How price promotion can be applied without damaging

brand equity

Ding LingGroup 8

Outline

Introduction

- Brand equity

- Price promotion Problem Solution Implication Evaluation List of references

Introduction Brand equity

Definition

“Brand equity is a set of assets andliabilities linked to a brand'sname and symbol that adds to (orsubtracts from) the value providedby a product or service to a firm.”

Source: Aaker, 1991; Aaker, 2012

Perceived quality

Brand loyalty

Brand association

Brand awareness

Other brand’s private property

Brand equity

Introduction

Price promotion

Outline

Source:Aaker (1991)

Perceived quality

Brand association

Price promotion Brand equity

Nonmonetary promotion

Advertising campaigns

Thesis Statement

How price promotion can be applied without damaging brand equity by combining the non-monetary promotion and advertising campaigns.

Problem The negative effect of frequent price promotion to

perceived quality and brand association

Source:Buil, I., de Chernatony, L. and Mart\'\inez, E. (2013). Examining the role of advertising and sales promotions in brand equity creation. 

price promotion

Non-monetary promotion

Perceived quality

Brand association

1st Solution

Non-monetary promotion

-- Definition (Yi and Yoo, 2011)

Promotional strategy

Hedonic benefits

-- Different from price promotion

2nd Solution

Advertising campaigns

--Definition (Kotler, 2012)

paid form of non-personal presentation

promotion of ideas, goods and services

--Different channels

Implication of Non-monetary promotion

Positive

--customers may receive the high-quality perception

--enhance brand equity

Negative

--enterprises could spend large budget on free gifts and free samples etc.

Implication of Advertising campaigns

positive --influence consumer behaviours in a large extent

--deepen the impression of products or services

negative --further investment

--less originality

Evaluation

the overall relationship between frequent price promotion and brand equity is negative

The most effective practice: nonmonetary promotions

The alternative possible solution: advertising

campaigns

As long as non-monetary promotion and advertising campaigns are implemented appropriately, price promotion can be applied along with the combination of two solutions without damaging brand equity

List of references

Aaker, D. (1991). Managing brand equity. 1st ed. New York: Free Press. Buil, I., de Chernatony, L. and Mart\'\inez, E. (2013). Examining the role

of advertising and sales promotions in brand equity creation. Journal of Business Research, 66(1), pp.115--122.

Keller, K. (2008). Strategic brand management: building, measuring, and managing brand equity. 3rd ed.

Kotler, P., Keller, K., Brady, M., Goodman, M. and Hansen, T. (2012). Marketing management. 2nd ed. Pearson Education.

Villarejo-Ramos, A. and S\'anchez-Franco, M. (2005). The impact of marketing communication and price promotion on brand equity. The Journal of Brand Management, 12(6), pp.431--444.

Yi, Y. and Yoo, J. (2011). The long-term effects of sales promotions on brand attitude across monetary and non-monetary promotions. Psychology \& Marketing, 28(9), pp.879--896

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