The effect of user-generated content on consumer-based brand equity of major retailers in the Cape Metropole

Abstract

Negative and positive views on service and brand quality are generally shared on various social media platforms and are categorised as user-generated content (UGC). Both negative and positive UGC can either damage or enhance a company’s reputation or consumer-based brand equity, and this may ultimately have an impact on the organisation’s financial performance. This study sought to examine whether UGC does influence consumerbased brand perceptions, and if so, to determine whether negative or positive UGC exerted the most influence on these perceptions. The data for the study was collected using a mono-method quantitative research approach, which included a sample of 513 Generation Y respondents who completed self-administered online questionnaires distributed using Survey Monkey. Data analysis was based on both descriptive and regression models using SPSS version 27. As its major result, the study found that UGC does exert an influence on consumer-based brand equity, while positive UGC exerted a more significant influence than negative UGC. Similarly, both positive and negative UGC had an influence on other brand equity elements, such as brand credibility, brand loyalty and purchase intentions. From a policy perspective, it is imperative for companies to implement strategies or interventions in the form of promotional and information campaigns that enhance positive UGC while at the same time countering negative UGC that is damaging to the business.