Empirical decomposition of customer responses to discount
Downloadable (with restrictions)! This study considers the efficacy of â€˜generalâ€™ discount coupons: i.e. those whose discounts apply storewide. We decompose purchase behavior into three effects: spending, basket size, and inter-purchase time. The effects of dollar-off vs. percentage-off coupons are examined for 3,827 customers who had redeemed both types of coupon framings in an
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A Price Discrimination Theory of Coupons
Downloadable! The objective of this paper is to analyze the consumer's decision in electing to use cents-off coupons distributed by manufacturers of consumer products. Arguing that the decision to use coupons is based on the tradeoff between costs of using coupons and the savings obtained, it is shown that coupons can serve as a price discrimination device to provide a lower price to a
Settling for Coupons: Discount Contracts as Compensation
Downloadable! A number of recent antitrust lawsuits have been settled with discount contracts in which the defendants agree in the future to sell to the plaintiffs at a discount off of the price they offer to other buyers. Economists often object to such settlements, arguing that the sellers will partially or fully offset these discounts by increasing the baseline price from which the discount
Price discounts or coupon promotions: does it matter
Price, Gregory K. & Connor, John M. & Fulton, Joan R., 1999. "Modeling Coupon Values For Ready-To-Eat Breakfast Cereals," 1999 Annual meeting, August 8-11, Nashville, TN 21553, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).Price, Gregory K. & Connor, John M., 2001. "Modeling Coupon Values for Ready-To-Eat Breakfast Cereals
Coupons : the choice of the promotional vehicle by the
Thus, the producer faces a trade-off between each of these policies or single pricing (no discrimination). We show that the promotional vehicle associated with a wide couponing policy will be direct-mail coupons, whereas the best propotional vehicle for a narrow couponing policy is …
Analysis of Retailer Pricing in the Presence of Coupons
Downloadable! A coupon is a ticket or document that can be exchanged for a direct financial discount when purchasing a specific product, or a total amount of goods in a certain store. Coupons are usually issued by manufacturers of packaged goods or by retailers, to be used as a part of sales promotions. As coupons are extensively adopted to enhance consumer demand and to compete for market
Estimating the Impact of Consumer Expectations of Coupons
We find that consumer valuation of coupons differ markedly across brands. (3) Our empirical evidence supports the notion that consumers hold beliefs about future coupon availability. We also find that the expectations about future coupons, estimated endogenously, differ depending upon whether or not a coupon was available in the current period.
Trade deals and/or on-package coupons
Downloadable (with restrictions)! The selection of either a pull or a push price promotion has mainly been investigated in contexts where manufacturers offer deals to consumers at the time of purchase or offer trade deals to retailers. This paper extends this framework to where manufacturers can offer either trade deals or rebate-like promotions to consumers such as on-pack coupons that
Pricing strategy and moral hazard: Copay coupons in
Downloadable (with restrictions)! Branded drug manufacturers issue copay coupons to compete with generics as their brands are coming off patent. To explore the impact of copay coupons on pricing and welfare, I estimate a model of demand and supply using data on sales, advertising, and copayment for cholesterol-lowering drugs and perform a counterfactual analysis to simulate equilibrium pricing
Promoting Fruit and Vegetable Consumption: Are Coupons
Because of this dual effect, the use of a coupon to increase fruit and vegetable purchases may be more effective than a pure price-discount policy or other noncoupon promotion. Assuming a coupon usage rate of 10 to 50 percent, lowering prices through a “10 percent off” coupon would increase average weekly fruit and vegetable quantities
Discount reference moderates customers' reactions to
Downloadable (with restrictions)! This paper aims at investigating customers' reactions to discounts as service recovery offered in context of an online store. It argues that customers prefer dollar-off discounts to percentage-off discounts. The present research also argues that for discounts on price of one item out of several items, customers evaluate dollar-off discounts more positively (i
Coupons and price discrimination in vertically-correlated
Downloadable! This research analyzes the non-cooperative and cooperative strategies with respect to manufacturer and retailer coupons. In a model with one manufacturer selling its product to one retailer, it is found that the retailer can achieve third-degree price discrimination equilibrium in retail markets by issuing coupons to demanders with higher elasticity.
The Effect of Package Coupons on Brand Choice
Downloadable! We propose a stochastic choice model, and supporting empirical analyses, to understand the effect of package coupons on brand choice. Package coupons can be broadly classified into three types: peel off coupons, on-pack coupons, and in-pack coupons. Our model helps understand the relative impact of these three types of coupons on market share.
What makes deal-of-the-day promotions really effective
Downloadable (with restrictions)! Deal-of-the-day (DoD) promotions are nowadays very popular. As a special form of a price promotion, they allow firms to offer products at substantial price discounts, usually at or above 50%, for a very limited period of time, usually between one and seven days. Conventional wisdom suggests that both characteristics, high discount levels and tight time
Scanning for discounts: examining the redemption of
Downloadable (with restrictions)! Coupons research has typically focused on single-coupon redemption, with scant attention devoted to multiple, competing coupons. To bridge this gap, we observe supermarket shoppers who used their smartphones to scan products in-store, receiving both coupons for the scanned product and several others as a result.
Using MSRP to enhance the ability of rebates to control
Downloadable (with restrictions)! Manufacturers have increasingly instituted widespread mail-in rebate programs in recent years. Two primary purposes for rebates are to: (1) more directly impact consumer demand by reducing net retail price, and (2) capitalize on consumers' slippage behavior because not all consumers who intend to redeem the rebate at purchase time end up actually redeeming it.
The Effect of Package Coupons on Brand Choice: An Epilogue
Downloadable! In Raju, Dhar, and Morrison (1994), a paper that appeared earlier in this journal, we developed an analytical model and conducted empirical analyses to examine the effect of package coupons on market share. In this epilogue, we extend the analytical framework in our earlier paper to study the relative impact of package coupons on profits.
The Optimal Choice of Promotional Vehicles: Front-Loaded
Downloadable! We examine the key factors that influence a firm's decision whether to use front-loaded or rear-loaded incentives. When using price packs, direct mail coupons, FSI coupons or peel-off coupons, consumers obtain an immediate benefit upon purchase or a front-loaded incentive. However, when buying products with in-pack coupons or products affiliated with loyalty programs, promotion
Investigating discounting of discounts in an online
Downloadable (with restrictions)! This research sheds light on the theoretical mechanism behind consumer discounting of discounts and extends it to the online daily deals context. Based on advertising and behavioral pricing research, we develop and empirically test a conceptual model of the effects of discount level on consumer perceptions of discount credibility, the extent of discounting of
Competitive location-based mobile coupon targeting strategy
Downloadable (with restrictions)! At present, retailers are increasingly targeting consumers based on consumers' geographic locations by distributing mobile coupons. We develop a theoretical model to compare uniform coupon targeting with one-to-one coupon targeting for two competing retailers with asymmetric mobile accessibilities. We find that retailers engage in targeting promotion only when
Mental accounting and small windfalls: Evidence from an
Downloadable (with restrictions)! We study the effect of small windfalls on consumer spending decisions by comparing the purchases online grocery customers make when redeeming $10-off coupons with the purchases they make without coupons. Controlling for customer fixed effects and other variables, we find that grocery spending increases by $1.59 when a $10-off coupon is redeemed.
Publications at Department of Economics McMaster
Publications by members of Department of Economics McMaster University Hamilton, Canada These are publications listed in RePEc written by members of the above institution who are registered with the RePEc Author Service.Thus this compiles the works all those currently affiliated with this institution, not those affilated at the time of publication.
Helping Merchants to Assess the Profitability of Deal-of
Downloadable! The ability to calculate and understand the profitability of deal-of-the-day promotions (DoDs) is of vital importance for merchants. It is also challenging because it requires these merchants to consider long-term, cross-selling, and cannibalization effects and select an appropriate discount for the promotion. The authors develop and implement a model as a free online calculator
Dynamic Analysis of Consumer Response to Marketing Strategies
Downloadable! This paper develops a methodology for modeling consumer response that integrates previous research in stochastic brand selection, diffusion of innovation, test market analysis, and new product design. The methodology makes it practical to extend brand selection models to include diffusion phenomena such as awareness, trial, and information flow.
Consumer and Retailer Promotions: Who is Better Off
"Trade deals and/or on-package coupons," European Journal of Operational Research, Elsevier, vol. 241(2), pages 541-554. Kunter, Marcus, 2012. " Coordination via cost and revenue sharing in manufacturer–retailer channels ," European Journal of Operational Research , Elsevier, vol. …
Effect Of Sales Promotion Schemes On Purchase Quantity: A
Downloadable! The research aims to study the effect of sales promotion on the purchase quantity and recommend sales promotional means and methods that could improve sales for retail sector in Malaysia. The impact of coupons, bonus packages, premiums, free samples and price discount is measured on purchase quantity of Malaysian retail consumers.
This paper extends W. J. Adams and J. L. Yellen's (1976) well-known mixed-bundling pricing model by examining the case of sellers pricing bundles of goods or services at a premium relative to the prices charged on bundle components; that is, sellers price discriminate by charging more, rather than less, at the margin for bundles relative to components.
jeongwen Chiang IDEAS/RePEc
Paul Mills & César Zamudio, 2018. "Scanning for discounts: examining the redemption of competing mobile coupons," Journal of the Academy of Marketing Science, Springer, vol. 46(5), pages 964-982, September. Chiang, Jeongwen & Lee, Lung-Fei, 1992.
Antecedents and consequences of cross-effects: An
Downloadable (with restrictions)! As the modern retail industry evolves from multi-channel to seamless omni-channel retailing, retailers are increasingly adopting omni-channel strategies, such as the usage of omni-coupons. A consumer may obtain an omni-coupon from a digital (catalog) channel and purchase either online or via the telephone channel.
Payments, Promotion, And The Purple Pill
Downloadable! Understanding competition in the US drug market requires knowing how sensitive demand is to prices. The relevant prices for insured consumers are copayments. There are many studies of copayment elasticity in the health literature, but they are of limited applicability for studies of competition. Because of a paucity of data, such studies typically control for neither competitor
The Dilemma of Pull and Push-Price Promotions
The authors conduct an analytical inquiry that shows that choosing between these two types of price promotion critically depends on the consumer sensitivity to both regular and promotional prices. More specifically, when consumers are more (less) sensitive to promotions than to regular prices, manufacturers are better (worse) off offering trade
Price Discrimination in the Information Age: Prices
"Coupons and Oligopolistic Price Discrimination," Other publications TiSEM 8da8ef6b-5dd5-46ee-9cbf-4, Tilburg University, School of Economics and Management. Bester, H. & Petrakis, E., 1994. " Coupons and Oligopolistic Price Discrimination ," Discussion Paper 1994-12, Tilburg University, Center for Economic Research.
The high cost of debt: very-high-denomination Treasury
Downloadable! "For most of their history after World War II, Treasury notes have been issued with denominations never rising above a high of $1 million. Yet, from 1955 to 1969, the Treasury issued Treasury notes with the added denominations of $100 million and $500 million. These very-high-denomination Treasury notes were issued because Treasury notes were the only viable way for the …
JEL Classification IDEAS/RePEc
"Currency Misalignments and Exchange Rate Regimes in Latin American countries: A Trade-Off issue," Working Papers 2020-05, CEPII research center. Valérie Mignon & Jorge Carrera & Blaise Gnimassoun & Romain Restout, 2021. "Currency misalignments and exchange rate regimes in Latin American countries: a trade-off issue," Post-Print hal-02919189, HAL.
Competition in Posted Prices With Stochastic Discounts
Downloadable! We study price competition between firms over public list or posted prices when a fraction of consumers (termed 'bargainers') can subsequently receive discounts with some probability. Such stochastic discounts are a feature of markets in which some consumers bargain explicitly; of markets in which sellers use the marketing practice of couponing; and of markets in which sellers
JEL Classification IDEAS/RePEc
Roman Krznaric, 2007. "Food coupons and bald mountains: What the history of resource scarcity can teach us about tackling climate change," Human Development Occasional Papers (1992-2007) HDOCPA-2007-63, Human Development Report Office (HDRO), United Nations Development Programme (UNDP). Undp, 2007.
JEL Classification IDEAS/RePEc
"Off-balance sheet funding, voluntary support and investment efficiency," Journal of Financial Economics, Elsevier, vol. 137(1), pages 90-107. Li, Jie & Lan, Liping & Ouyang, Zhigang, 2020. "Credit constraints, currency depreciation and international trade," Journal of …
Dynamic effects of price promotions: field evidence
Downloadable (with restrictions)! This paper investigates the dynamic effects of price promotions in a retail setting through the use of a large-scale field experiment varying the promotion depths of 170 products across 17 categories in 10 supermarkets of a major retailer in Chile. In the intervention phase of the experiment, treated customers were exposed to deep discounts (approximately 30%
The effectiveness of number of deals purchased in
Downloadable (with restrictions)! This research proposes and empirically tests a theoretical model of consumers' response to online daily deal promotions. A unique feature of such promotions is their social influence, as they provide information about how many others have already purchased the offer. Integrating cue utilization and social influence theories, the model outlines how the social
Optimal Mailing of Catalogs: A New Methodology Using
Downloadable! We investigate the key determinants of the optimal direct mail policy in a dynamic environment where customers maximize utility and the direct mailer maximizes profits. We measure the sensitivity of the customers to receiving a catalog in the mail, while controlling for customer characteristics such as elapsed time in responses and number of purchases.
Empirical generalizations on the impact of stars on the
Downloadable (with restrictions)! Movie industry experts continuously debate whether the industry's enormous investments in stars pay off. Although a rich body of research has addressed the question of whether stars are critical to the success of movies, previous research does not provide a consistent picture of the impact of stars on the economic success of the respective product.
On the relationship between the negotiated prices of
Downloadable! In this paper, we give a new insight on the relationship between the patients' co-payment for buying pharmaceuticals and the price of a patented pharmaceutical. We consider that the price of a pharmaceutical is the outcome of a negotiation between a health authority and a pharmaceutical monopoly producer. We use a model based on bargaining theory to represent this negotiation.
The Perfect Fit: The Moderating Role of Selling Cues on
Downloadable (with restrictions)! With the need among retailers to create effective promotional campaigns, scarcity, and popularity cues are increasingly used. Drawing from regulatory focus and popularity versus scarcity cues literature, this research explores the impact of popularity versus scarcity cues and product types on consumer perceptions of risk, product uniqueness, and purchase
The Effects of Discount Location and Frame on Consumers
Downloadable (with restrictions)! A discount may be defined by the location in which, and frame by which, it is communicated. Discount framing, particularly the differences between cents-off and percentage-off discounts, has been widely studied. Discount location (e.g., proximate to or distal from regular price info) has received considerably less attention.
Launch prices for new pharmaceuticals in the heavily
Downloadable (with restrictions)! This paper provides empirical evidence on the explanatory factors affecting introductory prices of new pharmaceuticals in a heavily regulated and highly subsidized market. We collect a data set consisting of all new chemical entities launched in Spain between 1997 and 2005, and model launch prices following an extended version of previous economic models.
The Effects of Publicity on Demand: The Case of Anti
Downloadable! Over the past ten years there has been increased recognition of the importance of publicity as a means of generating product awareness. Despite this, previous research has seldom investigated the impact of publicity on demand. We contribute to the literature by (i) proposing a new method for the interpretation of publicity data, one that maps the information in news articles (or