty. CRM Systems for Relationship building and Brand Loyalty. Web 2.0 and Social Media. Brand Loyalty in Digital age/ e-loyalty framework and its components. Social Media CRM. Modified Model of e-loyalty/ Model of Social CRM and Brand Loyalty. Summary of Chapter 2 Introduction Research Philosophy Research Design Research Method Target Population Sample Size Sampling Method Data collection equipment- Questionnaire Design. Ethical Issues Summary of Chapter 3 Introduction Reliability Analysis Profile of Respondents Descriptive Analysis Correlation Analysis Multiple Regression Analysis Summary of Chapter 4 Introduction Conclusion to Descriptive, Correlation and Hypotheses testing. Conclusion to Study Aim Implications Limitations Directions for future Research Summary of Chapter 5
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1.6 Summary: This chapter first explains the platforms of discussion of this project in the industrial sector section. It gives a detailed insight into the UK smartphone market, the brand loyalty dynamics of the market and the social media Facebook with all important numbers. It then explains how the research problem emerges and the corresponding aims and objectives of this research and details the research objectives with sub questions. Further it explains how the study is important and relevant in current times. Finally it shows how the dissertation is structured.
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Chapter 2: Literature Review
CHAPTER 2: LITERATURE REVIEW 2.1 Introduction: The aim of this chapter is to present a review of literature that is relevant to the aim of this study. To show the connections and discontinuity in the changing themes of brand loyalty, the initial construct and the changing constructs with introduction of new technologies (e.g. CRM Systems, Social media, Social CRM) have to be considered. Based on the discussions associated of brand loyalty in the social media age, following theories are identified to be the building blocks in constructing the research gap/ gap in literature. Brand Equity and Brand Loyalty. CRM Systems for Relationship building and Brand Loyalty. Web 2.0 and Social Media. Brand Loyalty in Digital age/ e-loyalty framework and its components. Social Media CRM. Modified Model of e-loyalty/ Model of Social CRM and Brand Loyalty. These sub sections are the joining links to the overall aims and objectives of this study as mentioned in Chapter 1. The study aims to determine the effect of Social CRM on brand loyalty by exploring the effects of introduction of Social CRM on the e-loyalty components. Further, the results will have direct implications for brands in the UK smartphone market, whether or not to invest in Social CRM systems with an aim to achieve and maintain brand loyalty. The literature review starts with the original classical concept of brand loyalty
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showing its close link with brand equity. It proceeds to a time frame where CRM systems were introduced with an aim for retaining customers and hence maintaining brand loyalty. It then takes the focus on to Web 2.0 and the Social Media and this section defines the social customer/ customer 2.0 concept, e- word-of-mouth and integrative interactive platforms. Then it discusses the framework of e-loyalty with its components and a model of eloyalty. Literature review then introduces to us the fresh construct of 2010 in social media, Social CRM that is mainly introduced for establishing and maintaining brand loyalty within the new/ social customer. It established a clear need of studying the effects of introduction of Social CRM on brand loyalty as once more it is the time for reconstructing the brand loyalty model with introduction of new technology. There are nearly not insights for brands whether to invest in creating the integrated services or not. So finally this literature review presents a modified model of e-loyalty/ Model of Social CRM and Brand Loyalty with research hypothesis. 2.2 Brand Equity & Brand Loyalty: A brand is a set of mental associations, held by the consumer, which add to the perceived value of a product or a service (Keller, 1998, cited in Kapferer, 2004, p.10). Strong brands have intense emotional component added to these mental associations. A brand could be said as an attitude of nonindifference knitted into consumers hearts. This attitude goes from emotional resonance to liking, belonging to evoked set, preference, attachment, advocacy, to fanaticism (Kapferer, 2004). Following the simplifying approach of, Franzen (1999) Feldwick (cited in Wood, 2001), brand equity can be defined and classified as:
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Financial brand equity: The total value of a brand as a separable asset when it is sold, or included on a balance sheet, is expressed as level of distribution, sales, market share, price premium and profits.
Consumer brand equity: Mental brand equity: a measure of the strength of consumers attachment to a brand; inclusion in evoked set, conscious and active preference for a brand based on consumers perceptions and feelings about the brand. Behavioural brand equity: a description of customers associations and about the brand; habitual or deliberately loyal purchasing of a brand by consumers in order to meet an important part of their category needs.
Figure 2.1 shows the brand equity model that gives us a view of the various
Figure 2.1: Brand Equity and its components.
Source: Aaker, D. (1991) Managing Brand Equity Capitalizing on the value of a brand name. New York, USA: Free Press.
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components of brand equity (Aaker, D., 1991). All of the five components of brand equity are discussed below: 1. Brand Loyalty is the extent to which people are loyal to the brand. It implies a reduced cost of marketing activities as charming new potential customers is costlier. It gives trade leverage as loyal customers from a stable revenue source for distributive trade. It will help attracting new customers as current customers do help boosting name and awareness. It gives more time to respond to new competitive threats as switching brands takes more time when customers are loyal. 2. Brand Awareness the extent to which a brand is known in the public. It can be an anchor to which brand associations can be attached and that in turn can eventually influence the brand awareness. Customers with a positive attitude towards a brand will spread brand awareness by talking more about it. It can be measured by determining whether or not the brand belongs to the evoked set at the time of purchase. 3. Perceived Quality the extent to which a brand is considered to be
providing good quality products. The quality of the brand/product becomes a reason of purchase selection. The level of differentiation in comparison with competing brands indicates the perceived quality. Price gets started to be taken as an indicator of quality. Wide availability through different channels gives a perception on higher quality. The brand extensions can indicate the customers about the quality guarantee of a brand being on a wide scale. 4. Brand Associations - is anything linked about the brand in the memory of customer and it has a level of strength. It is a set of associations that gives
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the brand an image. Higher the brand associations greater the brand equity as it creates positive feelings and attitude. 5. Other proprietary assets Patents, intellectual property rights, trade partner relationships are some examples and these things increase the competitive advantage of the brands in those specific fields. When Brand equity increases as brand loyalty increases, brand awareness increases, perceived quality improves, positive brand association increase and the number of proprietary assets increase. It has to be noted that brand loyalty is both, one of the dimensions of brand equity and is affected by brand equity and the potential influence on loyalty from other components is so significant, that it is considered as one or the ways that brand equity provides value to a brand (Aaker, 1991). Brand Loyalty: Brand loyalty, long a central construct in marketing, is a measure of the attachment that a customer has to a brand and as brand loyalty increases, the vulnerability of the customer base to competitive action is reduced (Aaker, 2004). Consumer brand loyalty is often the core of brands equity (Aaker, 1991). Looking into the extensively discussed literature of brand loyalty, the main emphasis is identified on two different dimensions of the concept: behavioural and attitudinal loyalty. A conceptual framework of brand loyalty that includes the full spectrum of brand loyalty based on a hierarchy of effects model with cognitive, affective, conative (behavioural intent), and action (repeat purchase behaviour) dimensions is given by Oliver (1997).
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Oliver (1999) using the multi-dimentional construct defines brand loyalty as: "a deeply held commitment to re-buy or repatronize a preferred
product/service consistently in the future, thereby causing repetitive samebrand or same brand-set purchasing, despite situational influences and marketing efforts having the potential to cause switching behaviour." Also Oliver (1999) states that loyal customers are typically satisfied but that does not imply that all the satisfied customers are loyal or satisfaction guarantees loyalty. This brings in the role of overall brand equity playing important role in creating a halo effect under which consumers would make future and repeat purchase decisions. The level of brand loyalty can be determined by the loyalty pyramid proposed by Aaker (1991). Figure 2.2: Levels of Brand Loyalty
Source: Aaker, D. (1991) Managing Brand Equity Capitalizing on the value of a brand name. New York, USA: Free Press.
A low loyalty customer is termed as switcher who can change brand very easily, habitual buyer has no reason to change which implies a good user experience, a satisfied buyer keeps with the brand if the price is within comparative limits, a liker will consider a brand more than price and committed customer never switches the brand despite other factors like price
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and alternative brands. Aaker (1991) also states, creating and maintaining brand loyalty requires treating the customer right, staying close to customer, management of customer satisfaction, creating switching costs and providing extras. 2.3 CRM Systems for Relationship Building & Brand Loyalty: Woodcock and Gamble (1999), cited in Tapp (2008). CRM (Customer Relationship Management) is an enterprise wide commitment to identify your named individual customers and create a relationship between your company and these customers as long as this relationship is mutually beneficial. CRM was initiated by the need of a system that would apply some computer intelligence to customer acquisition, customer satisfaction and customer retention. The aim was to merge all the information about the customer and to provide that data to the customer service representative on the computer screen (Sterne, 2000). The CRM literature suggests that marketers could enhance customer loyalty by being active and in regular contact with their customers. (Hansotia, 2002). The literatures also suggest about regular contacts with customers helping marketers to enhance the customer loyalty. The use of e-mail marketing in CRM strategy follows a simple law that greater the frequency of a customer buying or responding to messages and more recent the purchase, greater the chance of enhancing customer loyalty (Raulas and Merisavo, 2004). Kapferer (1998) and Aaker (2000) in their branding literature, indicate that the level of brand loyalty can be switched higher by providing depth to consumer brand relationships. Raulas and Merisavo (2004) state that how regular
communication can enhance customer loyalty can be implied from the fact
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that how communication from a brand or the interaction with the brand affect brand attitudes. Regularity in communication improves the value perception by provision of relevant information as it reduces their searching efforts. CRM systems allow convenient two-way dialogue to build and allow tailored services at time of communication of point of service. The direct marketing systems of any marketing department are a subset of CRM and both direct marketing and CRM are tools and processes that support the ethos of a relationship marketing driven firm weather its b2b or b2c (Tapp, 2008). CRM in practical use is driven by complex IT systems and applications and these systems are created by firms like Siebel Systems and Oracle and large firms create the demand for these systems (Tapp, 2008). The CRM system when set up on the companys website, is called e-CRM. All the mobile phone companies have a special website for customer service and carry on CRM activities through the website. The literature of CRM initially detailed the failure rate of these systems and it was highly debatable whether an organisation should invest in or manage relationships traditionally. But there were some success stories as well. The systems became more meaningful when recession hit the market as the core aim of a company then was to retain the customers (Greenberg, 2010b). Bois et al., (2007), in the customer management market sizing report gave an example of AMR Research giving an estimates about revenues for CRM software being 14 billion USD in 2007 which was 12% higher than previous year and the projection for 2012 was 22 billion USD. The estimates of other research agencies also showed similar figures which makes the numbers acceptable (Greenberg, 2010a). 2.4 Web 2.0 and Social Media.
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Web 2.0 is a term used for every online thing that is new, cutting-edge, upgraded, improved and is presently gaining momentum. The term web 2.0 was coined by Tim OReilly a founder and CEO of computer book publishing company OReilly Media together with John Battelle, founder of The Industry Standard when they launched a groundbreaking conference in San Francisco (Funk, 2009). Today the conference is organized by UBM Techweb and OReilly Media and is given the name of Web2.0 Summit and the final one being held in 2010.1 It includes websites, cultural trends like social networking, blogging or podcasting, or the technology behind it and the rich streaming media (Funk, 2009). The users can control their own online experience and can influence others experiences and success comes by harnessing power of social networks and the content creators can not anticipate the distribution, sorting, combination and display as these depend on the users as well (Funk, 2009). The social web is a online space where people with common interests can gather for sharing their thoughts, comments and opinions (Webber, 2009). Social media includes social networking sites such as Facebook, MySpace, YouTube, Flickr and other interactive web pages, allow display of user-generated content (UGC) in many types and forms such as basic bulletin boards, blogs, interactive applications and discussion forums. The marketers had to utilize the same space with the UGC for deploying effective marketing strategies online. Social Customer:
OReilly Media (2010). The Web 2.0 Summit 2010 (online). San Francisco, CA: OReilly Media. Available from: http://www.web2summit.com/web2010 (Accessed on 1-1-2011).
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A customer ecosystem is a sum of all the interactions centred around customers, taking place over a time. Customer is at the central focus of strategies and it is exactly opposite to the corporate ecosystem where company was the point of focus and customers were considered at the periphery. Customer from being just an object of sale earlier, now drives the business around self. Customers 1.0 They were dutiful consumers of mainstream messaging and one-size-fits-all goods (Greenberg, 2010). The previous generation customers would visit the retail outlets and followed the advice of retailers in making purchase decisions. They accepted any quality of customer service as the power was in the hands of retailers. Customers 2.0 Now, customers dictate how they will purchase and consumewhere, when, and how muchusing a variety of channels largely, if not exclusively, configured by them (Greenberg, 2010a). The customers now guide each other by using community-based tools like social networking, social shopping and bookmarking. The situation of mediameets commerce- meets community arises as the customers populate the social networks, and get connected with trusted people, their networks and so the social medias are becoming key distribution channels for marketing. The online social world is full of ratings, reviews and videos of their consumed items and brand experiences (Greenberg, 2010a).
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Social customers are easily connected through internet and mobile devices trust their peers. They have on demand exposure to any information and also have a desire and tools to share the information with trusted peers on social media, they might not even know them in some cases. Social customers require transparency with the companies/brands they deal with and also authentication by the peers. Social customers feel connected with the brand and feels rewarded for own effort on behalf of the brand. This makes their loyalty not only behaviourial but also attitudinal. It invites automatic brand advocacy if the brand satisfied the customer and this relationship is driven on trust (Geenberg, 2010 b). The change of customer to social customer is a cultural shift that is enabled by peer influence and technology. The shift is from an inside-out to an outside-in approach and the consumer has the power to produce and to share his/her ideas or complaints to world through variety of channels (Lieberman, 2010). Formation of Present scenario: Social media has many forms but the most popular forms include virtual worlds (second life), forums, review sites, social bookmarking sites, blogs, microblogs, social networks (Facebook and LinkedIn) and media sharing sites (YouTube and Flickr) (Zarella, 2010). The social media as a channel of communication gives its users an opportunity to post pictures, use their own quotes that make some meaning and meanwhile connect with their friends and peers. The new connections are real-time and unbound by the location (Peck, 2010). The low cost access of internet opened up opportunities for companies that allowed them to deal directly with numerous customers in an previously unimaginable way, as it was managed by intermediaries only. This
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empowered direct marketing to a great extent (Palmer and Koenig-Lewis, 2009). Some websites are very highly popular and if companies and marketers look forward to deploy experiences for customers through those websites the return of investment is supposed to be much higher. Consequently the social networking web sites succeeded in attracting both users and investors. Word Of Mouth goes digital and global, forcing new implications for brands: The process of diffusion of information among the consumers is referred to as word-of-mouth and the social networks started playing an important role in the spread of word-of-mouth. The sharing or the diffusion of information depends upon the relation of the individuals within the virtual community and there is a significant role of internet self-efficacy of the consumers as they need to adapt to innovations and try new things (Goldenberg et al., 2001). The power now shifts in the side of consumers and the content creators on social media. Johnson and Kaye (2004), made a note that the bloggers who also are creators of user generated contents (UGC) are unbound by standards of objectivity and most of them have strong views that they express openly. Thus, UGC is what runs the brand/ product spectrum from positive to negative. And this UGC is spared from time and boundaries so it spreads as word-of-mouth and can be alternatively termed as e-WOM. When UGC is negative, e-WOM is negative and it can have harmful implications for building and sustaining a brand's equity. A fact that for readers the UGC is more credible than the content by the brand itself, complements the spreading eWOM (Cheong and Morrison, 2008). Integration of Platforms makes Web 2.0 interactive:
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Fagerstrom and Ghinea, (2010), demonstrate from their findings the role of Interactivity in successful web campaigns. Their study considers the case of SCA Libresse a fashion and consumer products brand from Sweden. The company does the research of market segments and created an online campaign. There young girls could participate in a fashion design competition. The number of hits for the website shoots up after the new introduction. It demonstrated that interactive and social use of the Internet, helps the companies achieve increased brand awareness, positive attitude toward a brand, and increased sales in the target segment. Fagerstrom and Ghinea (2010) also say about low involvement consumers that they can be attracted to several web campaigns which have interactive features. They also describe the examples of Absolut Vodka and Nike as brands that deployed successful web campaigns and encouraged dialogues between brand and consumer but the consumption of products is not directly related to successful campaigns. The campaigns by such brands comprise basically a web application. These campaigns are easily syndicated with social networking sites in different ways. The social networking websites act as a magnification to the campaign as peers can see the users interaction with the brand through its application. Facebook added a shopping application that enabled the users to search for required products and then take opinions of those products from other Facebook members (Cha, 2009). Cyworld.co.kr, a popular Korean social network that attracts more than one-third of the country's population and 90% of people in their 20s, carries both real and virtual items (Cha, 2009). Consumers execute new learned behaviours by adapting to the interactive visual technologies and marketers need to keep up with the latest
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modifications through new theories. Any application on Facebook that adds a new feature can be considered as an integrated service. Integrated service combines products and services into a single package for users. Integrated services consist of 3 tiers; Devices, Networks and Applications through which the customer with a digital lifestyle can be reached (Faith and Tomsen, 2001). 2.5 Brand Loyalty in Digital Age/ e-loyalty framework and its components: There are significant differences in the customer loyalty in the traditional market space and the cyberspace (Gommans et al., 2001). The brand loyalty in digital world is market controlled concept towards a distribution driven, consumer controlled and facilitated by technology is different from brand loyalty in the product driven market of previous generations (Schultz, 2000). e-loyalty implies quality customer support, prompt delivery of service/product in terms of price and time, self persuasive product demonstration and transparent privacy policies (Reichheld and Schefter, 2000). The main emphasis of e-loyalty in the times of relatively compressed buying cycles should be on converting behaviourial intent to immediate buying behaviour
Figure 2.3: Model of e-Loyalty Framework
Sources: Lii, Y. (2009) A model of customer e-loyalty in the online banking, Economics Bulletin, Volume 29 (2), pp. 891-902. Gommans et al. (2001) From Brand Loyalty to E-Loyalty: A Conceptual Framework Journal of Economic and Social Research, Volume 3 (1), pp. 43-58.
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(Strauss and Frost, 2001). The Figure 2.3 by Gommans et. al. (2001) and Lii (2008) as verified by their researches shows the e-loyalty model. Attitudinal Brand Loyalty: The concept of attitudinal brand loyalty is very important in the e-marketplace and it includes the affective, cognitive and behaviourial intent (Gommans et al., 2001). Highly loyal customers stay loyal to a brand if their attitude towards the brand is positive and alternatively the ability to convert a brand switcher into a loyal customer, increases when the attitude towards brand is favourable (Balginder and Robinson as cited in Gommans, 2001). Behaviourial Loyalty: Generally the behaviourial brand loyalty is very nearly the repeat purchasing behaviour of a customer and when the concept is extended to the emarketplace, new factors like the number of visits to website and time spent on the website come into play (Gommans et al., 2001). As a cell phone is something that is not purchased frequently, the habitual repeat purchasing behaviour is less important. Trust: It is defined as willingness of relying on an exchange partner in which the consumer has the confidence by Moormann et al. (2003, cited in Lii, 2009), and trust is recognised as an important antecedent in most models dealing with relationships like loyalty and satisfaction (Lii, 2009). Also online information exchange has the same implication that if the consumer trusts the source, then the reliability of the information is perceived to be much higher.
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Trust, has a close relation with security, and plays important role in online information exchange. Quality: The software in an e-CRM system is related closely to the performance of the system and the quality of the experience needs to be good for acceptability of a transaction, for both a company and the customer (Taylor and Hunter, 2002). It is believed that the perceived quality of the service delivered by an e-CRM application, contributes to a positive outcome which leads to greater levels of satisfaction and favourable display of marketing behaviours like positive wordof-mouth (Taylor and Hunter, 2002). Satisfaction: The fulfilment of customers expectation improves the perceived usefulness of the application and Szymanski and Hise (2000, cited in Taylor and Hunter, 2002) prove the importance of e-satisfaction and they complement to the quality perceptions. Brand Image: Brand image is built on the basis of the brand building operations, online and offline. The brand building activities deployed through social media and internet are already known and the same can be done though the e-CRM websites in b2c relations. Offline brand experience also has an effect on the online brand image and these experiences affect the online satisfaction, trust and loyalty in different ways depending upon the built relationship between customer and the brand (Horppu et al., 2008). As on internet space, there
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many choices to refer at the finger tips of the customers, the internet gives an opportunity to offer use of unique tools that can build the brand interactively which is different for traditional brand building activities of mass media (Gammons et al., 2001). The corporate/ brand image is linked with the satisfaction and trust and it is considered to create a halo effect on the satisfaction (Lii, 2008). Perceived Social Presence: It refers to the extent to which a given medium allows the user to experience their psychological presence to others in the same place and it provides human warmth to the one who gets a space to express (Lii, 2008). Some interactive website features like human audio, product video, emotive text and pictures of humans and the ability to control all these actions are known. The social presence of web 2.0 applications in the computer mediated communications is helped to reduce ambiguity and increase level of trust. The results of the research showed that the website quality, corporate image and perceived social presence had a positive effect on the satisfaction and trust through hypothesis testing of group H1, H3 & H5 and H2, H4 & H6 respectively. Further there was a strong positive relationship between the trust and satisfaction. And previous researches had already shown satisfaction and trust are strongly correlated positively with brand loyalty was affirmed in the study. 2.6 Social Media CRM/ CRM2.0: Social Media CRM is a philosophy and a business strategy, supported by a technology platform, business rules, processes, and social characteristics,
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designed to engage the customer in a collaborative conversation in order to provide mutually beneficial value in a trusted and transparent business environment. Its the companys response to the customers ownership of the conversation (Greenberg, 2010b). A Social CRM system which combines social media and a CRM enterprise system was first modelled in International Conference for Convergence and Hybrid Information Technology held in Daegeon in August 2008 (Mohan et al., 2008). Kotadia (2009), describes Social CRM as a business strategy of engaging customers through Social Media with goal of building trust and brand loyalty and loyalty is referred to as the attitude towards a brand that inclines a customer to repurchase it and to recommend it. Kotadia (2009) also states that Social CRM and Social Media are more about building trust and managing loyalty with customers than about managing relationships or transactions, which are focus areas of traditional CRM. The collaborative platform of Social Media CRM System and the Social CRM System are proposed by Mohan et al. (2008), are shown in Diagrams 2.4 and 2.5. The collaborative platform has Operative CRM and Social Networking Web Services clubbed together on a Web 2.0 backed platform and by using a Mashup Technology. CRM 2.0 is all about a outcome of linkage between Operational CRM and Social Networking Web Services through a highly sophisticated software Plugin/ Adaptor that links both.Operative CRM is already linked with the Analytical CRM since the database marketing systems were started to be used in CRM.
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Figure 2.4: The collaborative platform of a Social Media CRM System
Source: Mohan, A. et al. (2008). Conceptual Modeling of Enterprise Application System Using Social Networking and Web 2.0 Social CRM System International Conference of Convergence and Hybrid Information Technology, Volume August, pp. 231-244. (online). Available at: http://ieeexplore.ieee.org/xpl/freeabs_all.jsp?reload=true&arnumber=4622830. (Accessed on 14-12-2010).
The Social Media CRM System shown in Figure5 gives us examples of web2.0 services that can be used in Social CRM. Facebook, LinkedIn, Digg, YouTube, Flickr, Pandora, Technorati are some of them. It shows that the collaborative paradigms are user driven though Social Networking using web as a platform. Web services and Mashup Technology enables the Social CRM System (Mohan et al., 2008).
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Figure 2.5: The Social Media CRM System
Source: Mohan, A. et al. (2008). Conceptual Modeling of Enterprise Application System Using Social Networking and Web 2.0 Social CRM System International Conference of Convergence and Hybrid Information Technology, Volume August, pp. 231-244. (online). Available at: http://ieeexplore.ieee.org/xpl/freeabs_all.jsp?reload=true&arnumber=4622830. (Accessed on 14-12-2010).
The characteristics of Social CRM are described as following, by Greenberg (2010,a). It gets fully integrated into an enterprise value chain and that includes the customer as part of it. Social media tools like blogs, wikis, podcasts, social networking tools, user communities are integrated into apps/services: Customer interactions are encouraged through authenticity and
transparency. Knowledge is utilized in context to create meaningful conversations.
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The company processes are modelled from the customer point of view. Both information-seeking and information-contributing behaviour are encompassed into the customer business ecosystem. Resides in a customer ecosystem. Plus style, design and interface do matter a lot. Creating conversation with customerengaging customer in activity and discussionobserving and redirecting conversations among customers are activities done in the Marketing frontline. Business is an aggregator of experiences, products, services, tools, and knowledge for the customer. The intellectual property that is created with the customer, partner, supplier, problem solver is also owned together. The business is focused on environments and experiences that engage the customer. Corporate strategy is customer strategy. Both external and internal sources innovate. The focus is on all the aspects of relationships (including company, partners, customers) and specifically on identifying, engaging, and enabling the influential nodes. Company-customer collaboration. Focus of technology is on both, operational and social/collaborative areas and customer is integrated into the value chain.
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The company customer relationship resembles to a peer to peer relationship (C2P or P2C, so to speak) but still the company must be an enterprise in all other aspects. Facebook CRM: Providers and potential providers example: There are many IT solution companies that provide CRM systems to various organizations around the world. The projected investments made by organisations are already shown in the CRM section of the literature review. Microsoft Dynamics CRM is one of the CRM solutions provider2. Link Development is a gold partner of Microsoft Dynamics and has introduced a newly developed CRM Facebook Connector3. Salesforce.com is the CRM provider for Facebook Inc. and has listed success stories of their more than 200 international clients4. 2.7 Modified model of e-loyalty / Model of Social CRM and Brand Loyalty (under investigation of this research): Based on the model/framework of e-loyalty, by Gommans et al. (2001), Lii et al., (2008) and Carlson and Sinnapan (2003) and integrating the model of Social CRM System given by Mohan et al. (2008), the following model is proposed for testing the effect of introduction of Social CRM System on Brand Loyalty. The Social Media in this case as shown in the Figure 2.6 is Facebook and the investigation in the young UK smartphone market. Hypotheses are formed for the effect/correlation of Social CRM on the perceived usefulness of brands
2
3
http://www.microsoft.com/en-gb/enterprise/it-solutions/CRM.aspx http://www.linkdev.com/Sol_Serv/Dynamics/addons.aspx
https://www.salesforce.com/uk/customers/
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application/service, brand image, perceived social presence with a CRM2.0 application. Further there will be hypothesis testing for the correlation between perceived usefulness and satisfaction and perceived usefulness and trust in the context of Social CRM (Facebook CRM Application here) being introduced.
Figure 2.6: Modified e-Loyalty model/ Model of Social CRM and Brand Loyalty.
Following hypotheses were formed and will be checked through data analysis. Hypotheses formation: H1: Introduction of Social CRM/ Facebook CRM will have a positive effect on perceived usefulness of the delivered service by Facebook CRM applicaiton. H2: Introduction of Social CRM/ Facebook CRM will have a positive effect on Brand Image of the smartphone company. H3: Introduction of Social CRM/ Facebook CRM will have a positive effect on the perceived social connection of smartphone users with their peers. H4: Perceived usefulness of the e-service delivered by the Facebook CRM application of the smartphone brand will have a positive effect on the satisfaction of smartphone users with their brand.
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H5: Perceived usefulness of the e-service delivered by the Facebook CRM application of the smartphone brand will have a positive effect on the trust of the user on his/her smartphone brand. 2.8 Summary: All the literature relating to brand loyalty and social media lead to an unexplored gap of the predicting the effect of introduction of Social CRM on the brand loyalty. A model is proposed in the end which is a modified version of e-loyalty framework and hypotheses were formed for this model which will be in scrutiny in the next chapters.
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Chapter 3: Research Methodology
CHAPTER 3: RESEARCH METHODOLOGY 3.1 Introduction: This chapter gives overview of methodological approaches used for the study. It includes description and justification of the research methods which were used to determine the effect of introduction of Social CRM on Brand Loyalty in the young UK smartphone market. The methods adapted are also explained in detail with the comparative consideration of alternative methods. The chapter contains the adapted research design, methods and philosophical approaches. Then chapter proceeds to sample size and target market. The process of data collection followed by the researcher for reaching the target population is explained. A questionnaire was designed based upon the aim of the research. Lastly the ethical issues are discussed at the end of chapter. 3.2 Research Philosophy: Each research makes certain assumptions about the nature of reality that is being studied, about how the knowledge is produced and the perspective from which the research is approached. (Kent, 2007).
Table 3.1: Research philosophy and approaches

Ontology Objectivist Epistemology Perspective Theory Positivist Researcher Deductive Method Technique
Quantitative Quantitative Research Analysis Mixed Research Qualitative Research Mixed Research Qualitative Analysis
Realist
Activist
Client
Mixed
Subjectivist Interpretive
Participant
Inductive
Source: Kent, R. (2007). Marketing Research: Approaches, Methods and Applications in Europe. London: Thomson Learning.
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Table 3.1 summarizes the different approaches that can be used in a research in terms of its ontology, epistemology, perspective, theory, method and technique. Each approach implies a different way of doing science. Epistemology is an area of philosophy that is concerned with how knowledge is established and ontology is the branch of metaphysics that is concerned with the nature of reality (Kent, 2007). In this research the nature of reality that is objectivist in this study, the positivist epistemological perspective is adapted. Positivism holds that an accurate and value free knowledge of things is possible (Fischer, 2004). Objectively verifiable knowledge is possible in social sciences by setting up hypotheses and then testing them by identifiable and measurable variables (Kent, 2007). The activist
epistemological perspective is more likely to be followed by client-based researcher which is opposite to positivist perspective which has a pure researchers perspective. The theory is deductive which means that researcher moved from general theories to more specific situations and observations (Kent, 2007). The deductive theory means the approach is topdown moving from theories to hypotheses to observations to confirmation and the hypotheses become theory if they get confirmed in the study. 3.3 Research Design: Chapter 1 states the research problem and after having a suitable approach, the attention is on formulation of a detailed research design. The research designs can be exploratory, descriptive or conclusive. (Hair et al., 2006). Exploratory research design is mostly qualitative and is executed by depth interviews, focus groups and observations. Every research has a exploratory phase but it is not to be confused with an exploratory design (Kent, 2007).
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The descriptive and conclusive designs are quantitative research designs. The descriptive design usually has a description of certain phenomena like percentage estimates and characteristics of a target population. Hence if the research involves description of existing characteristics of a market situation, then descriptive designs are appropriate (Hair et at., 2006). When nature of relationship is to be determined through hypotheses testing, conclusive/ explanatory designs are suitable (Hair et al., 2006). A combination of both descriptive and conclusive designs is also a valid option in certain situations if different kinds of the research aims are targeted (Kent, 2007). This study is aimed to determine the effect of introduction of Social CRM systems on the brand loyalty in the smartphone market and also the relationship between the perceived usefulness of the service delivered (by the Facebook CRM application) and satisfaction and trust on a brand, a combination of both descriptive and conclusive designs is used by the researcher. 3.4 Research Methods: 3.4.1 Secondary Data Secondary data was collected and used in this study to determine its aim. Secondary data is the data collected for some purpose rather than the problem at hand. The major source for secondary data of the smartphone market was Keynotes market segment report - Mobile Market 2010 and Ofcoms market segment report. Keynote is the official Athens authenticated data provider for organisations and academic researchers who are looking for recent market data. Additionally The Telegraph and The Neilsen Company were some additional sources for secondary data of the UK smartphone market described in Chapter 1. GfK NOP and WDS Global were two main
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bodies reporting the brand loyalty dynamics in the UK smartphone market in 2010. Secondary data about Facebook was obtained predominantly from Facebooks website statistics section. Text books and dissertation writing books were used for guidelines throughout the dissertation. Electronic resources gave access to a pool of academic journal articles. 3.4.2 Primary Data: Survey research methods The capture of data based on addressing questions to respondents in a formal manner and taking a systematic record of their responses is called a survey (Kent, 2007). Survey allows collection of quiet substantial amount of data in economical and efficient manner. This study has a descriptive and conclusive combined design and these methods involve survey and primary data was collected from a large sample from the target market. The survey methods are classified according to the method of questionnaire distribution as Interview Surveys, Telephone Surveys, Postal Surveys and Online Surveys (Kent, 2007). The survey link for survey was formed on the survey website
surveymonkey.com. Colourful graphics were integrated in the questionnaire and a diagram of proposed model to be used in questions was included in the online questionnaire. Although online survey was formed and was used in this research and it was executed using a computer and internet and was administered by self and also online. A questionnaire was designed carefully in a way that it covered all questions relating to the aim of the research and the hypotheses that were to be tested. A large sample size was necessarily targeted to consider it as a representative of the target market.
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3.5 Target Population: Determining the target population is a very important step in any marketing research. The target population of this research was UK youngsters aged over 16 and up to 30. Middlesex University students who all belong to this age group are a subset of the young population of UK. As time and budget were very limited, it is considered that the study can later be made on entire young consumer market of UK who use smartphones. It has been explained in the Chapter 1 how it is validated to research within the young age group when it involves social media. 3.6 Sample Size: The best sample size for this research is the entire population of UK in the given age group of 16-30, who are registered on social media/Facebook as the research is within social media. But it is not possible to reach all Facebook/social media users in short period of time and even if they can be reached, their participation can never be mandatory. So an attempt was made to reach a representative sample of all Middlesex University students who use Facebook through a selected sampling methods and a good sample size. It is a thumb rule that greater the sample size lesser the error and more the accuracy. 500 people were approached and convinced for participating in the survey out of which 88 did not have a smartphone and could not answer the questionnaire. So a total of 412 responses were collected. 3.7 Sampling Method and Data Collection: The sampling methods are of two types: non-probability and probability. The probability sampling method keeps a chance of selection according to the requirement and in non-probability sampling, there is not pre decided chance
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of a target market respondent (Kent, 2007). As the survey was a combination of self administered survey and online survey, the sampling was nonprobability sampling. Large sample size and short span of time implied convenience and snowball sampling to be used. For convenience sampling, People in Middlesex University were approached at different locations at different times and were asked to fill up electronic questionnaire in a touch screen device. Also people at wi-fi spots were requested to stop and go on a laptop for filling the questionnaires. 217 respondents answered the questionnaire in five days. For snowball sampling, the survey link www.surveymonkey.com/s/manzil was used which gave direct access to the online survey page. This was posted as a social network group message on Facebooks Middlesex University Page and respondents were requested to suggest to friends as well. 195 responses were obtained online in three days. 3.8 Data collection equipments Questionnaire: The questionnaire that was used for data collection is shown in the Appendix. There were 18 variables identified according to the research aims and objectives. The required variables were enquired within 16 questions in the questionnaire. Respondents were addressed at the starting of the questionnaire by a statement that mentioned the nature of the academic research, purpose of the research and confidentiality of their answers. The questionnaire for our understanding will be explained in five sections. The section 1 deals with objective 1 and aims to know the level of activity of respondents of Facebook which is explored by questions 1-2 where respondents have been asked to fill up the approximate range of the number
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people and brands they are connected with. Section 2 deals with objective 2, the Brand Experience of respondents with their smartphone brand. This section had questions that ask about satisfaction with the brand, problems occurred with the device and their visit on the service website of the brand through questions 3-6. Further it asks questions about whether they are looking to change their smartphone brand on next purchase or not and their liking of the idea of following the brand on Facebook through questions 7-8. Then a pictorial diagram that explains them what researcher means by using the term Facebook CRM Application before starting section3, that deals with objectives 3, 4 and 5. They are asked about whether they will install their brands Facebook CRM Application or not in question 9. Researchers aim is to know the perceived usefulness of the Social CRM (Facebook CRM Application here), effect on the Brand Image and Perceived social presence after introduction of Facebook CRM Application through questions 10-12. Section 4 deals with objective 6 has questions that explore the effect of perceived usefulness of the service delivered by the Facebook CRM Application on the satisfaction with the brand and trust on the brand through questions 13-14. The last two questions ask the age and gender of the respondent. Based upon the suitability various scales like metric, nominal, ordinal and Likert are used. Before collecting real responses, researcher took feedback from few respondents about the questionnaire to check there were no awkward and inconvenient questions which were difficult to understand and answer. Some minor changes were made in this pilot test and final questionnaire was then ready for data collection. 3.9 Ethical Issues:
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The entire research was carried out with conscious consideration of the ethical issues that might arise though the course of this dissertation. All the general rules of ethical behaviour were followed specially the honesty with which the approach of study and reporting of results (Kent, 2007). All the sources of data and authors whose work is used are acknowledged and credit was given to all the researchers whose work was used in the thesis to avoid plagiarism. Care was taken that no data gets manipulated for expression of better results. Further all the regulation of plagiarism and submitted work were followed from the guidelines available from
:http://www.web.mdx.ac.uk/regulations/archive/regs0910/postgraduate/sectio nc.htm. 3.10 Summary: The chapter is summarized in the order of activity as following: Selection of Objectivist Ontology, Positivist epistemology Deductive approach Descriptive and conclusive design, Quantitative method Self administered and online surveys Sample size of 412 respondents, sampling method Questionnaire design, data collection and ethical issues.
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Chapter 4: Research Results and Analysis
CHAPTER 4: RESEARCH RESULTS AND ANALYSIS 4.1 Introduction: Based on the data collected in the study, this chapter further presents findings and analysis. Statistical package software SPSS version 15 was used for analysing the collected data. First step in the analysis was to check the reliability of the selected scales statistically. Then it shows the profile (age and gender) of the respondents from the sample population of university students. Initially the descriptive statistics are carried out on the handful data for addressing the research questions. In the next step the analysis carries on to correlation tests (direction and strength of the relationship) of certain variables. The attitude towards introduction of Facebook CRM Applications (independent variable/ constant) is explored for its correlation with the perceived usefulness of delivered service quality by the Facebook CRM Application, brand image and perceived social presence(dependent variables). Further the correlation is explored between perceived usefulness of delivered service quality by the Facebook CRM Application (independent/ constant variable) with trust and satisfaction (dependent variables). Multiple regression analysis is used for testing the hypotheses made to test significance and magnitude of the independent/constant variables on the dependent variables to test the proposed model of Social CRM Brand Loyalty. 4.2 Reliability tests: The reliability of the scales developed to measure any constructs is measured in the reliability tests (Pallant, 2005). In SPSS we can measure the internal
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consistency of scales used in the datasheet. This means researcher can find out the extent to which the items used in scales measure same construct (Pallant, 2005). The reliability test gives a coefficient called Cronbachs alpha and higher value of alpha means greater reliability. Table 4.1 shows the variables that are used to measure the level of activity of Middlesex University students on Facebook. The value of alpha is 0.790 that shows that the scale is very reliable.
Table 4.1: Reliability Analysis Level of activity (scale)
Reliability Statistics Cronbach's Alpha Based on Standardized Items .790
Cronbach's Alpha .790
N of Items 4 Item-Total Statistics Cronbach's Alpha if Item Deleted .692 .689 .750 .805
FBProfileFriends FBProfileLikes InteractionFriends InteractionBrands
Scale Mean if Item Deleted 10.5097 10.9660 10.5825 10.9612
Scale Variance if Item Deleted 4.124 4.062 4.906 4.884
Corrected Item-Total Correlation .684 .689 .577 .461
Squared Multiple Correlation .503 .498 .357 .218
The second group of variables measure the attitudes towards and predict force of introduction of Facebook CRM Application on the other dependent variables as shown in Table 4.2. The value of alpha for 5 variables is 0.669 which indicates that the scales are fairly reliable.
Table 4.2: Reliability Analysis Attitude and effect scales.
Reliability Statistics
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Cronbach's Alpha .669 Item-Total Statistics
Cronbach's Alpha Based on Standardized Items .685
N of Items 5
Scale Mean if Item Deleted AppUsefulness AppEffBrandImage AppEffSocialPresence EffSatisfaction EffTrust 14.5485 13.8058 13.8883 13.7427 13.7621
Scale Variance if Item Deleted 6.380 6.629 6.941 6.810 6.634
Corrected Item-Total Correlation .315 .476 .461 .441 .471
Cronbach's Alpha if Item Deleted .687 .595 .605 .611 .597
4.3 Respondent profiles: Table 4.3 shows the profile of respondents in a frequency table which shows the number of respondents in each age group and gender. This is supposed to be an ideal sample in terms of basic respondent classification for representing Middlesex University students in whole.
Table 4.3: Profile of respondents

Age Cumulative Percent 17.0 51.9 84.0 99.5 100.0
Valid
16-20 21-24 25-28 28+ 28.00 Total
Frequency 70 144 132 64 2 412
Percent 17.0 35.0 32.0 15.5 .5 100.0
Valid Percent 17.0 35.0 32.0 15.5 .5 100.0
Gender Cumulative Percent 55.3 100.0
Frequency Valid Male Female Total 228 184 412
Percent 55.3 44.7 100.0
Valid Percent 55.3 44.7 100.0
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Nearly 70% of the respondents belonged to the age group of 21-28. There were 55% male and 45% female respondents. 4.4 Descriptive Analysis: It is necessary to check if any unacceptable or unexpected value has been entered in to the data file during data entry (Pallant, 2005). For this purpose, all the variables of the data were inspected by the frequency of responses. It was made sure by the researcher that no false values went into the data sheet at the time of manual data entry. The descriptive analysis are mostly univariate statistics and visual tables and graphics like frequency distribution, percentages, graphs and charts were used to answer the research questions up to a certain extent. The set of research questions within Objective 1 and Objective 2 are primarily explored within the descriptive analysis. The research objective 1 is to know the level of activity of the respondents on Facebook. Figure 4.1 shows the range of number of Facebook friends of respondents and likes given to Pages of various brands. The number of connections is useful insight into a Facebook Profile and gives an idea of level of activity on Facebook. It shows that very few respondents have less than 101 connections with friends and brands. Also other observation is that highest frequency of number of likes is 101-150, means connections with brands tend to be lesser than the number of friends on an average. Figure 4.2 shows the frequency of interaction of respondents with their connections in a pie chart.
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Figure 4.1: Range of number of Facebook Profile Friends and Likes

FBProfileFriends
200
250
FBProfileLikes
200
150
Frequency
Frequency
150
100
100
50
50
0 0-50 51-100 101-150 151-200 201-250+
0 0-50 51-100 101-150 151-200 201-250+
FBProfileFriends
FBProfileLikes
Figure 4.2: Interaction with Friends and Brands
InteractionFriends
very rarely rarely average frequently very frequently
InteractionBrands
very rarely rarely average frequently very frequently
This shows that the interaction with friends is mostly very frequent, frequent or averagely frequent and interaction with brands is more in range of being average rather than very frequent. This implies that there is significant participation of the respondents of Facebook. The overall summation is that they tend to be proactive on Facebook and there are potentially considerable interactions going on with friends and brands. Research objective 2 is to find out the current brand experience of the respondents with their smartphone brands. 128 respondents used Apple, 98
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used Android, 86 used Blackberry, 54 used Nokia and 46 used other brands of smartphone and they have had a varied experience and satisfaction with their brand. Table 4.4 shows the crosstabulation of smartphone brands and the problems faced by the respondents and the number of times they visited the service website of the brand. It shows harmonic responses in terms of number of times problem was faced corresponds to the number of times the visit was made to website for services. Figure 4.3 shows the attitude of the respondents towards following brands on Facebook.
Table 4.4: Brand Experience Problems and Service website visits
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This implies for the brands that customers are reaching them quite frequently
Figure 4.3: Attitude towards socialising with the Brand.
BrandPageLike
dislike neither like nor dislike like extremely like already given "like"to the page
for solving any issues with smartphones. This runs in favour of launching an application as it would reach customers on Facebook (quiet an aim of Social CRM) rather than customers reaching them giving a possibility of positive shift in their attitudes towards brands.
Figure 4.4: Switching Probability

BrandChange
very unlikely unlikely do not know likely very likely
The favourability of changing their brand was the last aspect of brand experience to be explored in Figure 4.4 which shows that more than 50% of the respondents were either likely or very likely to change the brand of their smartphone on the next purchase. This
implies for the manufacturers that any investment made in attempt of enhancing brand loyalty would give good returns. Table 4.5 shows the descriptive statistics of the remaining variables which are aimed towards exploring the answers to research question of objectives 3-6.
Table 4.5: Descriptive Statistics of other variables
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For each of the variable, the mean is shown on a five point scale. The overall attitude of the respondents towards installing the Facebook CRM Application lies towards positive (M=3.4) side and they are likely to install the brands application with moderate dispersion around mean. (SD=1.3). The perception of usefulness of the Facebook CRM Application is towards useful (M=3.3) with moderate dispersion around the mean. (SD=1.25) The brand image (attitude towards the brand) is on the better side (M=3.65) with low dispersion from the mean. (SD=0.9) It is likely, (M=3.55) the chance of the respondents feeling more socially connected (increase in the perception of the social presence) as an effect of introduction of Facebook CRM Application with low scattering of the responses from the mean. (SD=0.83). It is likely, (M=3.7) that the satisfaction with the brand will increase depending upon the perceived usefulness of the Facebook CRM Application with low dispersion of the responses from the mean. (SD=0.88). It is likely, (M=3.67) that the trust on the brand will increase depending upon the perceived usefulness of the Facebook CRM Application with low dispersion of responses from the mean. (SD=0.90). The descriptive statistics tend to provide useful information in answering the research questions, but the descriptive are not sufficient to know the degree of statistical significance.
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4.5 Correlation Analysis: Bivariate correlation was used to determine the strength and directions of the relationship between two variables. It is necessary to establish relationship of variables using Pearson correlation factor (r) before testing hypotheses (Hair et al., 2006). Pearson correlation factor (r) is considered to be very strong if it lies between 0.81-1.00, strong if it lies between 0.61- 0.80, moderate if lies between 0.41-0.60, weak if it lies between 0.21-0.40 and inexistent if it lies between 0.00-0.20 (Hair et al., 2006). Table 4.6 shows the correlation of the likeliness/possibility of installing the brands application with application usefulness, improving in Brand Image and increasing perceived social presence. The value of r is 0.576 (strong positive correlation), 0.221(moderate positive correlation), and 0.132 (no correlation) respectively for the three variables, with N=412 and significance level p < 0.0005 for each case.
Table 4.6: Pearson Correlation factors
BrandApp Install BrandAppInstall Pearson Corr. Sig. (2-tailed) N Pearson Corr. Sig. (2-tailed) N Pearson Corr. Sig. (2-tailed) N Pearson Corr. Sig. (2-tailed) N 1 412 .576(**) .000 412 .221(**) .000 412 0.132(*) .480 412 App Usefulness .576(**) .000 412 1 412 .327(**) .000 412 .019 .694 412 AppEffBrand Image .221(**) .000 412 .327(**) .000 412 1 412 .273(**) .000 412 AppEffSocia lPresence 0.132(*) .480 412 .019 .694 412 .273(**) .000 412 1 412
AppUsefulness
AppEffBrandImage
AppEffSocialPrese nce
Correlation is significant at the 0.01 level (2-tailed). *.Correlation is significant at the 0.05 level (2-tailed).
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Table 4.7: Pearson Correlation factors
AppUsefulness AppUsefulness Pearson Correlation Sig. (2-tailed) N Pearson Correlation Sig. (2-tailed) N Pearson Correlation Sig. (2-tailed) N 1 412 0.531(**) .000 412 0.675(**) .000 412
EffSatisfaction 0.531(**) .000 412 1 412 .471(**) .000 412
EffTrust 0.675(**) .000 412 .471(**) .000 412 1 412
EffSatisfaction
EffTrust
Table 4.7 shows the correlation of perceived usefulness of the service delivered with the Facebook CRM Application with the increase in satisfaction with the brand and increase in trust on the brand. The value of r is 0.531 (strong positive correlation), 0.675 (strong positive correlation), respectively for both the variables, with N=412 and significance level p < 0.0005 for each case. 4.6 Regression Analysis: To further determine the statistical significance and the predictive powers of the independent variables on the dependent variables, the multiple regression analysis was used. Multiple regression analysis helps in achieving this by letting researcher to test the proposed hypotheses. H1: Introduction of Social CRM/ Facebook CRM will have a positive effect on perceived usefulness of the delivered service by Facebook CRM application. Beta coefficient positive (0.576), and p < 0.05 indicates strong significant contribution and H1 is accepted.
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Table 4.8: Regression Analysis, For testing Hypotheses 1-3
H2: Introduction of Social CRM/ Facebook CRM will have a
positive effect on Brand Image of the smartphone brand. Beta
coefficient positive (0.221), and p < 0.05 indicates strong
significant contribution and H2 is accepted. H3: Introduction of Social CRM/ Facebook CRM will have a
positive effect on the perceived social connection of smartphone users with their peers. Beta coefficient positive (0.058), and p > 0.05 (0.372) that indicates no significant contribution and H3 is rejected.
Table 4.9: Regression Analysis, For testing Hypotheses 4-5
H4: Perceived usefulness of the e-service delivered by the
Facebook CRM application of the smartphone brand will have a positive effect on the satisfaction of smartphone users with their brand. Beta coefficient positive (0.119), and p (0.033) < 0.050 indicates contribution and H4 is accepted. H5: Perceived usefulness of the e-service delivered by the Facebook CRM application of the smartphone brand will have a positive effect on the trust of
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significant
the user on his/her smartphone brand. Beta coefficient positive (0.068), and p > 0.05 (0.171) that indicates no significant contribution and H5 is rejected. 4.7 Summary: This section summarizes the data analysis techniques used to find out the answers to the research questions related to the aim of the research. The reliability test is used to check the reliability of the scales used to measure the constructs. It is followed by the descriptive analysis that gives the answers to the research questions which fall within the first two aims of the research viz. Level of activity of Middlesex University students on Facebook and the smartphone brand experience of the respondents. It also gives the descriptive statistics of the remaining variables used to measure the effect of introduction of Social CRM (Facebook CRM Application here) on the brand loyalty. Further bivariate correlation analysis explores the strength and direction of the relationship between the variables. Finally multiple regression analysis is used to check the statistical significance of the independent variables on the dependent variables by testing the proposed hypotheses.
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Chapter 5: Conclusion and Recommendations
CHAPTER 5: CONCLUSIONS AND RECOMMENDATIONS 5.1 Introduction: This chapter aims to establish the effectiveness of the introduction of Social CRM (Facebook CRM Application in this case) on brand loyalty in the UK smartphone market (Middlesex University students in this case) and find implications for the smartphone brands whether to invest in Social CRM systems with an aim of establishing and maintaining brand loyalty of their existing customers. The chapter starts with the conclusions to the previously executed descriptive analysis, conclusion to the correlation test for relationships (direction and strength of the relationship) between the variables of the proposed Model of Social CRM Brand Loyalty model, followed by the conclusions to the hypotheses testing regression analysis on the variables of the same model. 5.2 Conclusions to analysis: 5.2.1 Conclusions to descriptive analysis. Questions from Objective 1: Level of activity and interaction on Facebook. More than 300 out of 413 respondents have more than 100 friends and more than 250 of the respondents have more than 150 friends. Considering that average Facebook user has 130 friends1, the number of connections of the target market is quiet high. The respondents have fair number of connections with the brands as well as more than 350 respondents are connected with more than 50 brands on Facebook. The general tendency of the respondents
http://www.facebook.com/press/info.php?statistics
65
of interacting with friends and pages is strongly towards frequent side (M=3.75 and sigma 0.7 for friends and M=3.4 and sigma 0.8 for pages). Question from Objective 2: Brand Experience with their smartphone brands. 128 respondents used Apple, 98 used Android, 86 used Blackberry and 54 used Nokia smartphones and they have varied experiences and satisfaction with their brands. More than 52% respondents were likely to change smartphone brand on next purchase. Only 94 respondents never visited the service website of their brand and 85% of the respondents either already follow their brand on Facebook or will like to follow their brand on Facebook. The overall attitude of the respondents towards installing the Facebook CRM Application lies towards positive (M=3.4) side and they are likely to install the brands application. Objective 3: What is the perceived usefulness of service delivered by Facebook CRM Application? Evidence: The perceived usefulness of the Facebook CRM Application is towards high (M=3.3). Conclusion: Respondents perceive the Facebook CRM Application as useful. Objective 4: What will be the Effect of Facebook CRM Application on Brand Image? Evidence: The brand image (attitude towards the brand) is on the better side (M=3.65). Conclusion: There is a strong chance of improvement of brand image.
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Objective 5: What will be the effect of Facebook CRM Application on perceived social presence? Evidence: It is likely, (M=3.55) the chance of the respondents feeling more socially connected. Conclusion: Increase in the perception of the social presence as an effect of introduction of Facebook CRM Application. Objective 6: What is the effect of perceived usefulness of the Facebook CRM Application, on Satisfaction with and Trust on the brand? Evidence: It is likely, (M=3.7) that the satisfaction with the brand will increase and It is likely, (M=3.67) that the trust on the brand will increase. Conclusion: The perceived usefulness of the service delivered by Facebook CRM Application has a strong chance to increase satisfaction and trust on the brand. 5.2.2 Conclusions to tests of relationship between variables. Correlation analysis was carried out to determine the strength and direction of relationship between the following variables Attitude toward the introduction of the application with application usefulness, Brand Image and Perceived Social Presence Application usefulness with satisfaction and trust.
As shown in Table 5.1 there is no relationship between attitude towards the application and the perceived social presence, moderate positive relationship between attitude towards application and brand image. All other variables had strong positive correlation with each other.
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Table 5.1: Conclusions to Correlation tests.
Variables
Evidence
Conclusion positive correlation
Attitude towards intro of r=0.576, N=412, Strong app/Application usefulness p<0.0005
between attitude towards app and application usefulness. positive correlation
Attitude towards intro of r=0.221, N=412, Moderate app/ Brand Image p<0.0005
between attitude towards app and brand image.
Attitude towards intro of r=0.132, N=412, No correlation between attitude app/ Perceived social p>0.0005 towards application and perceived social presence r=0.531, N=412, Strong p<0.0005 positive correlation
presence Application usefulness/Satisfaction with brand Application
between application usefulness and satisfaction with the brand.
usefulness/ r=0.675, N=412, Strong p<0.0005
positive
correlation
Trust on brand.
between application usefulness and trust on the brand.
5.2.3 Conclusions to tests of relationship between variables. After exploring the strength and direction of relationship between independent variable (attitude towards brand) and dependent variables (perceived usefulness, brand image and perceived social presence), the multiple regression analysis gave the following result and conclusions for the test of hypotheses. The table shows the hypothesis, evidences and conclusions for the five hypotheses from which H1, H2 and H4 were accepted and H3 and H5 were rejected.
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Table 5.2 Conclusions to Hypothesis testing.
Hypothesis H1: Introduction of Social
Evidence CRM/ Beta +ve
Conclusion
coeff. Accepted (0.576),
Facebook CRM will have a positive
effect on perceived usefulness of the and p < 0.05 delivered service by Facebook CRM (0.000) application. H2: Introduction of Social CRM/ Beta +ve coeff. Accepted (0.221),
Facebook CRM will have a positive effect on Brand Image of
the and p < 0.05 (0.000)
smartphone brand. H3: Introduction of Social CRM/
Beta +ve
coeff. Rejected (0.058),
Facebook CRM will have a positive effect on the perceived
social and p > 0.05 (0.372)
connection of smartphone users with their peers.
H4: Perceived usefulness of the e- Beta service delivered by the Facebook +ve
coeff. Accepted (0.119),
CRM application of the smartphone and p < 0.05 brand will have a positive effect on the (0.033) satisfaction of smartphone users with their brand. H5: Perceived usefulness of the e- Beta service delivered by the Facebook +ve coeff. Rejected (0.068),
CRM application of the smartphone and p > 0.05 brand will have a positive effect on the (0.171) trust of the user on his/her
smartphone brand.
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5.3 Conclusions to the Study Aim. Introduction of Social CRM/ Facebook CRM will have a positive effect on perceived usefulness of the delivered service by the brand. Introduction of Social CRM/ Facebook CRM will have a positive effect on Brand Image of the smartphone brand. Facebook CRM Application will have no effect on the perceived social presence. Perceived usefulness of the service delivered has a positive effect on the satisfaction with the brand and no effect on trust on brand. The satisfaction with a brand has a strong positive relation with the trust on the brand. Three positive outcomes of introduction of Social CRM are the increase in perceived usefulness of the services delivered by the brand, better brand image and increase in satisfaction with the brand. Satisfaction has a positive relation with trust and both have a strong effect on the brand loyalty. The exact effect on brand loyalty is not calculated. The overall predicted contribution of Social CRM will be moderately positive on the Brand Loyalty. 5.4 Implications The adjacent aim of this study was to determine for the smartphone brands serving customers of UK, whether or not they should invest in developing Social CRM systems with an aim to create and maintain brand loyalty. As the effect of Social CRM is positive on brand loyalty in the smartphone market it is definitely going to be worthy for brands seeking loyalty to invest in Social CRM systems development. Moreover the level of connection and activity as
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determined in the descriptive statistics for UK customers is much higher than the average level of activity on Facebook. This further reinforces the cause of serving the customers at their place of presence and reaching them straight through social media than pulling them to the service website. 5.5 Limitations: The study was carried out on only one form of social media Facebook and not all the social medias. Other social media might have slightly different implications. The study was carried out on only Middlesex University students, that limits the respondents geographically and the level of activity on Facebook and level of brand following is slightly subjective to the social media reference groups. As the study was focused on youngsters, and social media followers, this model will have no effect on a person who does not use any social media. So overall aim of brand loyalty has a multiplying factor of the ratio of the people in target market who are on social media. 5.6 Directions for future research: This study can be extended to all forms of social media and not just Facebook. It does not have implications only for smartphone brands, but can be carried out on other market sectors as well. Plus further focus could me make on the social media perspective of non users and elders after introduction of Social CRM systems could be an interesting area of study.
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5.7 Summary: This section first draws conclusion to the descriptive statistical analysis. Then conclusions are drawn to the results obtained in the correlation analysis which expressed the direction and strength of relationship between various variables. Then conclusions are finally drawn for the results of the multiple regression analysis for hypotheses testing and accepted hypotheses meant positive contribution to the strength of the model. These outcomes were then transferred to be the conclusions of the overall research aim. Based on the findings, implications are drawn for smartphone brands of UK. The limitations of the research are followed by the directions for future research.
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Appendix 1:
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Social Media CRM For Brand Loyalty. (Dissertation Thesis)

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Social Media CRM For Brand Loyalty. (Dissertation Thesis)

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Master of Arts in Marketing Dissertation

Middlesex University Business School Academic Year: 2010-2011 MANZIL MADHWANI

Supervisor: Dr Fawaz Baddar January 2011

TABLE OF CONTENTS: i Iii Iv vii Viii

EXECUTIVE SUMMARY ACKNOWLEDGEMENTS TABLE OF CONTENTS LIST OF FIGURES LIST OF TABLES

Chapter 1: Introduction to the Research Problem

Chapter 1: Introduction to the Research Problem

Chapter 1: Introduction to the Research Problem

Chapter 1: Introduction to the Research Problem

LG Motorola Nokia Palm RIM Samsung Sony Ericsson

Source: Keynote (2010) Mobile Phone Market Report, 2010

Chapter 1: Introduction to the Research Problem

Chapter 1: Introduction to the Research Problem

(Facebook, 2010). Statistics (online). Available from: http://www.facebook.com/press/info.php?statistics (Accessed on 14-12-2010).

Chapter 1: Introduction to the Research Problem

Chapter 1: Introduction to the Research Problem

More than 70 translations available on FB.

Chapter 1: Introduction to the Research Problem

(Facebook, 2010). Statistics (online). Available from: http://www.facebook.com/press/info.php?statistics (Accessed on 14-12-2010).

Chapter 1: Introduction to the Research Problem

Chapter 1: Introduction to the Research Problem

MySpace StumbleUpon Yahoo! Answers Other

Base: 199 companies and 126 agencies

Chapter 1: Introduction to the Research Problem

which activities do companies use Facebook.

Chapter 1: Introduction to the Research Problem

HR None of above Other Base: 199 companies and 124 agencies

Chapter 1: Introduction to the Research Problem

Chapter 1: Introduction to the Research Problem

Chapter 1: Introduction to the Research Problem

Chapter 1: Introduction to the Research Problem

(Facebook, 2010). AdsMarketing (online). Available at: http://www.facebook.com/adsmarketing/index.php?sk=targeting_filters. (Accessed on 14-12-2010).

Chapter 1: Introduction to the Research Problem

Chapter 1: Introduction to the Research Problem

1.5 Structure of Dissertation:

Chapter 1: Introduction to the Research Problem

Chapter 2: Literature Review

Chapter 2: Literature Review

Chapter 2: Literature Review

Chapter 2: Literature Review

Chapter 2: Literature Review

Chapter 2: Literature Review

Chapter 2: Literature Review

Chapter 2: Literature Review

Chapter 2: Literature Review

Chapter 2: Literature Review

Chapter 2: Literature Review

Chapter 2: Literature Review

Chapter 2: Literature Review

Chapter 2: Literature Review

Figure 2.3: Model of e-Loyalty Framework

Chapter 2: Literature Review

Chapter 2: Literature Review

Chapter 2: Literature Review

Chapter 2: Literature Review

Chapter 2: Literature Review

Figure 2.4: The collaborative platform of a Social Media CRM System

Chapter 2: Literature Review

Figure 2.5: The Social Media CRM System

transparency. Knowledge is utilized in context to create meaningful conversations.

Chapter 2: Literature Review

Chapter 2: Literature Review

Chapter 2: Literature Review

Chapter 2: Literature Review

Chapter 3: Research Methodology

Table 3.1: Research philosophy and approaches

EffSatisfaction 0.531() .000 412 1 412 .471() .000 412

EffTrust 0.675() .000 412 .471() .000 412 1 412