Page 533 - Foundations of Marketing

500 Part 6 | Promotion Decisions

manufacturers generally introduce new
Top 10 Categories in Total U.S. Consumer Packaged products or promote established brands. In
Goods Coupon Distribution Volume this section, we discuss coupons, cents-off
offers, money refunds and rebates, frequent-
user incentives, point-of-purchase displays,
Snapshot 1 2 3 4 5 6 Oral Hygiene Coupons and Cents-Off Offers
Ranking Categories
demonstrations, free samples, premiums,
consumer contests and games, and con-
Pet Food
sumer sweepstakes.
Vitamins and Supplements
Hair Care
Fresheners and Deodorizers
Coupons reduce a product’s price and
Household Cleaners
aim to prompt customers to try new or
Health & Beauty Care Cross Sector
7
established products, increase sales vol-

8
Skin Care Preparations
ume quickly, attract repeat purchasers, or
9 Paper & Plastic Products
introduce new package sizes or features.
10 Detergents
Savings are deducted from the purchase
price. Coupons are the most widely used
consumer sales promotion technique.
Source: NCH Marketing Services, Inc., Coupon Facts Report, 2012 Projections Based Upon NCH
Digital coupons via websites and mobile
Measurements and Proprietary Modeling of Market Activity.
apps are also becoming popular. Social deal
coupons Written price sites like Groupon, Living Social, and Crowd Cut, while not exactly in the coupon area, are
reductions used to encourage encouraging consumers to look for deals or better prices. Starbucks was able to boost sales
consumers to buy a specific by offering coupons on daily deal sites such as Living Social as well as by giving morning
product customers discounted drinks if they returned in the after-
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noon. To take advantage of the new consumer interest in
coupons, digital marketing—including mobile, social, and
other platforms—are being used for couponing. However,
print coupons are still the most widely used and have the
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most redemption value.
When deciding on the distribution method for coupons,
marketers should consider strategies and objectives, redemp-
tion rates, availability, circulation, and exclusivity. Bed, Bath
& Beyond frequently uses coupons to generate store traf-
fic. Bed, Bath & Beyond’s advertisement embeds a very
large coupon for 20 percent off on many of the items in its
stores. In addition, this coupon promotion embeds a link to
Facebook to encourage consumers to “like” its business. This
coupon is unique in that it is not tied to a specific product but
is trying to drive sales in the entire store. The coupon distri-
bution and redemption arena has become very competitive.
To avoid losing customers, many grocery stores will redeem
any coupons offered by competitors. Also, to draw custom-
ers to their stores, grocers double and sometimes even triple
the value of customers’ coupons.
Courtesy of Bed, Bath and Beyond with coupons are often more effective at generating brand
Coupons offer several advantages. Print advertisements

awareness than print ads without coupons. Generally, the
larger the coupon’s cash offer, the better the recognition
generated. Coupons reward current product users, win back

Because they are returned, coupons also help a manufacturer
determine whether it reached the intended target market. The
Print Coupons former users, and encourage purchases in larger quantities.
Bed, Bath & Beyond utilizes a large coupon as the central focus in advantages of using electronic coupons over paper coupons
its advertisement to increase sales in its stores. include lower cost per redemption, greater targeting ability,

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