Page 534 - Foundations of Marketing

Personal Selling and Sales Promotion | Chapter 17 501

G oing Green

E-Coupons Benefit a Variety of Stakeholders—Including the Environment

While coupon redemption rates have been falling in they are 10 times more likely to be redeemed than paper
the last decade, recent years have seen an uptick in coupons.
coupon usage. In fact, electronic coupon (e-coupon) E-coupons also benefit the environment. They save
redemption rates are growing rapidly. The increasing paper because consumers can print only those coupons
use of e-coupons benefits consumers, manufacturers, they want. Some stores even allow consumers to down-
and the environment. E-coupons seem less intrusive load e-coupons directly onto their rewards cards, which
than paper coupons, and with the growth of websites eliminates paper use entirely. From the manufacturer’s
like Coupons.com, consumers can search for the digital standpoint, e-coupons reduce the costs—in paper and
coupons they want at their leisure. One growing trend energy—of having to deliver coupons through direct mail.
in electronic couponing is the use of mobile devices. Indeed, 45 percent of people indicate that they prefer
One study revealed that 46 percent of those own- receiving mobile coupons through text messages. As
ing mobile devices are willing to try mobile coupons. more businesses and consumers realize the advantages of
d
Manufacturers like mobile coupons as well, because e-coupons, this sales promotion is likely to skyrocket.

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improved data-gathering capabilities, and greater experimentation capabilities to determine
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optimal face values and expiration cycles.
Drawbacks of coupon use include fraud and misredemption, which can be expensive for
manufacturers. Coupon fraud—including counterfeit Internet coupons as well as coupons
cashed in under false retailer names—costs manufacturers hundreds of millions in losses each
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year. Another disadvantage, according to some experts, is that coupons are losing their value;
because so many manufacturers offer them, consumers have learned not to buy without some
incentive, whether that pertains to a coupon, a rebate, or a refund. Furthermore, brand loyalty
among heavy coupon users has diminished, and many consumers redeem coupons only for
products they normally buy. It is believed that about three-fourths of coupons are redeemed by
people already using the brand on the coupon. Thus, coupons have questionable success as an
incentive for consumers to try a new brand or product. An additional problem with coupons is
that stores often do not have enough of the coupon item in stock. This situation generates ill
will toward both the store and the product.
With cents-off offers , buyers pay a certain amount less than the regular price shown on
the label or package. Chevrolet offered this incentive as well as money-back guarantees for
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those who wanted to return their purchases during a summer promotion. Like coupons, this
method can serve as a strong incentive for trying new or unfamiliar products and is commonly
used in product introductions. It can stimulate product sales or multiple purchases, yield short-
lived sales increases, and promote products during off-seasons. It is an easy method to control
and is often used for specific purposes. If used on an ongoing basis, however, cents-off offers
reduce the price for customers who would buy at the regular price and may also cheapen a
cents-off offers Promotions
product’s image. In addition, the method often requires special handling by retailers who are
that allow buyers to pay less
responsible for giving the discount at the point of sale. than the regular price to
encourage purchase
Money Refunds and Rebates money refunds Sales
promotion techniques that offer
With money refunds , consumers submit proof of purchase and are mailed a specific amount
consumers a specified amount
of money. Usually, manufacturers demand multiple product purchases before consumers of money when they mail in a
qualify for money refunds. Marketers employ money refunds as an alternative to coupons to proof of purchase, usually for
stimulate sales. Money refunds, used primarily to promote trial use of a product, are relatively multiple product purchases

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