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How does the use of in-store discount coupons affect retail revenues?

Author

Listed:
  • Lagin, Madelen

    (Dalarna University)

  • Daunfeldt, Sven-Olov

    (HUI Research)

  • Rudholm, Niklas

    (HUI Research)

Abstract

Few studies have addressed how discount coupons placed in stores affect retailers. By conducting a field experiment in 16 grocery stores in Sweden, we investigate how in-store discount coupons for Wrigley’s chewing gums affect sales at the product, brand, product-category, and category-assortment levels. When calculating the impact of the coupon campaign on revenues, we find that there is an increase in revenues for the retailer of between 30 748 SEK and 39 691 SEK during a 30 day coupon campaign depending on if the face value of the coupon is 2 SEK or 3 SEK, respectively. The in-store coupon campaigns under study thus increased retailer revenues even after considering product-, brand- and category level cannibalization effects.

Suggested Citation

  • Lagin, Madelen & Daunfeldt, Sven-Olov & Rudholm, Niklas, 2017. "How does the use of in-store discount coupons affect retail revenues?," HUI Working Papers 127, HUI Research.
    • Handle: RePEc:hhs:huiwps:0127
    as

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    More about this item

    Keywords

    Category management; Field experiment; Price tactic; Promotions;
    All these keywords.

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C99 - Mathematical and Quantitative Methods - - Design of Experiments - - - Other
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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