Shoebuy.com Coupon:Sales Promotion: Rebates Challenge Coupons' Redeeming Values

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Couponing's dominance as a sales promotion tool is being challenged by refund offers. Rebates stimulate sales without the high cost, waste, and fraud associated with coupons. Refunds are consistently predictable in terms of results and liabilities. Between 1977 and 1984, households using refunds increased from 27% to 51%. Dan Ailloni-Charas of Stratmar Systems attributes this growth to 3 factors: 1. the promotion and popularity of high-ticket rebates, 2. increased desire for shoppers to obtain greater savings than those possible by couponing alone, and 3. the proliferation of consumer swap clubs that foster awareness of promotional offers. Overuse of refunds by manufacturers, however, can be detrimental by eroding positive brand image in categories where there is a strongly perceived product differentiation. Because rebate offers often are made in response to competitive pressures, Ailloni-Charas says they should have a competitively favorable price-value ratio for the product.

Shoebuy.com Coupon:Sales Promotion: Couponamania

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Coupons can enhance brand awareness cost-effectively and provide flexibility and convenience in delivering the promotion quickly. Almost 80% of all households and over 2,000 manufacturers use coupons. Coupon distribution rose from 179.8 billion in 1985 to 202.6 billion in 1986, with packaged goods manufacturers increasing usage 13%. Redemption rate remained flat at 3.6%. Misredemption of coupons is estimated at 10%-15%. Coupons are distributed through freestanding inserts (FSI), print advertising, direct mail, and in stores. Determination of the proper vehicle to use should consider: 1. strategy and objective, 2. cost redemption, 3. availability, 4. circulation, and 5. exclusivity. FSIs carried 68% of all coupons in 1986, compared with 59.9% in 1985. Electronic coupon dispensers are being tested in an effort to find a better way to reach specific consumers. Computerized price reductions for in-store promotions may eliminate physical coupons. Rebates and refunds have gained popularity over cents-off coupons. Cross refunds/rebates among producers are increasing in usage.

Shoebuy.com Coupon:More About Rebates and Coupons

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A survey by Discount Merchandiser shows that managers find coupons still generate traffic. Moreover, many managers find rebates to be a nuisance because of the time it takes for the consumers to get their money. Rebates give the customer extra savings, but people are not getting their money back from the manufacturer within a reasonable amount of time. With a rebate service, all the rebates for a promotion come in at one time. This service helps control rebates tremendously. Generic or in-house rebates are copies of original manufacturers' rebates that can be used when the original supply runs out. With rebates, stores can advertise several different items and bring them all down to one price point. With coupons, customers can see the results immediately. However, coupons cost the manufacturers more money. Some in-store coupons bring in more customers than manufacturers' coupons. Stores try other promotions to generate sales and bring in more customers, including prize give-aways and promotions of certain items.

Shoebuy.com Coupon:Sales Promotion: What's Ahead

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Three top executives from the largest US sales promotion agencies and the executive director of the Promotional Marketing Association of America recently participated in a roundtable discussion on the future of sales promotion. The ratio of promotion to advertising now is about 60 to 40. Vincent Sottosanti, president-chief executive officer of Comart-KLP, says that broadcast media are no longer as effective as they once were and that more emphasis has been placed on regionalized sales. The role of sales promotion has changed dramatically in the past 10 years; now it deals directly with key decision makers for client companies, according to James Mack, executive vice-president, client services, Frankel & Co. Mack says sales promotion agencies can provide programs that operate on a working partnership between the manufacturer and the retailer. Joseph Flanagan, president of Impact, Chicago, explains that there are three challenges facing the marketing industry - creativity, accountability, and attracting intellectual capital.

Shoebuy.com Coupon:Coupons Maintain Redeeming Qualities

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The United States is the largest coupon market in the world, with the number of coupons redeemed in 1990 exceeding the world population. There are more than 3,000 manufacturers currently using coupons in the United States, a 50 percent increase over the last 10 years.

Many changes and record growth have taken place within the consumer promotion industry during the last decade. This growth occurred as manufacturers discovered that consumer promotions effectively increased and maintained brand sales. Retailers added to this growth by supporting and initiating couponing efforts, which in turn provided them with increased sales and profits.

The free-standing insert (FSI) has become the dominant distribution method in the United States, overshadowing the once-prominent newspaper medium. The share of coupons distributed within magazines is less than 20 percent of the 1980 share. While the use of in-ad coupons are not covered in this report, they are a growing market.

Throughout the past decade, we have seen many lifestyle changes. More women are choosing careers outside the home, and men are staying at home with their children. People are waiting longer to get married and have children. Preserving the environment has become a growing concern. With computers in many homes, and telephones in cars, the world has experienced a variety of technological advancements. This technological growth has also affected the coupon industry. For example, barcoding has assisted in the "computerization" of coupon promotions.

The past decade provided many economic fluctuations, from a recession in the early 1980s to regained consumer confidence during the mid-to late 1980s. With the end of the decade, however, came another decrease in consumer confidence in the economy. Sales of big-ticket items were down in the last quarter of 1990, and this trend has continued in 1991. NCH has studied the relationship between coupon redemption and the general health of the economy and has found that coupons are redeemed more heavily in times of economic recession.

Coupon Distribution

There were 279.4 billion coupons distributed in 1990, a 4.4 percent increase over the 267.6 billion coupons distributed in 1989. Total coupon distribution has almost tripled over the last 10 years, with a growth of more than 190 percent. Record expansion in coupon distribution occurred during the 1980s, with an average annual growth of 18.2 percent from 1981 to 1983. Mid-decade increases continued at a rate of 12.4 percent for the years 1984 to 1986. The latter part of the decade was characterized by a somewhat slower growth rate of 5.6 percent. The average annual growth rate during the 1980s was 11.4 percent.

The enormous growth rate in coupon distribution in the 1980s is the result of many factors, including:

* A shift in manufacturer promotion spending from media advertising to consumer promotions.

* The realization that couponing produces results and can be a more strategic and effective tactic than price cuts.

* Couponing's ability to induce trial of new and improved products and to gain sales volume in a competitive economy.

* The versatility in reaching virtually all target groups through a variety of media choices, and in implementation with any size promotional budget.

* Retailer interest in coupon promotions.

Over the last decade there has been a shift in manufacturer promotional spending from traditional media advertising to trade and consumer promotions. This trend continues today.

According to Donnelley Marketing's 13th Annual Survey of Promotional Practices, the decrease in media advertising budget allocations is partially attributed to changes in the economy and world events.

Additional survey findings include:

* A greater percentage of manufacturers are using coupons and cents-off promotions, while the use of money-back offers/cash refunds, sweepstakes and premiums is on the decline. This shift may be an indicator of consumer demand for promotions which provide more immediate gratification.

* Higher levels of in-store consumer promotions were recorded between 1982 and 1990. Thirty-six percent of consumer promotion expenditures were in-store promotions, nearly double that reported in 1982, reflecting the growing importance of the retailer.

* Couponing continues to be highly supported by the companies surveyed, with 65 percent planning to maintain or increase coupon budget allocations in 1991.

Marketers are faced with the challenge of deriving growth from a slowing economy. A promotional strategy including the use of coupons can increase sales volume and build brand loyalty.

Due to increased competition and costs in the marketplace, manufacturers are moving away from "mass marketing" techniques and toward more targeted, segmented methods of reaching their consumers. Through a great variety of distribution avenues, coupons can reach virtually any target group. Targeted database marketing is on the rise and becoming more sophisticated: With barcoding technology and the use of personal identification numbers (PIN coding), couponing is more than a sales generator; it is a method of gaining vital information on consumers who are purchasing products and a means for developing valuable mailing lists of target consumers.

The variety of media and cooperative distribution programs available allows coupon programs to be implemented within most promotional budgets.

The increasing growth and consolidation of retail trade power has increased pressure on manufacturers to work with retailers on merchandising and promotional activities. These cooperative coupon promotions can produce increased sales and profits for both the retailer and the manufacturer.

Distribution By Media

Media selection for coupon distribution has changed dramatically since 1980. Early in the decade, newspaper was the primary medium used, accounting for 48.2 percent of all coupons distributed. Other popular distribution methods in 1980 included FSIs, 18.4 percent; magazines, 13.3 percent; and Sunday magazine supplements, 9 percent. By 1985 a shift had occurred, with newspaper coupon distribution falling to a 20.2 percent share and FSIs growing to almost 60 percent. The use of Sunday magazine supplements dropped to 2.1 percent, and the use of magazines decreased to 8.6 percent. There were only minor fluctuations in the media mix during the latter half of the 1980s.

Because of their cost-effectiveness to manufacturers and visual appeal to consumers, FSIs continue to be the dominant distribution media, increasing in share every year. Overall, the 1990 FSI share of coupon distribution represented 79.9 percent of the total market, more than four times its 1980 share.

The coupon distribution share through newspaper ROP/Solo and Co-op for all products in 1990 was 6.5 percent, a slight increase over the 1989 share of 6.4 percent. However, the 1990 newspaper media share represented only a fraction of its 1980 distribution share.

Direct mail coupon distribution has fluctuated only slightly since 1980, when it represented 3.4 percent of total distribution for all products. The 1990 direct mail distribution share was 4 percent, a slight decrease from 4.3 percent in 1989.

The use of magazines for distribution has decreased significantly since 1980, when it represented a 13.3 percent share of the total. In 1990, coupon distribution by magazine represented 2.4 percent of the total, down from the 1989 share of 3.3 percent.

In-and on-pack coupons have also decreased in popularity, dropping from a 7.7 percent share of distribution for all products in 1980 to a 3.5 percent share in 1990.

One medium that has experienced growth since 1986 is the handout coupon (electronically dispensed coupons, tearoff pads, shelf pads and coupons handed out at the retail location). The use of bounceback coupons, which are sent to consumers at their request, also became more popular in 1990. Typically, proofs of purchase and the consumer's name and address are required to recieve the coupon. Handouts and bouncebacks are graphically represented within the "Others" media category, which increased from 2.4 percent in 1989 to 3.7 percent in 1990.

Face Value

The face value of a coupon in one factor that affects the performance of a coupon offer. One might assume that the higher the face value, the higher the consumer redemtion. There is not, however, a one-to-one relationship between the face value of a coupon and the redemption rate achieved. For example, a 50 percent increase in face value will no produce a corresponding 50 percent increase in the redemption rate. Face value is more of a contributor rather than a primary influencer of redemption rate performance.

NCH's analysis of thousands of coupon offers indicates that there are many factors influencing consumers' decisions to purchase a product for which they have a coupon.

Consumers seem to give primary consideration to the product itself, their interest in it and their "need" for it, rather than making their decision solely based on the face value of the coupon.

There are, however, minimum threshold values which should not be reduced if a coupon offer is to be effective. This minimum face value varies by product category and depends on marketing strategy. If brand switching or trial is the goal, higher face values are generally required than for a promotion whose goal is to maintain current brand users.

NCH encourages manufacturers to conduct controlled tests to further investigate the relationship between face value and redemption rate. Selective newspapers across the country allow for A/B split runs, where manufacturers can run two different coupon offers simultaneously in one geographic area. The face value of a coupon can be altered while other offer variables, such as medium, geographic area and copy, remain the same. Through this type of test, a correlation can be established between a particular brand's redemption rates and face values utilized.

This type of controlled analysis can provide brand managers with valuable insight into "appropriate" face values and will provide assistance in coupon offer planning and budgeting.

Expiration Date Trends

New trends during the 1980s were the use of shorter expiration dates and a decrease in no-expiration-date coupons. The average duration of all coupons decreased by one month over the last three years, from 5.9 months in 1988 to 4.9 months in 1990. The duration categories with growing distribution share have been the one-to-three-month category, growing from 30 percent share in 1988 to 42.1 percent share in 1990, and the four-to-six-month category, growing slightly from 31.4 percent in 1988 to 32.7 percent in 1990.

The longer duration categories have all decreased in share over the last three years. For example, in 1908, 9.3 percent of coupons distributed had no expiration date, while in 1990 only 3.7 percent of all coupons had no expiration date.

Variables Affecting Redemption

Since 1987, coupon duration has dropped 10.3 percent a year, from an average of 6.8 months in 1987 to 4.9 months in 1990. This means consumers have fewer usable coupons at any given period. Adjusting the distribution figures to account for the decline in duration, one can see that consumers actually have fewer valid coupons to redeem today then they did in 1987.

The plateau in redemption and the resulting decline in the redemption rate are not indicative, as one might suppose, of a consumer lack of interest in couponing but rather of the consumer adjusting to using shorter duration coupons. In fact, if distribution were adjusted for the coupon duration, one would see an increase in redemption rates.

Another important factor that influences the redemption of coupons is the general health of the economy. Consumers use more coupons when the economy weakens. To test this, NCH developed a statistical model designed to measure the effect of the economy on coupon redemption. The model showed two variables as significantly affecting coupon redemption: coupon distribution and the change in the real gross national product (GNP). Coupon distribution accounted for 90 percent of the model's predictive power, while the change in real GNP accounted for 10 percent. The model also showed an inverse relationship between coupon redemption and the change in the real GNP. That is, when real GNP is low, coupon redemption tends to be higher than expected. Conversely, when real GNP is high, coupon redemption tends to be lower than expected.

During the early 1980s, the recessionary environment contributed to the period of growth in coupon redemption. During the late 1900s, we experienced economic prosperity and a plateau in redemptions. Given the current economic recession, one would anticipate a growth in coupon redemption. In fact, we have already begun to see an increase in coupon redemption and anticipate continued coupon growth. In order to help us assess this growth, NCH commissioned a study on consumer attitudes toward the current economic situation and the impact on grocery shopping behavior. According to the study, 75 percent of primary grocery shoppers said they would increase their use of cents-off coupons in response to the recession, while fully 89 percent of these primary grocery shoppers said they had already changed their shopping behavior. This study supports our model's findings and underscores the importance of using coupons in our current economic environment.

Shoebuy.com Coupon:Coupons Go Computerised

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Concern over wastage and misredemptions of coupons in the UK is growing, and not surprisingly. According to recent research (Marketing, March 12, 1992) last year about 7.5 billion of the eight billion coupons that were issued were not redeemed. And at least a quarter were misredeemed.

With such wastage and inefficiency, the industry is due for a shake-up. And there is one coming, from across the Atlantic. In the US, the potential benefits of a link between coupons and barcodes are being realised.

In the UK so far, it seems to be widely believed that the simple introduction of barcodes on coupons will solve or at least ease the problem of misredemption. But barcoded coupons were introduced into the US many years ago and there has been no reduction in the misuse (or abuse) of the coupon.

Quite often, for example, when shopping in the US I've been confronted with stacks of local papers where shoppers or even checkout staff can search for coupons. Shoppers request coupons on their selections and staff will occasionally actually cut out the coupons.

Usually the customer had already bought the product before he or she even knew of the offer: it was brought to the attention of the customer by staff who have learned the lessons of customer care well.

The simple barcode solution to misredemption fails to address the core problem, which is to incentivise existing and new customers to buy more of the brand in question.

But now, in the US, retailers and manufacturers are tackling both questions of incentivisation and misredemption with one system--a system that uses databased techniques to target the households with tailor-made offers.

The system works like this. The shopper goes up to the machine which is offering promotions on a range of products. The shopper is asked to tap in a number such as their phone number (or postcode, or Shopper Club ID number). The shopper can then choose from a range of products selected for promotion by pressing a button. (The promotions concerned are paid for by participating manufacturers who treat the system as another advertising medium for the communication of their offers. There are also manager specials, which change day by day or even hour by hour according to sales.)

Say the consumer chooses 5p off a can of beans. A coupon is printed out, plus another coupon, say from the retailer promoting an affinity product--own-label frankfurters, for example. Both manufacturer and retailer have something to gain.

But the system is more sophisticated than that. Since the type of neighbourhood is known from the phone number or postcode, the likely purchasing habits of the shopper allows the coupon machine to make new offers. If it is a heavy drinking area, a consumer choosing a coupon on a salted snack, may be given a second coupon offering money-off on a selected beer.

And, unlike the Catalina system (Marketing, March 19 1992) which is being tested in Asda, the coupon is issued only to consumers who ask for it, rather than being issued willy nilly at the checkout.

But the real trick is datacapture. The machine issues different coupons to each individual. Individual barcodes can be laser printed on each one. So, all the information can be recorded when the consumer finally ends up at the scanning till.

The details of each individual's coupon redeeming habits are then stored on a database. Retailers can analyse the information to build up knowledge about the buying habits of particular catchment areas and they can target future promotions more accurately as a result.

Ideally, in the future the data will be fed back into the couponing machine creating more finely targeted promotions for each cycle.

The machines need not be in-store. They can be in car parks, at bus stops, in shopping malls. This opens the way for partnerships between non-competitive retailers who use the system to generate cross-visits and store traffic.

The new systems being tested in the US reduce the risk of wastage and the expense of door drops, and avoid the upfront commitment to printed coupons. What's more they are more effective than traditional systems. The machine responds with the right proposition to the right household at the right time.

With that sort of offer, the coupon will soon rise out of its currently debased status to become a key database driven promotional tool of the 90s.

Shoebuy.com Coupon:Financial Coupons Have Redeeming Value

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Given the current emphasis on thrift, savvy financial marketers are luring a coupon-conscious public with special offers to open an account or take out a loan. Couponing is being done in many different forms in the financial services business, one example being rebates in credit card offers. Coral Gables Federal (Florida) has been an avid user of coupons for the past several years. According to vice president and director of marketing Karl Steene, Coral Gables Federal gets a good response from its coupons, which are mailed to selected households. The best response rates - 6% to 7% returns - come from mailings to new customers. Coupons fit in neatly with the concept of relationship marketing, a central focus in most financial institution marketing strategies. The idea is to sell more products to existing customers and build on those relationships, rather than reach for new business. Coupon offers can help to boost direct mail responses from the general public and can help marketers better track which households respond to the offers.

Shoebuy.com Coupon:Coupons likely to remain popular

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Couponing is alive and well, and though it has reached a level of maturation, consumers still see it as a virtual cash reward for buying a certain brand or product and are not about to shy away from the practice.

Those perceptions and many others about couponing are in the Frankel & Co. 1992 study regarding "Consumer Promotional Attitudes and Practices."

Plain and simple: Consumers' attitudes are favorable toward coupons, and they continue to use them. Aggressively.

"Consumers are savvy shoppers. They come armed with coupons," according to Don Packard, the company's marketing communications vice president and director of research. "Consumers are getting smarter. They want to make their money go further. They're looking for value."

And they're looking for value in coupons. The Chicago-based firm's 1992 study, done every four years since 1984, shows that 95% of the 746 households that responded to the survey said they either like coupons very much (73%) or somewhat. Ninety-nine percent reported using coupons at some time or another.

"You thought, by God, we'd reached the saturation point in coupons," said Packard. but "the economy said otherwise. Consumers have no problem with coupons. They can save a lot of money."

Coupon proliferation, however, could drive manufacturers and retailers into new modes of promotional operation. Although coupons won't go away, "we think manufacturers are going to have to reach out to other methods for a tiebreaker."

Subsequently, Packard sees event sponsorships, tie-ins, premiums, and cause-related campaigns gaining prominence. But they won't displace coupons. They'll just help build the kind of relationship marketing Packard believes will help differentiate their brands. Frequent-shopper programs will also gain popularity. All of the above offer opportunities for continued aggressive couponing.

In fact, consumers are so attracted to saving money that frequency programs offer a great opportunity, Packard believes, to transcend most sociodemographic boundaries and reach the "mass" audience once thought to be dead. "Frequency consumers come from all sociodemographic backgrounds," said Packard. "Money talks. Saving money attracts everyone."

And coupons offer opportunities to save money. Now, though, having reached virtually every household, "there's got to be more targeting of coupons," Packard asserted, which is one reason frequency clubs will proliferate, because of their ability to build brand-and category-specific data bases.

"I think that is the future," he said. "I think that trend has already started."

With consumer attitudes increasingly favorable toward coupons, you can bet on it. Manufacturers and retailers are scrambling for ways to get coupons into the right targeted households, especially with 96% of households telling the Frankel researchers that coupons are either very or somewhat helpful. Saving money was the No. 1 response for favorable attitudes toward coupons.

The targeting aspect can be seen in the 56% of respondents who said they have either much more favorable or somewhat more favorable attitudes toward brands that coupon, a 9 percentage-point increase from 1988. Interestingly, the study said, "there was not one negative comment about cheapening the value of a product or brand through the use of promotional incentives."

Subsequently, while more and better targeting is called for, consumers still expressed great diversity in where and how they collect their coupons. More than 90 get the bulk of theirs from newspapers (FSIs) and/or mailings. In-store distribution and ticket-back offers from special events also gained in popularity.

So while "you better get in the store and have effective merchandising," said Packard consumers still "come armed with coupons." But "They're making their decisions in the stores."

Coupons are helping to drive their decisions. "Because it's money," said Packard. "Consumers see it as money. It's a reward for using the product. It's a reward for being loyal. Consumers see it as a reward for their patronage. They don't overthink it. It's become ingrained in them. Consumers really like brands that reward them with an incentive. Consumers like all kinds of promotion incentives and think favorably of the brands that give them to them."

Coupons are also much easier to use than other methods, like rebates, which don't offer "instant gratification," said Packard. "A store wants everything easy to do. A coupon is easy to do." Although "other promotional tactics can be expected to "narrow the gap" on couponing when the survey is repeated in 1996, just like a certain battery-charged bunny, Packard said, "Couponing will go on and on and on. There's always going to be coupons.

Shoebuy.com Coupon:Counting on coupons

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Coupons have become somewhat crumpled. Evidence that misredemptions have been running at an average 27% have been a turn-off for marketers with a 33% fall in the number of coupons issued last year compared with 1991's record performance. But fresh initiatives in point-of-sale verification targeting and distribution are now or the scene to help iron out the crease and restore credibility and confidence

While acknowledging the problem of misredemption, Brian Barberton, UK managing director of NCH Promotional Services, Britain's biggest coupon handling firm, believes other factors have contributed to the downturn.

"The coupon market in the UK is very cyclical, almost fashionable," he suggests. Consumer goods marketers. after a period of heavy coupon distribution, look for variety in other promotional methods to meet their objectives.

NCH calculates that the number of coupons redeemed in 1991 was 451 million, on a distribution of 8.1 billion. The previous redemption peak was 1987, at 411 million. Distribution fell to 5.4 billion last year end redemptions to 365 million. There were other troughs in 1985 and 1988.

Barberton contends that the misredemption element is given more weight than it deserves. "In any promotional activity a proportion of the expenditure is wasted," he argues. "Wastage is an important measurement but more important is whether the activity sells incremental product and pays for itself."

Towards this end, NCH is looking for sales promotion partners to employ the new Scanpro modelling system developed by its parent company AC Neilsen. This is designed to measure incremental sales achieved by a specific promotional activity.

Last year, the coupon committee o the Institute of Sales Promotion sough to tackle misredemptions by calling on the main store groups to display warnings to shoppers. But the grocery giant failed to agree on this and committed chairman Peter Le Conte now admits "It is probably a non-starter."

He sees technology as offering the most promising route. After trialing barcode scanning to validate coupons against purchases, Tesco is extending the system to all its stores with electronic point of sale (EPoS) tills.

At present, only Tesco-specific coupons are fully validated. For others, the checks just extend to confirming that the store has a trading relationship with the manufacturer.

But Le Conte regards this as a step in the right direction. "It does help establish in consumers' minds that big retailers are scanning coupons and perhaps people will be less inclined to hand over coupons for products they haven't purchased," he says.

Coupons printed automatically at the point-of-sale against specific purchases is another approach. Catalina Electronic marketing has introduced a system from the US, where it is said to be in use at 6000 stores. This has been on trial by Asda. It allows manufacturers three categories of coupon promotions.

There is "own use", where purchase of a product triggers a money-off coupon against the next purchase. Then there is 'complementary', where a purchase of, say, nappies produces a coupon for baby food. More cut-throat is the 'competitive' category, where the buyer of one brand receives a coupon for a competing brand.

This last is "competition in its purest form," says Catalina managing director John Eustace. "If you take the top 100 brands on sale in the UK during the trial, 74 of these were either triggering or being triggered on."

Another method of producing coupons and messages as an add-on to EPoS tills is produced by Riva Systems. This also rejects coupons if the product has not been purchased or if the coupon is out of date. West Midlands Co-op has had it on trial in 50 lanes at four sites.

There is a legal dispute to be resolved between the two suppliers, Catalina alleging that Riva has infringed its patent.

Another US system is the Instant Selector, marketed in the UK by BLP Consultancy. This is for special promotions, in-store or elsewhere. Consumers complete questionnaires on their tastes or requirements and appropriate coupons are printed out.

From the targeted to the large scale distribution of coupons. This year has seen ambitious launches of free standing inserts (FSIs), another idea imported from the US. There are three major players in the UK.

First on the scene was The Coupon Book, from IPC Magazines (previously seen as Reed Coupon Book and distributed via fre newspapers). On its heels is moneysavers from Brand Movers, formed from the unlikely alliance of three newspaper groups, Mirror, Express and Telegraph. Third to appear from News International and Associated Newspapers is Shoppers' Friend.

The Coupon Book was issued with Woman 5 Own on February 15. The next issue is due out in both Woman's Own and TV Times on April 19 and 20. Then, in June, it is planned to add Woman's Realm as a third carrier.

Moneysavers made its debut in its sponsoring newspapers in March ,with a circulation of 9.6 million. It allows advertisers to regionalise and to have copy splits. The next issue is due in September. Shopper's Friend appeared at the weekend with a distribution of 8.2 million copies: further issues are scheduled for June, August, October and November.

"The Coupon Book is just one important element in an overall package from IPC Magazines," says its managing director David Flavell, previously publishing director of Woman's Own. "We can offer a range of opportunities and link them together to put forward total advertising/marketing solutions."

While it has the potential for a circulation of seven million by adding other magazines from the IPC portfolio, Flavell says this is not necessarily what the market wants and he will be guided by his clients.

Looking at the competitive situation, he comments: "I am not sure there will be three of us around in a year's time. If there is a market, The Coupon Book will be here and it will be the leader." This view is not, of course, shared by the other FSI publishers. Alan Kirkland, sales director of Brandovers, asserts: "Retailers are recognising the power of the FSI in National newspapers." But he adds: "It's a shame that more people haven't had the bottle to get involved with Moneysavers at the beginning. We would like to have been bigger to start with."

Dorothy Cumpsty, managing director of Shopper's Friend, contends: "It is the quality of the content that sells. And Shoppers' Friend has quality advertisers, including in the launch issue a major grocery retail chain."

Signs are that initial response from advertisers has been less than overwhelming. The Coupon Book contained 12 pages, moneysavers six pages and Shoppers' Friend eight.

But these are early days. The coupon publishers take heart from the success of FSIs in the US. These started back in the early 70s as single sheet inserts. Today, about 80% of coupons in America are distributed by FSI methods.

Shoebuy.com Coupon:Who's Got the Coupon? Estimating Consumer Preferences and Coupon Usage from Aggregate Information

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Most researchers in marketing have typically relied on disaggregate data (e.g., consumer panels) to estimate the behavioral and managerial implications of coupon promotions. In this article, the authors propose the use of individual-level Bayesian methods for studying this problem when only aggregate data on consumer choices (market share) and coupon usage (number of distributed coupons and/or number of redeemed coupons) are available. The methodology is based on augmenting the aggregate data with unobserved (simulated) sequences of choices and coupon usage consistent with the aggregate data. The authors analyze various marketing scenarios that differ in terms of their assumptions about consumer choices, coupon availability, and coupon redemption. They illustrate the proposed methods using both simulated data and a real data set for which an extensive set of posterior predictive checks helps validate the aggregate-level estimation. In addition, the authors relate the empirical results to some of the findings in the literature about the coordination of coupon promotions and pricing and show how the methodology can be used to evaluate alternative coupon targeting policies.

Shoebuy.com Coupon:International coupon trends

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In 1992, 5.4 billion coupons were distributed to the U.K. market. This represents a decline of 33 percent from the exceptional level of 8 billion coupons distributed during 1991. However, the 1992 level represents a 6 percent growth compared to 1990, with a compound market growth of 3 percent over the last nine years.

Not surprisingly, coupon redemption also dropped in 1992 to 365 million coupons, a 19 percent drop from 1991. The overall coupon redemption rate was 6.76, percent, an increase over the prior year's rate of 5.56 percent. This is a direct reflection of the changes in media mix for coupon distribution in the United Kingdom.

A quality-rather-than-quantity approach to couponing has been seen throughout 1992 in the United Kingdom. Considerable postpromotion evaluation took place during the second half of the year.

This past year has made marketers in the United Kingdom increasingly aware of the need to target coupon activity more effectively by using the range of distribution vehicles available to those issuing coupons.

Newspaper and magazine distribution declined, with distribution growth coming from in/on-pack promotions and in-store media. Door-to-door coupon distribution remained stable at 18 percent of total distribution.

During 1992, the average face value of a coupon increased to almost 29 pence, the largest increase in three years. This has occurred despite research which has indicated that the optimum face value to drive usage at efficient cost is in the 15 to 20 pence range. As consumers become more active in collecting coupons, their main objective may change from saving on individual products to achieving acceptable discount levels off their total grocery bill. It is anticipated that the rate of increase will probably slow during 1993 as promotion budgets are used more effectively.

The effect of the increase in average face values is highlighted by the fact that coupon users saved almost 106 million pounds by using coupons, down only marginally from the 1991 value of 113 million pounds.

This past year the Food and Drink Federation and the British Retailers Association recommended a 15 percent increase in the retailer coupon-handling allowance, paid by manufacturers to retailers, to 26.50 pounds per 1,000 coupons. For the first time, this increase in the handling allowance reflects the manufacturers' commitment to coupons and the effort involved in retail handling.

Coupon redemption across media types has remained in line with distribution. Newspapers, magazines and FSI vehicles have seen a downturn in coupon redemption, with growth being experienced through in-store, in/on-pack and door-to-door methods. The "Others" category, with 1.4 percent of total redemption, tends to reflect the test marketing of new promotion vehicles. This means the volume of coupons redeemed via "other" media types remains relatively small as a proportion to the total.

A significant announcement made during 1992 was the decision of Tesco (a large U.K. retailer) to pursue point-of-purchase scanning of coupons to help control misredemption for retailer tailor-made coupons and reduce handling costs within the store. It is hoped that in time, the initiative will be developed to encompass misredemption control for all coupons.

A number of interesting new distribution vehicles were introduced in the United Kingdom during 1992, which included:

* Catalina's Checkout Saver

* Shoppers Friend FSI

* Money Savers FSI

Such innovations in the marketplace have increased U.K. distribution levels within the "Others" category. These new vehicles have also aided coupon issuers, who are searching for more effective means of distributing coupons to their consumers.

MARKET SUMMARY AND TRENDS IN ITALY

Coupon distribution in Italy continued to grow, reaching 621 million coupons in 1992. This represents a growth of 6.7 percent compared to 1991. The continued growth of coupon distribution in Italy is driven mainly by food manufacturers issuing more coupons.

The average face value of coupons distributed in Italy during 1992 grew just over 2 percent to 841 lira, compared to an average value of 822 lira in 1991.

Coupons distributed on a product package were still the media of choice for Italian manufacturers, with 38.1 percent of coupons distributed this way in 1992. Another 8.5 percent were distributed on a product package and were instantly redeemable.

The use of in-pack promotions grew in 1992, to account for 16.6 percent of total coupon distribution and door-to-door coupon distribution increased only slightly.

Magazine cou-pon distribution was cut in half in 1992, representing a 5.7 percent share of distribution, compared to a 12.8 percent share in 1991.

Coupon redemption continued its upward trend, reaching 89 million coupons in 1992. This represented growth of nearly 20 percent from the previous year.

The average face value of coupons redeemed in Italy increased only slightly to 875 lira, a 1.9 percent increase from the 1991 average of 859 lira. Italian consumers saved 77.9 billion lira on their grocery bills in 1992, up nearly 22 percent.

Similar to the United States, instant redeemable coupons commanded the highest average redemption rate at 39.1 percent. In-store coupons were the next highest at 32.3 percent, followed by in-pack promotions, which averaged 21.7 percent.

MARKET SUMMARY AND TRENDS IN SPAIN

The coupon market in Spain continued to decline, with coupon distribution dropping more than 25 percent to 106 million coupons. The Spanish economy has been extremely strong in recent years and there has been little need to stimulate sales by the use of consumer promotions.

The average face value of coupons distributed dropped more than 20 percent in 1992 to 32.3 pesetas, compared to 40.8 pesetas in 1991.

The use of newspapers and magazines to distribute coupons in Spain increased substantially, with these media accounting for nearly one-quarter of all coupons distributed in 1992. The distribution share of in/on-pack promotions also increased in 1992 to represent 43 percent of all coupons distributed.

Door-to-door coupons declined in popularity during 1992, dropping from a 49.9 percent share in 1991 to just 25.2 percent of total coupon distribution.

In 1992, the total number of coupons redeemed in Spain dropped 22 percent from 21.8 million coupons to 17 million coupons.

In contrast to the other top-line trends in Spain, the average face value of coupons redeemed increased more than 15 percent in 1992, growing from 34.5 pesetas in 1991 to 39.8 pesetas this past year. This allowed consumers to save 678 million pesetas on their grocery spcnding in 1992.

In/on-packs remained the highest redeeming medium in Spain, averaging 30.7 percent. In-store promotions averaged 28.2 percent redemption, while door-to-door coupons were redeemed at an average rate of 12.9 percent.

The outlook for promotions, and coupons in particular, is more positive for the future. The Spanish economy, having completed the Summer Olympics, is no longer showing substantial growth. Therefore, manufacturers must again fight for increased market share if growth is their goal.

MARKET SUMMARY AND TRENDS IN JAPAN

Coupon activities in Japan are still in the early stages. All restrictions on the print media carrying coupons have been lifted; however, reluctance on the part of retailers and consumers alike has kept the industry stagnant.

Coupon activity in Japan has been brief. The following information summarizes the major moves in the industry.

1990

* The restriction on newspaper ROP coupons was lifted. Maximum discounts, however, were limited to 50 percent of the normal price.

* SEIYU, Japan's #3 chain at the time, placed coupon advertisements within all the major daily newspapers. The chain included between five to 10 coupons in each paper. The coupons were valid for one week and redeemable only at SETYU stores in Tokyo and its vicinity. No information was available on redemptions.

1991

* The restriction on newspaper FSIs was lifted and two newspapers in Tokyo carried FSI coupons in a medium called "The Makers' Coupons."

* It is estimated that 103 million FSI coupons were distributed to subscribing homes. The coupons covered 14 different product types, were valid for one month and ranged in value from a low of 30 yen to a high of 380 yen.

* Video Research, the redemption agent/clearinghouse in Japan, estimated that 125,000 coupons were redeemed, an average redemption rate of 0. 12 percent. The highest food coupon redemption rate reached 0.27 percent, while the highest redemption rate for a health and beauty aid was 0.29 percent.

* Retail cooperation for this first FSI campaign was estimated at 17,000 retail locations.

1992

* In March, another FSI campaign was generated by Japan's two largest newspapers, Asahi Shimbun and Yomiuri Shimbum, covering the areas of Tokyo, Chiba, Saitama and Kanagawa.

* Retail chain cooperators reached 112, accounting for approximately 17,500 retail locations.

* Thirteen different coupons appeared in the FSIs, ranging in value from a low of 20 yen to a high of 200 yen. Each was printed in full color with a barcode and was valid for approximately one month. No information was available on redemption quantities.

* Subsequent similar FSI campaigns were distributed in May and September for a total distribution quantity in 1992 of 259.4 million coupons.

* Distribution of coupons via direct mail and magazines, in/on-pack promotions and retailer-sponsored coupons is very limited in Japan. Most coupons are redeemed through manufacturers or their appointed agents and redemptions are almost negligible in numbers.

* While the coupon market in Japan has begun to develop, it is growing very slowly. This is largely due to low consumer interest to use coupons and the lack of cooperation of Japan's #1 supermarket, DAIEI and #1 convenience store, Seven-Eleven.

1993 AND BEYOND

* It is estimated that three additional FSI campaigns will be run in 1993, much in the same fashion as the 1992 promotions.

* One positive factor for the coupon industry in Japan is its sluggish economy. It is speculated that the need for cost-consciousness among Japanese consumers will motivate consumers into an increased use of coupons.

OTHER COUNTRIES

In Portugal, there has been a growing interest in the use of coupons.

In France, only a small amount of couponing occurs. The retailer market is highly concentrated with a few retailers controlling the market. The cost of distribution is high and retailers have a fairly negative attitude toward coupons.

Although the population of France is similar to that of the United Kingdom, only 25 million to 35 million copies are redeemed annually.

The coupon market in the Republic of Ireland is very small, with the majority of the coupons issued by United Kingdom manufacturers and redeemed at retail locations within the United Kingdom.

Couponing became legal in Denmark only a few years ago. Therefore, this market is not yet being fully utilized by manufacturers and retailers.

In Germany, the discount given on a coupon cannot be greater than 1 percent of the product's value, so German consumers are not persuaded to use couponsregularly.

In the Commonwealth of Independent States, formerly the U.S.S.R., the lack of product availability, organized retail structure and little to no variety in advertising media provides an environment that is presently unsuitable for couponing.

In Belgium, environmentalists are trying to ban the household delivery of coupons. Annual redemption volume in Belgium is estimated at 70 million coupons.

In Holland and Switzerland, major retailers refuse to accept coupons; therefore, the coupon market does not exist in these countries.

In Greece, sales, marketing and retailing techniques are currently not sufficiently developed for couponing to be effective, so the market in these countries is limited.

In Sweden, Norway and Finland, the coupon market exists, with annual volume averaging 40 million.

Shoebuy.com Coupon:An experimental investigation of the consumer perception of products featured on coupons

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An experiment using a homogeneous group of male subjects in a controlled classroom setting exposed subjects to one of eight coupons, each representing one of eight possible conditions of a combination of two levels of three independent variables tested in a 2 x 2 x 2 experimental design: face value, manner in which the offer was stated, and familiarity with the featured brand. Subjects were asked to respond to a questionnaire measuring perceptions such as psychological value of using the coupon, perceived quality, perceived price, liking for the brand, liking for the offer, intention to use the offer, and perceived risk in using the coupon.

Findings show that the independent variables all have significant impact on consumer perceptions of the brand featured on coupons.

Among them, liking for the coupon and intention to use it increase more dramatically with increases in face value when the brand is familiar. Also, when only the face value was shown, liking and intention increased more with face value for the familiar brand than the unfamiliar one.

Finally, coupon proneness and value consciousness add to the understanding of consumer perceptions. Coupon prone consumers pay less attention to face values, and have more positive perceptions of coupons when only the face values are shown. Highly value conscious consumers, on the other hand, pay attention to the magnitude of the face values.

Shoebuy.com Coupon:Consumers' coupon use behavior: A theory of planned behavior perspective

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The use of cents-off coupons by businesses as a promotional tool to (1) introduce new products, (2) revitalize older products, (3) encourage store or brand switching, (4) build store traffic, (5) reduce inventory build up, (6) counter competitive promotional activities, (7) cushion the effects of price increases, and to realize many other marketing objectives has grown in popularity during the last quarter century. Each year, businesses distribute billions of cents-off coupons in the U.S. in an attempt to entice consumers to purchase their goods and services. Paralleling this trend, research indicates that the percentage of consumers who use cents-off coupons, as well as their frequency of use of cents-off coupons, has also been increasing. Furthermore, the use of cents-off coupons as a promotional tool has spread from marketers of frequently purchased packaged consumer non-durable goods to marketers of consumer durable goods and services as well. However, in recent years, some businesses have begun to reassess their heavy reliance on cents-off coupons and other forms of sales promotions, in light of concerns over potential detrimental effects such as erosion of brand franchise and diminished brand loyalty.

While most of the initial research on couponing focused on predicting aggregate redemption rates, this was later followed by a shift in focus towards examining the effectiveness of couponing as measured by its effects on incremental sales and profitability. More recently, there has been a greater focus on psychological factors underlying coupon use at the individual level. In the aggregate, however, there has been less research on the psychological aspects of coupon promotions than on predicting aggregate redemption rates and evaluating their effectiveness. This dissertation investigates consumers' coupon use behavior from a theory of planned behavior perspective. More specifically, the dissertation: (1) examines the moderating effect of consumers' coupon use experience, (2) investigates the extent to which coupon use behavior is under complete volitional control, and (3) tests competing models of coupon usage behavior based on the theory of planned behavior. The competing models represent alternative specifications of the relationship between consumers' coupon use experience, attitude towards the act of using coupons, subjective norm, perceived behavioral control, intention to use coupons and coupon use behavior. Data was collected in a two-stage approach from 347 consumers who were members of a large family-oriented organization based in South West, Texas. Moderator regression analysis was used to test the proposed model. The results show that the extended model based on the theory of planned behavior to be a better predictor of coupon use behavior. The findings also suggest that coupon use behavior is not under complete volitional control. The findings also corroborate the general belief that the extensive use of price-oriented promotions, such as coupons, by firms leads to greater use of coupons by consumers due to their developing more favorable attitudes toward the act of using coupons.

Shoebuy.com Coupon:Clipping coupons in cyberspace: A proposed model of behavior for deal-prone consumers

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The use of cents-off coupons by consumers is a widespread phenomenon and is well documented in the marketing literature. Recently, coupons have become available in electronic form on the World Wide Web. This article introduces an adaptation of the theory of planned behavior applied to coupon usage that encapsulates both traditional and electronic environments. A careful review of the couponing literature is presented, along with a proposed theoretical framework. A methodology for empirical verification is suggested and managerial implications are discussed, along with avenues for further research. (C) 2000 John Wiley & Sons, Inc.


The use of cents-off coupons as a marketing tool is a widespread phenomenon and serves different objectives for retailers and manufacturers. Typically, commercial surveys show that over 88% of grocery shoppers report having used at least one coupon in their grocery shopping in the last six months (Kingsbury, 1987). For retailers, chain-specific coupons or doubling and even tripling values of standard manufacturer coupons are mostly used to attract consumers into the store and as such, are often seen as loss leaders. For manufacturers, coupons are used as incentives for trial of new product entries and/or product reformulations; they can also be used as a price-reducing mechanism for estab lished brands, allowing deal-prone consumers to purchase the brand at a lower cost given their increased price sensitivity (Narasimhan, 1984). Firms use coupons instead of direct price reductions in order to maximize revenues by discriminating between price-elastic and non-priceelastic consumers and thus avoid the costly rewarding of current brand loyal users. From a consumer perspective, the decision to use coupons is actually a trade-off between the potential savings obtained and the associated costs of using coupons. Two key components of these costs are time and flexibility. Much time is required to search, organize, sort, and classify coupons. In addition, limited coupon dispersion within brands and categories leaves little flexibility in the choice of a particular brand or size in any given point of a purchase cycle. The information search literature suggests that search behavior will be observed if the buyer feels that the potential benefits outweigh the costs involved. A number of studies have also shown that deal-prone segments have specific demographic characteristics (Blattberg, Buesing, Peacock, & Sen, 1978; Webster, 1965), that have been appropriately coined by some as marketing mavens (Price, Feick, & Guskey-Federouch, 1988).

A well-researched area of marketing, couponing, has generally relied on intrusive forms of communication and distribution to reach potential consumers. Freestanding inserts in Sunday newspapers still represent over 78% of all distributed coupons (Blattberg & Neslin, 1990). Recently, technological advances have made it possible for coupons to be distributed electronically with the use of an interactive medium such as the World Wide Web (Web). Numerous e-coupon sites have emerged where consumers can browse through listings of product categories and brands and physically download specific coupons based on their own preferences. Some sites request consumption information prior to coupon access so that the offer can be tailored accordingly based on first trial, switching, or light/medium/heavy usage, for example. Users can select their own coupons by easily navigating through product/category listings; this transfers the choice option to the consumer level and signifi cantly reduces the time required to search, sort, and organize coupons. The purpose of this article is twofold: First, to review the current theories of coupon use put forward within a traditional mass media context. Second, to examine how these theoretical models hold in light of a new coupon distribution medium that exhibits interactivity and hence power of choice transferred to the end user. This article argues that in light of these new options, we might see a change in the profile of the typical coupon user and that the model of behavior observed might switch from a heuristic to a more systematic information search given reduced search costs. Retailers and manufacturers can benefit in targeting specific offers to specific segments while reducing distribution costs, thus enhancing efficiency and profitability. Implications of this are discussed.

The article is organized in three sections. First, a review of the cou poning and deal-prone literature examines key theoretical and practical findings relevant to our current investigation. Second, based on the current state of knowledge, a theoretical framework is proposed to examine coupon usage behavior based upon an enhancement of the wellgrounded theory of reasoned action (Fishbein & Ajzen, 1975). Third, issues that might contribute to support or disconfirm such a model within an interactive environment are identified and discussed. Finally, directions and avenues for future research within this context are presented.

Shoebuy.com Coupon: Penny-Pinchers' Paradise; E-coupons are catching on fast--and companies are learning how to use them

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The Internet is becoming one of the hottest spots to save with coupons. Web surfers who clip virtual coupons have risen to nearly 30% of those online from 23% a year ago. E-coupons are discount offers either found on a Web site or that can be redeemed online. E-coupons make up less than 1% of the 256 billion coupons distributed yearly in the US vs. the 80% that are distributed in Sunday papers. But nearly 57% of those who click on e-coupons or get them via e-mail redeem them, compared with the 1.2% of Sunday paper coupons that are redeemed. Merchants can e-mail offers targeted to customers' tastes once they find a consumer who loves the Beatles or Legos or 2% milk. Like their real-world counterparts, e-coupons help lure new customers, too. But Web sites should be careful not to give away the store. A good coupon campaign offers just enough savings to give consumers a little thrill.


Something about saving a few bucks brings out the miser in almost everyone. Maybe you won't admit it, but Lauren Tascan does. She's among the 80% of Americans that clips coupons every year. The 32-year-old New Yorker accepts her parsimonious streak with an easy shrug. ``There's a little thrill that comes from just a little bit of savings,'' Tascan says.

Get out your piggy bank, thrill seekers. The Internet is becoming one of the hottest spots to save with coupons. Web surfers who clip virtual coupons have risen to nearly 30% of those online from 23% a year ago, says researcher NPD Online.

What exactly are e-coupons? They're discount offers either found on a Web site or that can be redeemed online. Sites such as coupons.com and coolsavings.com, for example, let you print a coupon and redeem it at your local grocer. Just as often, consumers see an e-tailer's coupon bearing a special code in a magazine or on a Net portal. They then enter the code on a Web site to get a discount when buying online.

Virtual coupons have clear advantages over those you clip from the local paper. For starters, they have a ``phenomenal'' redemption rate, says Charles K. Brown, vice-president for marketing at promotions researcher NCH NuWorld Marketing Ltd. To be sure, e-coupons make up less than 1% of the 256 billion coupons distributed yearly in the U.S., vs. the 80% that are distributed in Sunday papers. But nearly 57% of those who click on e-coupons or get them via e-mail redeem them, Brown says, compared with the 1.2% of Sunday paper coupons that are redeemed.

What makes e-coupons so effective? Merchants can e-mail offers targeted to customers' tastes once they find a consumer who loves the Beatles or Legos or 2% milk. ``The manufacturer is able to build a relationship with the consumer in a lot more depth than in any other media,'' says Steven M. Golden, CEO of coolsavings.com, the Web's most visited coupon mall, with 11 million members.

Like their real-world counterparts, e-coupons help lure new customers, too. During the six months that ended in November, Staples.com jumped from 23rd to 14th among retail Web sites with the most buyers, says researcher PC Data Online. Many new customers were lured by an e-coupon that saved $25 on purchases of $75 or more. Web coupons are ``a key tool in the tool kit,'' says Kelly A. Mahoney, chief marketing officer for Staples Inc.

But Web sites should be careful not to give away the store. In 1999, when the Web teemed with fledgling e-tailers, merchants flooded consumers with ``impossible'' promotions, says analyst Mike May of Jupiter Communications Inc. Vitamins.com, for example, closed down partly because it was too generous with discounts. The site offered new visitors $25 off purchases of $25.01 or more. Then it added a $15-off coupon for the buyer's next purchase--and delivered it all free.

Better to be wise than bankrupt. Sure, the bigger the discount, the bigger the draw. But the idea is to wean consumers from boffo deals, migrating them from big savings to smaller ones. ``If a dollar off works the first time,'' May says, ``the customer should not see that discount again.'' A good coupon campaign offers just enough savings to give consumers a little thrill.

Shoebuy.com Coupon:Dealing With Coupons

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Non-food marketers lead growth spurt of Sunday inserts

Marketers issued an equivalent of 850 free-standing inserts for every U.S. citizen in 2004, distributing a whopping 251 billion coupons that offered deals on everything from cereal and cheese to coffeemakers, takeaway pizzas and restaurant meals.

The data, contained in the new Marx FSI Trend Report, estimates that coupon distribution rose 7.7 percent over 2003 and amounted to a potential per-person savings of nearly $1,000. FSI distribution registered a compounded 3.5 percent growth rate over the last five years, a 13 percent change overall, according to Marx Promotion Intelligence, a unit of TNS Media Intelligence. (FSIs, the coupon inserts in Sunday newspapers, account for the majority of U.S. couponing.)

During that time, non-food marketers-like those for household items and health and beauty aids-have significantly increased their coupon activity and now surpass food manufacturers. Led by a slew of product introductions in the oral care, cosmetic and household cleaning sectors, nine of the top 10 couponing brands in 2004 were non-food products.

Growth in the franchise sector outpaced that of consumer packaged goods in 2004, and now accounts for 11 percent of all FSI page distribution. That growth has been driven by wider acceptance of FSIs as a cost-efficient marketing vehicle for restaurants.

"Marketers outside the packaged-goods category appreciate the impression value of FSIs," observes Wallace Marx Jr., director of marketing at MPI. "Restaurants like Red Lobster, Applebee's and Chili's will use a full-page ad to deliver a single coupon. It's like a magazine ad, but one that reaches a Super Bowl-sized audience."

While coupons are widely used for product launches, they also help categories that have commodified and need to keep their standing with retailers. "Coupons tend to follow innovation," notes Marx. "But with products that have plateaued, they also have to coupon to keep up relations with the trade. They need to keep prices low and keep their place on the [store] shelf."

Consumer packaged goods remain the largest user of FSI coupons, accounting for two thirds of all FSI page activity. But newer categories like high-value coupons and those for appliances are quickly catching on. The average value of a coupon in 2004 was $1.03 cents, rising above $1 for the first time, and up from 95 cents in 2003. The difference is that while consumers may be saving 25 cents off a bag of flour, they might also be using $30-off coupons for a diabetic testing kit.

Coupon printer and distributor Valassis says consumers saved more than $3 billion last year using coupons, and notes that the demographics of coupon clippers run counter to popular perceptions: Some 43 percent of them are men, and 32 percent live in households with above-average incomes of between $40,000 and $75,000. -NOREEN O'LEARY

Shoebuy.com Coupon:Coupons Gain New Market on Cellphones

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The firm has linked up with about 200 marketers, including entertainment and fast-food shops such as Virgin Megastores, Hollywood Video, Domino's Pizza and Quiznos Subs. For the right to send mobile coupons, the marketers pay Cellfire an upfront fee and additional subscription rates if the number of cellphone subscribers to their coupons increases. Cellfire has separate arrangements with major cellphone carriers such as Verizon Wireless to ensure its coupons are available through their services. The companies declined to discuss the terms of these arrangements.

Ms. [Dee Mc Laughlin], who says she has met with various cellphone marketing companies, sees Cellfire's subscription-based service as a safe first step into mobile marketing. Virgin Megastores has offered discounts on products such as DVDs through Cellfire-distributed coupons. The early results have been good, she says, with redemption rates for mobile coupons at seven stores in New York and California at 15%, far higher than the typical 5% return for paper coupons. Virgin is also using Cellfire to market in-store events such as a Halo 3 videogame competition.

Shoebuy.com Coupon:Coupons, Vouchers, and Adjudicated-Debit Cards... How Is a Brand Manager to Decide?

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Each has its advantage, but one is tech savvy and just might make filling scrips for customers a whole lot more desirable By Michael Edmondson


According to various estimates, between 20 and 30 percent of prescriptions are never filled. There are numerous reasons for the shortfall, and cost certainly ranks high among them.

One of the ways to address this concern for pharma companies is to utilize patient-savings branded-drug programs and copay assistance incentives to help patients defray their costs.

Pharma companies have experimented with a variety of different platforms and formats through which to deliver the programs. Generally, they fall into two main categories: coupons/vouchers/patient savings cards and adjudicated-live debit cards.

All can accomplish the main goal: Making it easier for a patient to say yes to a prescription.

But there are significant differences between the two approaches-especially in terms of how they provide incentives to pharmacists.

Product managers need to understand the logic of these programs to make the best choice.

Paper coupons/vouchers

Coupons and vouchers come in a paper format; they are distributed via newspapers and magazines, or they can be printed from the Web. They can be used (depending on the conditions) to cover all or part of a patient's out-of-pocket expenses, including copays. To redeem a coupon, a patient must bring it along with a prescription to the pharmacist. The pharmacist submits a claim and deducts the discount. If the pharmacy does not accept the coupon, the patient has the option of mailing a form (often attached to the coupon) into the manufacturer for the discount.

Patient savings-program cards

These are virtually the same as the paper coupons and vouchers except they come in a card format on a heavier-stock paper. And like most paper coupons/vouchers, the card stipulates that should the pharmacist accept it, he or she will receive a reimbursement sometime in the future ( 10 to 20 business days).

From the pharmacist's point of view, there are two obvious problems with this:

* The coupons/vouchers/cards do not serve as a financial transaction.

* He or she receives no immediate payment.

Making the pharmacist wait for the money could be a turnoff and may prompt the pharmacist not to accept the incentives at all. This, in turn, could leave a sour taste in the mouth of the patient, who then must find another pharmacist to honor the discount. Or the patient might decide not to fill the scrip altogether.

This is also counter to the intention of the brand team, which sought to provide a positive, money-saving experience for the patient, and perhaps to create a long-standing relationship with the product.

The adjudicated-debit card

Enter the adjudicated-debit card:

It looks like an ATM card; it walks like one, too. Backed by banks, the adjudicated-debit card serves as a financial transaction, which means the pharmacist is paid rieht away.

Usually distributed by a sales rep to a doctor, the adjudicated-debit card is then passed along to the patient with the prescription.

The patient then presents it to the pharmacist, who swipes the card at the point-of-sale terminal and types in the identification number on the back of the card. Loaded with the patient benefit preset by the brand team, the card both facilitates and encourages copay purchases.

Additionally, the adjudicated-debit card can be used only for the NDC (national drug code) associated with the business rules designated by the brand team.

In terms of security, the card is inactive until all parameters are met. Money cannot be put onto the card or taken off the card unless the adjudication process is completed correctly for the program.

If all goes as planned with the adjudicated-debit card, the pharmacist gets his or her money in real time, and the patient gets the discount on the drug. And, like any successful DTC marketing initiative, awareness of the brand has been increased.

Shoebuy.com Coupon:A Perfect Storm for Savings - More Coupons, Bigger Discounts & Low Prices

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Concern over the economy has one silver lining - more retailers are offering online coupons and deals at deep discounts to drive sales. In turn, customers are responding, as more people go online to look for savings.

CouponMountain.com, which has been providing users with online coupons since 2001, bucked seasonal trends as February traffic outpaced November traffic by 10% according to the ComScore Key Measures Report. The reported number of total unique visitors is also up 90% over last February as more customers turn to the site to save on everything from laptops to baby clothes.

The discounts offered in February were deeper than last year. An internal survey of 1,162 coupons and deals from top computer retailers revealed that discounts listed in February 2008 offered a 19% deeper discount on average than ones listed in February 2007. The best discounts were offered by Buy.com, with an average discount of 58%, and HP, with an average discount of 34%. The average discount doubled at both stores compared to what they listed on CouponMountain.com in February 2007. Also, online retailers like Overstock.com and Newegg offered 82% and 207% more online coupons and deals on the site this February than last year.

MeziMedia, a division of ValueClick, Inc. (NASDAQ: VCLK), has leveraged this increased supply and demand for coupons on both their CouponMountain.com site as well as Smarter.com, a site that provides consumers with price comparison, product reviews, merchant reviews, product videos and more - all matched with online products. For example, in February they focused on adding online coupons to the listed products and managed to match online coupons to nearly 70% of the active product catalog offered on Smarter.com.

"Today, more and more top online retailers are offering special savings including coupons, rebates and free shipping offers in hopes of enticing consumers to purchase products," said Paul Willmes, MeziMedia's Product Evangelist. "Smarter.com has increased its coupon coverage to nearly 70% of all active products on our shopping search site in order to more accurately reflect market conditions and meet consumer demand for deep savings."

The addition of coupons and rebates to a price comparison site like Smarter.com makes it possible for consumers to save even more than on a traditional coupon site. Customers can choose the lowest price with taxes and shipping included and then save even more with a coupon or rebate. Smarter.com can help customers save on everything from tech products like digital cameras and iPods to apparel like women's jeans and men's watches.

Shoebuy.com Coupon:Buffalo ranks among top coupon markets: Redemption rate tied for 3rd in country

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Thirty-six percent of area households use them at least once a week, a rate that tied Buffalo for third highest in the country behind Milwaukee and Rochester, according to Scarborough Research, a consumer marketing research firm. The national average was 27 percent.

The survey results back up Buffalo's reputation as a town that likes a bargain. Wegmans grocery store chain says Buffalo is its leading market for coupon redemption, followed by Rochester and Syracuse, though the differences in the rates between those three markets is slight.

Coupon redemption at Tops Markets in its Buffalo and Rochester markets has stayed fairly constant compared to a year ago, said Katie McKenna, a spokeswoman for the Amherst-based supermarket chain.

Steve Seraita, executive vice president of sales for Scarborough, said there is a correlation between areas with strong rates of coupon use and high Sunday newspaper readership, since Sunday papers stuffed with inserts remain the leading source of coupons identified by the study.

"I also think couponing has been helped this year by a poor economy, unfortunately," Seraita said. As the economy softens, he said, consumers could be turning to coupons as a way to save money.

Buffalo Niagara's demographics also make it prime territory for coupon redemption, said Dan Fulham, a local supermarket industry veteran who now works with a private equity firm.

"You've got generally two working [parent] families, or a significant amount of retirees who are on a fixed income," Fulham said. Combining those groups creates a large pool of potential coupon users, he said.

New York City-based Scarborough's national data showed that grocery- clipping coupon households spent an average of $114 per week on groceries, $4 more than the national average. The study said coupon users are more likely than the average household to buy grocery items across categories, from coffee and ready-to-eat cereal to yogurt and energy bars.

Scarborough also said that people across all income brackets clip grocery coupons, but households with higher income brackets are slightly more likely to clip them.

CMS, a North Carolina-based coupon processing agent for grocery brands, says use of all types of coupons, not just for grocery items, could rise this year.

In 2007, consumers redeemed 2.6 billion manufacturers' coupons, including for grocery items, which was about the same total as the year before, the firm said. Even though the redemption rate didn't increase, it was the first time there wasn't an annual decline since a high of 7.9 billion coupons redeemed in 1992.

Matthew Tilley, director of marketing for CMS, noted that prior to last year, the economy had been in pretty good shape for the previous 10 or 15 years, going back to the early 1990s recession, when coupon redemption was far higher.

"That has meant that coupons have slowly crept out of everyday life for consumers," Tilley said in a presentation about CMS's 2007 data.

CMS said that through the first half of 2008, consumers' coupon use was essentially unchanged from a year earlier. But the firm sees signs that coupon redemption will increase in the second half of the year.

Wegmans has seen different results. In the most recent 13- week period compared to the same period a year ago, the Rochester-based chain has seen a significant decrease in coupon use in its Buffalo, Rochester and Syracuse area markets, said Ann McCarthy, a Wegmans spokeswoman.

Wegmans hasn't studied the trend to determine why the dropoff occurred. But the chain suggested a couple of possible influences. When shoppers are on tight budgets, it is possible they might not be able to afford the multiple items some coupons require. And since some coupons are for newly introduced items, it is possible some shoppers might consider them to be luxury purchases.

While Buffalo's rate of grocery coupon use was among the highest in the country, it was down from 46 percent in a Scarborough study released in 2004 that ranked Buffalo No. 1 in the country. The national average also declined over the same period, from 30 percent to 27 percent.

Scarborough also looked at where consumers obtained cents-off coupons, including for grocery items.

In the Buffalo area, 66 percent of households obtained coupons from the Sunday paper, making that the leading category. Nationally, 53 percent of households said they obtained coupons from the Sunday paper.

Thirty-six percent of Buffalo households acquired coupons through the mail; the third largest source was in-store coupons, at 32 percent. (The total for all 10 categories surveyed exceeded 100 percent.)

Twenty-one percent of Buffalo- area households said they never use coupons, according to Scarborough.

Coupons obtained through the Internet are a small but growing source of coupons. Nationally, 11 percent of households obtained coupons through the Internet in 2007, but that was up 83 percent from 2005, making it the fastest-growing source over that span, Scarborough said.

Shoebuy.com Coupon:Survey says use of online coupons up

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The survey, conducted by Simmons/ Experian Research, found that one key demographic for consumer packaged goods companies-young families with children and an annual household income of $60,000 or more-were more likely to print coupons online than clip them out of a newspaper or insert. Redemption rates are also higher among online coupon users versus print, reaching almost 17 percent, according to Weitzman, compared with less than 1 percent redemption of free-standing insert coupons.

The number of people turning to the Web for coupons has grown by more than 38 percent over the past throe years, and now totals some 36 million "coupon clickers," according to a new study released late last month by Coupons Inc., a leading provider of interactive coupon marketing and technologies.

The survey, conducted by Simmons/ Experian Research, found that one key demographic for consumer packaged goods companies-young families with children and an annual household income of $60,000 or more-were more likely to print coupons online than clip them out of a newspaper or insert. Some key findings:

* In households making more than $60,000 a year, 61 percent printed coupons from the Web versus the 56.6 percent who clipped paper coupons.

* Among consumers age 35 and under, 29.4 percent download online coupons versus 23.3 percent who clip paper.

* 35.6 percent of households with a child under the age of 18 use online coupons versus 29.2 percent who clip paper.

But it's not just young families that are seeking savings online-boomers are doing it, too. "It's a false assumption to say that consumers 60 and older are not using the Internet," Jeff Weitzman, chief marketing officer for Coupons Inc., told Drug Store /Vims. "There is a very active [online] community within that age group." Today's retirees are using the Internet more and more as a kind of online senior community center where they can find fellow retirees with similar interests, he said.

But it's not so much how many people download online offers; it's how many redeem them. Redemption rates are also higher among online coupon users versus print, reaching almost 17 percent, according to Weitzman, compared with less than 1 percent redemption of free-standing insert coupons.

In addition to higher utilization rates, online couponing affords marketers the opportunity to do a little demographic research of their own. According to the research, more than 70 percent of consumers seeking to download a $2 coupon were willing to share personal information, such as their full names and mailing addresses, or were willing to fill out a questionnaire.

That has the potential of helping to fine tune promotional strategies for retailers that post coupons on their sites. And, if the consumer becomes conditioned to finding greater value on a retailer's Web page before they even reach the store, it also has the potential of increasing shopper loyalty. "Retailer sites are one of the more popular places to get coupons," Weitzman noted. One of the primary reasons consumers visit retailer Web sites, according to the survey, "is to see if there are any promotions or deals they can find before visiting the store," he said.

Online couponing also easier to track and trace. Coupons Inc., for example, can pinpoint when a coupon has been printed and where that particular coupon was redeemed. There is also greater control over the total number of coupons that can be downloaded or printed per computer, as well as the number of total coupons printed.

In addition to the survey, Coupons Inc. has developed a couponing index that not only helps measure demand but also can serve as a leading indicator of economic stress. That can help retailers tweak their promotional strategies to better reflect real-time economic pressures. "The Coupon Index is more an instant measure of consumer psychology," Weitzman said.

Shoebuy.com Coupon:Consumers Turn to Coupons in Tough Economic Times

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Consumers Save Nearly $3 Billion Using Coupons

The Promotion Marketing Association Coupon Council Releases New Coupon Usage Statistics and Kicks Off National Coupon Month

NEW YORK, Sept. 4 /PRNewswire-USNewswire/ -- As Americans continue to be concerned about the price of gas and general cost of living in today's unpredictable economy, they look for ways to save and get the most "bang for their buck." September is National Coupon Month and a reminder that clipping coupons is an easy and fun way to save.

According to recent research from the Promotion Marketing Association's (PMA) Coupon Council, many consumers are already taking advantage of the savings opportunities. The recent PMA Coupon Council Internet survey of 1,000 people found that:

-- 89 percent of the overall population report that they use coupons when shopping (for grocery, household and healthcare items at supermarkets).

-- 97 percent of primary shoppers report that they use coupons at supermarkets.

-- Coupon users report an average of seven percent savings on their grocery bill with coupons.

"Consumers love coupons - they are a great way to economize, stretch the grocery budget and try new products for less than retail price," says Charles Brown, Co-Chair of the PMA Coupon Council. "And particularly when shoppers are pinched by rising gas and energy costs, as well as increasing food prices, coupons offer an easy chance to save. All consumers have to do is organize their shopping to buy items with the coupons available to them - whether in their newspaper, in their mailbox, in the store or on the internet."

Consumers See Value in Coupons - Typical Savings

-- Studies have shown that consumers who spend 20 minutes per week clipping and organizing their coupons can save up to $1,000 per year. (With an average annual family grocery bill of $5,000 that means 20 minutes could result in a 20 percent savings from coupons).

-- The typical family saves between $5.20 and $9.60 per week using coupons.

-- Those who spend 10 minutes or less per week clipping and organizing their coupons (46 percent of consumers) still achieve an average $7.00 weekly savings on their grocery bill.

PMA Coupon Council Co-Chair Matthew Tilley adds, "In this environment, consumers can be particularly responsive to coupon offers. But so far in 2008, CPG marketers haven't really changed the number of coupons available, therefore consumer redemption is steady with last year. That's a significant change because until last year, we saw 15 years of declining coupon redemption in the U.S."

Other Coupon Usage Statistics

-- Approximately $2.6 billion is saved annually by consumers using manufacturer's coupons when shopping for packaged products.

-- More than $350 billion of packaged goods coupons are offered annually.

-- Today, the average value is approximately $1.25 per coupon.

-- Nearly 90 percent of all coupons are issued in the Sunday newspaper Free Standing Inserts (FSI), but coupons are also available directly in many retailers' ads or in the store, and in magazines, in and on the package, on the Internet, and even in your mail box.

Shoebuy.com Coupon:Mambo Sprouts Marketing; Coupon Usage Rising as Consumers Grapple with Financial Crisis and Economy

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In a consumer buying survey launched during the financial crisis' first record market drop, nine in ten consumers (91%) reported paying more attention to everyday spending using grocery coupons to help manage finances during this economic crisis.

Launched on September 29, the survey by Mambo Sprouts Marketing (www.mambosprouts.com) gauged coupon use among natural and organic product consumers during the 2008 economic crisis. The survey launch coincided with a then-record 700 point drop in the Dow.

Grocery coupon usage was very high with virtually all respondents (99%) using coupons, 7 in 10 (70%) reporting regular coupon redemption. While one in two (51%) continued historic high coupon levels, a significant number of consumers (46%) reported increased usage. On average, natural and organic consumers used about six to nine coupons per week, spending about $75 - $99 per week on groceries and saved about $8.00 per shopping trip-representing a savings of about 10% off of their weekly grocery bills.

The most commonly used sources for coupons were in-store programs (95%), coupons by mail (84%), and newspapers (84%). Three in four (76%) used online printable coupons (76%), while only 1 in 10 used cell phone coupons (9%). Mailed coupons were preferred to printable online coupons by two to one (72% vs. 37%).

Six in ten or more natural product shoppers felt like "smart shoppers" using coupon deals (76%), often tried new brands or products with coupons (62%) and considered coupons when planning their grocery shopping (61%). More than 1 in 2 would use more coupons if they were offered for natural and organic brands vs. more conventional brands (56%).

The Mambo Sprouts survey focused on grocery coupon use in tough economic times. The online survey was issued in September 29, 2008 and completed by 1,080 natural and organic consumers. The survey was fielded by Mambo Sprouts Marketing, a leader in natural and organic product marketing and promotions.