The last time I received a physical coupon was in the newspaper delivered to my home. You see, there is a service provided by Singapore Press Holdings (SPH) where advertisers can insert such coupons in the bundled newspapers to be delivered to homes around the country. Since the delivery is managed and controlled by SPH, the advertiser has the choice of selecting which geographical location they wish the coupon is to be delivered (e.g. the eastern side of Singapore would include towns such as Marine Parade, Bedok and Changi). An example of such a physical coupon is shown below.
Setting aside the theory on how such direct marketing tactics are developed by advertisers, I have to admit that I will take the trouble to look through the coupon with great interest. But the intent to encourage me to buy a product otherwise would not will fail on me because the promotional product has to be something that I need now, or aspire to own in the future. Hence, the coupon has to address my demand requirements at the point of receiving the promotional instrument (i.e. coupons).
Assuming that the product or service in the coupon addresses this need of mine, I will pay close attention on the the nature of the coupon. This nature represents what the coupon seeks to communicate:
- Is it a price discount?
- A conditional offer such as a ridiculously low price for the 1st 100 customers?
The nature mentioned above will determine whether I will make a purchasing decision or not (though I must admit that the second nature will not interest me). Having said that, I must confess that this behaviour which I described earlier somehow indicates that I am reliant on coupons to make purchasing decisions for certain products. This is because coupons intentionally influence the demand and supply of a purchasing decision. Prior to this influence,I (i.e. consumer) may not have reached a point where the demand is so overwhelming that I have to make that purchase. As such, coupons do play a major role in influencing my purchasing decision for specific products. As a general rule, this influence will be the most effective for products which are not commoditized in the market such as mobile handsets, vehicles and consumer electronics.
Hence, companies that use coupons as a promotional strategy will need to make sure that the product or service in the promotion matches the need of consumers like myself. This matching is aligned to my earlier posting on market segmentation on user databases. In such instances, the medium which is employed to distribute the coupons play an important role in changing the usage pattern of consumers such as myself. For example, a broad product category such as food and beverage, groceries or clothing will see the coupons being distributed through newspapers which are perceived as mass media platforms (see below).
As the products get more specific such as consumer electronics, then the medium used to distribute the coupons will change accordingly. For instance, a coupon that offers three months free membership to a gym will work best in magazines that focuses on exercise and general fitness.
Hence, the effectiveness of coupons to influence consumer behaviour is dependent on first and foremost, market segmentation and matching products to consumer needs. Following this, the distribution of the coupons through the right channels is critical as such channels represent the proxy of consumer needs. Mixing both together with the right execution will probably get me to buy more than I would usually have done (which may not be a good thing given this economy...).
- Darren -
