Analysing the Effect of Social Media on Customer Equity: A Study of Fast-food Restaurants

Abstract

The enormous number of social media users globally and the increased time spent by each user on social media every day have made social media an irreplaceable part of the contemporary marketing mix. Markets have become more competitive because of the new informed and empowered customers. Integrating social media into the existing marketing mix and honing its power to the optimum is the need of the hour. This has led marketers and researchers to develop a considerate understanding of social media and to analyse its effect on customers. This research paper attempts to address this contemporary paradigm and investigates the effect of social media on customer equity in fast-food restaurants. In addition, the effect of user-generated content and firm-generated content on relationship equity, value equity and brand equity is analysed. A conceptual framework is proposed in this regard, and later the relationships of this framework are evaluated with the help of data from 400 respondents. The results confirmed that social media has a positive effect on the drivers of customer equity for fast-food restaurants. While user-generated content affects brand equity the most, followed by value equity and relationship equity, firm-generated content affects relationship equity the most, followed by brand equity and value equity.