Abstract:
Building a strong Brand equity in the market is the current goal of every organization, as this leads to higher prices, greater market share, more responsive promotions, earlier market penetration and more efficient product line extensions. This study aims at investigating the conditional effect of Word of Mouth on the relationship between Sales Promotion and Brand Equity. Explanatory research design was used and data collected by questionnaires from a sample size of 160 using convenience sampling technique. Instrument reliability was tested by Cronbach alpha. Pearson correlation and multiple regression models used to analyze the data and to test the hypotheses. Results reveal that Sales Promotion and Word of Mouth, both having a significant and direct effect on Brand equity. Furthermore, Word of Mouth significantly
has a conditional effect on the relationship between Sales Promotion and Brand equity, hence creating new knowledge in the literature. Firms should therefore, offer price discounts on their products and use gifts in sales promotion campaigns more often as these has been found to influence Brand equity. Management should also put more emphasis on improving quality of
their products and excellent features which increases satisfaction in customers, thereby strengthening Word of Mouth that affects the development of Brand equity.
