A Study On Effects Of Sales Promotion On Brand Equity Of New Products

Due to increasingly fierce market competition, promotion has become the biggest expense item in company' s marketing expenditure. Promotion has been widely used as an effective weapon by a lot of companies to encourage consumers to buy their new products. Sales promotion is a double-edged sword; it has both positive and passive effects on an enterprise. Although sales promotion is one of the key factors in marketing activities, it is also a research field full of contradictions. Under such circumstances, there is an urgent need for every marketer to improve effectiveness of promotion.The objective of this paper is to examine the impact of various types of sales promotion on brand equity of new products. Based on the review of former research literature on sales promotion and brand equity, using students of Hunan Normal University and Hunan Public Security College as samples, this paper carried out two independent experiments to respectively study how the different type of sales promotion impacts on perceived quality, purchase intention and brand loyalty which are three dimensions of brand equity. We compared the effects of price discount, coupons, gifts with buying and prizing on brand equity of new products.It is found that 1) compare to monetary promotion, non-monetary are more beneficial for brand equity of new products; 2) among the four promotion types studied in this research, coupon is least effective; 3) all of four promotion tools have positive effects on purchase intention, and monetary promotion may have negative effects on perceived quality when the new products are deep-involved commodity; 4) advertisement has an obvious positive effect on new products' brand equity, which can weaken the possible negative effects sales promotion may brought on brand equity.Based on this research and the former research results, some marketing strategies of new products are suggested. At the end of this article, a thorough summary about this research is presented, and some directions for future research are also discussed.