The landscape for brand management in the 21st century is dynamic and global with the
creation of the Internet and more particularly social media where consumers are able to
interact in real-time with brands and other consumers. Fake news (often shared through social
media) has become popular in recent times owing to the low barriers to entry in the media
industry which has created conducive space to spread information that is not fact-checked or
verified which may affect the reputation of brands. The impact of word of mouth, particularly
through electronic word of mouth on brands has been the focus of researchers recently. This
study investigated the role of fake news on the relationship between consumer-based brand
equity and consumer responses to premium brands.
A conceptual model was developed from the literature review testing the relationship between
consumer-based brand equity (independent variable), brand preference, willingness to pay a
price premium and brand loyalty (dependent variables) with fake news via electronic word of
mouth as the moderating variable. By employing a quantitative study, 191 valid responses
were received from the middle-class consumers in South Africa through an online survey to
test the developed hypotheses. Structural equation modelling (SEM) was used to analyse the
relationship the consumer-based equity, and consumer responses and a moderation
interaction analysis was used to examine the effect of the fake news through electronic mouth
on these relationships.
The result revealed that brand awareness, brand image, perceived quality and brand
association were strong indicators of the consumer based-brand equity of premium brands.
However, the strongest dimensions were brand awareness and brand image in the context of
South Africa. The relationship of consumer-based brand equity was found to be the strongest
with brand preference, followed by brand loyalty and willingness to pay a price premium. It
was further revealed that fake news through electronic word of mouth does not moderate any
of the relationships between brand equity and consumer responses in this case. These
findings are relevant for both academics and brand managers as it revealed that the building
of strong brand equity would shield premium brands from any fake news that may be
disseminated through social media platforms.
Mini Dissertation (MBA)--University of Pretoria, 2018.