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Commentaries on Business & Marketing Strategy in a Digital Age
 
Implications of Instantaneous Coupons
 
Posted by Yuping Liu on Mar 14th, 2008

Colloquy’s weekly newsletter reported two stories of new coupon strategies: one is P&G and Korger’s adoption of mobile coupons, and the other is Kroger’s partnership with AOL’s Shortcuts Program, which allows users to download coupons online and have them preloaded on their store cards. Both of these stories represent a fundamental change in coupon usage. Traditionally, the time-consuming process of cutting coupons and the subsequent process of remembering to use the coupons (which I often forget) have made coupons a self-selected promotional tool. Consumers who value their time more are unlikely to spend the time needed to benefit from coupons. But now, with immediate and mobile access to coupons, the cost of coupon usage is going to reduce dramatically. This has both positive and negative implications for a business. On one hand, easy access to coupons means they are going to be more influential in consumers’ real-time decision making. On the hand, universal use of coupons means that the self-selected nature of coupon usage will disappear and the cost of using coupons as a marketing tactic may go up because of the higher redemption rate. What the CPG companies gain, however, is consumer information. With customized coupon service made available by the Internet, it is possible to embed a code in each coupon downloaded and subsequently track the coupon usage of each individual. This should grant CPG companies more power and immediate access to consumer insight, without having to rely on retailers for that information.

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