The effect of past purchase behaviour on consumers' coupon redemption probabilities

Date of publication: June 15, 1991

Abstract:

Coupons are one form of Sales Promotions which have experienced a dramatic growth in most countries during the past 10 years. Studies conducted by commercial market research companies such as AC Nielsen provide ample evidence of this trend. One characteristic of coupon is the redemption process ie. the specific behaviour required from the consumer in order to benefit from a special offer, often a price reduction. This special property allows a precise tracking of promotion sales number and was used in an experimental study conducted in 1990 in New Zealand in order to assess the sales effectiveness of a number of coupons for 3 grocery products. A copy of each coupon set is shown in the appendix. However, measuring sales alone could not provide any information about the characteristics of the consumers who redeemed the coupons. This is particularly unfortunate when one considers the bulk of the promotion literature dedicated to the study of the coupon-prone consumer. Numerous attempts were made at demographically describe the coupon-prone segment. A substantial number of studies were also devoted to the impact of consumer's past purchase behaviour on coupon redemption. A consumer survey was therefore organised in conjunction with the experimental study, utilising the same design and the same coupons, but asking consumers to state the probability that they would redeem a given coupon on their next purchase in the product category. Each respondent was also asked additional information about past purchase behaviour.

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