The Assignment: Advance Marketing (MGT 609)

Semester: Fall 2022

Submitted to: Dr. Ameer Rajput.

Submitted by: Junaid Afzal

Registration number: FA22 RMS 003

Due date: 4th January, 2023

FIELD: Masters in Management Science Specialization in Finance

Topic: Effect of social media marketing of brand on purchase intention of customer

keeping brand trust and customer price perception as mediator

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 Introduction

Customer purchase intention is dependent on many variables, in this study we will critically
analyze the effect of social media marketing of a brand on the purchase intention of customers
keeping brand trust and customer price perception as mediators. From the literature review, we
concluded that price perception is positively impacted customer purchase intention. Also, from
the literature review, we concluded that brand trust also has a positive impact on the purchase
intention of customers in the social media marketing of the brand. The background of this study
is to answer how social media marketing of a brand affects the customer purchase intention after
keeping these questions as mediating, does price perception affect customer purchase intention,
and Does brand trust affect customer purchase intention? Making a positive Customer purchase
intention is ultimately the objective of all marketing to influence customers’ purchase intentions.
Both mediator brand trust and customer price perception model have a positive impact on
influencing customer purchase intentions, but sometimes social media marketing of the brand is
greatly impacted brand trust, irrespective of the price perception model. Such as the purchase
intention of customers with high paying power is only affected by the brand trust. But the
intention of low-paying power, purchase intention is mostly impacted by price perceptions.

Keywords social media marketing of brand, brand trust, price perception model, customer
purchase intentions.

Independent variable mediator variables dependent variable

. . . .

Brand Trust

Customer Purchase
Social Media Marketing
Intention
of Brand
Price Perception Model

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Social Media Marketing of Brand

Social media marketing of a brand is a marketing tool by which companies can communicate
with consumers effectively (easily and with a very small amount of expense and time) in
building brand trust instead of other old traditional methods such as new papers and face-to-face
marketing. It is the easiest and most economical way of marketing any product or brand in the
current era. Among the most significant developments in social media is the introduction of
Facebook, Twitter, Instagram, YouTube, TikTok, and others like them which have accelerated
the potential for business-to-consumer communications. Consequently, many organizations have
leveraged their marketing efforts on social media; these include retail stores, airlines, hotels, and
educational institutions (Chinje, 2018). Just due to social media marketing marketers are now
eligible to communicate and exchange information with the target audience through virtual
channels in an effective manner which is very useful and helpful for all stakeholders such as
customers, consumers and marketers. Due to these, social media marketing is now the best-
acknowledged online selling platform. For example, approximately a quarter of consumers tend
to share their buying experiences on social media (Jain, 2018). In general, (Statista, 2021) states
that the penetration rate of social media in Malaysia is one of the highest in the Asia–Pacific
region: 74% of Malaysia’s population have access to social media platforms where they socialize
and obtain the latest market information. So, customer purchase intention is greatly impacted by
social media marketing. In the current era people are now busy they do not have time to pay
attention on face-to-face marketing, instead of this they now use and entertain social media
marketing such as communication done by some social media apps and sites like Facebook,
Instagram, snapchat and YouTube. So, for making good influence on customer purchase
intention, it is very necessary. Social media marketing is not only factor on customer purchases
intention they are many other factors which also mediates then relationship of social media
marketing and customer purchase intention such as brand trust, customer price perception model
and other factor behind the scope of our study. In this era, many brands use the power of social
media marketing in creating, sustaining, engaging, and interacting with their new potential
consumers. Due to social media marketing provides the policy maker multiple opportunities to
grab new customer and can be helpful for detaining their old and new customer with the help of
social media marketing in very short time (Ra’d Almestarihi, Gasawneh, Malik Khlaif
Gharaibeh, & Odai Nawras, 2021). customers which are acquired by social media marketing can
express their feedback easily as compared to traditional marketing also they act as ambassadors
if their experience is good.  Regardless of the fact that social media marketing allows brands and
marketers unlimited potential, there have been numerous instances where traditional methods of
advertising have failed, and businesses are not in full command of their brand identities.
Customers almost always provide feedback on the products they have purchased and their
interactions with other users. Sites with millions of users will proliferate bad experiences as they
are shared. This seriously influences a business (Ra’d Almestarihi et al., 2021). So social media
marketing may have negative impact on influencing customer purchase intention if they are
negative feedback old customers (Ra’d Almestarihi et al., 2021).  Due to social media marketing,
level of audience is not much enhanced to global level. Business is now very much concerned
about how they can take maximum benefit to enhance brand and so influence customer purchase
intention. Previous studies shown they is positive association of social media marketing in brand
association (Llopis-Amorós, Gil-Saura, Ruiz-Molina, & Fuentes-Blasco, 2019; Vinh, Phuong,
Nga, & Nguyen, 2019). Social media marketing of brand impact on brand awareness and also

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product awareness of that brand which causes the positive influence on customer purchase
intention. Social media marketing of brands has a positive influence on perceived quality which
also ultimately influence customer purchase intention (Cheung, Pires, & Rosenberger III, 2020;
Llopis-Amorós et al., 2019). Many studies also shows that social media marketing directly
influences loyalty (Amoako, Okpattah, & Arthur, 2019; Ebrahim, 2020). Social media marketing
also have positive impact on brand image (Savitri, Hurriyati, Wibowo, & Hendrayati, 2022).
Social media is the preferred method of internet use in Indonesia, which is why e-marketing, or
the use of marketing tricks using social media to promote a product or company's brand, is
expanding. Due of the lack of direct face-to-face contact, consumers will indeed find it simpler
to find more information about the things they wish to purchase (Sanny, Arina, Maulidya, &
Pertiwi, 2020). Customer can easily get their required information from social media instead of
face-to-face meetings. Social media have rich content comprising of high information, uploaded
by peoples who use social media technology, which is very easily to access, effective
communication with customers. This technology has broadened the marketing scopes
(Yuliantoro, Goeltom, Juliana, Pramono, & Purwanto, 2019). Due to social media marketing the
more commonly a product is displayed on social media, the more routinely it is discussed, and it
can promote word-of-mouth advertisement where consumers who do not directly see the product
on social media might learn about it (Rahadjeng et al., 2022). Based on observation of the
previous studies, the current direction of traditional marketing in the coming years, marketing
activities (e.g., promotion, advertising, and campaigns) will be fully dominated and controlled by
social media platforms. (Hande et al., 2021; Ibrahim, 2022). (Koay, Ong, Khoo, & Yeoh, 2020)
define, social media marketing as “how consumers perceive a company or brand engagement in
various social media marketing activities”. After a covid-19 pandemic, the trend of online sales
and purchased is grow very speedily in whole world. So, special emphasis is given to social
media marketing of brands as it targets customers more effectively (Dubbelink, Herrando, &
Constantinides, 2021). With the help of social media marketing, firm can increase the volume of
sale which will ultimately effect the profit of that firm (Savitri, Hurriyati et al. 2022) . Effective
result of social media marketing on purchase intention is only obtain if they are some mediating
and moderating factors such as brand trust, price perception model and product image. Due to
these moderator and mediator researcher concludes that social media marketing of brand if more
effected on customer purchase intention. The use of social media is considered very important,
because of its wide and unlimited reach. Thus, it will provide many benefits for entrepreneurs
(Saputra, Setyoko, & Kurniasih, 2022). Making the most of social media will enable businesses
to create strong connections with clients and rivals, enhancing their capabilities and, eventually,
their performance. One of them is enhancing marketing performance, which may be measured by
rising revenue, sales volume, and consumer base. The effective use of social media has an effect
on sales revenue (Olanrewaju, Hossain, Whiteside, & Mercieca, 2020) this mean they is
significancy of social media marketing in influencing purchase intention of customers. It is
impossible to ignore the advantages of social media use, which dramatically increases sales. the
availability of social media as a catalyst for ongoing, sustained marketing initiatives. Utilizing
social media for brand or product promotion helps build a very strong network for it. Using
social media as a tool for marketing does not mean doing away with much more existing
technique, such face-to-face communication with consumers, partners, and suppliers.
Conversely, the accessibility to social media might be a complement to traditional routes, at least
under the present circumstances where it is risky to meet in person. Social media marketing of
any brand is impacted by many factors and multiple research projects has been already

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conducted in many countries. Social media can be important for having a constant touch and
communications with certain parties (Saputra et al., 2022).  According to (Saputra et al., 2022)
and (Ningsih & Afriaris, 2021), The use of social media has a positive relationship to the
marketing performance and customer purchase intentions of service and brands. The literature
view ravels that social media marketing of brand has significant and positive impact on brand
loyalty and brand image and this leads to influence customer purchase intentions.
Brand Trust

Brand trust is simply the consumer's willingness to believe that a brand's products are superior to
those of other brands and the best available in the modern world. Brand trust is crucial for
effective marketing, particularly in social media marketing for brands. To maintain consumer
trust, brand reputation is just as crucial as perceptions of value and quality. There are numerous
instances where a buyer is content with the perceived value of a product but decides against
making a purchase because he does not trust the brand. Therefore, brand credibility is essential
for the successful social media marketing of a brand. For customers to buy back products from
the company, the company must introduce its products well to build brand trust in customers
(Sulivyo & Ekasari, 2021). So, brand trust is a vital component to build long-term
relationships with consumers as well as customers. Trust is always built after fulfilling of
expectations of the second party, here customers and consumers. So, for effective marketing of
the brand, brand trust plays a vital role in influencing the customer purchase intentions. Trust is
the willingness of a person to rely on others at a certain risk (Atulkar, 2020). In social media
marketing of the brand, brand trust causes the hope of high expectations in customers as emirates
airline has a good brand name, after a little bit of social media marketing, the purchase decision
of customers is highly influenced. Because due to social media marketing of brand (emirates)
recalls about emirates, emirates have a great brand name, so a customer with high expectations
starts to buy the product/ service of that brand. Brand trust is developed by many factors such as
past experience and world of the month, by hearing already experienced customers about the
brand. So, brand trust is a combination of two important factors knowledge and experience. Price
perception is also important to factor or brand. In this advanced era, the customer is validating
brand trust again and again by comparing of price, quality, and quantity of items of a different
brand. This is only due to the advancement of social media marketing. Brand Trust represents the
recognition that brand value can be created and developed by regulating several aspects that
exceed customer satisfaction with performance. (Sulivyo & Ekasari, 2021). Brand trust is valuable
pieces of legal property for any business, capable of affecting customers' intentions (Ra’d Almestarihi et

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al., 2021).  Nagoya et al. (2021) and Ronald et al. (2020), social media can be used to encourage a
consumer to express his/her opinion on the product or service offered, and publish his/her opinion on
social networks on the internet, which can later increase the knowledge of consumers who read the
comments or opinions of that person on the market and the goods or services offered so that they are more
likely to inform friends and colleagues about the products they see. The use of internet in various
countries is dominated by social media. Therefore, Brand Image can indirectly improve consumer
purchasing decisions.

Price Perception Model

Basically, the price perception model is defined as the amount of money that a seller demands from the
customer to render a service or product that he has rendered (ARTIK & Duygun). The basic concept of
price means "the value for money of something in selling or buying, worth, pricey (ARTIK & Duygun).
The price perception variable has a positive significance on customer purchase intentions. (Susilawati,
Prastiwi, & Kartika, 2022). Price perception refers to a consumer's evaluation and the emotional
aspect that goes with it of whether the price being supplied by the seller and the price in
comparison to other parties is fair, reasonable, or rational (Rahayu, 2021).  It is very common in
marketing, that a customer’s perception of the price depends on a very sharp comparison of the
market price of that demographic. Due to social media marketing, they are many apps and
websites that, make comparisons of quality and quantity at a very fast speed without any serious
effect done by customers in a very short time. So, marketers should exercise due care in
practicing social media marketing of their brand (ARTIK & Duygun). Social media marketing of
brands is much impacted by mediator name as customer purchase price perception model. So, the
price perception of the product is differentiated on the basis of price whether it is low, or
reasonably high, which has a great impact on customer purchase intention. Price perception, and
positively and significantly affect the satisfaction of customers (Arigata, Anggraini, & Ribek,
2022) (Muhammad, 2018) and (Wiedyani & Prabowo, 2019). Price perception can be taken in
two contexts, one is from the seller context and another one is buyer content. In seller contexts,
the best price is cost plus his reasonable margin. In the context of the buyer, price is the value of
a product or service in the eye of the buyer. Price perception can also be referred to as
psychology state, the price in the bottom right appears higher than the actual (Williams, 2018),
while the price in only the bottom looks lower (Odhong' et al., 2019). Price perception is the
amount of money that is charged for a service or a product or the amount of value exchanged by

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both parties I-e (sellers and buyers) to utilize the service or a product (Ricardo, 2021). It is an
emotional form about the price of a product or service, whether the price is acceptable, justifiable
and reasonable (Ricardo, 2021). Price Perception can be applied according to two indicators , number
one is Price according to the benefits and the second one is the price according to the quality, both will
affect Customer Satisfaction (Husadha, Hidayat, Suryati, Prasetyo, & Meutia, 2021) So, this can be
concluded that the price offered by the seller to the consumer will lead to the customer satisfaction, and in
this era, customer make purchase intention if he is satisfied with the product or services before actual
purchase because of feedback by other customer and information available in social media due to social
media marketing enhancement. Price Perception has a positive and significant effect on customer
purchasing decisions (Agesti, Ridwan, & Budiarti, 2021). Customers' understanding of the deep meaning
of the product or service is often term as price perception. If a brand effectively maintains pricing
according to its customer, then price perception can play a vital role as a mediator. The term mediator
means the variable by which the independent effect on the dependent variable can be influenced. So, if
Price perception is efficiently maintained the effect of social media marketing is enhanced on customer
purchase intentions.  Many studies such as (Agesti et al., 2021), (Husadha et al., 2021), and (Arigata et
al., 2022) revealed a positive and significant impact of price perception on customer purchase intention
and ultimately leads to customer purchase intention.

Customer Purchase Intention  

Social media marketing encourages customers to feedback to express their opinion on the service
rendered or offered product and share their opinion on social networks on the internet (different social
media websites and apps such as Facebook, Instagram, link din, Twitter, snap chat, and Tik Tok, which
can further increase the knowledge and understanding of product or service of customers who are reading
the opinions or comments as a feedback old customers/experienced person. Also, they are more likely to
colleagues and inform friends about the products they see. Therefore, social media marketing can
indirectly improve customers purchasing decisions (Nagoya et al., 2021). Many researchers such as
(PRAMONO, Sondakh, BERNARTO, JULIANA, & PURWANTO, 2021) states that social media
marketing of a brand positively and significantly impacts customer purchase intention. Making a
positive Customer purchase intention is ultimately the objective of all marketing to influence
customers’ purchase intentions. Both mediator brand trust and customer price perception model
have a positive impact on influencing customer purchase intentions, but sometimes social media
marketing of the brand is greatly impacted brand trust, irrespective of the price perception model.
Such as the purchase intention of customers with high paying power is only affected by the brand

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trust. But the intention of low-paying power, purchase intention is mostly impacted by price
perceptions. They are many factors on which a customer’s purchase intention is dependent.
Social media marketing has a positive effect on brand image, which means that if the use of social media
increases, then the brand image will also increase. on purchasing decisions, which means that if brand
image increases, purchasing decisions will also increase. Brand image is able to mediate the relationship
between social media marketing and purchasing decisions, which means that if brand image increases, the
relationship between social media marketing and purchasing decisions will also increase.

Conclusion

Concluding all the above discussions, and from the literature review, it is concluded that social media
marketing has a positive great impact on customer purchase intention, which ultimately leads to customer
purchase decisions. Brand trust and customer price perception models also have positive and significant
impacts on customer purchase intentions and brand trust and customer price perception can enhance the
impact of social media marketing of a brand on the purchase intention of customers to a great extent.

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