The effect of celebrity endorsement on Instagram fashion purchase intention: The evidence from Indonesia

Herjanto, Halimin; Adiwijaya, Michael; Wijaya, Elizabeth; Semuel, Hatane Article The effect of celebrity endorsement on Instagram fashion purchase intention: The evidence from Indonesia Organizations and Markets in Emerging Economies Provided in Cooperation with: Faculty of Economics and Business Administration, Vilnius University Suggested Citation: Herjanto, Halimin; Adiwijaya, Michael; Wijaya, Elizabeth; Semuel, Hatane (2020) : The effect of celebrity endorsement on Instagram fashion purchase intention: The evidence from Indonesia, Organizations and Markets in Emerging Economies, ISSN 2345-0037, Vilnius University Press, Vilnius, Vol. 11, Iss. 1, pp. 203-221, https://doi.org/10.15388/omee.2020.11.31 This Version is available at: https://hdl.handle.net/10419/317161 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by/4.0/ 203 Organizations and Markets in Emerging Economies ISSN 2029-4581 eISSN 2345-0037 2020, vol. 11, no. 1(21), pp. 203–221 DOI: https://doi.org/10.15388/omee.2020.11.31 The Effect of Celebrity Endorsement on Instagram Fashion Purchase Intention: The Evidence from Indonesia Halimin Herjanto (Corresponding author) University of the Incarnate Word, United States of America herjan[email protected]du https://orcid.org/0000-0003-2917-0014 Michael Adiwijaya Petra Christian University, Indonesia [email protected] https://orcid.org/0000-0001-6186-242X Elizabeth Wijaya Petra Christian University, Indonesia [email protected] Hatane Semuel Petra Christian University, Indonesia [email protected] https://orcid.org/0000-0002-5266-0137 Abstract. To maintain the significantly positive influence of celebrity endorsement (CE) on Instagram user consumption behavior, scholars and business practitioners are motivated to have a better understanding of this phenomenon. Literature on CE focuses on its direct effect on attitude toward various brand components; however, this study takes a different approach by developing a new conceptual model and a set of hypotheses that aims to generate a better picture of the relationship between two brand components (brand image and brand trust) and repurchase intention. The present study also examines the moderating role of CE in the relationship between brand image and brand trust as well as repurchase intention. Received: 10/3/2019. Accepted: 2/7/2020 Copyright © 2020 Halimin Herjanto, Michael Adiwijaya, Elizabeth Wijaya, Hatane Semuel. Published by Vilnius University Press. This is an Open Access article distributed under the terms of the Creative Commons Attribution Licence, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. Contents lists available at Vilnius University Press 204 ISSN 2029-4581 eISSN 2345-0037 Organizations and Markets in Emerging Economies The hypotheses were tested using online survey data from 220 Indonesian respondents. To test the theoretical model, this study employs ordinary least square regression (OLS), as well as Baron and Kenny’s (1986) method to test moderating hypotheses. The results show that the hypothesized model of CE on brand image, brand trust and repurchase intention fits the data. In addition, the findings also demonstrate that CE moderates the relationship between brand image and brand trust, and between brand image and repurchase intention. The findings offer important contributions to the academic by enriching the body of literature on online consumption behavior. They reveal the moderating effect of CE, and potentially inspire scholars to conduct further research. To business practitioners, this study suggests the importance of engaging with celebrities to endorse their brands. At the same time, to avoid the risk of reverse image, managers are recommended to think carefully about which celebrities are suitable to represent their brands. Keywords: celebrity endorsement, brand image, brand trust, purchase intention. Introduction To improve their digital infrastructure, Indonesia introduced the Internet superhighway “Palapa Ring” that connects districts and cities across Indonesia (Beritasatu, 2019). As a result, 65% of Indonesian population, or 171 million Indonesians, have Internet access (Indonesia Investment, 2019). This Internet superhighway allows 96% of its users to experience online shopping through company websites and social media. Accordingly, in 2019 alone, Indonesian online shopping accounted for $20.3 billion, of which $2.3 billion, or nearly 12%, went to fashion-related purchasing (Datareportal, 2019). To encourage online spending, the Indonesian fashion industry employs local celebrities to represent and endorse their brands on their social media, such as Instagram (Danniswara et al., 2017). Although Instagram is claimed as Indonesian most preferable online shopping platform (Greenhouse, 2019) and is considered as a suitable marketing tool for the fashion industry (Moatti & Abecassis-Moedas, 2018), one third of the fashion industry suggests that CE on Instagram does not highlight their products, and therefore they do not view Instagram as an important platform (Ipsos, 2018). To ensure the fashion industry’s social media attractiveness and effectiveness, scholars attempted to find answers by more intensively examining the CE phenomenon. For example, Wahloonluck and Chokesamritpol’s (2013) study on Thai’s social media found that CE helps the ice cream industry reach its customers and promote its brands. To these authors, featuring celebrities on social media improves social media attractiveness. A different study by Phua, Syan and Lim (2018) on the effect of CE on US online E-cigarette consumption behavior revealed that CE improves customer engagement. Similarly, Djafarova and Rushworth’s (2017) investigation on British online purchasing habit documented that CE positively affects young female online purchasing decision. In contrast, other scholars have found that featuring celebrities on Instagram also potentially lowers a brand’s perceived uniqueness (De Veirman et al., 2017) 205 Halimin Herjanto, Michael Adiwijaya, Elizabeth Wijaya, Hatane Semuel. The Effect of Celebrity Endorsement on Instagram Fashion Purchase Intention: The Evidence from Indonesia and more importantly, the image of celebrities can overpower the fashion brand (Fong & Yazdanifard, 2014). Adding to this inconsistency, none of these researchers above examined the effect of CE on Instagram in the context of the fashion industry. Thus, their findings may not be applicable to the fashion industry. In addition, most of this research was conducted outside Indonesia and thus the findings may not be suitable for Indonesian context. Based on these caveats, current studies into the effect of CE on Instagram are incomplete. Therefore, the subject is in need of further investigation (Totoatmojo, 2015). Thus, the present study aims to further explore the effect of celebrities on brand image and brand trust as well as purchase intention. In addition, this study also investigates the moderating effect of CE on the relationship among brand image, brand trust and repurchase intention in Indonesian context. Conceptual framework Purchase intention Ajzen and Fishbein (2004) argue that intention is the most important mental state that serves as the gateway to determine customer behavior. Based on this definition, purchase intention can be translated as the degree of customer tendency to buy similar products or services in the near future (Diallo, 2012). To Lin and Lu (2010), the degree of purchase intention occurs when a customer simultaneously experiences a strong psychological state that stimulates willingness, wants and buying desire. According to Ajzen and Fishbein (2004), different psychological states are responsible for purchase intention. Among these psychological factors, Tseng and Lee (2013) suggest that different brand components are considered most important. It is because these brand components serve as evaluation tools that build stronger brand attitude that produces stronger purchase intention. Brand image Brand image is the product of a customer’s positive evaluation toward brand attributes which is stored in customer mind (Hsieh & Lindridge, 2015). According to Wang and Yang (2010), the strength of brand image is determined by its stability, favorability and uniqueness. That is, the consistency of quality performance, the likeability of brand attributes, and the distinctiveness of brand features generate stronger brand credibility and brand position in the customer-evoked set. This way, Chauhan (2013) concludes that strong brand image becomes a customer benchmark in making a decision. Accordingly, a strong brand image promotes brand trust (Liao et al., 2009) and repurchase intention (Wang & Yang, 2010). 206 ISSN 2029-4581 eISSN 2345-0037 Organizations and Markets in Emerging Economies Brand trust Pribadi et al. (2019) argue that brand trust is one of the most important pillars of a strong brand. To these authors, brand trust is generated by the combination of brand personality and brand experience. That is, when a customer feels that their personality matches with the brand, they feel emotionally connected, and at the same time, it improves the positive experience with the brand. This way, this positive experience generates a higher brand trustworthiness and more importantly improves a customer’s sense of security and likability. As a result, brand trust positively contributes to a stronger brand attachment, brand commitment (Esch et al., 2006) and brand faithfulness (Pribadi et al., 2019). Celebrity endorsement CE can be explained as the validating statements made by celebrities or public figures in support of a brand with the aim of increasing the attractiveness of the brand (Zamudio, 2016). Seno and Lukas (2017) suggest that the more credible and attractive the celebrity is, the more effective the CE becomes. In other words, the celebrity’s degree of credibility enhances the trustworthiness of a brand, and his/her degree of attractiveness improves its likeability (Ohanian, 1990). In general, credibility is generated by a celebrity’s relevant knowledge, expertise and consumption experience of that brand (Forounhandeh et al., 2011) and a celebrity’s attractive physical characteristics, such as body shape or sexiness, promote the attractiveness of the brand (Erdogan et al., 2001). In today’s overflowing product availability, a customer has to decide which brands he/ she needs to purchase. In this selection process, a customer tends to evaluate available brands based on personal experience as well as on the opinion of the public and experts. According to Bednall and Collings (2000), public and expert opinion is a strong influencer, particularly when a customer perceives the endorser as “fitting” with the brand. That is, the image of the endorser supports the image of the brand. Examples can include David Beckham and H&M fast clothing. David Beckham, a former England soccer captain, is represented as sporty, sexy and rebellious, and his image fits with the H&M motto “The H&M way”. According to Charbonneau and Garland (2010), celebrity “fitness” with a brand is crucial because the image of the celebrity transfers to and complements the brand. Accordingly, it improves customer brand awareness and differentiates the endorsed brand from its competitors (Sagar et al., 2011). A failure to find a perfect balance between a celebrity and a brand generates a reverse image, which leads to customer confusion and a negative attitude toward the brand (Charbonneau & Garland, 2010). Thus, the characteristics and image of the celebrity determine the success of the CE (Hakimi et al., 2011). 207 Halimin Herjanto, Michael Adiwijaya, Elizabeth Wijaya, Hatane Semuel. The Effect of Celebrity Endorsement on Instagram Fashion Purchase Intention: The Evidence from Indonesia Celebrity endorsement on social media Recent studies show that CE boosts the fashion industry’s social media popularity and attractiveness (Danniswara et al., 2017). For example, based on 330 Korean Facebook users, Um (2013) found that CE helps to increase the need for affiliation and self-identity. To this author, following celebrity-endorsed fashion not only fulfils such need but also allows him/her to feel good about him/herself. Accordingly, this positive feeling promotes positive brand attitude and purchase intention. This finding confirmed Thanh’s (2016) Facebook study in Vietnam. Similarly, Cunningham and Bright’s (2012) study on the effect of CE on Twitter revealed that CE improves the perception of brand relevance. That is, Twitter users view an endorsed brand to fit with their interest. This finding supported Jin and Phua’s (2014) study on Twitter CE in the US. Laila and Sjabadhyni’s (2017) study on Indonesian Instagram online spending behavior noted that CE improves the online shopper’s willingness to repurchase. They argue that CE increases an Instagram user’s degree of perceived congruency. This finding reinforced Wahloonluck and Chokesamritpol’s (2013) study in Thailand. Despite these extensive efforts, Djafarova and Rushworth (2017) suggest that research on CE on social media is limited. Figure 1 presents a model of the direct and moderating effect of CE. This model offers a brief conceptual framework of the direct and indirect impact of the various constructs toward purchase intention. Brand Image Purchase Intention Celebrity Endorsement Brand Trust H5 H4 H3 H2 H6 H1 H8 H7 FIGURE 1. The celebrity endorsement model Source: Authors’ own contribution Hypotheses development The effect of celebrity endorsement on brand image Traditionally, a brand is regarded as a unique product/service identifier that consists of name, design, style and words or logo (Omar & Williams, 2006). A customer views these brand characteristics as reflecting a manufacturer’s desire to distinguish their 208 ISSN 2029-4581 eISSN 2345-0037 Organizations and Markets in Emerging Economies product’s value, culture and benefits. In other words, a customer perceives a brand as the manufacturer’s promise or guarantee to deliver a quality product (Merz et al., 2009). A manufacturer’s failure to fulfil its promise, or to fulfil it in a timely manner, hurts the brand experience (Pribadi et al., 2019). When a manufacturer’s promise is fulfilled, the image of the brand immediately improves (Maroko & Uncles, 2008); that is, it enhances a customer’s positive perception and beliefs (Nandan, 2005), which ultimately guides a customer to purchase the brand (Wijaya, 2013). Brand image is known as a customer’s overall impression and perception of the brand (Wymer, 2013). According to Wijaya (2013), building a strong brand image is a complex process that is determined by brand identity, brand competence, brand personality, brand attitude and brand association. Among these components, brand association is the only component that is always associated with external factors, such as a celebrity. For example, Under Armour is associated with Dwayne “The Rock” Jackson, and Nike is associated with Michael Jordan. This association encourages a customer who idolizes a certain celebrity to become more involved (Gong & Li, 2017) and to view the value and image of their celebrity idol within the brand (Chan et al., 2013). Accordingly, this study hypothesizes: H1: CE positively influences brand image. The effect of celebrity endorsement on brand trust Brand trust is customer’s confidence in the brand’s ability to deliver a high-quality performance (Wang & Emurian, 2005). A high degree of customer confidence develops when a brand closely relates to a customer’s self-concept, is in line with a customer values and can fulfil a customer’s need (Mowen & Minor, 2000). Hegner and Jevons (2016) argue that when a brand is able to gain a customer’s confidence, it allows the customer to predict the brand’s future performance and accordingly, the customer is comfortable in continuing to consume the product (Laroche et al., 2012). However, Nick Black (2009), the managing partner of Intensions Consulting, suggests that to maximize the strength of brand trust, marketers should associate their brands with customer trust drivers. These include external opinion leaders such as celebrities (Erdogan et al., 2001). A celebrity is viewed as a famous person who enjoys public recognition for his or her achievements or dedication in a specific field (Karasiewicz & Kowalczuk, 2014). This definition shows that a celebrity is someone who is experienced and an expert in his or her field and therefore, a customer tends to view a celebrity as an alternative source of information. As a public figure, a celebrity’s behaviors are always subject to general public scrutiny. A customer evaluates a celebrity’s knowledge and behavior and decides whether the celebrity is capable of maintaining these to meet public expectations. This includes what he/she endorses and encourages people to use or wear. For example, a customer trusts that as a professional basketball player, Michael Jordan has a good knowledge about basketball. This includes what gear he needs to wear to achieve his best performance. When a customer sees him wearing his endorsed Nike shoes dur- 209 Halimin Herjanto, Michael Adiwijaya, Elizabeth Wijaya, Hatane Semuel. The Effect of Celebrity Endorsement on Instagram Fashion Purchase Intention: The Evidence from Indonesia ing his basketball matches or in his personal life, he/she is more likely to trust that Michael Jordan is genuinely wearing the shoes because of their performance. Accordingly, seeing Michael Jordan’s trust in the brand will encourage a customer to trust the brand as well. Based on this argument, the present study hypothesizes that: H2: CE positively influences brand trust. The effect of celebrity endorsement on purchase intention Self-identity theory maintains that a customer compares and evaluates whether he/she meets the identity that he/she wants to portray to the rest of the group members or society (Tajfel & Turner, 1979). When a customer wants to maintain or improve his/ her status or belongingness, the customer is more likely to enhance his/her self-image by adopting a brand that has been endorsed by celebrities. Psychologically, adopting a celebrity-endorsed brand reinforces a customer’s self-identity and to some extent, it provides a sense of personal and status similarity with their idol (Dib & Johnson, 2019). As a result, a customer feels better about him/herself with a boost in self-confi- dence, and life becomes more enjoyable and meaningful (Tantiseneepong et al., 2012). Consequently, to maintain such positive feeling, a customer tends to develop a better brand attitude (Chin et al., 2017), which encourages a stronger connection to the brand (Escalas & Bettman, 2015) and produces a solid brand preference (Albert et al., 2017). Ultimately, it improves a customer’s purchase intention. Based on this discussion, it can be said that: H3: CE positively influences purchase intention. The effect of brand image on brand trust Makasi et al. (2014) suggest that a strong brand image provides a competitive advantage. That is, a strong brand image provides a strong indication of product quality (Khasawneh & Hasouneh, 2010) and conveys an overall positive impression (Chao et al., 2015), which helps reduce a customer’s perception of risk while improving a customer’s familiarity with the brand (Makasi et al., 2014). During this process of brand familiarization, brand image serves as the first brand characteristic that the customer encounters. Psychologically, a customer screens the overall brand attributes, and if these attributes match or exceed his/her expectations, a brand is awarded a positive brand image. To illustrate, Abercrombie and Fitch (A&F) portrays itself as a fashion leader amongst young people. When a customer visits A&F stores and encounters product design, store ambiance, floor staff and advertising materials, it confirms his/her expectations and creates a stronger brand image. Different studies have shown that brand image is responsible for strengthening brand trust. For example, based on 355 European participants, Esch et al. (2006) found that brand image strengthens brand trust. 210 ISSN 2029-4581 eISSN 2345-0037 Organizations and Markets in Emerging Economies Similarly, Liao et al. (2009) confirmed that brand image is responsible for brand trust. Recently, Alhaddad’s (2015) Syrian study also found that brand image directly affects brand trust. Based on the literature review, this study also proposes that: H4: Brand image positively influences brand trust. The effect of brand image on purchase intention Although online transactions offer convenience, Harridge-March (2006) argues that there are still customers who do not trust such transactions. One reason for this is that a brand may have a weak brand image (Wu et al., 2011). For a customer, brand image is a barometer to evaluate the acceptability and suitability of a brand. If a brand is involved in negative events, a customer is more likely to perceive the brand negatively and accordingly he/she will avoid association with the brand. For example, in early 2000, Nike was found to be using sweatshops in Asia. This scandal led to some of Nike’s customers switching brands because they did not want to be associated with Nike’s negative image. Thus, scholars concluded that brand image is important because it is responsible for building customers’ positive perception (Alhaddad, 2015) and dedication toward the brand (Malik et al., 2012), which in turn is responsible for loyalty and future purchase intention (Porral & Lang, 2015). These findings were confirmed by Tariq et al. (2013) and Wu et al. (2011), who also recognized the effect of brand image on purchase intention. These sets of studies show that brand image positively improves a customer’s purchase intention. Thus, the present study hypothesizes that: H5: Brand image positively influences purchase intention. The effect of brand trust on purchase intention Pribadi et al. (2019) suggest that brand trust is crucial to building customer loyalty. That is, the more a customer trusts a brand, the higher his/her customer loyalty is and accordingly, the more profitable and sustainable the fashion brand becomes. In other words, brand trust encourages a stronger and more enthusiastic brand relationship (Xie et al., 2014). According to Kim et al. (2015), a close relationship can reduce negative perceptions and improve a customer’s tolerance towards the brand. This is because a customer is likely to believe that the brand will not take advantage of him/her and will always deliver good quality products. Accordingly, when a customer receives consistently good products and experiences, he/she is more willing to rely on the brand and ultimately to commit to future purchases (Hahn & Kim, 2009). Punyatoya (2014) has confirmed that strong brand trust leads to repurchase intention. Accordingly, this study hypothesizes that: H6: Brand trust positively influences purchase intention. 217 Halimin Herjanto, Michael Adiwijaya, Elizabeth Wijaya, Hatane Semuel. The Effect of Celebrity Endorsement on Instagram Fashion Purchase Intention: The Evidence from Indonesia References Aaker, D. A. (1996). 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