Coupon Characteristics and Redemption Intentions: A Segment-Level Analysis

The authors investigate how different segments of consumers react to different coupon characteristics, such as face value and method of distribution. They utilize a latent segmentation approach to identify the underlying segments. The empirical analysis suggests that different segments of consumers place varying emphasis with regard to economic benefits, psychic benefits, effort costs, and substitution costs. A further examination of the derived segments with respect to consumer correlates such as psychological, attitudinal, behavioral, and demographic characteristics reveals that coupon-related consumer characteristics, rather than demographics, exhibit significant and meaningful differences across these segments. Implications of the segment-level analysis for evaluating coupon drops and managing promotional expenditures are also discussed. ©1998 John Wiley & Sons, Inc. With 269 billion coupons distributed in 1996 in the United States, and approximately 5.3 billion coupons redeemed, for a total savings of $3.7 billion (Brown, 1997), coupons continue to be among the most important promotional vehicles being used today. To improve the profitability of promotions, an in-depth understanding of the impact of promotions *Both authors contributed equally to this article.