An Empirical Research On The Impact Of Price Promotion On Brand Equity

Price promotion is one of the most common marketing methods. It is used to stimulate demand, increase sales, maintain or expand market share. In the field of theoretical research, there is no unified conclusion about price promotions'impact on brand equity.This paper discusses price promotions'impact on brand equity in the long-term, considering the margin and frequency of price promotions. This paper designs two ways of price promotions: Occasionally deep price promotions (promotion plays twice a year, each for a month, 50% off) and frequent slight price promotions (promotion plays at any time of year, 25% off).The research shows that the impact of price promotions on brand equity differs according to price promotion strategies. Occasionally deep price promotions have a positive impact on brand equity while frequent slight price promotions have a negative impact on brand equity. We can find more through further analysis: compared to margin of price promotions, the frequency of price promotions has an even greater influence on customer-based brand equity. The margin of price promotions has an even greater influence on consumer perception of discount volume. Deep price promotions seem more attractive to consumers.