How price promotion can be applied without damaging brand equity Ding Ling Group 8

Outline Introduction - Brand equity - Price promotion Problem Solution Implication Evaluation List of references

Introduction Brand equity “Brand equity is a set of assets and Definition “Brand equity is a set of assets and liabilities linked to a brand's name and symbol that adds to (or subtracts from) the value provided by 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.

Non-monetary promotion 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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