The Effect of Social Media Marketing Activities on Brand Loyalty and Willingness to Pay Premium Price: Brand Equity as Intervening Variable and Income Level as Moderating Variable

Abstract

Currently, the Indonesian society cannot be separated from the need for the internet, which serves various purposes to facilitate their daily activities. The internet is used for accessing information, communication, education, entertainment, as well as business needs. By the end of 2022, the internet was predominantly used for exploring social media and streaming video. One of the companies that provides video-on-demand (VOD) streaming services popular among the Indonesian population is Viu. Viu utilizes marketing activities through social media, including on TikTok. This study intends to investigate the influence of social media marketing activities (SMMAs) on brand loyalty (BL) and willingness to pay premium price (WPP), with brand equity in terms brand awareness (BA) and brand image (BI) as a mediating factors and income level as a moderating factor. The research adopts a quantitative method with a causal approach. The population for this study comprises all followers of Viu’s TikTok account and Viu users. Purposive sampling, a sample selection technique based on specific considerations, is employed. Data collection is conducted through online questionnaires via google form. The data analysis technique utilized in this study is SEM-PLS using SmartPLS 3.2.9. The research findings indicate that SMMAs have a positive and significant influence on brand awareness and brand image. Brand awareness does not affect brand loyalty and willingness to pay premium price. However, brand image has a positive and significant influence on brand loyalty and willingness to pay premium price. Brand loyalty has a positive and significant influence on willingness to pay premium price. Brand awareness does not mediate the relationship between SMMAs and consumer willingness to pay a premium price, but brand image mediates this relationship. Furthermore, income level strengthens the relationship between brand loyalty and willingness to pay premium price.