Copyright is owned by the Author of the thesis. Permission is given for
a copy to be downloaded by an individual for the purpose of research and
private study only. The thesis may not be reproduced elsewhere without
the permission of the Author.
OF COUPONING IN NEW ZEALAND
A thesis presented in partial ful f i lment of the requirements
for the degree
of Doctor of Phi losophy in Marketing at
Massey University
Pascale Genevieve Marie-Ange Quester
1990
ii
ABSTRACT
The increasing rol e played by Consumer Sales Promot ions in the Promot i onal mix has not been matched by an equal interest shown in the market ing research w i th regard to their effectiveness .
Existing evidence o f profi tabi l i ty presents data util ised .
Sales Promotions l im i tat ions stemming
impact on sales f rom the nature of
and the
Improving the qual ity o f the data used f or the purpose o f the assessment of Sales Promotions ef fectiveness ultimately depends on the researcher ' s abil i ty to gain control over the other inf luential factors affecting sales during the promotional activi t ies . This means that such research should follow the principles of experimental des igns .
One area of sales promot ion experiencing growth amongst grocery products is couponing. Yet , very l i ttle exper imental research has been undertaken in that area .
This thes is reviews the existing promotion and coupon l i terature and describes an experiment a l l owing a better assessment o f coupon effec tiveness and pro f i tabi l i ty in the New Zea land case .
In recognition o f the managerial diff icult ies encountered in the routine appl icati on of an experimental approach , this thesis also uti l i ses a cost e f f ective consumer survey in order to invest igate a number of coupon related i ssues .
A nationwide experiment was conducted in New Zealand using magazine insert as a means of coupon distribution . The sales of three fast
moving consumer goods were moni tored over an eight week period f or a representat ive sample o f supermarkets within each of three geographical ly def ined treatment uni ts enj oying d i f f erent levels of discount .
The results o f this experiment did not a l low identification of a sign i f i cant sales increase as a couponing activi ty .
the posi tive result of the
The conventional consumer-survey method would not have enabl ed the product managers to forecast accurately the sales response to the al ternative coupons distributed , although it did indicate that in some instances , the l ower discount level would trigger a higher redemption .
The study therefore suggests that experimenta t i on should be more readi ly used by promoti on decision-makers to assess the ef fectiveness of the dif ferent activi t ies w i th which they are involved . Magazine
distributed coupons, f or i nstance , failed to generat e a s ign i f i cant increase in sales w i th obvi ous impl ications for the pro f itabi l i ty of the products concerned .
PREFACE
Marketing is a young discipl ine . As such , i t goes through peri odic iden t i ty crisis and experiences chronic growing pains . One o f the issues of debate is whether Rigour or Rel evance should be predominant in Marketing Research .
Mos t o f the academi c marketing research output is of l ittle relevance to the practising marketers and likewise , most of the concepts and pri nc iples used by marketers are quest ioned by market ing academics . A study like this one is evidence that such a conf l ict can be solved . A scient i f ic approach al lows a better assessment of the i mpact of coupons and as such , enables marketers i nvolved in the promot i on o f a large number of grocery .products to make bet ter dec i s i on , and therefore to maximise the return of the ir promotional investment .
As marketing matures , perhaps a balance can be struck between r igour and relevance whi ch wi l l be beneficial to both practitioners and academics involved in this area of business .
iv ACKNOWLEDGEMENTS
I would like to thank my Chief Supervisor , Dr N Marr without whom this project would have never eventuated . His communicative enthus iasm , prompt feedback and positive atti tude made a l l the di f ference at a cri tical stage of the thes is write-up .
I would also l ike to thank my Advi sor , Dr A C Lewi s for his benevolent support throughout thi s proj ect , which he first convinced me to undertake .
I am grateful to a l l the people in the industry who helped me wi th this research , particularly Brenda Cartriss , Andre Boyer , Margot Fox , Graham Budd , Jan Z i j derveld , Helena Van der Linden , Vincent S tockda le , Nigel Whyte , Peter Mi tchell and Mike Shakespeare.
I am indebted to the companies that gave me assis tance in the organisation of the experiment , Butland Industries , Uni l ever NZ Ltd , A C Nielsen NZ Ltd , Coupon Promotion Company , The NZ Woman ' s Weekly , Lintas and Watties Food Ltd .
I am also indebted to Massey Univers i ty and the Market ing Department for the support and encouragement I have enj oyed over the past three years . Ron Garland ' s col laborat ion on the omnibus survery was most valuable , whi le Mat t Blakeley ' s assistance with SPSSX made i t all so much simpler .
Many thanks to Sandy who sacrificed weekends and evenings to interpret and wordprocess my manuscript to f orm this thesis .
Fina l l y , for his undivided trust in me , his constant wi l l ingness to discuss issues and his everlasting patience when conversat i on turned , once again, to the topic of coupons , my deepest gratitude and love to my husband , Robert .
ABSTRACT PREFACE
ACKNOWLEDGEMENTS TABLE OF CONTENTS LIST OF APPENDICES LIST OF FIGURES LIST OF TABLES
I -INTRODUCTION 1 . 1 Introduction 1 . 2 Sales Promotions 1 . 3 Consumer Promot i ons 1 . 4 Research Obj ectives
1 . 5 The New Zealand S i tuation 1 . 6 Thesis Out l ine
1 . 7 Summary
I I - COUPONS
2 . 1 Introduction
2 . 2 Definit ion o f a coupon
2 . 3 Methods of coupon distribut ion 2 . 4 Industry pract ises
2 . 5 Industry rules about coupons
2 . 5 . 1 Advantages of couponing 2 . 5 . 2 Disadvantages o f coupons 2 . 6 Trends in couponing
2 . 7 Coupon variations
2 . 8 Issues related to coupons
2 . 8 . 1 Issues related to sales
2 . 8 . 2 Issues related to prof itabi l i ty 2 . 8 . 3 Issues related to the �edempt ion 2 . 9 Coupon variables af f ect ing redemption
2 . 1 0 Summary
Page
i i
i i i i v
V
v i i v i i v i i i
9 9 9 1 1 1 3 1 5 1 9 2 0
2 1 2 1 2 2 2 4 3 2 3 6 3 8 4 0 4 2 4 4 4 8 4 8 5 7 process 6 6 7 8 82
Ill - METHODOLOGY 3 . 1 Introduct ion
3 . 2 Problems in measuring sales
3 . 2 . 1 Data collection methods 3 . 2 . 2 Confounding factors
3 . 2 . 3 T iming aspects of sales measures 3 . 3 Methods used in the past
3 . 3 . 1 Purchase intention surveys 3 . 3 . 2 Panel data analysis
3 . 3 . 3 Experimental approach 3 . 4 Rational e for the methodology
3 . 4 . 1 Product
3 . 4 . 2 D iscount level
3 . 4 . 3 Rationale for the coupon campaign features 3 . 4 . 4 The consumer survey
3 . 5 Descript i on o f the methodology used 3 . 5 . 1 The coupon campaign 3 . 5 . 2 The omnibus survey 3 . 6 Summary
IV - RESULTS 4 . 1 Introduct i on
4 . 2 Findings of the experiment 4 . 2 . 1 Redempt ion rates 4 . 2 . 2 Aim Toothpaste 4 . 2 . 3 Drive
4 . 2 . 4 Craig ' s Berry Jams 4 . 3 Results o f the omnibus survey
4 . 3 . 1 Response rate
4 . 3 . 2 Predictive power about redemption 4 . 3 . 3 Respondents coupon usage
4 . 3 . 4 Respondents brand usage
4 . 3 . 5 Coupon redemption probabi l i ty scores 4 . 4 Summary
V - DISCUSSION AND CONCLUSIONS 5 . 1 Introduction
5 . 2 Research hypotheses
5 . 3 Limitations of the experiment 5 . 4 Limitat i ons o f the omnibus survey 5 . 5 Limitati ons o f the Juster scale 5 . 6 Product maturi ty and market posi t i on 5 . 7 Promotion obj ectives
5 . 8 Longer term impl ications
5 . 9 The need f or concerted research 5 . 1 0 The empirical tool
5 . 1 1 Summary
BIBLIOGRAPHY
Page 84 84 85 85 87 88 89 89 9 0 9 1 9 4 96 98 99 1 0 4 1 0 7 1 0 7 1 1 3 1 1 3
1 1 6 1 1 6 1 1 6 1 1 6 1 1 8 1 2 1 1 2 3 1 2 5 1 2 5 1 2 5 1 2 6 1 2 7 1 2 7 1 3 6
1 38 1 38 1 38 1 4 1 1 4 3 1 4 3 1 4 4 1 4 5 1 4 5 1 4 6 1 4 7 1 49
1 50
Appendix Appendix 2 Appendix 3
Appendix 4 Appendix 5 Appendix 6 Appendix 7 Appendix 8
LIST OF FIGURES F igure 1 . 1 F i gure 2 . 1 F igure 2 . 2 Figure 2 . 3 Figure 2 . 4 F i gure 2 . 5 F igure 2 . 6
Figure 3 . 1 F i gure 3 . 2 F igure 4 . 1 Figure 4 . 2 F igure 4 . 3 F i gure 4 . 4 F i gure 4 . 5 F i gure 4 . 6 Figure 4 . 7 F igure 4 . 8 F i gure 4.9
List of interviewed pract i t ioners Coupon Code o f Practice
Sample of coupons 3 . 1 French coupons 3 . 2 USA coupons 3 . 3 Canadi an coupons 3 . 4 New Zealand coupons
Readership information about Women ' s Weekly Weekl y Sales Measurements During the Experiment Instruct ion sheets for omnibus survey
interviewers
Copy of the omnibus survey quest ionnaire Results o f the Omnibus Survey ( coupons )
Map of A C Niel sen ( NZ ) regional breakdown Coupon di stribut ion trends Canada and USA Coupon redemption trends Canada and USA Des i rable sales pattern
Neutral sales pattern Negative sales pattern
Inf luence of brand pos it ion on promot i on sales pattern
Coupon experimental campaign phases Diagrammatic reproduction of the study Sales for Aim toothpaste
Sales for Drive washing powder Sales f or Craig ' s berry j am
Omnibus Juster score for Aim 20c coupon Omnibus Juster score for Aim 50c coupon Omnibus Juster score for Drive 2 0c coupon Omnibus Juster score for Drive $ 1 cpupon Omnibus Juster score for Craig ' s 2 0c coupon Omnibus Juster score for Craig ' s 4 0 c coupon
1 59 1 6 1 1 6 3 1 6 4 1 6 6 1 7 5 1 79 1 88 1 9 1 1 9 3 1 9 6 2 2 3
1 8 42 43 63 63 64 65 1 02 1 1 5 1 1 9 1 2 1 1 23 1 27 1 29 1 3 0 1 32 1 3 3 1 3 5
LIST OF TABLES Table 3 . 1
Table 3 . 2
Table 4 . 1
Table 4 . 2 Table 4 . 3 Table 4 . 4 Tabl e 4 . 5 Table 4 . 6 Table 4 . 7 Table 4 . 8
Table 4 . 9
Table 4 . 1 0
Table 4 . 1 1
Table 4 . 1 2
Table 4 . 1 3
Table 4 . 1 4
Table 4 . 1 5
Detai l o f the dif ferent discount levels per treatment units
Treatment and control distribution
Page
9 9
amongst units 1 0 3
Compari son of ' tradi t ional ' and ' true '
redemption rates 1 1 7
Test of s igni f icance for Aim toothpaste 1 2 0
Ana lysis of variance for Aim toothpaste 1 2 1 Test of s igni ficance for Drive powder 1 2 2 Ana lysis o f variance for Drive powder 1 2 2 Test of s i gnificance for Cra ig ' s berry j am 1 2 4 Ana lysis o f var iance for Craig's berry j am 1 2 4 Response rate for the 1 9 9 0 Palmerston North
omnibus survey 1 2 5
Actual versus intended redempt ion rates ( omnibus survey )
Analysis o f variance for Aim 2 0c coupon ( omnibus survey )
Analysis o f variance for Aim 50c coupon ( omnibus survey )
Analysis o f variance for Drive 2 0c coupon ( omnibus survey )
Analysis of variance for Drive $ 1 coupon ( omnibus survey )
Analysis o f variance for Craig ' s 20c coupon ( omnibus survey )
Analysis of variance for Craig ' s 4 0c coupon ( omnibus survey )
1 2 6
1 28
1 3 0
1 3 1
1 32
1 3 4
1 3 5
