A presentation delivered in Helsinki, Finland, July 4-8, 2012, to the Twenty-First Annual World Business Conference of the International Management Development Association (IMDA)

1. THE RELATIONSHIP OF CROSS-CULTURAL SOCIAL
NETWORK USAGE PATTERNS TO BRAND BUSINESS
VALUE: AN EXPLORATORY INVESTIGATION OF
BRANDED WEBSITES
G. Russell Merz, Ph.D.,
Professor, Eastern Michigan University
Silvina Diaz,
Client Services Team Lead, Foresee, LLC
A Presentation to the Twenty First Annual World Business Conference
International Management Development Association (IMDA), July 4-8,
2012

2. Agenda
Background
Conceptual Framework
Research Problem, Questions and Hypotheses
Methods
Findings and Discussion
Implications, Limitations and Future Research
2 2

3. Social Media Usage Increases by the
Minute
3 3

4. What are Social Media?
Social media includes web-based and mobile based Table 1: Social Media Examples
technologies which are used to turn communication into
interactive dialogue between organizations, communities,
and individuals (Margold and Faulds 2009).
Kaplan and Haenlein (2010) define social media as "a
group of Internet-based applications that build on the
ideological and technological foundations of Web 2.0, and
that allow the creation and exchange of user-generated
content.” Social media is ubiquitously accessible, and
enabled by scalable communication technologies.
This form of media ‘‘describes a variety of new sources
of online information that are created, initiated, circulated
and used by consumers intent on educating each other
about products, brands, services, personalities, and
issues’’ (Blackshaw and Nazzaro 2004).
A common thread running through all definitions of social
media is a blending of technology and social interaction
for the co-creation of value.
[Source: Margold and Faulds 2009]
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5. Social Media Penetration is Global
5 5

6. Facebook Global Usage and Penetration
Facebook usage and penetration across geographical world regions.
6 6

7. Social Media Penetration Varies by Type
The Global Web
Index (Breslauer et
al. 2009) has also
documented the
increasing
international usage
of social networks
across time, and the
relative sizes of
social media usage
across countries.
What explains the
observed
variations?
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8. Types of Social Media Users
Forrester Research has used its Social
Technographics® Benchmark Survey to
compare social media use across
countries.
The proportion of “on-line” adults falling
into five overlapping types of users
provides a country profile.
The results highlight the differences in
how social media are used within each
country.
While this descriptive information is interesting, its
usefulness is limited by the small number of countries
currently available.
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9. Social Media and Global Business Use
The potential use of social networks
for brand communication is a growing
global phenomenon that has received
much coverage in the business press
(Cortes 2012; eMarketer 2011, 2012;
Meller 2010; Sass 2012), but for which
little marketing strategy guidance exists
(Hutton & Fosdick 2011).
The multi-way flow of information
contained in social networks is attractive
to brands because of the capability for
the establishment of cross-cultural
personalized communication to
current and potential customers
(Grant Thornton 2011).
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10. Expanding Global Business Use
Along with the usage growth, there
is evidence that companies
worldwide intend to expand their
presence on social media
particularly in Latin America and
Southeast Asia (eMarketer 2011,
December 13).
The movement into Latin America
reflects prescriptions made by Meller
(2010), as well as Korzenny and
Vann (2009) who have documented
the growth and size of the Latin
American and domestic Hispanic
social media markets.
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11. Social Media Use and Consumer
Decision Making
The TNS “Digital Life 2011” study found that users
in BRIC, Indonesia and Mexico were more likely to
view social networks as a good place to learn about
and buy brands and products than users in developed
markets like Canada, the UK and the US.
What could explain the large spread between
developed and emerging markets?
In developed markets, users are accustomed
to third-party ecommerce sites and payment
methods and mainly look to social networks for
keeping up with friends.
In emerging markets, ecommerce is untested
and new; knowing the person or brand, even
virtually, can engender more trust among users.
Social media marketing is important in the US and
other developed markets, but higher levels of trust in
emerging markets suggest that social networks can
play a bigger role in the purchase cycle there.
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12. Social Media Use and Brand Bonding
Hutton and Fosdick (2011) report that:
Globally, 18 percent of social media
users claim that they actively have set
up an online brand community.
Such communities are an expression
of consumers who want to control their
relationship with their preferred brands.
Even as they have been moving away
from brand-sponsored Web sites,
consumers still appeared to be strong
brand advocates.
Nearly 60 percent of the respondents
who said they had joined an
independent brand community also
claimed that they subsequently were
more likely to buy the brand.
There are also clear variations across
regions.
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13. Conceptual Framework
Given the review of the global social media phenomena, the following conceptual
relationships can be hypothesized.
Social Media
Antecedents of Usage Consequences of
Social Media Use Characteristics Social Media Use
Macro Level: Macro Level: Macro Level:
•Technological infrastructure •Social capital •Brand communities
•Economic development •Viral marketing effects
•Culture Micro Level:
•Marketing and business •Mix of social media used Micro Level:
activities •Reference networks •Interpersonal bonding
•Seeking /Sharing •Trust
Micro Level: •Shopping aid •Brand responses
•Age •Content generation (knowledge, preference,
•Income •Co-creation loyalty)
•Education •Purchase intentions
•Gender •Shopping and buying
•Life style behaviors
•Product Involvement
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14. Research Problem and Questions
Despite the size and continued rapid expansion of social networks worldwide reviewed
above, little is known about cross-cultural exposure to social networks and if exposure to a
mix of information channels, that includes social media, contributes to brand business
value.
For example:
Hutton and Fosdick (2011) posit that social media are in the ascendency as the
primary way active internet users stay in contact with each other.
Furthermore, they assert that official company and brand web sites consequently are
losing audiences, although they suggest that this displacement may also reflect
greater presence on social media by brands.
If this is the case, there might be a complementary relationship between social media
and company web sites as suggested by Gordon (2012) and Shields (2012).
Several research questions arise from these observations.
RQ1: Do social media differentially influence customers and prospects across cultures to
visit company and brand web sites?
RQ2: Can cultural group membership explain the mix of information channel used
when shopping?
RQ3: Can information channel usage explain brand business value such as brand
preference and purchase intentions?
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15. Research Hypotheses—Study 1
This study empirically explores the role that social networks play in the communication of
brand information across cultural groups.
To answer the research questions two studies were conducted.
The first study was a descriptive analysis that examined the information sources used
by website visitors when deciding to visit a mix of profit and non-profit branded websites.
The objective was to describe the cross-cultural differences in social media influence;
and whether the differences were also apparent in the overall satisfaction with the website
experience, and the future recommendation intentions to others regarding those
experiences.
The hypotheses tested were:
H1a, b, c: The variance in (a) social media influence, (b) satisfaction, and (c) likelihood to
recommend the web site will be significantly different across cultural groups.
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16. Methodology—Study 1
To evaluate the hypotheses in Study 1, the
Foresee Social Media Value (SMV) measurement
approach was used.
Respondents are asked to indicate a primary,
secondary and tertiary information source that
most influenced their visit to the website.
Referring URL information was also captured for
each respondent.
If a respondent indicated that a social media
related information source influenced their visit,
they were scored as a “1”, otherwise the score was
“0”.
Comparisons were then made across language
groups and websites of (1) social media influence,
(2) satisfaction with the website visit, and (3)
recommendation of the website to others.
Three websites that had different language
versions were used for the evaluation; two non-
profit NGO websites, and one device manufacturer
website.
T-tests were calculated to determine significant
differences.
16 16

17. Findings—Study 1
An inspection of the proportional variation across levels of social media influence revealed
some noticeable differences across language groups. However, the t-test results were
inconclusive, thus H1a is not supported.
17 17

18. Findings—Study 1
There were significant differences
found in satisfaction with the
website visit across language
groups at all levels of social media
influence for the device
manufacturer, but virtually no
differences were significant for
either NGO website. Thus
hypothesis H1b is partially
supported.
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19. Findings—Study 1
There were significant
differences found in
recommendation of the website
across language groups for 7 of
the 8 comparisons made of
levels of social media influence
for the device manufacturer, but
no differences were significant
for either NGO website. Thus H1c
is partially supported.
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20. Research Hypotheses—Study 2
The second study empirically explored the relationships between culture, information
channel use (including social media) and measures of brand business value (brand
preferences and brand purchase intentions).
The objective was to test a conceptual framework derived from secondary literature
evidence suggesting the following explanatory relationships:
Cultural Group Information Channel Exposure Brand Business Value
A rationale for the effect of culture on exposure to information channels can be found
research by Vasalou et al. (2010). In a study of 423 Facebook users from five countries they
found that two user characteristics, “experience with the site,” and “culture,” shape the nature
of true commitment, thus influencing the motivations for using Facebook, as well as the
instrumental uses and the time invested on the site.
Two hypotheses are tested:
H2: The cultural profile of the website visitors positively explains the nature of the information
channel mix used by visitors in their decision to visit the brand website.
H3a, b: The information channel mix used by website visitors in their decision to visit the brand
website significantly positively explains both (a) brand preferences and (b) brand purchase
intentions.
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21. Methodology—Study 2
A two-step procedure was used to test the model.
First, a descriptive analysis of the social network forms used by visitors (n=15000) to an
international website for a branded smart-phone device was conducted. The analysis
examined the cross-cultural differences in the use of social networks for acquiring
information about the brand.
Second, the cross-cultural brand communication model was specified and its explanatory
power was evaluated. The intent of the model is to build a preliminary framework for
explaining the role of culture and social network exposure in acquisition of brand
information through a branded website and ultimately contribute to the brand commitment
and purchase intentions. This conceptualization of brand value is consistent with recent
reported social media research (Kamal & Carl 2011).
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22. Findings—Study 2
The table below shows the results of a descriptive analysis of the relationship between
language group membership (a proxy measure for culture) and the use of different information
channels when seeking information about the product. Twenty one (21) language groups were
compared across thirteen (13) information channels.
22 22

23. Findings—Study 2
Cultural H2 Information H3a Brand
Groups .348 Channel Mix .308 Commitment
[4.25] [27.84]
R2 = 0.121 R2 = 0.084
More information channels
Greater brand effects
H3b Brand
Lower brand effects .290 Purchase
[27.98]
R2 = 0.095
Fewer information channels
Reflective Latent Variables
Formative Latent Variable
Formative Latent Variable n = 15932 cases; t-stat for estimates shown in brackets are all significant at
p≤.000 based on bootstrapping 8000 cases 300 times.
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24. Discussion and Contribution
The analysis findings support all the
hypothesized relationships.
Cultural H2 Information
For Hypothesis 2, the results demonstrate that: Groups .348 Channel Mix
[4.25]
R2 = 0.121
Cultural Group membership significantly
affects the size and nature of the Information
More information channels
Channel Mix used by visitors to a device
manufacturer’s website, explaining 12.1% of
the variance in mix size.
Furthermore, the formative specification of
the model provides insight into which cultural
groups use more or fewer information
channels.
For example the results show that more
information sources are used by South East
Fewer information channels
Asian visitors [Thai (0.353) and Indonesian
(0.264)] while fewer information sources are
used by North American English [ US (-0.283),
Canada (-0.563)] and Western European
language [ German (-0.358), France (-0.383)]
groups.
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25. Discussion and Contribution
For Hypotheses 3a,b, the results demonstrate that:
H3a
Information Brand
Channel Mix .308 Commitment
The size and composition of the Information [27.84]
R2 = 0.121 R2 = 0.084
Channel Mix (ICM) has a significant effect on both
Brand Commitment (β=0.308) and Brand Purchase
Intention (β=.290), explaining 8.4% and 9.5%
respectfully of the variance.
In addition, the formative specification of the ICM
latent variable shows that higher levels of exposure
H3b
to ads on social networks (0.541), and friends on Brand
Purchase
.290
social networks (0.300), were more likely to have [27.98]
R2 = 0.095
positive brand related outcomes.
Greater brand effects
The theoretical implications of the model findings
are that:
(1) Cultural background affects the mix of
information resources that customers used
before visiting the website; and ,
(2) The mix of information resources used is
Lower brand effects
directly related to the strength of brand
bonding and purchase intentions.
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26. Limitations and Future Research
The limitations of the research reported here are its lack of breadth in explanatory variables
and the need for better measurement of cultural group membership, social media exposure
and influence.
Future research should investigate the role of cultural values (e.g., Hofstede) as predictors
of social media attraction and use. For instance, Korzenny and Vann (2009) suggest that
among Hispanics “collectivistic values” are strong, and that their higher levels of social media
usage may be reflective of these values. Girard and Bertsch (2011) explored the relationship
between Hofstede’s dimensions and the six components of Forrester’s Social
Technographics® scale for 13 countries. Their results were inconclusive. However, a follow-
up study using the GLOBE societal values did identify some significant correlations.
Pookulangara and Koesler (2011) have
proposed a hybrid model combining
Hofstede’s cultural dimensions with the
technology acceptance model (TAM) to
examine the moderating influence of
cultural values on social networking and its
influence on purchase intention.
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27. Thank You
Any Questions?
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28. Selected Bibliography
Austin, M., & Lerman, K. (2011). Lessons from the front lines: How to engage BRIC consumers in
multinational online communities. ESOMAR: 3D Digital Dimensions, Miami, October. Retrieved
December 28, 2011 from WARC web site: http://warc.com .
Breslauer, B. Ruoss, S. & Smith, T. (2009). Social media trends around the world! – The global web
index (GWI). ESOMAR: Online Research, Chicago, October. Retrieved December 28, 2011 from
WARC web site: http://warc.com.
eMarketer (2011, December 13). Companies worldwide plan to increase social media marketing.
eMarketer: Digital Intelligence. Retrieved December 24, 2011 from eMarketer web site:
http://www.emarketer.com/Articles/Print.aspx?R=1008731 .
eMarketer (2012, January 5). Social networks more influential in emerging markets. eMarketer: Digital
Intelligence. Retrieved December 24, 2011 from eMarketer web site:
http://www.emarketer.com/Articles/Print.aspx?R=1008766 .
Hutton, G. & Fosdick, M. (2011). The globalization of social media: consumer relationships with brands
evolve in the digital space. Journal of Advertising Research, 51, 4, Retrieved December 28, 2011 from
WARC web site: http://warc.com .
Kamal, I., & Carl, W. (2011), Does investing in social media create business value? A study of the
impact of exposure to social media on sales and brand perception, Ogilvey & Mather, Retrieved
December 28, 2011from Ogilvy PR web site: http://blog.ogilvypr.com/2011/10/exposure-to-social-media-
linked-with-changes-in-sales-and-brand-perception/ .
Korzenny, F. & Vann, Lee. (2009). The multicultural world of social media marketing: Tapping into their
connections. Quirk’s Marketing Research Review. June, 48-52. Retrieved March 31, 2012 from Quirk’s
web site: http://www.quirks.com/articles/2009/20090606.aspx?searchID=373210567&sort=5&pg=1 .
Pookulangara, S., Koesler, K. (2011). Cultural influence on consumers' usage of social networks and its'
impact on online purchase intentions, Journal of Retailing and Consumer Services, 18(4), 348-354.
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30. 30
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31. Background—Social Media and Culture
Aside from the level of
worldwide social media usage
some evidence suggests a
relationship between cultural
membership and social media
use.
For instance, Korzenny and
Vann (2009) examined the
patterns of social media
behaviors of different
ethnic/cultural groups in the U.S.
They found that among US
residents, social media use
varied across cultural/ ethnic
groups.
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