The impact of social media conversations on consumer brand choices
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This paper estimates the impact of social media conversations on consumer valuation of brand characteristics and demand for carbonated soft drinks (CSDs). We formulate a random coefficient, discrete choice model of consumer demand that includes social media conversations, and estimate it matching Nielsen sales data on carbonated soft drinks to social media conversations on Facebook, Twitter, and YouTube. Empirical results indicate that consumers’ conversations about brands and nutritional aspects of CSDs have a significant impact on their valuation of brand characteristics and ultimately on their choices of CSDs. These findings have important implications not only for firms using social media as a strategic tool for effective brand promotion and product design but also for public health policies aimed at reducing the consumption of sugary beverages and high-calorie foods.
KeywordsSocial media Word-of-mouth Demand Consumer behavior Internet Carbonated soft drinks
JEL ClassificationD12 M37 L66
The authors acknowledge funding from the Zwick Center for Food and Resource Policy at the University of Connecticut via USDA-NIFA Grant 2010-306-34178-20766.
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