Effects of social media-mediated customer engagements on purchase decisions and competitive advantage: mediating role of brand equity in full-service restaurants

Abstract

Despite the prominence of customer engagements with brands, as occasioned by latest technology developments, small businesses are yet to fully comprehend how they can tap into this dominant phenomenon to increase their market share, growth and profitability. This organisational inertia is unfortunate as, in the past decade and lately during the Covid 19 pandemic, customer consumption of brands and interaction with small firms has become significantly social media mediated due to the prevalence of emerging social technologies. The social media platforms’ power to influence consumers’ purchase intentions and decisions can no longer be ignored by firms if their competitiveness is to be sustainable. However, the disconcerting evidence from literature suggests that the restaurant businesses’ adoption of social media has not been accompanied by an in-depth grasp of how such technology can be harnessed for the economic benefits of these firms, a research problem this study sought to address. Therefore, the objective of this study was to investigate the influence of social media mediated customer engagements on brand equity attributes, purchase intentions and competitive advantage of graded full-service restaurants in the Free State Province. The study drew on a positivist epistemology and quantitative research approach with an online and one-on-one survey conducted on 241 owners/managers of these restaurants and 379 of their customers. A total of 144 restaurant owners/managers and 307 customers successfully responded to the survey, representing a response rate of 72.7%. The statistical package for the Social Sciences was employed to conduct descriptive statistics and some inferential statistics, especially correlations and regression, for the study. The study’s main statistical technique for testing the relationship in the model was the partial least squares structural equation modelling (PLS-SEM) technique. The results of this study revealed that social media engagements positively impact brand equity dimensions and exerted a positive impact on purchase intentions. The findings further revealed that restaurateurs are not using social media as their main strategy for gaining competitive advantage against their rivals. The study recommends the adoption of some targeted interventions to improve social media and ensure its enduring benefits for full-service restaurants. These include the mainstreaming of content creation, enhanced customer relationship management, greater emphasis on on-the-job digital skills training for employees, the development of a social media marketing strategy, and promotion of greater digital integration in hospitality education.