The Impact of Sales Promotion on Brand Equity: The Case of Brewery Industry

Abstract

The effects of sales promotion on the creation of brand equity; effects of brand equity dimensions on overall brand equity; and the nature of inter-relationship among brand equity dimensions is a new area of research in Ethiopia. By adapting exploratory approach, the study assumed a positive sales promotion-brand equity dimensions-overall brand equity linkage in the Ethiopian beer market. Structural equation modeling (SEM) was used to verify the conceptual model, that is, the hypothesized linkage. The study is purely quantitative and a cross-sectional descriptive research design was applied. The study confirmed brand equity is a multidimensional concept that consists of brand loyalty, perceived quality and brand associations. Brand loyalty exerts a great influence on the formulation of brand equity and it is a holistic concept. The nature of brand equity dimensions relationship in the Ethiopian brewery industry is a causal order.  The study also indicated that sales promotion affecting the formulation of brand equity with different level of intensity. The study further concluded that monetary promotion affecting positively the creation of brand equity by influencing brand awareness, brand associations and perceived quality; and non-monetary sales promotion affecting positively the formulation of brand equity by influencing brand awareness and negatively by affecting perceived quality.

Keywords: Brand Equity, Brand Loyalty, Perceived Quality, Brand Associations, Brand Awareness, Sales Promotion, Ethiopia