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- Title
Double Couponing and Retail Pricing in a Couponed Product Category.
- Authors
Krishnan, Trichy V.; Rao, Ram C.
- Abstract
A common practice in many supermarkets is double, and in some cases, triple couponing. Retail managers adopting this policy react emotionally to couponing by manufacturers: They "won't tolerate dumping in this marketplace by manufacturers who run 25 cents coupons elsewhere, but 50 cents coupons [t]here." How justified are retail managers in their claims? Does it really benefit manufacturers to do this? How is the retail pricing of the category affected by the double-couponing policy? And, what happens to the competing retailer that does not double coupon? The authors provide answers to these questions. They use a game theoretic model to (1) study the effects of double couponing, (2) derive the equilibrium level of couponing by manufacturers, and (3) derive the double- couponing retailer's retail pricing of brands in the category as well as the pricing of the competing retailer that does not follow the double-couponing policy. The authors then test their results using primary data on retail prices.
- Subjects
COUPONS (Retail trade); PRODUCT management research; PRICING; SUPERMARKETS; GROCERY industry; GAME theory; SALES promotion; ADVERTISING effectiveness; COMPETITIVE advantage in business; MARKETING strategy; ECONOMIC competition; PRICE discrimination; MANAGEMENT
- Publication
Journal of Marketing Research (JMR), 1995, Vol 32, Issue 4, p419
- ISSN
0022-2437
- Publication type
Article
- DOI
10.2307/3152177