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Full Terms Conditions of access and use can be found at httpswwwtandfonlinecomactionjournalInformationjournalCodergfm20 Journal of Global Fashion Marketing ISSN 20932685 Print 23254483 Online Journal homepage httpswwwtandfonlinecomloirgfm20 Impacts of Luxury Fashion Brands Social Media Marketing on Customer Relationship and Purchase Intention Angella Jiyoung Kim Eunju Ko To cite this article Angella Jiyoung Kim Eunju Ko 2010 Impacts of Luxury Fashion Brands Social Media Marketing on Customer Relationship and Purchase Intention Journal of Global Fashion Marketing 13 164171 DOI 10108020932685201010593068 To link to this article httpsdoiorg10108020932685201010593068 Published online 12 Dec 2012 Submit your article to this journal Article views 10406 Citing articles 120 View citing articles 164 AJ Kim E Ko Journal of Global Fashion Marketing 13 2010 164171 Impacts of Luxury Fashion Brands Social Media Marketing on Customer Relationship and Purchase Intention Angella Jiyoung Kim1 Eunju Ko2 Abstracts Luxury brands have always been fashion industry leaders with admirable aesthetic value and innovative yet traditional business management The brands constantly struggle to secure profits by providing novel value to customers through quality products and services customer management retail strategies and innovative marketing mixes However the recent entry of numerous fashion brands in the luxury market coupled with decreased sales related to economic downturns have led to new challenges for luxury firms Because the luxury fashion business is considered high valueadded with guaranteed high profit margins and secure regular customers the lower sectors have begun to heat up the competition To survive the recent unforeseen challenges of heated competition they have turned toward marketing communication using social media Social media are the twoway communication platforms that allow users to interact with each other online to share information and opinions Use of social media sites such as Twitter and Facebook has already expanded to almost every luxury fashion brand and been evaluated as business takeoff tools With the increased use of social media as a means of marketing communication for luxury brands it has become necessary to empirically analyze the effect of social media marketing SMM Thus the study presented here investigated the effects of this SMM on customer relationships involving intimacy and trust and purchase intention A preliminary test was conducted in order to draw a sample of a luxury fashion brand for this study Selfadministrated questionnaires with visual stimuli were used to collect data from luxury consumers in the Seoul area Respondents were restricted to consumers who had purchased any luxury fashion brand item within the previous two years Among 150 questionnaires distributed 133 questionnaires were finally employed for statistical analysis Principal component analysis using varimax rotation was 1 Corresponding author Graduate Student Dept of Clothing and Textiles College of Human Ecology Yonsei University Korea Tel 821072520423 Email ngkimyonseiackr 2 Professor Dept of Clothing and Textiles College of Human Ecology Yonsei University Korea Email ejkoyonseiackr This work was supported and funded by Ministry of Knowledge and Economy Republic of Korea Development of Marketing Service Value Model Project 10035335 2010 KAMS All rights reserved conducted to figure out the properties of luxury fashion brands SMM The social media contained five properties entertainment customization interaction word of mouth and trend Factor loadings ranged from 84 to 52 Cronbachs α lay between 80 and 88 demonstrating adequate construct reliability Multiple regression analysis was conducted to test the effects of SMM on customer relationship ie intimacy and trust and purchase intention as well as relationship between customer relationship ie intimacy and trust and purchase intention Results show that entertainment has a significant positive effect on intimacy β25 t348 p01 trust β34 t575 p001 and purchase intention β31 t432 p001 Other positive effects are customization on trust β13 t228 p05 interaction on purchase intention β25 t354 p01 word of mouth on intimacy β14 t192 p05 and purchase intention β19 t265 p01 and trend only on trust β32 t530 p001 It seems that entertainment customization and trend were satisfying what customers expected from a luxury fashion brand Because the luxury industry aims to provide value to customers in every way possible the brands should focus on providing free entertainment content customized services and trend forward social media site which all act positively toward enhancing customer relationship Trust has a significant relationship with purchase intention β34 t485 p001 Since the trust variable within a customer relationship was only significantly associated with purchase intention the mediating effects of customization and trend were found The study proves the effectiveness of luxury brands SMM on both customer relationships and purchase intention and proposes a strategy to enhance the brands performance by defining specific factors influencing both The result show that the chosen brands SMM includes distinctive elements in comparison to oldfashioned marketing performances Every property found in luxury brands SMM positively influenced customer relationships and purchase intention with entertainment affecting more variables than any other properties Luxury brands should heavily supply an entertainment aspect of social media contents and activities Every activity enabled by use of the media such as creating relationships with other users providing customized service and free entertainment contents and obtaining genuine information on personal interest should all be entertaining By focusing on providing such features customer relationships and purchase intention will be enhanced Concerning the association between customer relationship and purchase intention trust and purchase AJ Kim E Ko Journal of Global Fashion Marketing 13 2010 164171 165 intention were highly related Customers trust was strengthened via interaction with other users as well as brand on social media sites Trust gained while enjoying entertainment and communication provided on the sites seems to contribute greatly toward a luxury brands profit With the growing interest of luxury fashion brands in providing luxurious value to customers in every way possible using social media appears to be appropriate for retaining old customers and attracting crossshoppers As competition among luxury fashion brands becomes more intense by providing plenty of alternatives to customers the brands prosperity seems no longer quite so promising The importance of managing customers as valuable assets cannot be emphasized more As such more luxury brands should engage in social media marketing activities to anticipate a positive contribution to the brands by providing new luxury value to customers Keywords Luxury fashion brand Social media marketing Customer relationship Intimacy Trust Purchase intention Twitter Facebook 150 133 84 52Cronbachs α 80 88 β 25 t348 p01 β34 t575 p001 β31 t432 p001 β13 t228 p05 β25 t354 p01 β14 t192 p05 β19 t265 p01 β32 t530 p001 β34 t485 p001 1 Introduction The recent entry of numerous fashion brands in the luxury market coupled with decreased sales related to economic down turns have led to new challenges for luxury firms Having founded their characteristics on long history and tradition luxury brands nonetheless have become frontrunners in leading trends They have always been placed at the top of the fash ion stream and influenced the rest of the fashion industry with their aesthetic value and innovative yet traditional way of busi ness management While relying on the styles of their own traditional design houses they have never neglected to provide hip and trendy styles as industry leaders Innovative style is not limited to their main products but also is applied to cus tomer management marketing mixes customer services retail strategies and more Because the luxury fashion business is considered high val ueadded with guaranteed high profit margins and secure regu lar customers the lower sectors have begun to heat up the competition In this intense business environment many luxury brands have begun to search for new markets in Asia in order to make up for poor sales in Europe and America Others have either focused on a retail network that brings efficiency to existing retail systems or launched second brand lines to expand customer boundaries They have even stopped depend ing solely on their own design house to collaborate with ce 166 AJ Kim E Ko Journal of Global Fashion Marketing 13 2010 164171 lebrities star designers and artists in providing new value to their customers From temporary stores to exclusive limited items luxury brands are struggling to take back their lost customers As a means to provide value to their customers in every way possible luxury brands have now turned to social media the twoway communication platforms that allow users to inter act with each other online to share information and opinions Use of social media sites such as Twitter and Facebook has already expanded to almost every luxury fashion brand and been evaluated as business takeoff tools Advanced technology has begun to benefit the luxury fashion industry while brands and customers are building and strengthening relationships via the social media sites Even more brands are able to introduce themselves and provide information while engaging in a casual interaction with customers In the beginning as evident in the brands use of websites and ecommerce the luxury market showed a passive attitude toward the use of technology and did not believe in its potential to attract customers Most were resistant because the technology worked against the firms de sire to control their own brands However although the tech nology is still seen as a threat to luxury brands it is also inevitable With the increased use of social media as a means of mar keting communication for luxury brands it has become neces sary to empirically analyze the effect of social media market ing SMM The purpose here is to define SMM properties and evaluate the impact for luxury brands on customer rela tionships as well as on purchase intention Luxury brands en gage in social media activities mainly to build a strong rela tionship with their customers and create purchase intention to ensure success in the long run Therefore the research pre sented here studies the impact of luxury fashion brands SMM and details its effects Moreover as this study has been carried out at the beginning stage of luxury fashion brands SMM ac tivities it is hoped that the results will eventually serve as a guide to managing SMM for the rest of the fashion industry 2 Literature Review 21 Social Media Marketing of Luxury Fashion Brands Traditional designer houses such as Louis Vuitton are pro viding live broadcasts of fashion shows on Facebook Ralph Lauren Chanel Donna Karen and Gucci have worked with Apple to create iPhone applications Many luxury houses have created their own Twitter accounts or posted themselves on Facebook Brands and customers are communicating with each other with no restriction in time place or medium so that oldfashioned oneway communication is transformed into inter active twoway direct communication Social media are defined as the online applications plat forms and media which aim to facilitate interactions collabo rations and the sharing of content Universal Maccann International 2008 There are a variety of forms including weblogs social blogs microblogging wikis podcasts pictures video rating and social bookmarking Two of the most com monly used among luxury fashion brands are social blogs eg Facebook and microblogs eg Twitter The Facebook pages of luxury fashion brands provide a variety of contents such as video clips pictures and stories The brands not only expose their PR contents on Facebook but also designers lives and episodes which draw attention from customers On Twitter users are able to get instant customer service or an swers to personal questions and can easily form a community through networking and to exchange opinions as well as information According to Miller Fabian and Lin 2009 the importance of social media lies in the interaction between consumers and the community and in the facilitation of immediate interactive and lowcost communications Nowadays internet communities blogs and social networks have become a part of life for most people so that social media have become alternative communication tools supporting existing relationships and activ ities in a joyful way that can enrich the users experience Moreover increased use of social media provides a platform for nurturing brands and affecting consumers purchase decisions Luxury fashion brands actively make use of social media for advertising and marketing Now that marketing has merged with services as joining of business and advertising it will continue to align itself with services that users value The shift to marketingsupported services opens up enormous oppor tunities for marketers to expose consumers to brand messages and more important to interact with them Commercial mes sages and interactions with consumers will be partnered with media events entertainment retailers and digital services of all types Social media have made it possible to perform in tegrated marketing activity with much less effort and cost than before Marketing is a multidimensional process made up from various strategies however one of the main goals of any mar keting strategy is to increase sales and profitability Thus this study investigates the effects of this newly introduced market ing phenomenon social media 22 Customer Relationships Relying on a brand itself can no longer guarantee company performance as competition gets tough in the luxury environment Loyalty toward a certain brand weakens as a va riety of alternatives are provided to customers Brands now need to build strong relationships with their existing customers in order to keep them around as long as possible Intimacy and trust have received extensive exposure in the academic lit erature on customer relationships in the fashion marketing field While this study aims to investigate how SMM influen ces customer relationships and purchase intention it will focus AJ Kim E Ko Journal of Global Fashion Marketing 13 2010 164171 167 Fig 1 Research model on intimacy and trust as representative of a customer relation ship that will eventually contribute to a brands performance 221 Intimacy Intimacy refers to feelings of closeness connectedness and bondedness Sternberg 1996 It is possible that consumers forge an emotional relationship such as intimacy with a certain brand and perceptions of intimacy are required before the consumer will make an emotional investment in the brand and develop perceptions of trust Elliot and Yannopoulou 2007 Intimacy is a matter of knowledge that accumulates over time Carroll and Ahuvia 2006 and lasts longer than other emotional relationships Sternberg 1996 222 Trust A degree of tendency to believe in a certain brands ability to perform a promised function can define trust Chaudhuri and Holbrook 2001 Trust is considered one of the keys to an enhanced relationship between a consumer and a certain brand and it has been recognized recently as a core variable of longterm relationships with customers In order for custom ers to attain firm and lasting relationships with a brand trust must first be obtained As one party trusts another positive behaviors such as intention to purchase and recommend are created Lau and Lee 1999 Thus strong belief in a brand becomes a fundamental element of a customer relationship 23 Purchase Intention Purchase intention is defined as the consumers possibility of purchasing in the future Since it is expressed as a customers will to promise certain activity related to future consumption many studies have employed purchase intention to estimate a brands future profits Understanding consumers purchasing be havior is essential to a firm in order to attract and retain its customers Ko Kim and Zhang 2008 According to previous studies purchase intention is strongly related to attitude and preference toward a brand or a product Kim and Ko 2010 Kim and Lee 2009 As customer relationship is built on atti tude toward a brand purchase intention is expected to be in fluenced by such relationships 3 Methods 31 Research Questions Hypotheses and Proposed Model According to Samsung Design Net 2009 the use of social media among luxury fashion brands builds friendly affection toward brands and stimulates customers desire for luxury Because of the recent emergence of the use of SMM among luxury fashion brands academic work dealing with its effects is rare However in light of the luxury industrys growing in terest in SMM it has become necessary to empirically inves tigate those effects Within a limited body of literature the following research questions and hypotheses have been devel oped Research Question 1 What are the properties of luxury fashion brands social media marketing Research Question 2 How does each property affect customer relationships ie intimacy and trust and purchase in tention H1 Social media marketing will have a significant positive in fluence on customer relationships ie intimacy and trust H2 Social media marketing will have a significant positive in fluence on purchase intention Research Question 3 What is the relationship between custom er relationships ie intimacy and trust and purchase in tention H3 Customer relationships ie intimacy and trust will have a significant positive influence on purchase intention Figure 1 presents a proposed model for outlining the hy pothesized relationships among SMM customer relationships and purchase intention 32 Preliminary Test Sampling and Data Collection In advance of the final development of survey ques tionnaires a preliminary test was conducted among fifteen graduate students majoring in fashion marketing in order to draw a sample of a luxury fashion brand for this study Participants were asked to list three such brands After a fre quency test using SPSS 170 Louis Vuitton was mentioned most often and was selected to represent the brands Louis Vuitton is currently engaging in a variety of social media ac tivities and is ranked at the top in international luxury brand 168 AJ Kim E Ko Journal of Global Fashion Marketing 13 2010 164171 On June 2009 Louis Vuitton created its official account on Facebook called The Art of Travel by Louis Vuittonwwwfacebookcomlouisvuitton as a first among luxury brands Louis Vuittons Facebook has been visited by 850 thousand people around the world up to now and it is creating intimacy between the public and brand since its page on Facebook provides exclusive details such as designersdaily lives preparation for collection or episodes which are not found on its official webpage On October 2009 Louis Vuitton attempted service to feed realtime fashion shows on line and it also receives realtime feedback from customers by Facebook and Twitter In addition Louis Vuitton established official Twittie httpwwwtwittercom LouisVuittonHQ on Twitter for users to lively exchange information or diverse opinions based on the network created online Fig 2 Visual stimulus of Louis Vuittons social media Factors Items Factor loading Cronbachs α Entertainment The contents found on Louis Vuittons social media seem interesting 82 88 It is exciting to use Louis Vuittons social media 73 It is fun to collect information on brands or fashion items through Louis Vuittons social media 70 It is easy to kill time using Louis Vuittons social media 69 Customization It is possible to search customized information on Louis Vuittons social media 79 87 Louis Vuittons social media provide customized services 76 Louis Vuittons social media provide lively feed information I am interested in 67 It is easy to use Louis Vuittons social media 63 Louis Vuittons social media can be used anytime anywhere 52 Interaction It is easy to convey my opinion through Louis Vuittons social media 84 88 It is possible to exchange opinions or conversation with other users through Louis Vuittons social media 73 It is possible to do twoway interaction through Louis Vuittons social media 69 It is possible to share information with other users through Louis Vuittons social media 66 Word of Mouth I would like to pass out information on brands products or services from LVs social media to my friends 87 80 I would like to upload contents from LVs social media on my blog or micro blog 72 I would like to share opinions on brands items or services acquired from Louis Vuittons social media with my acquaintances 70 Trend It is a leading fashion to use Louis Vuittons social media 82 82 Contents found on Louis Vuittons social media are uptodate 73 Table 1 Factor analysis of social media marketing rankings eg Interbrand 2008 Millward Brown 2008 Data were collected from a convenience sample in the Seoul metropolitan area Respondents were restricted to consumers who had purchased any luxury fashion brand item within the previous two years Selfadministrated questionnaires were dis tributed to 150 customers and after excluding incomplete an swers 133 questionnaires were finally employed for statistical analysis 33 Measurements The questionnaires consisted of three parts with the first part measuring the brands SMM activities In order to do this a visual stimulus of Louis Vuittons activity on the two most commonly used social media Facebook and Twitter was de veloped See Figure 2 Participants were asked to review the proposed visual stimulus and answer 25 measurement items which were developed from previous literature related to luxu ry fashion brands social media marketing ie Kim 2010 The second part of the questionnaire included eight items to measure customer relationship and purchase intention In this study customer relationship was to include overall intimacy to ward a brand eg I am a true fan of this brand I feel in timacy toward this brand I know this brand well trust eg I have a strong belief in this brand This brand provides pre cise service information Measures were developed from HennigThurau Gwinner and Gremler 2002 and Ju and Chung 2002 Items to measure purchase intention were devel oped from Park Jeon and Kwak 2007 All statements were measured by fivepoint Likerttype scales 1 Strongly AJ Kim E Ko Journal of Global Fashion Marketing 13 2010 164171 169 Independent variable Dependent variable β tvalue R2 F Entertainment Intimacy 25 348 12 372 Customization 10 147 Interaction 01 22 Word of Mouth 14 192 Trend 05 75 Entertainment Trust 34 575 35 1418 Customization 13 228 Interaction 07 118 Word of Mouth 10 174 Trend 32 530 Entertainment Purchase intention 31 432 24 842 Customization 13 185 Interaction 25 354 Word of Mouth 19 265 Trend 04 63 p001 p01 p05 Table 2 Impact of social media marketing on customer relationship and purchase intention Disagree 5 Strongly Agree The last part measured demo graphic characteristics of the sample including age education marital status occupation average household income spending on fashion goods and spending on luxury purchases 4 Results 41 Properties of Social Media Marketing Principal component analysis using varimax rotation was conducted to figure out the properties of luxury fashion brands SMM After eliminating some items possessing either low factor loadings or cross loadings five factors with ei genvalues greater than one were drawn entertainment custom ization interaction word of mouth and trend As indicated in Table 1 factor loadings ranged from 84 to 52 Cronbachs α was used to test reliability of the measures and the reliability coefficient of each property lay between 80 and 88 demon strating adequate construct reliability The brands social media were found to comprise fun elements and provide custom erfocused service while supplying twoway interaction plat forms that enable users to influence each other Moreover the social media included trend aspects 42 Impact of Social Media Marketing To test the effects of SMM on customer relationships and purchase intention multiple regression analysis using SPSS 170 was used The five SMM properties were entered as in dependent variables and intimacy and trust for customer rela tionship and purchase intention were applied as dependent variables Prior to multiple regressions to test the hypotheses reliability tests proved the internal consistency of each depend ent variable Cronbachs α was 74 for intimacy 82 for trust and 81 for purchase intention 421 Customer Relationship When the effects of SMM on intimacy and trust were ex amined entertainment β25 t348 p01 and word of mouth β14 t192 p05 had a positive impact on intimacy Regarding trust entertainment β34 t575 p001 customization β13 t228 p05 and trend β 32 t530 p001 each had a positive impact Table 2 summarizes the results of multiple regressions between SMM and customer relationships According to the findings intimacy was driven by entertain ment and word of mouth Because intimacy with a certain brand is formed by frequent exposure with familiar feelings and positive information entertainment and word of mouth seemed to influence intimacy positively Trust was affected by entertainment the most and the effects of trend and custom ization followed after It seems that entertainment custom ization and trend were satisfying what customers expected from a luxury fashion brand Because the luxury industry aims to provide value to customers in every way possible the brands should focus on providing free entertainment content customized services and trend forward social media site which all act positively toward enhancing customer relationship Moreover entertainment was the most effective property of SMM influencing all customer relationship variables in the study In addition Chen and Wells 1999 insisted that enter tainment contributes most to attitude toward the website A re lationship between customer and brand formed by entertainment is steady and is enough to induce future customer behaviors that are important to a brand Thus luxury fashion brands should focus on offering entertainment through their social me dia platforms as much as possible 422 Purchase Intention With regard to the impact of each SMM property on pur chase intention entertainment β31 t432 p001 inter action β25 t354 p01 and word of mouth β19 t265 p01 had a positive influence on purchase intention It was interesting that the impact of interaction was greater than that of word of mouth The result indicates how im portant it is for customers to share information and opinions on social media Consumers seem to create purchase intention while they engage in a casual interaction with other users as well as the brand It thus becomes necessary for luxury fash ion brands to provide an interaction venue that enables cus tomers to express and share opinions of communal interest 43 Relationship between Customer Relationship and Purchase Intention In addressing Research Question 3 multiple regression anal ysis with SPSS 170 statistic package was conducted to figure out the connection between customer relationships and purchase intention Table 3 summarizes the results of multiple re gressions between customer relationship and purchase intention 170 AJ Kim E Ko Journal of Global Fashion Marketing 13 2010 164171 Independent variable Dependent variable β tvalue R2 F Intimacy Purchase intention 00 01 51 4555 Trust 34 485 p001 Table 3 Relationship between customer relationship and purchase intention The results indicated a significant relationship between trust and purchase intention β34 t485 p001 Thus H3 was partially supported Only the trust variable within a customer relationship was significantly associated with purchase intention In testing H1 and H2 the mediating effects of customization and trend were found Although these two properties did not have a direct effect on purchase intention they will eventually affect intention through the influence of customers trust Since intimacy was not significantly influential toward purchase in tention it is assumed that there might be other moderating factors that affect the relationship between intimacy and pur chase intention For that reason future studies might test mod erators concerning this in order to reveal the relationship be tween customer relationship and purchase intention in more detail 5 Conclusion and Implications The study presented here has examined the impact of luxury fashion brands social media marketing on customer relation ships and purchase intention Research objectives and hypoth eses were developed to meet the purpose of the study and the results were derived through appropriate procedures to reach the conclusions Findings indicate that luxury fashion brands SMM is a significantly effective marketing medium Specific results and corresponding implications are as follows First luxury brands social media comprise five properties entertainment customization interaction word of mouth and trend The result show that the chosen brands SMM includes distinctive elements in comparison to oldfashioned marketing performances In evaluating its impact on customer relation ships and purchase intention entertainment and word of mouth had a significant positive influence on intimacy Trust was in fluenced by entertainment customization and trend while pur chase intention was influenced by entertainment interaction and word of mouth Every property found in luxury brands SMM positively influenced customer relationships and purchase intention with entertainment affecting more variables than any other properties Luxury brands should heavily supply an enter tainment aspect of social media contents and activities Every activity enabled by use of the media such as creating relation ships with other users providing customized service and free entertainment contents and obtaining genuine information on personal interest should all be entertaining By focusing on providing such features customer relationships and purchase in tention will be enhanced These results correspond to a DEI Worldwide report that states that consumers make a purchase decision based on the information posted on social media sites and consumers using those sites pass along information to others DEI Worldwide 2008 While marketing can be characterized as an investment in improving a firms performance Srivastava Shervani and Fahey 1998 marketing activities using social media have pro ven their effectiveness Recently previous studies on customer equity have noted that customers can be seen as intangible as sets that a firm should wisely acquire maintain and maximize like other financial assets Blattberg Getz and Thomas 2001 In the current competitive marketing environment customers future behavior is a key strategic asset that must be monitored and nurtured by firms to maximize longterm performance And customer relationship is what strengthens the bond be tween customer and brand Thus using social media in con ducting marketing activities appears to be an appropriate me dium for luxury brands Concerning the association between customer relationship and purchase intention trust and purchase intention were highly related Customers trust was strengthened via interaction with other users as well as brand on social media sites Trust gained while enjoying entertainment and communication pro vided on the sites seems to contribute greatly toward a luxury brands profit With the growing interest of luxury fashion brands in pro viding luxurious value to customers in every way possible us ing social media appears to be appropriate for retaining old customers and attracting crossshoppers As competition among luxury fashion brands becomes more intense by providing plen ty of alternatives to customers the brands prosperity seems no longer quite so promising The importance of managing cus tomers as valuable assets cannot be emphasized more As such more luxury brands should engage in social media mar keting activities to anticipate a positive contribution to the brands by providing new luxury value to customers As an initial effort to evaluate effects of social media mar keting a visual stimulus employed to measure attributes of so cial media marketing activities faced difficulties Moreover its possible error could not be controlled Due to the reason men tioned above limitation follows in generalizing the result of the study Future study should develop effective instrument to measure social media marketing of luxury fashion brand more appropriately Received August 2 2010 Revised August 16 2010 Accepted August 23 2010 References 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