Though both of these observations support the appropriateness of a coupon-primacy strategy for these shoppers, due to small sample sizes and large variances in the data, neither difference was significant. One additional pair of comparisons between the coupon-primacy shoppers and other coupon users was of interest. The coupon-primacy shoppers reported using fewer coupons, on average, per trip- to the grocery [4.
Thus, these coupon users who assumed without checking that they were getting the best deals tended to be lighter users of coupons overall. These shoppers said they did not consider brands other than the one they had chosen, yet neither did they assume their choice represented the best deal. These consumers apparently used other criteria to select a brand. It may well be that their choices were fairly routinized, based on non-price factors.
Through their comments at the end of the interview concerning the effect of coupons on their shopping behavior, the subjects shed some light on feelings and thoughts that play a role in the use of coupons. All but 10 of the shoppers had comments to share. While a thorough content analysis of these comments is beyond the scope of the present paper, useful insight is provided by looking at the sorts of statements made as a function of the consumers' coupon usage.
To accomplish this, the shoppers were ranked according to their responses to two items: the percent of their grocery trips on which coupons are used, and the average number of coupons used per trip.
The heaviest users of coupons clearly got some satisfaction out of using them. Phrases such as "I love coupons," "I really like them," and "coupons are great" were quite common from the most regular users, as were comments of appreciation for the significant savings they offer. One moderately heavy user even said she keeps a chart of her coupon savings week-by-week, and she looks for coupons to see how much she can save each week. Thus, the "smart shopper" feelings suggested in the literature do appear to characterize those shoppers who make the most use of coupons. Several heavy users also commented that coupon savings are worth the time and effort involved, implying that they do weigh the tradeoff between costs and benefits of couponing, as suggested in the literature.
The lightest users of coupons offered rather different comments. For example, seventy percent of the 35 shoppers who said they never use coupons made comments about using coupons being "too time consuming" to be worth the "small savings" they generated. Others criticized the "hassle" or "pain" of clipping and using coupons. Slightly-more-frequent users also noted that time constraints limited their use of coupons.
As coupon use increased, however, the nature of time-oriented comments shifted somewhat. For example, one shopper who reported using coupons on half of her shopping trips said that couponing is "kind of a nuisance, but the savings is worth the trouble. Comments from some consumers in the study provide direct evidence of the use of a "lowest price' strategy. Some noted that having coupons encourages them to compare prices across brands, leading to better deals.
Several shoppers noted that they like to use their coupons in stores offering "double coupon" values, to maximize their savings. One woman even showed how her shopping list was organized by stores and by coupons, with coupons for multiple brands in several product categories. Prior to shopping, she had determined which products to buy where, to take best advantage of price and double-couponing differences among stores.
The Secrets of a Successful Coupon Strategy
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. Focus on first time visitors and people who have never bought from your online store. Some experts might tell you to never discount your products. You simply have to be creative. It can simply be applied on the whole purchase or offer some sort of additional incentive.
Show the coupon on pages that get a lot of traffic from first-time visitors. For example your homepage or blog post. Show the coupon only when visitors come from specific traffic sources. For example, do not show it when people come from email campaigns since you already have them on your email list. Display it on traffic coming from Google Organic or Social Media. Show the coupon only after a specific amount of time spent on your website.
For example, if people spend on average 50 seconds on a page, show it at the 45 second mark. Show the coupon on pages that have a high bounce rate. Show the coupon offer when shoppers have browsed a specific amount of pages. For example, if someone visits 5 pages on average during their visit, why not show it during their 4th page visit. This can potentially help you increase the pages browsed per visit. Test everything! The comparison of a number of brands on the basis of multiple promotional attributes -- the lowest price model -- should be appropriate for those more experienced with promotions.
The two models of coupon behavior described above are directly contradictory. However, the behavior patterns may accurately describe two alternative types of consumers. As discussed above, the two alternative models are distinguished by the consumer's desire to simplify the process of using a coupon.
This desire should be more pronounced in those who are less experienced at using promotions. Experience with promotions can best be approximated by a consumer's current degree of deal-proneness. Deal-proneness will therefore provide the qualification to each model. H1: Coupon primacy--Price paid should be higher when a coupon is used than when it is not used for less deal-prone consumers. Consumers who are relatively less experienced with using coupons should be particularly vulnerable to simplification strategies and thus more likely to ignore shelf price or other in-store stimuli when planning to use a coupon.
Note that such consumers will be generally less responsive to other promotional elements. The hypothesis test the difference in responsiveness between coupon and noncoupon purchases. H2: Lowest price--More deal-prone consumers should make choices based on the combination of coupon discount and shelf price. Consumers who are relatively more experienced with using coupons should, of course, be generally more sensitive to all forms of promotion.
The hypothesis suggests that such sensitivities are more than additive; they are expected to interact in a positive fashion. The two competing models are tested by comparing the effect of using a coupon on a purchase and not using -a coupon. The data are records of individual purchases collected from a "northeast scanner market"--a metropolitan area of about , population.
This market contains three major grocery chains, with a total of 15 stores, all of which are part of the scanner system. The period covered by the data is from April to October for overlapping data series. Purchases of two product categories are analyzed: bathroom tissue "paper" and caffeinated instant coffee "coffee". The categories were selected on the basis of data availability. Category boundaries are defined using preexisting partitioning data Urban, Johnson and Hauser ; Vanhonacker A data base was constructed with all category purchases and included brand choice, whether a coupon was used on the purchase, and characteristics price, advertising, and deal packs of all available brands.
The characteristics represent the price and promotional environment available to the consumer. Other purchase influences such as qualities of the brands themselves or media advertising are not used in modeling. The available variables include the following:. For paper the relevant price is price per roll; for coffee it is price per ounce. Retail Ad: Retail ad means that the product was advertised in local newspapers by the grocery store during the week of purchase.
Such advertising stressed price, but the product was not necessarily discounted by the retailer. Advertised specials were defined as pertaining to all variations of a brand size. Manufacturer Ad: This measure indicates that the brand was advertised in local newspapers by the manufacturer during the week of purchase.
All such ads carried coupons. Coupon: Coupon denotes that the purchase was made using a coupon from any source. The coupon did not need to be the one carried in a manufacturer's ad. Price Change: Price change was defined as the difference, measured in dollars, between the current price and the average shelf price at the same store, using store scanner data, during the week preceding the purchase.
A value of -. This data base was divided into relatively homogeneous deal-proneness segments, defined on the basis of previous work see Henderson for details of the segmentation procedure. These segments, shown in Table 1, were unique to each product category. The groups were isolated with the aid of cluster analysis on five variables: percentage of purchases made with coupons, price changes, deal packs, retail newspaper ads, and manufacturer newspaper ads. The coupon-using clusters are defined on the basis of very high heavy coupon users or moderately high light coupon users coupon usage.
The multi-deal-prone group was a small segment with abnormally high responsiveness to all five forms of promotions. The cluster analysis did not yield a multi-deal-prone cluster or the paper category. Preliminary analysis involved a cross-tabulation comparison of characteristics of coupon vs.
Coupon Statistics: The Ultimate Collection
A multinomial logit brand choice model was then used to compare purchase influences between purchases on which a coupon was used and those on which one was not used. The cross-tabulation compares purchase attributes which pertain to the selected brand, for example, the average price paid when a coupon is used and not used. The logit model compares the relative effect of a variable, for example, the shelf prices of all available brands, on choice for coupon and noncoupon purchases see Malhotra b for a review of application of this model.
This model has been widely used in promotion studies Hee ; Guadagni ; Novich ; Levin ; Jones and Zufryden and is based on a choice theory Luce The model's consumer homogeneity assumption is mitigated in this research by running the choice model for individual deal-proneness segments. Within each segment, consumers are assumed to be homogeneous. Where sample sizes permitted, the files were further divided into two samples to test the model's stability.
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