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Couponing As A Horizontal And Vertical Strategy: Theory And Effects

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  • Connor, John M.

Abstract

This paper surveys developments in analytical models and empirical findings concerning the strategic use of manufacturers' coupons for U.S. grocery products. Traditional theories examine the horizontal effects of coupons as a strategy to charge various classes of consumers different prices. Recent developments focus on the use of coupons in manufacturer-retailer vertical competition. The paper provides data on trends in couponing: numbers, face values, redemption rates, total promotional costs, and international usage. The paper further analyses the effective price discounts provided by coupons across brands and segments of ready-to-eat cereals during 1992-1995.

Suggested Citation

  • Connor, John M., 1997. "Couponing As A Horizontal And Vertical Strategy: Theory And Effects," Working Papers 14344, University of Minnesota, The Food Industry Center.
    • Handle: RePEc:ags:umrfwp:14344
    DOI: 10.22004/ag.econ.14344
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    References listed on IDEAS

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    1. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, December.
    2. John M. Connor, 1999. "Breakfast cereals: The extreme food industry," Agribusiness, John Wiley & Sons, Ltd., vol. 15(2), pages 247-259.
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    Cited by:

    1. Gregory K. Price & John M. Connor, 2003. "Modeling coupon values for ready-to-eat breakfast cereals," Agribusiness, John Wiley & Sons, Ltd., vol. 19(2), pages 223-243.
    2. Connor, John M., 1999. "Evolving Research on Price Competition in the Grocery Retailing Industry: An Appraisal," Agricultural and Resource Economics Review, Cambridge University Press, vol. 28(2), pages 119-127, October.

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