Do Sales Promotions Necessarily Erode Brand Equity? Maybe Not

Joshy Joseph, Indian Institute of Technology Madras, India
Sivakumaran Bharadhwaj, Indian Institute of Technology Madras, India
The ratio of advertisements to sales promotion in the IMC budget, which was heavily skewed towards ads earlier, has now shifted towards promotions despite the research evidence that promotions erode brand equity. This widespread usage of sales promotions by the industry, despite the conflicting research findings forms the background for this paper. The study finds that under certain situations (high involvement/deal proneness and at high levels of advertising support), even non CFB promotions (e.g. discounts) help in improving brand equity. Thus the rise in promotional budgets could be attributed to these factors being present in several product markets.
[ to cite ]:
Joshy Joseph and Sivakumaran Bharadhwaj (2008) ,"Do Sales Promotions Necessarily Erode Brand Equity? Maybe Not", in NA - Advances in Consumer Research Volume 35, eds. Angela Y. Lee and Dilip Soman, Duluth, MN : Association for Consumer Research, Pages: 823-823.