Digital branding adoption by specialty eatery start-ups in the post-pandemic environment in India

Abstract

The aim of this research paper is to investigate the adoption of digital branding among specialty eatery start-ups in a post-pandemic environment. The study analyses the relevance of digital branding’s advantages and drawbacks, and examines the intention of specialty eateries to adopt digital branding. Additionally, the research investigates the mediating influence of digital support and awareness on the adoption of digital branding. A detailed Google-form-based survey was conducted on 231 small cafés and restaurants in Maharashtra’s major cities that opened after COVID-19 (Mumbai, Pune, Nagpur, and Thane) to collect primary data. The data was analysed using the AMOS (Analysis of Moment Structures) program. The study concludes that digital branding plays a crucial role as an independent branding strategy and enhances the performance of specialty eatery start-ups in the post-pandemic era. Furthermore, the study highlights the significant mediating effect of digital support and awareness on the adoption intention of digital branding. This research is the first of its kind to examine the intention of startups in the specialty eatery industry to use digital branding to reach their intended audience. The study utilizes a quantitative approach, contributing to the respective research area that has been predominantly qualitative in previous studies regarding digital branding adoption. The findings of this research provide valuable insights for specialty eatery start-ups and other related businesses to enhance their digital branding strategies.

Keywords:

• digital branding
• start-ups
• specialty eatery
• adoption intention
• perceived value
• independent branding
• digital support
• awareness

PUBLIC INTEREST STATEMENT

The COVID-19 epidemic has had a devastating effect on the food and beverage business in India, particularly on small and medium-sized specialised eatery startups. The business has been compelled to adopt digital channels in order to survive. The research will investigate the degree to which startups have intention to adopt digital branding after the pandemic. This study’s findings will be of public interest because they will shed light on the obstacles and possibilities that specialised eatery startups face when implementing digital branding in the post-pandemic climate. The findings of this study can teach policymakers and industry stakeholders on how to assist and encourage the use of digital branding by food and beverage sector startups. This study will contribute to the body of information on the adoption of digital branding in the food and beverage industry and give practical advice for startups seeking to use digital branding strategies.

1. Introduction

The second wave of COVID-19 significantly impacted individuals and businesses, resulting in adverse health outcomes and substantial financial losses (de Gennaro et al., 2022; Lichtenthaler, 2021). Among the sectors hit hardest by the pandemic were the food and hotel industry, which experienced the closure of hundreds of eateries during the initial wave in 2020 (Tajvidi & Tajvidi, 2021). The pandemic altered the means through which food needs were earlier met (Varma & Dutta, 2022). While the industry is beginning to recover, many new restaurants and start-ups rely on online food delivery platforms, which promise a range of services and offer a strong digital branding presence (Gupta, 2019). However, partnering with these platforms can be costly, with restaurants typically giving up 10–15% of their profits to these delivery services and meal delivery services such as Swiggy and Zomato taking a commission of 20–25% that can rise to 30% with promotional activities (Patwa, 2021). Despite the cost, restaurant start-ups work with these platforms to ensure a guaranteed return, although this comes at the expense of a significant proportion of their profits.

Incorporating new technologies, such as digital branding, has significantly benefited businesses by enhancing their reach and visibility (Deshmukh & Patil, 2021; Erhan et al., 2022). Start-ups across various sectors increasingly adopt digital branding due to its cost-effectiveness and broader audience reach (Deshmukh & Patil, 2021; Narkiniemi, 2013). Digital branding enables customers to identify and prefer specific products over competitors by providing visual cues (Aghazadeh et al., 2022). Traditional branding methods such as hoardings, banners, and print media are becoming less effective in the world of electronic and convenient media where everything is “on-screen” (Grzesiak, 2015). The use of digital branding provides a better output at a comparatively lesser cost (Narkiniemi, 2013). Entrepreneurs can leverage digital branding to acquire information, expand business networks, promote brand visibility, develop customer connections, and grow their markets (Ahmad et al., 2018; Olanrewaju et al., 2018; Smith et al., 2017). Social media branding is the most prevalent mode of digital branding, and it continues to evolve, providing businesses with new commercial prospects (Tseng et al., 2022). According to recent studies, social media has become a highly beneficial medium for start-ups, with 73% of entrepreneurs acknowledging its value (Lee & Weder, 2021). Furthermore, 71% of consumers find social media favourable for brand recognition and are likely to recommend it to others (Lee & Weder, 2021). Small businesses, such as speciality eateries, can leverage the widespread reach of social networking sites to target their desired audience effectively.

Prior studies on digital branding have mainly focused on large industries and start-ups of significant size, neglecting the analysis of digital branding in small, specialty eateries (Cizmeci, 2015; Hawaldar et al., 2022). While there have been studies found on the role of digital marketing in brand recognition and awareness, little attention has been given to the pre-purchase mindset of start-ups (Teixeira et al., 2018). According to research by Almansour (2022), digital branding can significantly impact the pre-purchase attitude of new businesses, such as cafés and restaurants. Despite the growing relevance of digital branding in the post-pandemic age, little is known about why Indian speciality eatery start-ups are still reluctant to adopt independent digital branding. There are some studies available on digital marketing and branding in the hotel business (Iskender et al., 2022), but speciality eatery start-ups in India need a more concentrated assessment of their particular concerns and prospects. This study examines digital branding adoption intention of Indian speciality eatery start-ups.

This study also revealed that many cafés and restaurants disregard the significance of digital branding and neglect to evaluate the variables influencing their decision to go independently on digital platforms. By performing more studies in this area, cafés and restaurants may gain a deeper understanding of the advantages of independent digital branding and make more educated decisions on their online presence. This study addresses this gap by examining the factors that influence the decision of eatery start-ups to adopt digital platforms independently, with a specific focus on pre-adoption factors. The study aims to support new cafés and restaurants in developing their digital brand without having to pay high commissions to online food delivery platforms. Furthermore, by establishing their brand through social media, specialty eateries can increase consumer convenience in finding new cafés and restaurants instead of relying solely on online food delivery platforms. Ultimately, this study provides valuable insights for digital marketing companies seeking to persuade start-ups to adopt digital branding.

The remaining sections of this paper are organized as follows: First, a comprehensive literature review is conducted to build hypotheses. Subsequently, the research methodologies, data analysis, and findings are presented. The study’s theoretical and managerial implications are then discussed before the results are thoroughly analyzed and interpreted. The paper’s limitations are examined in the final section, and a concluding statement is provided.

2. Literature review and Hypothesis development

2.1 Start-ups and digital branding adoption

Start-ups and SMEs in developing countries play a crucial role in the global economy (Venkatachalam et al., 2019), and they are gradually recognizing the value of adopting digital branding for globalization. Businesses should merge or upgrade traditional branding methods to digital branding to enhance customer satisfaction more efficiently (Royle & Laing, 2014). With numerous alternatives and accessible options available to consumers, it is challenging for businesses to understand the market for building a brand and generating traffic to their business. To succeed, start-ups can use online advertising as a potent branding tool to develop their individual brands and increase profitability (Yamin, 2017).

Digital technology innovation is both a great motivator and a severe challenge for start-ups (Mazzarol, 2015). The concern arises from start-ups losing money due to a lack of resource utilization and innovation in primarily digital branding strategies (Mazzarol, 2015). Small businesses or start-ups often establish themselves with minimal resources, so they must act innovatively (Alkhalaf et al., 2022) in their branding techniques to reach a wider and more diverse range of audiences (Akeel & Gubhaju, 2020). Therefore, digital branding plays a crucial role for start-ups as it is more affordable than traditional branding (Akeel & Gubhaju, 2020).

To remain competitive in the market, it is crucial to bear in mind that the demands and preferences of customers are always evolving, and it is necessary to adapt to these changes (Hanelt et al., 2021). However, while platforms such as Zomato and Swiggy provide exposure to potential customers, they may not provide the same degree of control and flexibility as digital marketing initiatives. As for return on investment, it is vital to analyse the efficacy of digital branding activities and compare them to the price of participating in platforms such as Zomato and Swiggy. For certain startups, a mix of both strategies may be the most productive strategy. To find the ideal solution for specific firms, the current study’s finding suggested that independent digital branding gives better ROI than any other third-party affiliation (Dabas et al., 2021; Sharma et al., 2022). Zomato and Swiggy have substantial user bases that may be utilised to reach a larger audience. However social networking, email marketing, and search engine optimization may help in reaching a big audience through digital marketing and advertising without profit-sharing. Digital branding provides greater control over who sees the ads or messaging with digital promotions. Start-ups may target certain demographics, hobbies, or behaviours, which can help them reach their intended audience more effectively. Zomato and Swiggy are meal delivery websites, hence their target audience consists mostly of those seeking food delivery choices.

2.2 Perceived Cost of independent branding

Investing in advertising is considered a form of investment activity and relies mainly on temporal variables. Advertising carries risks compounded by the fact that it is designed to elicit a response from human perception (Al-Ababneh Ali et al., 2020). The cost of branding can be optimized by educating investors about changing trends and consumer psychology patterns. Most start-up companies do not consider digital branding strategies when implementing their business plans, as they are hesitant to spend money on it (Akeel & Gubhaju, 2020) due to the perceived high cost. However, in reality, digital branding is very cost-effective and has a significant commercial impact (Bala & Verma, 2018). Small companies find it challenging to compete against stronger rivals with traditional marketing strategies due to a lack of funds, knowledge, expertise, and cost-making approach. However, online branding offers access to targeted audiences through advanced methods and minimal cost (Bala & Verma, 2018). Based on the literature, we propose the following statement:

H1:

The perceived cost of independent branding has a significant impact on the perceived value of digital branding

2.3 Perceived risk concerns from digital branding

Many start-ups hesitate to adopt digital branding platforms independently due to various risk concerns. When people use a product or service, they worry about the potential negative outcomes, known as perceived risk (Choe et al., 2021). Perceived risk is a key factor in determining people’s willingness to adopt new technologies (Choe et al., 2021; Ko et al., 2004). One significant concern is the possibility of other marketing campaigns replicating online ads, which could result in digital branding getting lost in a sea of online ads. Start-ups should focus on professionalizing their internet branding initiatives to establish credibility with their target clients (Paxton, 2020). Another risk concern is customer trustworthiness, which is considered a major roadblock to the expansion of internet branding. As a result, online trust has become a significant research topic, with a growing impact on digital branding methods (Paxton, 2020). Data leakage, including the selling of customers’ private information for direct marketing purposes, is another significant risk concern. Based on the literature, we propose the following statement:

H2:

Perceived Risk has a significant impact on the perceived value of digital branding

2.4 Perceived Distrust in Digital Marketers

The extent to which users believe that a medium or source provides information in a trustworthy and competent manner is known as users’ trust in the media (Mohammed & Ferraris, 2021). However, according to a survey by Marketing Sherpa, Digital Branding is still struggling to gain users’ trust in the market. A study conducted in the USA among 2,400 consumers showed that digital branding techniques are not as trustworthy as traditional branding methods (Al-Ahwal et al., 2022; Sharma et al., 2022). Consumers lack trust in digital branding because they are concerned about fraud and the requirement of personal information and data, which they fear can be misused or leaked. To establish trust, marketers need to use the right technology and ethical tactics, providing a 360-degree view for users and assuring them that their message will reach the right audience at the right time without compromising the confidentiality of their data (Al-Ahwal et al., 2022). Before choosing the right digital branding professional, it is essential to ensure that they have existing case studies, a clear pricing plan, and do not use unethical branding techniques like Black Hat SEO.” (Sharma et al., 2022).

H3:

Perceived Distrust has a significant impact on the perceived value of digital branding

2.5 Perceived return on Investment (ROI) from Digital branding

The return on investment (ROI) of digital branding is calculated based on the profit or loss generated from its campaigns (Nikhil, 2021). ROI is a crucial aspect of digital branding (Lal et al., 2020), and estimating its impact is a complex process throughout the advertising process (Nikhil, 2021). Business intelligence (BI) technologies, which are widely used in large and international organizations, require significant investment and expensive labor (Nikhil, 2021). However, approximately 45% of start-ups cannot calculate ROI from digital branding due to a lack of resources, indicating inadequate investment in digital branding (Nikhil, 2021). Businesses can achieve a higher ROI from digital branding by combining machine learning and digital branding tactics (Miklosik et al., 2019). Machine learning can aid decision-making by extracting insights from big data (Miklosik et al., 2019). Start-ups and small firms face fierce competition, increased transaction costs, and limited resources when introducing innovations. Although digital branding can enhance ROI, its long-term results are more reliable and require time. To investigate the link between perceived ROI and perceived value, the following hypothesis has been proposed:

H4:

Perceived Return on Investment from existing Online Food Delivery Platforms has a significant impact on the adoption of digital branding

2.6 Perceived promotion from digital branding

The central aspect of Digital Branding adoption is related to social media promotions (Rippa & Secundo, 2019). The reach of social media plays a critical role in disseminating information from anywhere to any corner within seconds. In practice, social media refers to a group of digital technologies, typically displayed as websites and apps, that enable people to exchange and access digital information through various social networks (Appel et al., 2020). The primary advantages of social media branding are cost optimization and wider reach. Social media platforms cost less than traditional promotional tools, such as direct branding or advertising through distributors or intermediaries. Furthermore, social media branding helps companies communicate with their customers, which is challenging in traditional branding due to time and geographic limitations (Pereira Correia et al., 2014). The real benefit of social media branding is that it enables businesses to increase their reach with minimal cost (Alkasasbeh, 2020). Companies can utilize social media branding to reach their target audience without investing in intermediaries typical of conventional marketing. Based on the literature, the following proposition has been formulated:

H5:

Perceived Promotion from digital branding platforms has a significant impact on the perceived value of digital branding

2.7 Perceived targeting through digital branding

With the rapid expansion and growing trend in the digital world, many businesses are adopting new tactics in their branding strategies due to their effectiveness in targeting, reliability, and accessibility. Targeting in digital branding demonstrates how businesses can create media sources and strategies to direct marketing messages at specific market segments. Businesses that do not focus on their customers employ uniform advertising tactics that limit their market reach (Iyer et al., 2005; Sharma et al., 2022). Another compelling advantage of targeting through digital branding is the appealing benefit of removing undesired and unnecessary aspects that can cost the firms more. Therefore, the ability to target through digital branding increases businesses’ equilibrium earnings (Iyer et al., 2005; Sharma et al., 2022). For instance, if a café runs an advertising campaign on social media for their upcoming burger, they can run the ad for the targeted region, and the café can control the flow of advertisements according to the day and time. This approach can save the cost of promotion and provide effective targeting.

H6:

Perceived Targeting from digital branding platforms has a significant impact on the perceived value of digital branding

2.8 The perceived value of digital branding

In branding and marketing, perceived value refers to the benefits and drawbacks of a product or service measured by comparing them to customers’ expectations and requirements (Hasbi et al., 2021). Epistemic value, generated by the need for knowledge and intellectual curiosity, is a component of consumer value (Sheth et al., 1991; Sánchez-Fernández & Iniesta-Bonillo, 2007). Previous studies suggest that individuals’ willingness to accept new technologies is positively correlated with the importance they place on epistemic value (Jayashankar et al., 2018). Virtual marketplaces have the potential to create value by integrating information, physical products and services, and reconfigurations among suppliers, partners, and customers (Amit & Zott, 2001).

The actual value of digital branding, after analyzing its proposed benefits and sacrifices, is referred to as perceived value. This study focuses on the adoption of digital branding, which depends on the perceived value. Thus, before adopting any technology or branding medium, businesses need to weigh the pros and cons and determine the investment’s worthiness. The impact of all constructs, including cost, distrust, risk, ROI, promotion, and targeting, affects the degree of perceived value, which eventually decides specialty eatery start-ups’ intention to adopt digital branding.

H7:

Perceived Value from digital branding has a significant impact on the adoption intention of digital branding

2.9 Mediation effect of “Awareness” and “Digital Support” between perceived value and adoption intention

The mediation effect determines the link between the dependent and independent variables via a mediator variable or construct (VanderWeele, 2016). Start-ups in the specialty food industry of the present generation have access to digital media, but many are unaware of how to make the most of it (Sivasankaran, 2017). To achieve optimum utilization with extreme care and caution, start-ups must be aware of all digital branding portals (Sivasankaran, 2017). As per many studies, users are risk-averse in the case of digital branding, and hence they must be educated on how to deal with the risks associated with it (Sivasankaran, 2017). Practical knowledge and integration of the best digital branding tactics and patterns can ensure the lucrative success of start-ups. Here, awareness can positively influence the impact of perceived value on adoption intention. After final perceived value, start-ups may still be uncertain about adopting digital branding. However, if start-ups were aware of the benefits and accessibility of digital branding, their intention to adopt it could shift positively.

Digital branding is a skillful concept consisting of five major dimensions, i.e., digital gadgets, digital mediums, digital sources, digital information, and digital knowledge (Nam & Pardo, 2011). Understanding these aspects requires time and skills, which are hard to acquire without digital support. Specialty eatery start-ups refrain from independent digital branding due to a lack of support and guidance. Effective and efficient digital branding strategies require expertise; otherwise, it may lead to investment failure (Chaffey, 2010). Digital transformation has become crucial irrespective of any industry to sustain in the competitive market, but every change requires resources to implement. After analyzing all the constructs indicating the benefits and sacrifices of digital branding, the perceived value is determined. Start-ups may still be unsure about investing in digital branding because now they know the benefits of it, but the question arises about how they will implement it. Here, digital support can mediate their decision to adopt digital branding positively. Based on the literature, the following propositions have been made:

H8:

Awareness regarding independent digital branding mediates the relationship between perceived value and adoption intention of digital branding

H9:

Digital support for independent digital branding mediates the relationship between perceived value and adoption intention of digital branding

2.10 Conceptual framework

Kim et al. 2007 proposed a value-added model (VAM) as an alternative to the traditional technology acceptance model (TAM) developed by Davis et al. in 1989. The TAM model is limited in its understanding of the adoption of new technologies and it is more appropriate to refer to users as consumers (Davis et al., 1989). The TAM model focuses on usefulness and ease of use and neglects negative aspects, whereas the VAM can identify perceived value by comparing perceived benefits and sacrifices. However, if the proposed framework (Figure 1) places too much emphasis on perceived sacrifices, a start-up’s adoption intention may still be uncertain. Nevertheless, these mediation effects can contribute to a greater shift in adoption intentions towards digital branding.

Figure 1. Extended VAM model with mediation effect.

3. Research methodology

Taiminen and Karjaluoto (2015) argue that digital platforms are crucial in today’s growing internet and related technologies. Jorge et al. (2018) state that a digital branding strategy is essential for targeting a maximum audience. However, investing in new technologies is often challenging for small businesses due to their limited budget. In order to successfully adopt any technology, start-ups should have secure and informed knowledge (Gilmore et al., 2001). The purpose of this study is to identify the factors that influence the decision of specialty establishments to adopt independent digital branding, and to emphasize the necessity of such branding.

3.1 Survey Element

The researchers employed a quantitative approach and found limited studies on start-ups’ intentions to use digital branding. Subsequently, the researcher utilized the digital branding adoption model, along with the value-added model (VAM) and its mediation extension, to identify the factors influencing start-ups’ decisions to adopt digital branding. Following the adaptation of previous research and a survey conducted with restaurants and cafes, the characteristics and criteria listed below were utilized in the analysis. A comprehensive Google form-based questionnaire with 35 questions on a five-point Likert scale (ranging from strongly agree to strongly disagree) was used to collect responses from a sample of restaurant and cafe owners, irrespective of gender. The survey instrument was confirmed by digital marketing professors and specialists. Moreover, the questionnaire’s constructs were derived from the existing literature and linked to the costs and benefits of digital branding.

The questionnaire’s constructs and items were taken from earlier literature, as shown in Table No. 1.

3.2 Sampling Criteria and Sample Size

The study collected responses from entrepreneurs of eateries located in major cities in Maharashtra, namely Mumbai, Pune, Nagpur, and Thane. According to Bharath et al. (2018), these entrepreneurs are from various parts of India. The focus of the study was on restaurants and cafes with a staff size of no more than four and a yearly revenue of no more than Rs. 25 lakhs. The researcher chose different areas in cities with a greater diversity of cafes and restaurants as the target locations. The sample respondents were selected using the judgmental sampling technique.

The study specifically targeted cafes and restaurants that opened after the COVID-19 pandemic and those that use Zomato for branding. Zomato recorded over 9,000 eateries in 2021, which is three times the previous year’s total (Statista, 2021). Because the Zomato data was unclear, the sample size was determined using the thumb rule. According to Roscoe (1975) and Sekaran (2003), the sample size for multivariate research, including multiple regression analyses, should be five to ten times the number of variables (Sharma et al., 2022). Since the questionnaire included 35 questions, the study required at least 175 respondents to complete the multivariate analysis. A total of 255 cafes and restaurants were asked to complete the survey based on the inclusion criteria, of which only 255 responded. Out of the respondents, 24 were excluded due to incomplete answers. Later, the researcher used AMOS to analyze the data and identify latent variable interactions. The data were presented in tables and figures to make the presentation more appealing. The constructs and items of the questionnaire adopted from the previous literature are demonstrated in Table 1.

Table 1. Constructs and items extracted from the previous studies

Constructs	Questions	Sources
Perceived Targeting (PT)	Digital branding is customer-focused Digital branding is area focused Digital branding more specific to the target market Digital branding is more specific to the customers	Iyer et al. (2005)
Perceived Promotion (PP)	(5) It helps to improve brand visibility (6) It helps to reach the wider audience	Appel et al. (2020) and Alkasasbeh (2020)
Perceived ROI (PROI)	(7) Digital brandings give better returns (8) Digital branding is more profitable (9) Overall ROI is very high (10) My sales will increase after digital branding (11) Revenue will be increase after digital branding	Nikhil’s (2021) and Miklosik et al. (2019)
Perceived Risk (PR)	(12) My information can be shared with the third party (13) My idea of business can be copied (14) My transactions maybe not secure (15) My customer data can be leaked	Choe et al. (2021) and Paxton (2020)
Perceived Cost (PC)	(16) The cost of digital branding is very high (17) The digital branding services don’t fit my budget (18) I am happy to spend money on digital branding	Bala and Verma’s (2018)
Perceived Distrust (TR)	(19) I don’t trust digital branding professionals (20) The digital branding professionals are not reliable (21) I don’t trust digital branding professionals due to unethical practices	Al-Ahwal et al. (2022)
Perceived Value (PV)	(22) Digital branding is value for money (23) Digital branding is beneficial for my business (24) Overall digital branding has good value for me	Abbas and Mehmood (2021), Isohella et al. (2017) and Jayashankar et al. (2018)
Adoption Intention (ADP)	(25) I am planning to use digital branding for my business (26) I am more intent on using social media to boost my business (27) I will use digital branding in the future for my business (28) I am interested in getting associated with a digital branding supporter for my business	Odoom et al. (2017), Gavino et al. (2019), Venkatesh et al. (2003) and Nawi et al. (2017)
Awareness (AW)	(29) I am not aware of digital branding (30) I am not aware of the digital branding platforms (31) The digital supporters are not accessible	Sivasankaran (2017)
Digital Support (DS)	(32) I need support to learn more about digital branding (33) I need more handholding to manage the digital business (34) I need guidance for making effective branding strategies (35) I need to learn more about digital branding supporters	Akeel and Gubhaju (2020)

3.4. Common method bias

The same participants were asked to complete questionnaires regarding dependent and independent constructs. The CMB was examined using Harman’s one-factor, latent factor, and multiple latent factor tests (Podsakoff et al., 2003). Since all components were inserted into their respective constructs, no single factor dominated the test outcomes. In addition, item factor loadings on latent constructs vary by no more than 0.2. (Podsakoff et al., 2003).

4. Results analysis

AMOS software was used to test the hypothesised model. The measurement model proved validity and reliability before the structural model tested the hypothesis.

4.1 Measurement model

Using the AMOS software, confirmatory factor analysis (CFA) was conducted to assess the data’s validity and reliability (Figure 2). The study’s constructs’ reliability was assessed by measuring Cronbach’s alpha. All of the constructs had Cronbach’s alpha values above 0.70, indicating their reliability, as per the research (Hair et al., 2017). The measurement model’s validity was assessed by measuring the convergent validity and discriminant validity of the constructs. Table 2 shows that the average variance extracted and composite reliability are within the range of 0.50 and 0.70, respectively, as suggested by Hair et al. (2017), confirming the convergent reliability. Moreover, discriminant validity was determined by comparing the square root of each variable’s AVE value with the correlation coefficient of other research constructs (Fornell & Larcker, 1981). As shown in Table 2, the square root of each construct’s AVE value was higher than the associated correlation coefficients, confirming the discriminant validity of the measuring scale (Fornell & Larcker, 1981).

Figure 2. Measurement model.

Table 2. Summary statistics of the measurement model

Construct	Items	Factor loading
Perceived targeting (PT) (AVE= 0.51, CR=0.80, α=0.82)	Digital branding is customer-focused	0.68
	Digital branding is area focused	0.58
	Digital branding more specific to the target market	0.76
	Digital branding is more specific to the customers	0.81
Awareness (AW) (AVE= 0.56, CR=0.72, α=0.74)	I am not aware of digital branding	0.69
	I am not aware of the digital vendor	0.68
	The digital vendors are not accessible	0.67
Perceived Promotion (PP) (AVE= 0.54, CR=0.71, α=0.61)	It helps to improve brand visibility	0.647
	It helps to reach the wider audience	0.739
Privacy risk (PR) (AVE= 0.53, CR=0.78, α=0.78)	My information can be shared with the third party	0.59
	My idea of business can be copied	0.52
	My transactions maybe not secure	0.72
	My customer data can be leaked	0.80
Perceived ROI (PROI) (AVE= 0.63, CR=0.89, α=0.89)	Digital brandings give better returns	0.68
	Digital branding is more profitable	0.80
	Overall ROI is very high	0.81
	My sales will increase after digital branding	0.80
	Revenue will be increase after digital branding	0.85
Perceived Value (PV) (AVE= 0.52, CR=0.76, α=0.75)	Digital branding is value for money Digital branding is beneficial for my business Overall digital branding has good value for me	0.79 0.75 0.60
Perceived cost (PC) (AVE= 0.57, CR=0.79, α=0.76)	The cost of digital branding is very high	0.48
	The digital branding services don’t fit my budget	0.85
	I am happy to spend money on digital branding	0.86
Perceived distrust (TR) (AVE= 0.63, CR=0.87, α=0.88)	I don’t trust digital branding professionals	0.86
	The digital branding professionals are not reliable	0.89
	I don’t trust digital branding professionals due to unethical practices	0.72
	Digital marketing professionals are not transparent	0.69
Digital Support (DS) (AVE= 0.55, CR=0.83, α=0.83)	I need support to learn more about digital branding	0.80
	I need more handholding to manage the digital business	0.76
	I need guidance for making effective branding strategies	0.72
	I need to learn more about digital branding professionals	0.69
Adoption (ADP) (AVE= 0.51, CR=0.81, α=0.81)	I am planning to use digital branding for my business	0.70
	I am more intent on using social media to boost my business	0.74
	I will use digital branding in the future for my business	0.74
	I am interested in hiring a digital branding professional for my business	0.67

4.2 Hypothesis testing

A structural model utilising covariance-based structural equation modelling (CB-SEM) was used to evaluate hypotheses H1 to H7 (Byrne, 2001). Additionally, path analysis is used to calculate the direct and indirect effects in order to assess mediation (H8 - H9).

4.3 Structural model

With CMIN/DF = 1.331 (p 0.001), CFI =.947, GFI =.950, AGFI =.922, NFI > = 0.900, TLI =.930, and RMSEA = 0.03 the structural model’s results showed a satisfactory model fit (Figure 3) (Hair et al., 2017). According to the path analysis results shown in Table 3, perceived targeting ( = 0.125, p 0.05), perceived ROI ( = 0.230, p 0.001), perceived promotion ( = 0.230, p 0.001), perceived risk ( = 0.350, p 0.001), perceived distrust (= −0.09, p 0.05), and perceived cost (= −0.161, p 0.05) all have a H1, H2, H3, H4, H5, and H6 were so approved (Table 4). Additionally, perceived value has a large influence on the intention to adopt digital branding ( = 0.360 p 0.001) (Table 4). Therefore, it is likewise believed that H7 is also accepted. The results also look at the variance inflation factor (VIF) and tolerance values, and they show that there is no multi-collinearity as long as these values are below 0.5 and 0.2, respectively (Hair et al., 2017).

Figure 3. Structural model.

Table 3. Discriminant validity

	DS	PT	AW	PP	PR	PROI	PV	TR	PC	ADP
DS	0.745
PT	0.349	0.714
AW	0.173	0.179	0.680
PP	0.239	0.384	0.566	0.664
PR	0.368	0.376	0.345	0.344	0.653
PROI	0.392	0.363	0.493	0.566	0.226	0.792
PV	0.483	0.348	0.089	0.475	0.500	0.446	0.719
TR	−0.031	−0.091	0.073	0.007	0.085	−0.011	−0.185	0.796
PC	−0.063	−0.041	0.140	0.031	0.071	0.002	−0.063	−0.142	0.752
ADP	0.630	0.316	0.367	0.436	0.506	0.516	0.524	0.066	0.050	0.711

Table 4. Direct effects

Path			B	SE	P-value
Perceived Value	<—	Perceived Targeting	.134**	.042	.003
Perceived Value	<—	Perceived ROI	.242	.053	***
Perceived Value	<—	Perceived Promotion	.228	.068	***
Perceived Value	<—	Perceived Risk	.335	.065	***
Perceived Value	<—	Perceived Distrust	−.103**	.048	.033
Perceived Value	<—	Perceived Cost	−.161	.035	***
Adoption Intention	<—	Perceived Value	.355	.088	***

Notes: ***p < 0.001; **p < 0.05; CMIN/DF = 1.344 (p < 0.001), CFI = 0.94, GFI = 0.90, AGFI = 0.86, NFI = 0.90, TLI = 0.93, RMSEA = 0.04. CFI = comparative fit index; GFI = goodness-of-fit index, AGFI = adjusted goodness of fit index, NFI = normed fit index, TLI =Tucker-Lewis index, RMSEA = root mean square error of approximation.

4.4 Mediation analysis

The bootstrapping method was used for the mediation study, using bias-corrected confidence intervals at a 95% level and 2000 bootstrap samples. Table 5 displays the outcomes of the mediation analysis. According to the investigation, DS partially mediates the connection between PV and ADP. As a result, proposition H8 is approved. However, in the context of digital branding, awareness does not mediate between perceived value and adoption intention; H9 is rejected.

Table 5. Mediation effect of digital support and awareness

Hypothesis	Effect		Result
PV -> AW -> ADP	Direct	0.355	No mediation
	Indirect	0.030
PV -> DS -> ADP	Direct	0.355	Partial mediation
	Indirect	0.142

5. Discussion

The COVID-19 pandemic has forced firms to make unplanned changes, and digital media has helped businesses, particularly start-ups, adapt to a changing environment and survive (Corvello et al., 2022). This study presents a framework based on the VAM model with the mediation effect, assessing the effect of perceived value from advantages and sacrifices on digital branding adoption intention. The study’s findings suggest that the perceived cost of digital branding has a detrimental effect on perceived value. Perceived distrust also negatively impacts the perceived value, and the propensity to address the perceived risk has a positive impact on the perceived value ((Choe et al., 2021; Paxton, 2020)). The study also shows that perceived ROI, perceived promotion, and perceived targeting have a positive impact on the perceived value of digital branding (Esmaeili et al., 2021; Nadaraja & Yazdanifard, 2013). The study’s findings also demonstrate that the perceived value of digital branding has a favourable effect on the intention to embrace it (Sheth et al., 1991; Sánchez-Fernández & Iniesta-Bonillo, 2007). Digital support partially mediates the connection between perceived value and adoption intention (Chaffey, 2010). Awareness does not serve as a bridge between perceived value and adoption intention in the context of digital branding (Akeel & Gubhaju, 2020). In recent years, digital marketing methods have transformed the café and restaurant sector, and entrepreneurs in the field have the chance to leverage on these trends to develop brand recognition and attract consumers (Bhandari & Sin, 2023).

Social media presence has been acknowledged as a crucial component of effective digital marketing for restaurants and cafes. Instagram, Facebook, and Twitter provide companies the chance to promote their cuisine and ambiance, interact with consumers, and grow a following. 56% of consumers follow restaurants on social media, according to a research by Square and the National Restaurant Association, underscoring the necessity of a robust social media presence (Li et al., 2021). In addition, social media advertising may be highly targeted to certain groups, making it an efficient method of reaching potential buyers.

SEO is another crucial component of digital marketing for restaurants just starting out (SEO) (Rostovtsev, 2017). Businesses may increase their exposure and attract more organic visitors by optimising their websites and content for search engines like Google. This may be accomplished by utilising strategies like keyword research, content production, and link building. Local SEO is especially vital for restaurants just starting out, since prospective diners frequently look for nearby dining alternatives.

Email marketing is an additional powerful tool for restaurant companies. By collecting clients’ email addresses, businesses are able to conduct tailored campaigns containing promotions, special offers, and updates (Marinova et al., 2002). Email marketing may assist organisations in fostering consumer loyalty and promoting return visits. Personalization and segmentation may be crucial to the success of email marketing initiatives, with customised messages sent to certain client groups based on their interests and behaviour.

Ultimately, a strong social media presence, good SEO, and targeted email marketing can be crucial aspects for café and restaurant entrepreneurs’ digital marketing success. By employing these techniques, businesses may increase brand recognition, attract new consumers, and promote return visits.

5.1 Theoretical Implication

This study makes significant theoretical contributions by examining the factors that influence the adoption intention of digital branding among start-up specialty eateries. Although digital marketing has been extensively researched in various fields, the branding aspect of digital marketing has received limited attention, particularly in developing countries such as India where empirical studies are scarce. This study, to the best of our knowledge, is the first to use mediation analysis and the VAM model to explore the perceived benefits and costs of digital branding adoption among specialty eatery start-ups, such as cafes and restaurants. The study demonstrates that digital branding can enhance the brand visibility, trust, and consumer awareness of start-up specialty eateries, and identifies the factors that influence their adoption intention. Importantly, the study examines the pros and cons of digital branding in a careful and nuanced manner. This research extends the existing literature on digital branding adoption by focusing on small-scale start-ups, such as cafes and restaurants, in contrast to previous studies that examined start-ups requiring significant capital. Moreover, prior research on digital branding has been limited, with most studies focusing on digital marketing more broadly. The study collected data through in-depth interviews with the owners of new specialty restaurants, providing a valuable contribution to the literature on digital branding adoption intention. Finally, this research demonstrates the importance of mediation constructs in expanding the VAM model to include small start-ups. In sum, this study provides new insights into the adoption intention of digital branding among start-up specialty eateries and contributes to the existing literature by providing a detailed examination of the pros and cons of digital branding. This research can also contribute to the public administration sector by utilising digitalization channels such as social media to improve start-up marketing campaigns. This study provides insights for all emerging nations striving to sustain start-ups confidence through digital platforms.

5.2 Managerial Implication

The present study has important managerial implications. Firstly, it provides insights to the government to better understand the current status of start-up businesses in India, which can aid in the implementation of the digital India mission. Secondly, the study highlights key issues such as risk, cost, and distrust on vendors that need to be addressed by the government through the development of a digital support system and scaling up digital literacy, particularly for start-ups. Thirdly, the study underscores the importance of digital branding for start-up eateries targeting a specific niche market as a means to reduce costs and more effectively target customers. This information is particularly critical for start-ups seeking to adopt new technology in their branding plans, as it provides them with a better understanding of the benefits and challenges involved. Additionally, the study finds that start-up size is a critical factor in the adoption of digital marketing strategies, particularly among small start-ups with limited funds. Perceived cost and distrust negatively influence adoption intention among small start-ups. This finding is essential for policymakers and company strategists in developing tailored policies and strategies to encourage start-ups to adopt digital branding. Through a comparative analysis of digitalisation’s benefits and sacrifices, this article enables start-ups to make more informed decisions on digital adoption by demonstrating the significance of digitalisation’s sustainability. Therefore, the study highlights the need to consider independent digital branding for small scale start-ups in the development countries.

5.3 Limitations and Future Research Directions

The major findings are based on Maharashtra-based start-ups, which may differ from the results and conclusions of research conducted on a larger scale in order to achieve more generalizability. The methodology utilised in the study is a quantitative research method. In contrast, future studies can use a hybrid methodology by combining qualitative and quantitative methodologies to find other aspects involved in encouraging start-ups’ desire to embrace digital technologies.

Given the increasing importance of digital branding for start-ups, it is imperative that future research in this area, particularly among small-scale start-ups, is conducted. Future studies could gather data from a diverse range of start-ups and analyze digital branding features before and after implementation. Furthermore, additional factors could be explored, such as appropriate promotional tactics, brand recognition, and trust in digital branding experts. As there is a lack of research focused solely on digital branding, future studies could examine digital branding tools independently. A global-scale study could also be conducted to compare how start-ups from various industries and regions perceive and utilize digital branding.

6. Conclusion

In the highly competitive post-pandemic environment, cafes and restaurants often affiliate themselves with well-known online food delivery platforms for quick success. However, in exchange for guaranteed returns and trust, they must face high commissions and restricted branding opportunities. Despite these sacrifices, the recent study proposes a better alternative for independent branding without any commission or restriction. Digital branding still faces challenges regarding guarantee and trust. According to the findings of the recent study, several factors affect the decision of specialty eatery start-ups to step onto independent digital platforms. After a thorough analysis of perceived benefits (ROI, targeting, promotion) and perceived sacrifices (cost, risk, distrust), the study suggests that digital branding offers a satisfactory alternative for branding. However, start-ups may still be unsure about adopting it. Therefore, the study proposes a framework based on the VAM model, which extends it with mediating impact to improve the degree of adoption intention after perceiving the value. In this study, digital support mediates the relationship between perceived value and adoption intention. Thus, start-ups can consider adopting digital branding if they are aware of the benefits of digital branding and have access to proper digital support. Future research in this field could examine the effectiveness of the proposed framework in enhancing adoption intention among start-ups.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Notes on contributors

Aman Sharma

Aman Sharma is a professional researcher, academic, and analyst in digital marketing. He has four years of expertise developing digital branding strategies for startup companies. Aman is pursuing a doctorate at India’s Symbiosis Institute of Business Management, Symbiosis International University (Deemed). His study focuses on the digitalization of startups through autonomous and cost-effective methodologies. Continuously investigating the most effective digital branding strategies for startups, he intends to establish his own digitalization initiatives. This will not only be beneficial for research and communication, but also for industrial and branding objectives. Email: [email protected]