Are Influencers the Next Brand-Building Tool? : A Qualitative Study on How Influencer Marketing Affects Customer-Based Brand Equity

Abstract: Given the rise of social media and the growing importance of influencers on consumer behavior, gaining an understanding of how influencers and the practice of influencer marketing impact the brand from the consumer's perspective is crucial. Additionally, a significant amount of companies compete for consumers' attention in today's market. Consequently, it is essential to comprehend how to foster strong brand equity in order for brands to compete. A research gap identified in this study is the lack of research examining the four dimensions of brand equity in relation to influencer marketing considering source credibility and brand-endorser fit. Earlier studies have focused on dimensions of brand equity separately, not taking all of them into account. Additionally, academic research has to be undertaken to enhance our understanding of influencer marketing.  Considering the research gaps, this study aims to develop a deeper understanding and extend the knowledge of how influencer marketing on Instagram affects different aspects of customer-based brand equity considering source credibility and brand-endorser fit on Generation Z consumers through the research question: How does influencer marketing through brand-endorser fit and source credibility on Instagram influence customer-based brand equity among Generation Z consumers?  The study employed a qualitative research methodology, and ethical considerations were given constant thought during the course of the study's execution. The theoretical framework presents theories focusing on influencers and influencer marketing, brand-endorser fit, eWOM, source credibility, and brand equity. Ten semi-structured interviews with people from Generation Z were carried out in order to collect the data. All of the interviews focused on the consumers' experiences of influencer marketing on Instagram and the impact it has had on their perceptions of brands, which were then examined thematically. The qualitative study has provided extensive insights into how Generation Z consumers perceive the impact of influencer marketing on brand equity. The findings indicate that influencer marketing has an impact on each of the dimensions of brand equity, both positive and negative, through the factors of source credibility, brand-endorser fit, exposure, and eWOM. The analysis discloses that a good fit between the brand and the influencer, followed by the perceived credibility of the influencer through either trustworthiness, expertise, or attractiveness, or all of them, can foster positive eWOM and a positive view of the brand. Exposure has shown to have a beneficial effect on awareness of a brand but, incongruously, a negative effect on perceived quality. It also showed how strong the brand is perceived to be will impact influencer marketing has an effect on the dimension of brand equity.  In addition to theoretical contributions, the thesis offers implications for managers and marketers by providing a deeper understanding of how the use of influencer marketing affects the brand. The thesis offers managers insightful information that can be used to create effective marketing strategies in order to compete in today's market by helping them understand how customers perceive the impact of influencer marketing on brands.