Why do manufacturers issue coupons

Clearly she was a "lowest price' coupon user. Other interesting observations emerge from subjects' comments. A few shoppers indicated that the coupons they have on a given trip often help define the set of brands they consider -- they give preference to the brands for which they have coupons.

Many consumers, ranging from heavy to light users, commented that they always or usually use coupons only for the brands they regularly buy. Finally, several women said they'd rather have lower regular prices than gain savings by coupons. However, as one heavy couponer commented, "as long as everyone else is paying for my savings, I'll keep using coupons. This study provides evidence that using coupons does influence brand choices in several ways as previously hypothesized. About half of those shoppers with coupons used them in ways consistent with either Henderson's "lowest price" or "coupon primacy" models.

The "lowest price" consumers tended to be more regular users of coupons while the "coupon primacy" strategy was likelier among light coupon users, as Henderson had speculated. Substantial numbers of shoppers, primarily the heavier users of coupons, reported positive, "smart shopper" feelings associated with coupon use. And evidence that shoppers weigh the benefits against the costs of coupon use came from many shoppers, heavy and light coupon users alike.

Thus, each of the mechanisms postulated in the literature to be involved in coupon usage appears to apply to one or another segment of users. While both heavy and light coupon users indicated they assess the costs and benefits they realize from couponing, their conclusions were quite different. Heavy couponers felt their savings from using coupons well justified the effort involved, while light- and non-users felt just the opposite.

This poses an interesting question for future research: are these disparate perceptions of couponing both correct? That is, are the products categories or brands that light couponers tend to buy different from those bought by heavy users of coupons? And, if so, do the light users' preferences tend to be items for which coupons are often not available, or for which coupon values are generally small? Such findings would account for the two groups' perceptions, and, moreover, would suggest strategic changes in couponing behavior by marketers to appeal more to those who are currently light users.

The findings of the present study don't answer the question, but they do suggest that marketers might be wise to explore segmentation of coupon users according to their views and usage patterns regarding coupons. Several other coupon-use issues offer interesting questions for further study.

The present study explored coupon use with respect to only a single product category per shopper. Does the way a consumer uses coupons e. Bawa and Shoemaker found that heavy coupon usage by a household for one product category tended to predict heavy usage in other categories, but they did not explore the processes by which those coupons influenced brand choices.

An investigation of this issue would help clarify the relative influences of personal and situational variables in coupon usage patterns. Another usage issue needing further study concerns those consumers who bring to the store coupons for multiple brands, and perhaps even multiple values per brand, within a product category. Such consumers might be expected to be lowest-price shoppers, but we know little about their brand-choice processes.

While the present study found some evidence of this sort of coupon usage, a larger-scale study is needed to estimate the extent of such behavior among shoppers and to explore more fully their choice mechanisms.

A final area for further research concerns the relationship between coupon usage and other facets of deal-prone behavior. In the present study, coupon usage was found to be moderately correlated with frequency of reading grocery ads to find the best buys.

But heavy users did not shop more stores per week than light users. An extension of this line of inquiry into a broader range of deal-seeking behaviors might help explain the role coupon use plays in the larger effort to economize when shopping.

In conclusion, this exploratory study has corroborated several ideas about how coupons influence brand choices, and it has provided a sense of how consumers view the role of coupons in their shopping. These results help provide direction for further efforts to learn much that remains to be known about consumers' use of coupons. Bawa, Kapil, and Robert W. Henderson, Caroline M. Michael J. Price, Linda L. Schindler, Robert M.

Coordinating Price Reductions and Coupon Events. In this article, the authors use an economic model to show that it may be optimal to lower the retail price during a coupon event when marginal consumers have moderate hassle costs of coupon … Expand. We examine the affect of retail and manufacturer coupons on the nutritional quality of breakfast cereal purchases made by households.

Using household level purchase data we find that coupon usage has … Expand. View 1 excerpt, cites background. Recent theoretical work has shown that the incentive to target rival firms' customers with low prices can increase price discrimination, and that the strength of the incentive depends on a firm's … Expand.

Consumer uncertainty and price discrimination through online coupons: An empirical study of restaurants in Shanghai. Highly Influenced. View 5 excerpts, cites methods and background. This paper studies a market where soda is sold in both refillable and nonrefillable bottles. Purchasing refillables is inconvenient but cheaper. Using a discrete choice model, I find that … Expand. Branded pharmaceutical manufacturers frequently offer "copay coupons'" that insulate consumers from cost-sharing, thereby undermining insurers' ability to influence drug utilization.

We study the … Expand. Abstract We examine variety pass-through effects that occur when multiproduct retailers adjust the length of their product lines in response to changes in wholesale prices. Studying variety … Expand. Branded pharmaceutical manufacturers frequently offer "copay coupons" that insulate consumers from cost-sharing, thereby undermining insurers' ability to influence drug utilization.

The purpose of this paper is to examine the vertical relationship between the manufacturers of ready-to-eat cereals RTEC and the retailers in the Boston area. The study uses highly disaggregated … Expand. A Price Discrimination Theory of Coupons.

The objective of this paper is to analyze the consumer's decision in electing to use cents-off coupons distributed by manufacturers of consumer products. Arguing that the decision to use coupons is … Expand. View 3 excerpts, references background. Credit Cards. Rewards Cards. Cash-Back Cards. Your Privacy Rights.

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To Advertise a New Product. To Buy Loyalty. To Get Repeat Business. To Target Their Marketing Efforts. The Bottom Line. Key Takeaways Manufacturers and stores benefit from the coupons they offer to consumers.

Loyalty cards are a form of coupon that allows stores to keep a record of scanned purchases. Offering coupons is a way to market products and engage consumers. Coupons can entice customers to build loyalty with a specific company or product.

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