Coupon response in services

Abstract

To date, most marketing research has focused primarily on the use of coupons for the promotion of packaged goods. Coupons are widely used in service establishments, even though little is known about a coupon’s impact on consumer behavior. Through the use of a field experiment, this study examined coupon redemption, purchase timing, and repeat purchase for 984 subjects. Consumer purchase histories and coupon response data were gathered via identification cards and electronic cash register reports. Results of the study show, as with packaged goods, prior purchase frequency is a significant predictor of coupon redemption. Coupon redeemers were almost seven and a half times more likely to make a repeat purchase during the postpromotion period compared to nonredeemers and subsequent purchase timing was not influenced by coupon redemption. As it relates to redemption, consumers’ behavioral response to coupons in the test establishment appeared to be similar to those found in some packaged goods studies, but different as it relates to purchase timing and repeat purchase probability.