Introduction
Firms collectively spend over $7 billion annually on coupon promotions and becoming concerned with the effectiveness on consumer buying behavior. The objective of the promotion mix is stimulating consumers to buy a product or service. Our goal for this paper is to examine whether coupon promotions influence consumers to adjust their purchase behavior. The premise is dependent upon consumer's reactions toward coupons and their willingness to change their purchase decision as a result of the coupon. Our group sought out to determine if discounts, specifically coupons, were effective in motivating consumers to purchase products they would not have purchased without the existence of this type of promotion.
History of Coupons
The very first coupons were distributed in 1894. They were in the form of a hand-written ticket for a free glass of Coca-Cola, which was the new fountain drink at the time. The following year in 1895 the first grocery coupon emerged. C.W. Post was giving one cent off of his new cereal, Grape Nuts. By the 1930's, coupons had become a regular part of shopping in the United States mainly because of The Depression. Everyone was looking to save money in any way they possibly could. And, by 1965, one-half of Americans were now coupon users.
Overview of Coupons and Consumer Buying Behavior
In 2003, 258 billion coupons were circulated, 10 billion more coupons than the year before, quantifying a 4% increase. Eighty-percent (80%) of all coupons are distributed through newspapers, according to the Promotion Marketing Association, while Internet coupons account for just ½% of the total. Of the coupons printed and distributed, surprisingly less than ...