Do Consumers Always Spend More When Coupon Face Value is Larger?
-"Retailers use pricing strategies to fine-tune offers for greater sales and higher ROI"
-Coupons that can be used on different products at different prices within a brand.
- Consumers compare the tradeoffs between buying low-and high dollar products
- some consumers seek percentage discount rather than total amount saved .
( lower priced product will have a larger savings percentage)
-lower spending values
-Mental budget increases with couponing
-motivates to buy higher priced options
- higher spending levels
Consumers deciding whether to use a coupon and on which product can activate two opposing forces
What This Tells Us
Larger discounts don't always lead to more sales
Product line discounts have an inverted U shape effect on sales, low and high discounts lower consumer spending
Moderate discounts lead to highest consumer spending under 5 conditions
shifts from mental budget to saving comparisons
consumers that compare options naturally compute and compare savings percentages
low information load - b/c consumer is not bothered with product & savings analysis
weak preferences for a product benefit =consumers are less committed to a specific product feature, more concerned with coupon influence
strong savings orientation - lower priced item with larger savings
spending larger amounts lead to price awareness
Pricing & Branding Strategy
-gaining most value from low prices
Customer-based Strategies for Raising Prices
-adding more decreases value
Analytic choices pricing & Insights
-Prices that are too high dont lead to sales
Customer Will Pay More for Less
-categorical thinking can add misconceptions
1. What are some of your experiences with product- line couponing, looking back was the purchases worth it or not?
2. How do you think low or high discounts can negatively impact a business or company brand?