Four decades of coupon research in pricing: Evolution, development, and practice

Abstract

Coupons are a sales promotion tool frequently used by marketers. While considerable research has been conducted on coupons such as its profitability, design, and redemption rate for increased sales, few attempts have been made to summarize the published literature in the form of a review. This paper presents a comprehensive evaluation of research on coupons over the last four decades by examining the evident patterns via keywords, research themes, coupon types, and countries where the studies are based, authors, journals, and product categories utilizing coupon schemes. This mapping of the literature clarifies the evolution of research on coupons and identifies potential developments related to aspects such as coupon design and framing. More importantly, it contributes to the future research agenda by identifying gaps in extant knowledge and evidence.

Full text

Research Article
Four decades of coupon research
in pricing: Evolution, development,
and practice
Received (in revised form): 12th October 2016
Neeraj Pandey and Vaibhav Maheshwari
Marketing Area, National Institute of Industrial Engineering (NITIE), Vihar Lake, Powai, Mumbai 400087,
India
Neeraj Pandey is an Associate Professor of Marketing at the National Institute of Industrial Engineering
(NITIE), Mumbai. He did his post-doctoral research at Johns Hopkins University, USA in the area of
healthcare pricing. He has authored two books (Pearson and PHI) besides publications in reputed
international journals and case studies in Asian Case Research Journal, Ivey Publishing, The Case Centre
and Emerald Emerging Markets Case Studies. He received ‘The Best Teacher’ award by NITIE Mumbai and
‘Young Management Researcher’ award by Higher Education Forum (HEF). His research interests are
Pricing, Digital Marketing, B2B Marketing, and Services Marketing.
Vaibhav Maheshwari is a post-graduate from the National Institute of Industrial Engineering (NITIE),
Mumbai. His area of interest includes Pricing, Revenue Management, IT Management, and Marketing
Research. Currently, he is working as Management Trainee at Hindustan Unilever Limited.
Correspondence: Neeraj Pandey, Marketing Area, National Institute of Industrial Engineering (NITIE), Vihar
Lake, Powai, Mumbai 400087, India
E-mails: neerajpandey100@gmail.com; npandey@nitie.ac.in
ABSTRACT Coupons are a sales promotion tool frequently used by marketers. While considerable research
has been conducted on coupons such as its profitability, design, and redemption rate for increased sales, few
attempts have been made to summarize the published literature in the form of a review. This paper presents a
comprehensive evaluation of research on coupons over the last four decades by examining the evident patterns
via keywords, research themes, coupon types, and countries where the studies are based, authors, journals, and
product categories utilizing coupon schemes. This mapping of the literature clarifies the evolution of research on
coupons and identifies potential developments related to aspects such as coupon design and framing. More
importantly, it contributes to the future research agenda by identifying gaps in extant knowledge and evidence.
Journal of Revenue and Pricing Management (2017) 16, 397–416. doi:10.1057/s41272-016-0076-7;
published online 25 November 2016
Keywords: coupons; promotion; pricing; consumer behavior; literature review
INTRODUCTION
Brands use every conceivable promotional
technique to survive in today’s hypercompet-
itive environment and grow their market share
(Dubey, 2014). The mature life stage of many
brands with little or no growth in primary
demand (Papatla and Krishnamurthi, 1996) has
also contributed to the heightened emphasis on
promotion. Half the sales targets, in many
organizations, are driven through promotion
(Blattberg et al,1981; Neslin, 1990). Even
customers today are increasingly more deal
loyal than brand loyal (Bawa and Shoemaker,
1989; Dubey, 2014). Accustomed to receiving
Ó2016 Macmillan Publishers Ltd. 1476-6930 Journal of Revenue and Pricing Management Vol. 16, 4, 397–416
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incentives with purchased products, customers
consider the associated incentive to be a major
factor in their purchase decision-making pro-
cess (Dubey, 2014).
Not surprisingly then, companies spend
billions of dollars every year on promotions,
with the aim of pushing consumers to switch
to their brands (Johnson et al,2013).
Coupons are the most popular form of pro-
motion used by manufacturers of consumer
goods, accounting for over two-thirds of all
promotional efforts undertaken (Kumar and
Swaminathan, 2005; Bawa and Shoemaker,
1989). Coupons consume the largest chunk of
dollars spent on consumer-oriented promotions
(Leclerc and Little, 1997). They are the most
popular form of promotion in supermarkets
(Nielsen, 2011). Every year, millions of cents-
off coupons are distributed by packaged con-
sumer goods manufacturers, and the number of
coupons issued increased from 287 billion in
2008 to 321 billion in 2015 (Inmar, 2016).
Initial investigations on coupons were con-
ducted by Mason and Wilkinson (1977)and
Dodson et al (1978). These pioneering studies
focused only on cents-off coupons and their
channel of coupon distribution, such as free
standing insert (FSI) or direct mail (Neslin and
Shoemaker, 1983; Raju and Hastak, 1983). The
past few decades, though, have seen the growth
of a variety of coupon deals, including per-
centage-off, dollar-off, free samples, buy-one-
get-one-free offers, and co-promotions (Buy X,
Deal on Y) (Raghubir, 2004). The usage of
coupon also correlated with type of user –
heavy, moderate, light (Kang et al,2006); ethnic
identification (Donthu and Cherian, 1992); type
and method of distribution (Sethuraman and
Mittelstaedt, 1992); and availability in offline
and online mode (Fortin, 2000).
With the advent of technology and changes
in people’s lifestyles, new mediums for coupon
distribution, such as the mobile phone (m-
coupons) and the internet (e-coupons), have
come to be associated with better chances of
redemption. While the face value of coupons
remains the most important factor, the popu-
larity of the medium, especially the mobile
phone, has attracted considerable research
interest (Hui et al,2013; Thakur and Srivastava,
2013) as many retailers use m-coupons to
inform customers about promotional offers
(Danaher et al,2015; Khajehzadeh et al,2015).
Juniper Research (2014) predicts that number of
m-coupon redemption is likely to increase from
560 million in 2014 to 1.05 billion by 2019.
In this study, we have analyzed the past, cur-
rent, and future research trends of coupons. The
digital coupons are going to quite relevant in
emerging markets like India, China, and Brazil
due to increased mobile subscription base (Gre-
wal et al, 2016). For example, in India, digital
coupons enjoy high popularity in non-metro
cities (Tier II and Tier III) and towns that report
exponentially growing mobile subscription and
IT penetration rates (startupcity.com). India has
more than a billion mobile subscribers (http://
trai.gov.in) and the highest population of youth
(10–24 years, 356 million). These figures high-
light high growth trajectory for the coupon
market in India (Inmar, 2016). The presence of
numerous coupon companies in India, such as
Couponada, Coupondunia, Freekaamaal, Mad-
dycoupons, Mydala, Couponhaat, Indiafreestuff,
Couonzclub, Flipit, Taazacoupons, Upto75,
Couponmachine, Freeclues, Couponzclub, and
Cashkaro, lends further support to this prediction.
This study also contains key take away and
research gaps for future researchers in the field
of coupons so as to ensure higher industry-
relevant research. There is dearth of such
comprehensive studies which may look into
overall development of this field till date and
set the tone for applied research on coupons.
The previous studies (Su et al,2014;
Venkatesan and Farris, 2012; Ashworth et al,
2005; Anderson and Song, 2004; Taylor, 2001;
Tat and Bejou, 1994; Bawa and Shoemaker,
1987; Chapman, 1986; Blattberg et al,1981)
have taken specific aspect of coupon and
delved deeper on the issue to come up specific
recommendations. The research methodology
followed in achieving these objectives is elab-
orated in the next section.
Pandey and Maheshwari
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METHODOLOGY
This study is a comprehensive review of cou-
pon literature to date, which aims to map and
assess the extant body of literature to identify
potential research gaps and highlight the limi-
tations in knowledge (Tranfield et al,2003).
Comprehensive reviews summarize the exist-
ing knowledge base in a scientific and sys-
tematic manner, laying the groundwork for the
pursuit of further research (Light and Pillemer,
1986). The starting point of a literature review
typically involves an iterative cycle of defining
suitable search keywords, searching for related
or synonymous keywords in the literature, and
completing the exploration (Saunders, 2011).
The present study followed a similar rigorous
method to map the previous studies on cou-
pons (Figure 1).
Firstly, reputed peer-reviewed journals were
identified on the basis of their citation index
score (Thomson Reuters citation) and influ-
ence on academic and managerial decision
making (as reflected in the journal rankings).
This list of journals was cross-checked and
refined with the last three years’ journal rank-
ings of Financial Times, the Australian Business
Deans Council, the Association of Business
Schools, and the Academy of Marketing Sci-
ence. The top twenty consistently ranked
journals based on the citation index and journal
ranking were finalized for the review
(Table 1). The iterative process was followed
Search with
"coupon" as the
keyword
• No. of articles found were
785,778
Elimination of
expanders (e.g.,
applying equivalent
subjects) and
limiters (e.g., full
text) from the
search
• No. of articles reduced to
237,586
Filter using journal
names • Count - 226
Elimination to
ensure topic
relevance and
avoid
duplication
•Count - 134
Analysis
• Text mining and analysis
• Aduna Cluster (NLP)
• Bubble Chart
•Geo Map
• Bar Chart and Pie chart etc.
Implications
and
Conclusion
• Academic Implications
• Managerial Implications
Figure 1: Review methodology.
Four decades of coupon research in pricing: Evolution, development, and practice
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in preparing the final list. Next, to identify the
relevant research papers, the title, abstract, and
the author keywords of the journals were
scanned for the word ‘‘coupon.’’
The time frame for the selection was from
1976 to 2015 – 40 years (the past four dec-
ades). The search yielded 226 research papers,
and all the papers were manually reviewed by
the authors. Many of them did not discuss
coupons in a pricing (marketing) context but
focused more on the financial or economic
aspects. Such research papers were eliminated
from the review process. Similarly, twelve
papers were found to be similar and were not
used for the study. Articles published in jour-
nals that were not in the selected (twenty) list
of journals were also dropped from the analysis.
Table 2shows the journals (in alphabetical
order) selected for the review, the number of
articles found in the journal database from the
initial search results, and the number of articles
after refinement. The search results were stored
in an Excel file along with details such as the
paper title, authors’ names, journal name,
publication year, abstract, keywords, type of
study, the country of study, the university, and
industry/product used for study. The research
focus of the studies was also recorded, such as
the design of the coupons, brand, profitability,
etc. Finally, 134 research papers were found to
be relevant for further analysis.
The articles were cleaned, extracted, and
analyzed using the text-mining software Van-
tagePoint (www.thevantagepoint.com). The
software presents the analyzed output in dif-
ferent formats that are easy for visualization.
After extracting keywords using natural lan-
guage processing (NLP), Aduna clustering
helped in determining the relationship
between different key terms. The Aduna
clustering is based on advanced algorithm based
on k-means clustering that determines the
interrelation between co-occurring key terms
(Samant and Sangle, 2016). The resultant
Aduna map provides a pictorial view of the
linkages between key terms, and helps in cre-
ating new linkages and identifying the missing
knowledge links for future research.
TEXT-MINING RESULTS
The growth and evolution of research on
coupons since 1976 was analyzed. The line
graph (Figure 2) shows that the highest num-
ber of studies (nine) was published in 1996.
Overall, the 1990s have witnessed the maxi-
mum contribution in this field, with more than
one-third of the total studies being published in
the decade (1990–2000). Many companies
realized the importance of coupons during this
period, which prompted scholars to investigate
this promotional tool in the subsequent years.
Figure 3shows that research on coupons
has steadily grown over the first three decades
– from 12 papers in 1976–1985 to 47 in
1986–1995, and 49 during the 1996–2005
Table 1: List of journals (in alphabetical order)
S. no. Journal names
1 European journal of marketing
2 Industrial marketing management
3 International journal of research in
marketing
4 Journal of advertising
5 Journal of advertising research
6 Journal of business and retail
management research
7 Journal of business research
8 Journal of consumer psychology
9 Journal of consumer research
10 Journal of Indian business research
11 Journal of international marketing
12 Journal of marketing
13 Journal of marketing management
14 Journal of marketing research
15 Journal of public policy and marketing
16 Journal of retailing
17 Journal of the academy of marketing
science
18 Marketing letters
19 Marketing science
20 Psychology and marketing
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period. Interestingly, this was followed by
almost a 25 per cent decline in the last decade,
i.e., 2006–2015. Interestingly, the coupon
design and coupon redemption dominated as
research theme in all four decades (Figure 3).
Another factor which can be attributed to this
distribution (Figures 1,2) is the editorial policy
of the journals in different years. The number
of articles published is significantly affected by
the number of papers accepted or rejected due
to current trend which affects editorial policy.
Influential authors
Influential authors were identified on the basis of
the number of papers published (three or more)
in the selected list of 20 journals (Table 1).
1111
2
33
44
333
2
8
3
5
8
9
4
5
1
2
5
4
3
6
7
3
44
3
2
1
7
333
1111
2
33
44
333
2
8
3
5
8
9
4
5
1
2
5
4
3
6
7
3
44
3
2
1
7
333
0
2
4
6
8
10
1976 1980 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015
Number of published academic
articles
Year
Figure 2: Evolution of research on coupons.
Table 2: Search results
S. no Journal names Initial results After refinement
1 European journal of marketing 4 3
2 Industrial marketing management 0 0
3 International journal of research in marketing 4 3
4 Journal of advertising 23 5
5 Journal of advertising research 10 6
6 Journal of business and retail management research 1 1
7 Journal of business research 21 11
8 Journal of consumer psychology 4 3
9 Journal of consumer research 7 7
10 Journal of Indian business research 1 1
11 Journal of international marketing 10 0
12 Journal of marketing 14 9
13 Journal of marketing management 4 2
14 Journal of marketing research 39 24
15 Journal of public policy and marketing 1 1
16 Journal of retailing 35 21
17 Journal of the academy of marketing science 3 3
18 Marketing letters 4 4
19 Marketing science 21 14
20 Psychology and marketing 20 16
Total 226 134
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Table 3lists the most influential authors in this
field along with their number of publications.
Kapil Bawa is the most prominent researcher in
the field, with more than seven publications. He
is followed by Donald R. Lichtenstein and
Robert W. Shoemaker, with six publications
each on coupon research (Lichtenstein et al,
1990). It is interesting to note that Bawa and
Shoemaker have co-authored many articles.
More than 70 per cent of the authors have
conducted quantitative studies, while others have
adopted experimental, qualitative, and triangu-
lation methods. Interestingly, 75 per cent of the
studies have been contributed by approximately
15 per cent of the total authors.
1976-1985 1986-1995
1996-2005
2006-2015
Figure 3: Trends in research on coupons over four decades.
Table 3: Influential authors in the field of coupon
research
S. no. Authors No. of publications
1 Kapil Bawa 7
2 Donald R. Lichtenstein 6
3 Robert W. Shoemaker 6
4 Richard G. Netemeyer 5
5 Scott A. Neslin 5
6 Srini S. Srinivasan 5
7 V. Kumar 5
8 J. Jeffrey Inman 4
9 Scot Burton 4
10 Michel Larochea 3
11 Sanjay K. Dhar 3
12 Youjae Yi 3
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Spatial distribution
Figure 4shows the spatial distribution of
countries where studies on coupons have been
conducted. The majority of the research
(80 per cent) has been conducted in the Uni-
ted States. Only a few studies have been
undertaken in emerging markets, particularly
Brazil, Russia, India, China, and South Africa
(BRICS). Given the cultural, psychographic,
demographic, and behavioral differences
between the US market and emerging nations,
it is important that researchers focus on the
latter to understand the drivers of coupon
usage.
Leading journals
Journal of Marketing Research is the most influ-
ential journal in the field of coupon research,
with a total of 24 papers (Figure 5). This is
followed by Journal of Retailing (21 papers),
Psychology & Marketing (16 papers), and Mar-
keting Science (14 papers). These four journals
Figure 4: Spatial distribution of country of study.
Figure 5: Leading journals in coupon research.
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Figure 6: Distribution of published papers by year and journal.
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account for more than 50 per cent of the total
available research on the topic in the last four
decades. On the other hand, hardly any focused
research on coupons has been published in
Journal of International Marketing and Indus-
trial Marketing Management. To show the
changes in the number of articles published in
each journal over the years, we generated a
bubble chart (Figure 6). The figure within each
bubble corresponds to the number of published
articles on coupon in the respective journal in
that particular year. The chart shows that Journal
of Marketing Research and Journal of Retailing are
almost uniform in their distribution of papers
on coupons over the past 40 years and are the
most influential journals.
Affiliation
The affiliation details of the authors of the
review studies were analyzed. The name of the
researchers’ universities along with the latitude
and longitude and the geographical data of the
organizations that supported the research on
coupons have been plotted on a map (Figure 7).
The affiliation statistics clearly show that results
are skewed with the maximum contributing
organizations located in the United States. A list
of prominent institutions (contributing five or
more articles) is given in Table 4.
Figure 7: Affiliation map.
Table 4: Institutions leading in coupon research
Institutes Number of papers
New York University 12
University of Pennsylvania 10
Drexel University 8
Louisiana State University 7
University of California 7
University of Texas 7
Georgia State University 6
University of Chicago 6
Dartmouth College 5
University of Colorado 5
University of Illinois 5
Washington University 5
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Keyword statistics
To identify the words/phrases that are most
commonly used as keywords, we analyzed more
than 300 keywords and grouped them on the
basis of certain themes. Thirty-seven keywords
were identified and analyzed using the Aduna
clustering tool. Figure 8shows the linkages
between these keywords. Not surprisingly, the
most prominent keyword is ‘‘coupon,’’ present
in 69 of the 134 articles. It is followed by
‘‘consumer behavior’’ and ‘‘attitude,’’ which are
listed as keywords in 59 articles.
Another clustering analysis (Figure 9) was
performed to identify the most commonly
occurring words/phrases in the abstracts of all
134 research papers. Out of a total 2997 key-
words, 30 were selected for the analysis
according to their relevance to the study. One
of the key advantages of cluster maps is that
they offer insights into potential avenues for
future research. By highlighting two or more
subjects that are studied simultaneously under a
particular theme, they help in determining
relevant topics for key themes of further
research. For example, in Figure 8, ‘‘coupon,’’
‘‘consumer behavior,’’ ‘‘attitude,’’ and ‘‘brand’’
are the concurrent research themes for four
research papers. Thus, a scholar conducting
research on brands may try to include con-
structs of consumer behavior or/and attitude in
the study. These maps also shed light on the
themes that have not been studied simultane-
Figure 8: Cluster chart of keywords (extracted from author keywords).
Pandey and Maheshwari
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ously in any of the papers, enabling researchers
to determine and address the gaps in research.
For example, ‘‘coupons’’ have not been studied
in conjunction with topics like ‘‘complaint
management’’ and ‘‘brand’’ (Figure 8).
Theme
The reviewed papers were classified into dif-
ferent themes according to their research focus.
Those that could not be categorized have been
grouped under miscellaneous.
Some papers are marked in more than one
category on the basis of their research interests.
Figure 10 shows the percentage distribution of
the themes. The most prominent theme is
‘‘coupon design (25 per cent)’’ followed by
‘‘redemption for increased sales (19 per cent),’’
and ‘‘sales promotion (14 per cent).’’ The
Figure 9: Cluster chart of keywords (extracted from abstracts).
Four decades of coupon research in pricing: Evolution, development, and practice
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Coupon Design
25%
Redemption for
increased sales
19%
Miscellaneous
14%
Sales Promotion
14%
Brand
11%
Profitability
9%
Store Performance
3%
Competitor/Market
Response
3%
Loyalty
2%
Figure 10: Major themes in coupon research.
Figure 11: Year-wise distribution of themes.
Table 5: Key theories used in coupon research
Theory Number of
instances
Acquisition-transaction utility theory 3
Self-perception theory 3
Theory of reasoned action 3
Bayesian method 2
Customer relationship management (CRM) 2
Logit model 2
Structural equations analysis 2
Theory of planned behavior 2
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bubble chart (Figure 11) shows the evolution
of different themes over the years.
Use of theory
Researchers have referred to a number of theo-
retical concepts and phenomena in their studies
on coupons. Table 5lists the theories used in
more than one publication. While there is no
dominant theory, the ‘‘theory of reasoned action,’’
the ‘‘self-perception theory,’’ and ‘‘acquisition-
transaction utility theory’’ are the most cited.
Coupon profile
Of the 23 coupon profiles identified in the
literature review, the cents-off coupon is the
most popular (Table 6), and FSI is the most
frequently used medium for the distribution
of coupons. Figure 12 shows the evolution of
the coupon profile over the last 40 years.
Cents-off coupons have been popular for
almost three decades; however, no study has
focused on this coupon type since the last
decade. The interrelationship between various
coupon profiles is shown in Figure 13.The
figure shows that few of the coupon profiles
are linked in terms of concept and impact,
while certain coupon profiles are stand alone.
New coupon profiles have gained popularity
in past few years such as m-coupons, e-cou-
pons, and reward coupons.
Dominant industry/product
We analyzed the literature to examine if a
particular type of industry or product domi-
nated the research on coupons. To ensure
clarity and simplify the analysis, we grouped
the different products into categories as shown
in Table 8. The product/industry category
Figure 12: Mapping of coupon profiles.
Table 6: Coupon profiles
Coupon profile No. of studies
Cents-off coupons 12
FSI coupons 12
On-pack coupons 6
Direct mail coupon 5
Double coupons 5
e-coupon 4
m-coupons 4
In-pack coupons 3
In-store coupons 3
Mail-in coupons 3
Peel-off coupons 3
Retailer coupons 3
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most frequently occurring in coupon research
is groceries. A total of 40 studies (Table 7) have
examined the use of coupons for purchasing
groceries. The next most popular category is
FMCG (23 studies) followed by food and
beverages (21 studies). Some products like
coffee have been excluded from the product
categories (Table 8) because of the compara-
tively large number of studies on them.
Figure 14 shows the product/industry dis-
tribution in coupon research over the years.
The distribution of research studies on gro-
ceries, FMCG, and foods and beverages is
almost uniform. These product categories have
been studied almost every year and by same
number of studies, indicating that they are the
main targets of coupon research. Coupon
redemption is also comparatively higher in
these categories than the rest (businesswire.-
com). These research trends reflect the influ-
ence of the past studies on coupons besides
other factors like availability of scanner data
Figure 13: Cluster map of coupon profiles.
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and access to consumers of these categories.
However, given the high number of research
papers on these products, it is imperative that
researchers consider other emerging industries
like travel, e-commerce, and hospitality, which
are increasingly using coupons as a promotion
tool.
CONCLUSIONS
Coupons are an important promotional tool,
and the high volume of research on coupons in
the past four decades validates this fact. While
our review of more than 130 papers from
twenty journals presents interesting trends in
this domain of study, it also highlights crucial
research gaps that need to be addressed. It
analyzes research trends both from a macro-
and micro-perspective and contains the key
takeaways for academicians and practitioners
which are elaborated below.
Insights and agenda
for academicians
Firstly, more than 80 per cent of the studies on
coupon research are based in the United States
(Figure 4). The abundance of studies with a
Western context spells the potential to explore
the subject from diverse regional perspectives.
As is well known, the strategies prevalent in the
developed nations can rarely be replicated in
developing countries and vice versa. For
example, Jhamb and Kiran (2012) investigated
Table 8: List of products included in each category
Category Products
FMCG Shampoo, deodorant, soap, toothpaste, detergent, hairspray, feminine hygiene products,
creme conditioners, disposable diaper, shaving blade, perfume, disinfectants, oil stain
remover
Foods and
beverage
Cookies, crackers, fruit juice, snack food, soft drinks, milk, ice cream, frozen novelty
desserts, yogurt, flavored chips, bars and squares, carbonated beverages, candy bar,
saltine crackers, hot dogs, bacon, cold cuts, frozen pizza, tuna, light tuna
Grocery Margarine, cooking oil, all-purpose flour, dressing, dog food, dry mix dinners, cake mix,
cat food, frozen entre
´es, gelatin, spaghetti sauce, soups, other mixes, tomato sauce,
maple syrup, macaroni, ketchup, pickles, rice, salad dressing
Paper products Facial tissue, paper towels, toilet tissue, bathroom tissue, plastic wrap, zipper bags
Entertainment Movie tickets, amusement park, entertainment show
Fashion Jewelry, clothing, shoes, sports shoes, ladies casual wear, sports wear
Fitness Fitness recreation complex, weight-loss snacks/meal substitutes, sports equipment
Table 7: Industry/product category for coupon research
Industry/product category No. of studies
Grocery 40
FMCG 23
Foods and beverages 21
Paper products 11
Coffee 10
Restaurants 9
Cereals 7
Fashion 6
Automotive services 5
Drugs 4
Electronics 4
Entertainment 4
Beauty salon 3
Fitness 3
Household 3
Bakery 2
Books and magazines 2
Financial services 2
Car rental 1
Hair regrowth treatment 1
Health and beauty products 1
Novelty gifts 1
Office supplies 1
Personal care product 1
Toys 1
TV converter box 1
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Figure 14: Product/Industry-wise evolution of coupon research.
Pandey and Maheshwari
412 Ó2016 Macmillan Publishers Ltd. 1476-6930 Journal of Revenue and Pricing Management Vol. 16, 4, 397–416

the success of economic benefits like coupons
and non-economic benefits like the internal
store environment and found that coupons are
more effective than the internal store envi-
ronment in a developing country context like
India. However, this finding may not be
applicable to developed countries where con-
sumers expect shopping comfort. Thus, con-
sumer preferences with regard to coupons vary
according to the setting. Given that emerging
economies like India, Brazil, and China are
predicted to drive market growth in the
coming years, it becomes necessary to analyze
and understand coupon-related aspects, such as
design format, consumer behavior, store per-
formance, loyalty, and brand, from an emerg-
ing market context. Researchers should focus
on bridging this knowledge gap in their future
studies.
Secondly, in terms of product/industry cat-
egories used in research studies on coupons,
three categories – groceries, FMCGs, and food
and beverages – are most favored by
researchers (Figure 14; Table 7). However,
consumer behavior changes across product
categories as a result of varied prices and offers
(Bawa and Shoemaker, 1987). The literature
review highlights that consumer behavior in
terms of coupon usage and redemption patterns
in product categories like eyewear, health and
wellness, and holiday and travel packages
deserves more research attention than is cur-
rently shown.
Thirdly, the review shows price expectation
is an important reference point for consumers
who evaluate prices before purchasing a product
(Jacobson and Obermiller, 1990, Singh and
Pandey, 2015). Many companies increase the
price of products with increase in cost of raw
material, however, give discount coupons to
match the previous price and to meet the
competition (Quelch and Kenny, 1995). With
the exponential growth of e-commerce and
m-commerce, companies are aggressively
adopting the coupon-based route of price
promotion to acquire market share in various
product categories. For a comprehensive
understanding of coupons as a promotional tool,
its use in different product categories like dietary
supplements products, baby products, LGBT
products, security equipment, etc., as well as in
emerging markets needs to be investigated.
Fourthly, there is hardly any publication
on coupons in Journal of International Mar-
keting and Industrial Marketing Management
(Table 2). One of the reasons may be usage
of coupons in international markets and
business markets are fewer. In business mar-
kets, most of the organizations have price
structure with inbuilt fences and controls,
whichtakecareofvolumediscountand
preferred customer discount. These discounts
reduce the need for price coupons. However,
with the growth of online B2B trade portals
like alibaba.com, discount coupons have
become common. It would interesting to see
the first few studies on coupon-related
impact from online B2B trade in Journal of
International Marketing and Industrial Mar-
keting Management.
Fifthly, our results show that the cents-off
coupon is the most frequently studied coupon
type, and FSI is most frequently researched
medium for the distribution of coupons (Fig-
ure 12; Table 6). However, this coupon pro-
file and mode of distribution are likely to be
completely replaced by their digital counter-
parts in the coming years (startupcity.com;
Inmar, 2016). The growing popularity of
m-coupons and e-coupons presents an inter-
esting area of study for researchers. The dis-
tribution of m-coupons, in particular, through
SMS and mobile apps is expected to grow
exponentially in the coming years because of
the growing number of mobile phone sub-
scribers. China and India alone have more than
1.29 billion (www.statista.com) and 1.03 bil-
lion (http://trai.gov.in) mobile phone sub-
scribers, respectively. Changing business
models have also given rise to other coupon
formats such as reward coupons and social
coupons. Studies on these emerging coupon
formats are essential for effectively utilizing
them to achieve sales targets.
Four decades of coupon research in pricing: Evolution, development, and practice
Ó2016 Macmillan Publishers Ltd. 1476-6930 Journal of Revenue and Pricing Management Vol. 16, 4, 397–416 413

Insights and agenda
for practitioners
Today, managers have access to a number of
sales promotion alternatives, and they consider
various aspects like profitability, brand image,
loyalty, sales, and competitor response while
selecting an option. Dhar and Hoch (1996)
compared coupons and discounts and found
that in-store coupons lead to higher sales and
profit than bonus buys (discounts). They
showed that in-store coupons, at an average
redemption rate of 55 per cent, produced a
35 per cent increase in the sales of promoted
brands and a 108 per cent increase in dollar
profit compared to bonus buys. The Aduna
cluster (Figures 8,9) highlights that relation-
ship between coupon and brand. There is need
to explore this relationship further by both
academicians and practitioners.
Chen et al (1998) found that coupon pro-
motions are more effective and favorable in
changing the purchase intentions of the cus-
tomer. Heilman et al (2002) predicted that
number of unplanned purchases on a shopping
trip and the size of shopping basket will
increase with the use of surprise coupons. The
digital coupons in the form of m-coupons and
e-coupons would enable to provide location-
based coupons. These may come as pleasant
surprise to the customers who may redeem the
coupons in the nearby store.
Further, customized coupon campaigns gen-
erate a positive redemption effect (Venkatesan
and Farris, 2012). Customization is linked to a
greater chance of redemption because of cus-
tomers’ affinity for a particular coupon design
and their buying pattern (Jayasingh and Eze,
2012;YinandDubinsky,2004). Many firms do
not have well-established mechanisms for
determining the profitability of a couponing
program. Most assess it on the basis of
redemption rates, the cost of coupon promo-
tion, and market share (Neslin and Shoemaker,
1983). Chapman (1986) predicted that the
profitability of a coupon program should be
5.2 per cent of the gross margin obtained during
a normal period (without any couponing effort).
Our results show that appropriate coupon
design is positively correlated to redemption by
the customers (Figure 3).
However, Kumar and Rajan (2012) found
that even though companies invest a lot of
effort in targeting coupons to the right cus-
tomers, many customers trade those coupons.
Su et al (2014) argue that trading of coupons by
consumers will result in more profit for either
the retailer or the manufacturer but not at the
same time. Leone and Srinivasan (1996) found
that when the manufacturer tries to increase
profits from a coupon promotion program,
profit for individual chains in the market
reduces, indicating that couponing does not
increase the profit across the value chain. Thus,
if managers target the coupons to responsive
markets, they can be profitable.
This study highlights that coupon redemp-
tion is higher in groceries, FMCG, and food
category (Table 7). Organizations need to look
at the best practices in coupon design and
coupon implementation schemes in these cat-
egories as this study highlights positive corre-
lation between coupon design and redemption.
These inputs would work as pointers in the
respective organization’s coupon program. The
organizations need to analyze the key drivers
for coupon redemption in their respective
category as the world average of coupon
redemption is quite low.
Khajehzadeh et al (2015) suggested that cus-
tomer’s redemption intentions also depend on the
type of product: their shopping motivation mat-
ters in case of a hedonic product, whereas their
location matters in case of a utilitarian product. In
another study, these authors suggested that more
personalization is needed in case of utilitarian
shoppers than hedonic shoppers to generate
coupon redemption (Khajehzadeh et al, 2014).
According to Osuna et al (2016), when customers
redeem the coupon of a brand, they evaluate the
cost and the benefits depending on whether they
are current buyers of the brand or not. Different
brand and category characteristics are also
Pandey and Maheshwari
414 Ó2016 Macmillan Publishers Ltd. 1476-6930 Journal of Revenue and Pricing Management Vol. 16, 4, 397–416

responsible for incremental sales and higher
redemption rates.
Overall, coupons present an interesting and
growing promotional phenomenon which
allows customers to save money. However,
with growing consumer awareness and
increased competition, the design and delivery
of coupons have become critical for its success.
Digital coupons facilitate faster and cheaper
delivery of price-based promotions to the tar-
get customers. They are quite popular in
developed countries like the United States, but
their use is yet to be fully leveraged in
emerging economies like India, Brazil, and
China. These developing markets serve as ideal
settings for exploring and understanding the
potential of coupons as a sales promotion tool.
Many new insights related to contextual factors
can be learnt by practitioners as a coupon-
based campaign is monitored, analyzed, and
changed according to consumer feedback and
redemption response.
LIMITATIONS
One of limitations of the study is that papers
from only top twenty journals were used for
the study. Hence, the analysis and data which
are presented in the study are limited to only
top twenty journals selected for the study.
Moreover, the editorial policy of journal to
include articles on given topic in a given year
adds further to this limitation. Another limi-
tation is that not all the papers had author
keywords.
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