OBSERVATIONS: Are Cents-off Coupons Effective?

KJ Cheong

Describes a research study into the effect of money-off coupons on purchasing behaviour. Results discussed in terms of: price perceptions, the surplus value for the consumer, effects of/on total spent on shopping, number of items bought, repeat purchases.

OBSERVATIONS: Are Cents-off Coupons Effective?

K J Cheong Purdue University

Presently low (ie, 3.45% annually on average between 1984 and 1991 for manufacturer coupons) and decreasingcoupon redemption rates every year (ie, 3.8% in 1984 and 2.5% in 1990)1 and insufficient incremental sales due to coupon promotion (Neslin, 1990) suggest that the current practice of coupon promotion may be inadequate, and perhaps is based upon inaccurate assumptions about the effects of coupons on shoppers' purchases. Marketers have used coupons, rather than directly reducing price, to influence purchases mainly in the belief that (1) coupons carry a...

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