Impact of Advertising and Price Promotions on Brand Equity in Service Sector

Abstract

The marketing communication tool may provide the means for developing strong customer based brand equity. Among the marketing communication tools advertising and price promotion have always played a pivotal role. Prior research suggests that consumer search behavior is likely to be different across product categories. Hence, this paper examines the effect of perceived advertising spending and price promotion on brand equity across experience goods/services. Bank, Fast Food Restaurants, Mobile Service Provider were chosen as experience  products, since their quality is difficult to judge before use.According to the analytic results of this study, it was found that advertising has an impact  on brand equity for experience product. Though respondents are aware of the various price promotion tactics followed by brands, it does not impact their judgment on quality. Price promotions may not be helpful in winning the loyalty of the customers. In order to build strong brand equity  effectively, managers must invest in the advertising but considering product categories when applying price promotion.