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Estimating the effects of higher coupon face values on the timing of redemptions, the mix of coupon redeemers, and purchase quantity
Author(s) -
Krishna Aradhna,
Shoemaker Robert W.
Publication year - 1992
Publication title -
psychology and marketing
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.035
H-Index - 116
eISSN - 1520-6793
pISSN - 0742-6046
DOI - 10.1002/mar.4220090604
Subject(s) - coupon , face value , advertising , face (sociological concept) , business , value (mathematics) , marketing , promotion (chess) , econometrics , economics , statistics , mathematics , finance , political science , sociology , law , social science , politics
One of the key decisions a manager must make in designing a coupon promotion is to decide on the face value. In this study we examine the effects of higher face values on coupon redemption timing, category purchase timing, the mix of buyers who redeem the coupon, and purchase quantity. Data from a field experiment on coupon face values are used to test the hypotheses. A new method of measuring the effects of a coupon on category purchase timing is proposed. We find that coupons per se tend to advance category purchase timing, but higher face values do not increase the magnitude of this effect. Surprisingly, higher face values appear to increase redemption rates for both the prior nonbuyers and prior buyers of the brand in a similar way. However, higher face values have little effect on the package size purchased, the number of units purchased, or the total quantity (package size times units) purchased.