Value Creation Practice in Brand Community Reza Ashari

Value Creation Practice in Brand Community Reza Ashari Nasution, Ph. D School of Business and Management Institut Teknologi Bandung National Marketing Conference, Prasetya Mulya Business School, Jakarta, 14 February 2013

Outline 1. 2. 3. 4. 5. 6. 7. Research Background Literature Study Research Method Findings and Discussion Conclusion and Managerial Implication Further Research References

RESEARCH BACKGROUND

Overview of Brand Community • A brand community is a specialized, nongeographically bound community, based on a structured set of social relationships among admirers of a brand. • Muniz and O’Guinn (2001) found the that brand communities are social entities that reflect the situated embededness of brands in the day-today lives of consumers and the ways in which brands connect consumer to brand, and consumer to consumer

Brand Community Research • Mc. Alexander, Schouten, and Koenig (2002) reveals insights that add to prior research in four important ways: ▫ expands the definition of a brand community ▫ treats vital characteristics of brand communities, such as geotemporal concentrations and the richness of social context, as dynamic rather than static phenomena, ▫ demonstrates that marketers can strengthen brand communities by facilitating shared customer experiences in ways that alter those value creation practices and ▫ yields a new and richer conceptualization of customer loyalty as integration in a brand community. •

• In 2005, Muniz and Schau explored the grassroots brand community centered on the Apple Newton. Their study was conducted to examine how a grassroots brand community responds to the loss of the brand upon which it is centered and what this response reveals about the relationship between brand communities, technology, and the magico-religious.

• Mathwick, Wiertz, and Ruyter (2007) examined the relational norms that determine social capital, an intangible resource embedded in and accumulated through a specific social structure. The social structure examined in this study is a virtual community created upon text-based conversations oriented toward peer-to-peer problem solving (P 3).

• Schau, Muniz, and Arnould (2009) revealed the process of collective value creation within brand communities. The researchers induced 12 valuecreating practices across the nine brand communities they studied. They further organize these practices into four thematic categories: social networking, impression management, community engagement, and brand use. •

Value Creation Practice • very important for further elaboration of brand consumer relationship in society • put community-driven brand building in a more systematic manner • help us understanding how brand building and anti-brand building activities take place in a brand community

Research Problems • Empirical findings about those value creation practices are still rare. • It is not known whether: ▫ different brand communities perform similar value creation practices, ▫ value creation practices benefit brand consumer development in the communities and ▫ brand owners can influence the value creation practices for maximum development of their brands

LITERATURE STUDY

Brand Consumer • Brand is defined in American Marketing Association as a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competitors. • The initial identity attached to a brand is developed by the company as the brand originator. But, the overall identity of the brand is made by the entire stakeholders (company, supplier, and supplementary). • Nowadays, brand becomes incorporated into the customer’s self identity and has a prominent role in defining and communicating complicated and important identity project to others (Schau and Gilly, 2003). • In a consumer society, brand becomes a part of the non-verbal language of social identity because the consumer’s consumption is routinely implicated and connected with the identity (Patterson and O’Malley, 2002)

• Consumers progressively own the brand use its symbolic benefits. • The interaction with a particular brand is experienced by many consumers who then interact with each other and communicate to share values and experiences. Later development of this interaction forms brand community (Cova and Pace, 2006)

Brand Community Development • A brand community is made up of brand some entities and the relationship among them. • A brand community tends to be identified on the basis of commonality or identification among their members, whether a neighborhood, an occupation, a leisure pursuit, or devotion to a brand. • A brand community is not geographically bound.

• Through brand community, people share essential resources that may be cognitive, emotional, or material in nature (Mc. Alexander et al. , 2002). • People gather in the same brand community tend to have same values and beliefs that they have toward something (Davidson et al. , 2007). • This builds commitments to the brand the community in the absence of corporate advertising and promotion (Muniz Jr. and Schau, 2007). • Members of brand community are quite active in promoting the existence of the brand that they love. Brand communities can lead to formation of vigilante marketing (Muniz Jr. and Schau, 2007)

Salient Brand Characteristics According to Muniz and Schau (2007), the followings are salient brand characteristics that can create brand community: • 1. Well-defined brand image: A well-defined brand avoids confusion among its users thus offering clear image to be promoted and embraced in a community. • 2. Expressive hedonic culture: Brand communities have been shown to form more readily around brands that are rich in expressiveness and hedonic qualities. • 3. Rich and lengthy history: Brands that have long history, usually already considered to have more stable quality and worth as a center of a brand community. The history brings some reputations that are boasted by its members. • 4. Publicly consumed: If the brands are publicly consumed by people in a certain group, it can attract significant number of members to share ideas about the brand to collectively build the brand. •

Value Creation Practice • Schau et al. (2009) induced 12 value-creating practices across the nine brand communities they studied. They further organize these practices into four thematic categories: ▫ Social networking (SN): (1) welcoming, (2) empathizing, and (3) governing. ▫ Impression management (IM): (1) evangelizing and (2) justifying. Members act as altruistic emissaries and ambassadors of good will when practicing these activities. Various impression management practices are evident in the extant brand community literature. ▫ Community engagement (CE): (1) staking, (2) milestoning, (3) badging, and (4) documenting. ▫ Brand use (BU): (1) grooming, (2) customizing, and (3) commoditizing. •

Brand Community Value • As an individual, members can receive social and emotional support from the others, which will further create a friendship among them that will surely make the entertainment (Ridings and Gefen, 2004; Maloney. Krichmar and Preece, 2005; Johnson and Ambrose, 2006). • Wang and Fesenmaier (2004) found that community members will get a sense of satisfaction and pride when helping each other and will create a good relationship and trust. • Maloney-Krichmar and Preece (2005) indicated that community members can interact anytime anywhere they want. Having easy and good access, community member interaction will have no limit in time and places which is very useful for members to fulfill their needs. • Millen et al. (2002) mentioned positive impacts of brand community to companies as follows: ▫ Employees who were involved in many activities in brand community will gain better value than those who were not. ▫ Increasing the business and innovating of products. ▫ Increase the employees knowledge. w about the product issued by a company ▫ Can protect its brand

Figure 1. The relationship between practices of value creation and their common anatomy in brand community CE SN IM BU Figure 1. The relationship between practices of value creation in brand community

• The practices in brand community have effects on both the community and the brand. • Practices in brand community endow participants with cultural capital. • Practices, especially community engagement practices, present opportunities for individual differentiation through adroit performance. • Practices also produce a repertoire for insider sharing. • Practices provide participants with an almost inexhaustible source of shared insider jargon and modes of representation, which enhance consumers’ brand experience.

Research Questions • What are value creation practices in Indonesia brand communities? • What are the benefits to the brand, community and members?

RESEARCH METHOD

• Community selection: based on Muniz and Schau’s criteria • Two types of brand community: ▫ Brand-based: HDCI, BMWCCI, HPCI and Star Wars ▫ Product-based: Polygon Xtrada 5 and Canon EOS 1000 D • Data collection: netnography (Kozinets, 2010) ▫ ▫ Became a member of the community Studied all postings and documentations Participated in the community’s events Interview with community members • Data analysis: grounded research coding, content analysis and pattern matching

FINDINGS AND DISCUSSION

Findings Community Type SN BU CE IM Harley Davidson Club of Indonesia Brand-based V V BMW Car Club of Indonesia Brand-based V V Harry Potter Club of Indonesia Brand-based V V Star Wars Brand-based V - Polygon Xtrada 5 Product-based V V V - Canon EOS 1000 D Product-based V V V -

• As expected, Social Networking is the first and foremost value creation activity • Community Engagement is prevalent in all community, indicating that it is an extension of social networking activities • Brand community with CE activity tend to have more activities in the future. It also triggers the new member flow to conduct SN activity. • Brand Use is visible when the brand community involves the use of a product • Members with active participation in CE will share more information about BU • CE will likely happen to members who experience a good environment of brand use • Member whose motivation to BU is stronger than CE will be less interested to conduct IM. Therefore, CE is very important antecedent to IM • Impression Management tends to happen when a brand community has an effective CE activity and when it has received a cult status

Revised Model CE SN IM BU

CONCLUSION AND MANAGERIAL IMPLICATIONS

Conclusions • The main motivation for joining a brand community is to exercise Social Networking activity • Members are divided into two groups: those with strong motivation to be engaged in the community and those who just want to know how to use a product • Positive experience in both community engagement activities and brand use will trigger more member to come to the brand community, making it bigger and stronger • Brand community with good community engagement practice will have a potential to conduct impression management activity

Managerial Implications • Brand community will bring positive influence to company. The minimum advantage is to create awareness. • Positive experience in brand use and community engagement will make the community larger, so company must help the community to create a good environment for sharing brand usage and sponsor the community’s engagement activities • Company involvement in the community engagement activities will help the company to create free brand campaign from the community in terms of impression management • Companies must monitor the community activity and decide with whom they want to engage

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