The Impact Of Advertising & Price Promotions On Brand Equity

Abstract

In an extension of the research demonstrating the effect of marketing communications on consumer-based brand equity, the present study experimentally examines the effects of advertising and price promotion on consumer-based brand equity in the context of fast moving consumer goods. Based on past research, advertising and price promotion are known to have an essential role among marketing communication efforts. In order to test their effectiveness in the context of low involvement, random switch purchase behavior of consumers, the Nestle Milkpak brand was chosen. Perceived advertising spending and price promotion either did or did not have an impact on brand equity across randomly chosen consumers. The specific dependent measures were perceived quality, brand loyalty, brand awareness, and brand image. While advertising was found to have a positive relationship with brand equity, no significant negative effect on price promotion could be established. Hence, in order to develop strong brands, managers must focus on investing towards advertising, along with occasional small-scale price deals. Additionally, they need to explore other marketing tools, such as logistics, distribution, and the retail environment.