Impact of Price Promotion on brand equity model: A study of online retail store brands

Abstract

The study evaluates the effect of Price Promotion strategy (PPs), extensively used by online stores to promote sales and improve market share, on Brand Equity (BE) elements of these stores. The study focuses on the mediating role played by the two prominent elements of BE, perceived quality (PQ) and brand awareness(BA) in forming the relationship between the PPs on brand association (BAsso) and brand loyalty (BL) in case of online stores (Amazon, Flip Kart, Snap Deal). The data for the study was collected from the students of graduate and post graduate programs at Gwalior, Madhya Pradesh (India) selected on the basis of random sampling method. The causal relationships between PPs and the elements of BE along with moderating effects of PQ and BA on the relationships of PPs on BAsso. and BL were evaluated using SEM methodology. PPs contribute positively to all the four elements of BE (PQ, BA, BAsso. and BL). The study has thus, made significant contribution to the existing literature that unlike physical stores, in case of online stores, PPs contribute in improving all the elements of BE instead of having adverse effect. The study has made another very important contribution to existing literature in evaluating the mediating role played by PQ and BA. The results indicate that PQ fully mediates the relationships of PPs with BAsso. and BL. Similarly, BA fully mediates the relationships of PPs with BAsso. and BL.