What are the Objectives, Pros and Cons of Coupons?

Coupons are a type of a godsend boon to the shoppers which acts like a certificate to win discounts on goods or services when they are redeemed with the sellers. It is primarily by the sellers as a sales promotion tools to achieve the specific sales and marketing goals. They are quite renowned among small businesses as they are so cheap to disperse and they are effective as well. Coupons are deemed as appealing to the customers as they provide immediate value and savings, but in the recent times, the proliferation of coupon dispersion campaigns have now excessed in the marketplace. The flood of coupon offers is called coupon clutter and has led to a fall in the redemption rates in the recent times.

Objectives of Coupons

They are issued to deliver a plethora of various strategic marketing objectives. One way is to evoke the customers to try the new product range. Coupons are deemed to be fairly efficient as the history proves it. It also gets them to try the new products by eliminating the risk of trying something innovative.

They are also issued to the convert trial users into a regular or a long term customer like when trying a product sample may comprise a cashback coupon or nykaa.com offers. Moreover, coupons are also used to encourage the customers to purchase new sizes, flavors etc.

They also serve in building the retail distribution and support, shifting the out-of-balance stock, targeting various markets, cushioning price increases, and improvising other promotional efforts with the coupon add-ons. Coupons are also utilized by manufacturers because of the presence of a competitive pressure. When it is utilized against the competition, they are issued to get the customers of a competitive product to try a new brand. When used on a defensive basis, manufacture offer coupons to its existing customers to retain them from purchasing the competing brand.

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Pros and Cons of Coupons

Coupons have a plus side of transferring savings directly to the consumers which is quite opposite to trade allowances provided to the retailers by the manufacturers. It is a temporary special offer for the customer rather than a price reduction, so redemption of coupons generally doesn’t have a significant impact on the sales. Moreover, coupons usually create added traffic from the sellers who have the power of doubling or tripling the value of the coupons at their own risk to generate more store traffic. In addition to this, sellers often receive additional compensation from the producers for managing the coupons.

The critics of marketing management believe that coupon clutter can create an unnecessary impact on the effectiveness of the sales promotion. They wonder whether the coupons really generate significant business from the new customers, pointing out to the fact that the raised quantity of dispersed coupons has been heeding the path of falling redemption rates. Additionally, excessive coupon dispersion generates the likelihood of fraud and miss redemption. The coupons that have been particularly issued for the big-shot brands are prone to be redeemed usually by the loyal customers who had bought the product with no coupon.

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