Why Social Currency Becomes a Key Driver of a Firm's Brand Equity – Insights from the Automotive Industry
Lobschat L, Zinnbauer MA, Pallas F, Joachimsthaler E
Brands represent a significant share of a firm's value. While a brand's value has always been dependent on acceptance and interaction between consumers, so far, academic literature has not revealed a suitable metric to capture the complex social nature of brands. Especially, due to today's digital world, it has never been easier for consumers to engage in an open dialogue on brands and interact with other brand users, posing challenges for companies to better understand this phenomenon and respond to it in a strategic manner. Therefore, the objectives of our study are twofold: First, we conceptualize a new multifaceted formative construct, social currency, and its dimensions based on social capital theory. Our second objective is to empirically validate our construct and its multiple dimensions, and to examine its nomological validity by exploring its influence on well-established brand equity measures. For this purpose, we apply a partial least squares (PLS) approach to analyze data from a representative U.S. consumer survey in the automotive context. Our results indicate a valid description of social currency and we find a positive effect of social currency on our brand equity measures: perceived quality, brand loyalty, and brand trust. Moreover, our findings provide researchers and managers with insights on how to assess social currency.