Coupons are one of the most popular and attractive tools of promotion. Redeeming coupons makes shoppers feel that they are doing something good for their family's budget, because coupons offer 'savings.' On the other hand, a coupon might have several negative effects on purchase behavior as well, which might 'devalue' the promoted product in the consumer's perception. But a review of the literature shows a lack of attention afforded to the above-mentioned aspects of coupon redemption. In addition, the consumer's coupon redemption behavior is moderated by several factors drawn from research in the fields of market pricing, economics and psychology, each of which have contributed to the current study in their own way. Finally, there does not exist any substantive research as to why coupon redemption rates have been on the decline, despite an increase in distribution of coupons. Therefore, this research not only fills existing gaps in the literature but also enriches it by synthesizing views from different academic disciplines. This dissertation concentrates on grocery products. Data is collected from about 2500 adults, primarily residing in the Dallas-Fort Worth area. The conceptual framework is based on the theory of reasoned action, which suggests that an individual's beliefs influence his/her attitude towards the consequences of actions, and attitudes, in turn, influence the individual's actions. Toward this end, the model incorporates intention to redeem coupons, intention to keep or spend savings and intention of how to spend savings from coupon redemption as the dependent variables, and several other independent variables. Behavioral independent variables are measured using items borrowed from established scales, as well as those developed exclusively for the current study. Standard statistical tools such as factor analysis and accepted measures of reliability and validity (Cronbach's alpha) are applied and reported, while structural equation modeling has been used to re-validate certain findings. Multivariate regression is applied for testing the hypotheses. Results indicate that several psychological (e.g. arousal-seeking, novelty-seeking tendency), socio-economic (e.g. income effect, opportunity cost) and behavioral factors (e.g. savings propensity, switching behavior) influence the individual's intention to redeem a coupon. The current research offers several academic and managerial implications, while providing promising prospects for further studies.

Entertainment Coupons are a popular method of restaurant advertising. These books contain coupons for hundreds of local restaurants and are often sold to consumers as part of a fundraising campaign for a charity. Consumers are likely to use the book in one of two ways: to save money while maintaining their previous frequency of dining out, or to use the savings to increase the number of times that they can dine out with their fixed disposable incomes. Most coupon books are purchased by consumers. Consumers that have purchased a coupon book should be inclined to use coupons from it more frequently than consumers that have received a coupon book for free. Purchased coupon books involve a sunk cost that the consumers may try to recover through the savings the coupons provide. The impact of sunk costs may be reduced for coupon books with charitable ties; however, unless consumers consider the entire purchase price to be a charitable donation, there will still be costs involved in acquiring the coupons. An experiment was designed to test the effects of purchased vs. free coupon books and coupon books with and without charitable ties. Consumers using coupons from the purchased books were more likely to switch restaurants than were consumers that used a coupon from a free coupon book. The experiment showed few other loyalty effects; however this lack of effect may have been caused by the simulated method of implementing loyalty.

Pharmaceutical manufacturers’ use of prescription brand-name drugs coupons and vouchers to subsidize patients’ cost-sharing obligations such as co-pays has increased. The co-pays are used by managed care organizations (MCOs) to give their plan members an appreciation of drug costs as well as to offer incentives to use available equivalent generic alternatives due to lower co-pays. With higher tiered co-pays for brand-name drugs being offset by coupons, little is known about MCO representatives’ perceptions about use of co-pay subsidy coupons for brand-name prescription drugs. The objective of this study was to assess health plan managers and pharmacy benefit managers (PBMs) perceptions on the use of prescription drug co-pay subsidy coupons. An online survey instrument was used to collect data. A convenience sample of 834 MCO representatives was selected from the Academy of Managed Care Pharmacy (AMCP) membership directory. A total of 122 surveys were returned of which 105 were usable surveys, giving a response rate of 13.7%. A five-point, 11-item Likert scale ranging from 1 through 5, (1 = ‘Strong Disagree’ and 5 = ‘Strongly Agree’) was used to measure respondents’perceptions. Some items referred to coupons used to get co-pay discounts repeatedly over a year (i.e., long-term use coupons) while some items referred to coupons distributed for trial purposes (i.e., short-term use coupons). Of the 105 respondents, 42 (40%) “agreed,” while 58 (55.2%) “strongly agreed” that co-pay subsidy coupons encouraged non-preferred brand-name drugs over preferred brand-name drugs. A total of 78 respondents (74.3%) reported that brand-name drug coupons undermined tiered formulary structure. Sixty respondents (57.1%) “strongly agreed” that short-term use coupons increased plan sponsor’s costs and 72 respondents (68.6%) “agreed” that sponsor cost increased with long-term use coupons. A total of 42 (40%) reported to “strongly agree” that short-term use coupons should be eliminated whereas 49 (46.7%) respondents reported “strongly agreed” that long-term use coupons should be eliminated. In summary, MCO representatives believe that brand-name drug utilization is increasing due to prescription drug incentives such as coupons which undermines their formulary controls and in turn, increases health care costs. / text

Thesis (M.S.)--Massachusetts Institute of Technology, Alfred P. Sloan School of Management, 1981. / Bibliography: leaves 62-63. / by Judith Ann Hee. / Thesis (M.S.)--Massachusetts Institute of Technology, Alfred P. Sloan School of Management, 1981.

Thesis (Ph. D.)--University of North Texas, Aug., 2007. / Title from title page display. Includes bibliographical references.

Thesis (M.S.)--Virginia Polytechnic Institute and State University, 1994. / Vita. Abstract. Includes bibliographical references (leaves 144-152). Also available via the Internet.

This dissertation contains three essays on theoretical analysis of pricing and promotional strategies. Chapter 1 serves as a brief introduction that provides a motivation and an overview of the topics covered in the subsequent chapters. In Chapter 2, we study optimal couponing strategies in a differentiated duopoly with repeat purchase. Both firms can distribute defensive coupons alone, defensive and offensive coupons together, or mass media coupons. They can also determine how many coupons to offer. Allowing consumers to change their tastes for the firms' products over time, we find that the optimal couponing strategy for the firms is to only distribute coupons to all of the customers who buy from them. The effects of intertemporally constant preferences and consumer myopia on the profitability of the optimal couponing are investigated as well. Chapter 3 examines the profitability of behavior-based price discrimination (BBPD) by duopolists producing horizontally differentiated experience goods. We consider a three-stage game in which the firms first make price discrimination decisions followed by two-stage pricing decisions. The main findings are: (i) there are two subgame perfect Nash equilibria where both firms do not collect information about consumers' purchase histories so that neither firm price discriminates and where both firms collect consumer information to practice BBPD; and (ii) BBPD is more profitable than uniform pricing if sufficiently many consumers have a poor experience with the firms' products. The asymmetric case where one firm produces experience goods and the other search goods is also investigated. Chapter 4 provides a possible explanation of the fact that one ticket price is charged for all movies (regardless of their quality) in the motion-picture industry. Considering a model a la Hotelling in which moviegoers form their beliefs about movie quality through pricing schemes to which an exhibitor commits, we characterize the conditions under which committing to uniform pricing is more profitable than committing to variable pricing. The welfare consequences of a uniform pricing commitment and some extensions of the model are discussed as well. / Ph. D.

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Coupons are a marketing tool used to entice consumers to try a new brand or product in the hopes that they will then become loyal users after trial (Boundless, n.d.). Issuing coupons is a common practice for many businesses because it is relatively inexpensive to begin, and can be used for general advertising purposes in addition to attracting new customers. Digital coupons have been introduced in the last few years and their acceptance is growing, with redemptions in 2010 increasing by 10 times the 2009 rates and projected to increase exponentially with each year (Savings.com, n.d.). Despite the higher acceptance and redemption rates for digital coupon formats over the past 5 years, the overall coupon redemption rate has remained at around 2%. Early coupon academic studies in the promotional literature examine profitability maximization through manipulating coupon characteristics or the coupon process such as the timing of release, length of expiration dates, amount of the cents-off, and other related monetary factors. Despite the ability to adjust coupon features to maximize revenue and redemption, the effect is not strong enough to generate the motivation required to elicit new use from non-users being targeted nor improve the overall low redemption rates. Basic characteristics such as demographic and socioeconomic variables as well as some predisposing motivational characteristics have also been studied to predict coupon use. While some of these characteristics demonstrate differences between consumers who do and do not use coupons, characteristics provide little insight into why non-users choose not to coupon. Furthermore, the findings cannot be generalizable to the population as a whole when the redemption rate persists at 2%. With digital coupons a rapidly growing practice, it is important to determine whether or not this new coupon format might contribute to behavior change in current non- or infrequent users of coupons. The overarching goal of this research was to better understand the motivational processes driving the decisions to not use coupons in the context of consumer packaged goods (grocery). While most previous research has concentrated on characteristics of the consumer, characteristics of the coupon, and predisposing motivational constructs, this study examined why consumers rejected coupons by examining their narratives on the various stages of the coupon process to narrow down the factors contributing the most to deterring coupon use. A two-phase qualitative approach was selected to determine how digital coupons were perceived by both frequent and infrequent users followed by a more in-depth investigation into the timing, motivation and cognitive processes occurring behind the decision not to coupon. The Phase 1 study included 58 participants, 29 frequent users and 29 infrequent users. Participants completed a set of questionnaires measuring previously identified predisposing characteristics, given guidance on the selection of digital coupons loaded onto shopper loyalty cards and were provided with Sunday circulars. Each participant had 1 week to try and redeem the digital coupons and complete follow up questionnaires to determine any changes post-trial. Participants were invited to participate in 1 of 6 focus groups to determine themes related to the digital coupon trial. The Phase 2 study included 10 individuals who participated in depth interviews focusing on the processes, motivations and decisions related to coupon use during grocery shopping. The interview was broken out into 5 stages: 1 is an ice-breaker introduction to the study; 2 involves rapport building and setting the tone; 3 is the depth interview that attempts to elicit understanding into the motivation, timing, and rationale behind rejection of coupon use; 4 presents some popular emerging technologies based on emerging applications of interest to the Association of Coupon Professional Board; and 5 includes a brief discussion of different type of coupon and verification. Overall, the consumer's perceived purpose of the coupon is to save money through item cost reduction whereas from a marketing perspective the coupon is intended to entice consumers new to the brand or to encourage trial of a new product (Boundless, n.d.). This difference in perception could be a major contributor to the valuation process and resistance/rejection themes of infrequent users. Interestingly, very few infrequent users rejected the practice of coupons outright and were far more likely to resist or postpone the practice. More research should be conducted to identify when, how and why infrequent users re-evaluate coupons or try the process again. Coupon industry members should review the coupon practice and make a decision to either abandon or overhaul the process as it currently does not provide value to either the manufacturers issuing the coupons or the consumers, even those actively using coupons. If the decision is to overhaul the practice then a decision should be made whether or not to adapt to the current perceptions that coupons are a means to reduce product price or re-educate consumers and industry members alike on the coupon as a means to solicit trial. Lastly, many of the existing apps do not address any of the coupon-related barriers, incongruities, or infrequent user needs. A disruptive technology is needed to change consumer perceptions, encourage coupon use and provide value added utility beyond just bypassing the coupon process to make the practice relevant in today's mobile culture.

This research presents a new approach to derive recommendations for segment-specific, targeted marketing campaigns on the product category level. The proposed methodological framework serves as a decision support tool for customer relationship managers or direct marketers to select attractive product categories for their target marketing efforts, such as segment-specific rewards in loyalty programs, cross-merchandising activities, targeted direct mailings, customized supplements in catalogues, or customized promotions. The proposed methodology requires cus- tomers' multi-category purchase histories as input data and proceeds in a stepwise manner. It combines various data compression techniques and integrates an opti- mization approach which suggests candidate product categories for segment-specific targeted marketing such that cross-category spillover effects for non-promoted categories are maximized. To demonstrate the empirical performance of our pro- posed procedure, we examine the transactions from a real-world loyalty program of a major grocery retailer. A simple scenario-based analysis using promotion responsiveness reported in previous empirical studies and prior experience by domain experts suggests that targeted promotions might boost profitability between 15 % and 128 % relative to an undifferentiated standard campaign.