Paper Example on Impact of Social Media on Luxury Brand Management

Published: 2021-06-23
1854 words
7 pages
16 min to read
University of California, Santa Barbara
Type of paper: 
Literature review
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Even though there are numerous studies, different statistics, and reports that point towards the effectiveness of social media campaign positively impacting on the brand. Most of the business people who use social media still remain unsettled on the exact benefits of social media. Further, they are not even sure of the specific social media tools that would work best for them (Erdogmus, and Cicek, 2012).

The Impact of Social Media on a Brand and the Advantages and Disadvantages

Enhancing the Brand Recognition

By increasingly showing a brand on social media platform, the brand gets more exposure and hence become recognized (Piller, Vossen and Ihl, 2011). Recognition, in this case, entails the companys identity linked to the brand. To ensure that the brand progressively stands out, there is need to use paid adverts like the case on Facebook. Also, through sponsorship of giveaways, the brand becomes popular on social media. This can be achieved using appropriate tools on Facebook profiles (Hutter, Hautz, Dennhardt and Fuller, 2013). For the brand to increasingly be known in the market, social media can help in excite buyers. Through promos, deals and limited discounts put on social media, a brand becomes easily recognized. When one creates a comprehensive profile on the different social media networks, they easily become recognized. Through the creation of profiles on the big four social channels such as LinkedIn, Facebook, Google+ and Twitter, a brand becomes recognized. The profile, in this case, includes the logo of the company and the bio which are consistent across all the social sites.

Increased Trust through Leveraged Credibility

Through social media, a brand can easily increase their trust through leveraged credibility. This may happen when a major brand or a major company retweets, links the different blog posts that have been written on behalf of your brand to their audience. This may end up linking your brand to the newly established audience as well. Getting good messages concerning the products in the market also helps in boosting the brand image of the products in the market. In fact, according to the research done by Goh, Heng, and Lin (2013), if consumers trust a brand then nearly 90% of them will recommend the brand. Additionally, if they trust a product, approximately 85% will frequently use the product, 78% will look at it for the thing that they want and 50% will pay more to get the brand.

Competitive Advantage

Through the use of social media, a brand gets a competitive advantage over the rest. The competitiveness, in this case, entails conversion of the visitors who use the internet search into members and potential consumers of a brand (Bruhn, Schoenmueller and Schafer, 2012). Getting the competitive advantage happens when a there is the active and quality presence of a brand on social media. This happens through a blog, Pinterest or even through LinkedIn. The competitive advantage is gained when the competitor, on the other hand, has a weak presence on social media. This means that the brand with strong presence will obviously catch the attention of individuals as it is the one that is more engaging as compared to the rest. Social media generally has impacts on the guiding the purchasing decisions of persons in regards to a product (Laroche, Habibi, Richard and Sankaranarayanan, 2012).

Increase the Percentage of Referrals Closed

Through the search options in the different social media platforms, individuals can narrow down to the things that they want (MARI, 2016). One can easily eliminate the results that do not match their pages and then be left with those that match their requirements. For the brands that stand out in social media, they display obvious expertise, show social proof, stand out as the most credible, has clear brand visuals and messages and can easily be navigated by users through the search options available. Having this kind of guides, the best brand will undoubtedly stand out among the rest.

Improving on Brand Loyalty

Social media platforms play a critical role in building and maintaining a brand loyalty to the customers (Laroche, Habibi and Richard, 2013). Through advantageous campaigns that run on social media, the brand loyalty is assured. Also, the other critical factors that affect brand loyalty as far as social media use is concerned to include the relevancy of the content and the popularity of the content among friends and consumers. For a company to showcase its brand, it has to take into considerations the benefits, the different values, advantages that they offer to the consumers and the things that make them loyal to their brands (Chaudhuri and Holbrook, 2001). The platforms are different and they affect the brand loyalty among the consumers in different ways. This means that for each of the platforms that are used to market a brand, there is need to have creative ways, means and different approaches in engaging with the brands. Owing to this, the companies need to work on the best ways to create engaging, participative and interesting means to communicate with the persons (De Vries, Gensler and Leeflang, 2012).


Easy to Generate Leads

Through social media platforms, one can easily generate leads and engagements from just the normal individuals. For a brand to generate leads, the content around it must be clearly speaking to the followers. The content has to be informative, of great benefit and exciting. Additionally, one has to create content that will inspire conversation. Social media is not a place where passiveness can take center stage. There is need to create as many opportunities as possible to ensure that individuals are engaged maximum and this has to happen through the content created (Gao, Barbier and Goolsby, 2011).

Low Cost

The use of social media platforms to create a brand is advantageous given the low or non-existing cost as well as a few resources that are needed to boost the presence of a brand on social media. This means that through social media, there are numerous possibilities that have been opened up for small businesses (Safko, 2010).

Targeting A given Demography

Using social media to boost the presence of brand often targets a given demography. Each demography has a defined market or target. For instance, when a product is put on a discussion forum, it ends up serving a given group of individuals and the sub-categories that exist allows for targeting certain sub groups. A case in point is Facebook where one can set the target capability as far as advertising on the platform is concerned. On Facebook, the company can easily target their brand adverts depending on the segments which are not limited to age, geolocation, and interests.


The measurability of social media and the data that one gets from social media offers a huge advantage. The data that is got from social media can easily help in gaining valuable insights on the brand perceptions and even create effective strategies. For instance, it becomes very easy to assess and evaluate a brand in real time using data obtained from social media.

Requires too much Time

Social media is often interactive and successful hence takes lots of commitment. The amount of time that is put in place to monitor each network is overwhelming. Equally, lots of time are required to respond accurately to the comments, answer the different questions that arise and post the brand information to the customers as they request (Bolton et al., 2013).

No Control over Feedback

On social media platforms, the companies suffer a lot as they may not be able to control the feedback that they get from their customers, their competitors and any other user (Gallaugher and Ransbotham, 2010). This implies that negative posts and responses may end up damaging the marketing campaigns and the brand image of a product. Unhappy persons may end up posting demeaning or even invasive posts, pictures, and videos that may not even be true (Fuchs, C., 2013). Therefore, the best way is to manage the social media in an effective way to ensure that such negative responses are immediately neutralized.

Effect of Social Media on the Luxury Brand Market

Social media mainly affects the luxury brand market in a positive way. Through social media, there is a definite improvement in the luxury brand market. The improvement happens in various ways. First, social media creates awareness of the luxury brands. In fact, one of the characteristics of the luxury brands is the unique features that they have. If the features are not properly hyped, consumers may not be aware of the products that they are interested in (Kim and Ko, 2012). Second, through social media platforms, the luxury brand can have an increase in their base loyalty or consumer loyalty. The different characteristics that are talked about and the hyping of the brands ends up in creating the brand for the product (Rapp et al., 2013).

Through the social media, the luxury brands have gotten new distribution channels that ensure that they can keep up with the consumer demand for the latest fashion at certain value prices.


For most of the use of social media in the luxury brand market, engaging the customers in different customized and bespoke initiatives have been limited. The clients also need to be involved when it comes to the product design. Engaging the customers in this process is likely to create an emotional attachment to the brand and in the end, promote loyalty and improve on the brand advocacy. Owing to the exclusivity of the luxury brands, most of them have concentrated only single channels. There is need for the luxury brands to explore the different channels where their users are.


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