Sales Promotions Effects on Consumer-Based Brand Equity

Abstract

Research has traditionally posited that sales promotions erode brand equity. However, in current management practices, one may observe that companies design promotional programmes to differentiate and modernise their brand image and build brand awareness. This divergence between practice in the industry and the general academic view must inevitably lead to a rethink about the goals assigned to sales promotions. Consequently, the research question that concerns this study is whether sales promotions can contribute to building brand equity. Adopting a consumer-based brand knowledge perspective of brand equity, this study shows that monetary and non-monetary promotions are useful to create brand equity because of their positive effect on brand knowledge structures. The findings derived from a sample of 167 buyers suggest that non-monetary promotions are more appropriate as a brand-building activity and that the product type exerts a moderator effect on the relationship between sales promotions and brand knowledge.