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I'm in Coupons Scholarship 2014. Entry-Jabar A.

To be able to discuss whether or not coupons (also known as discount vouchers or codes) have an impact on consumers purchasing decisions, first discussing what is meant by coupons and then explaining what a coupon is.  Furthermore, the discussion will entail the use of coupons and non-use has on purchasing decisions.

The word coupon derives from the old French word ‘colper.’  This became ‘couper’ in French which meant ‘cut.’  In the modern Anglo-French, this became ‘coupon’ which in French meant ‘piece cut off.’  This became known for the name of the detachable portion of a stock certificate in the early 19th Century.  This description may somewhat apply in modern day, as many coupons in magazines and newspapers require one to cut out or tear off to use in stores.

Coupons may also be referred to as discount vouchers or promotional codes – in the case of no physical voucher.  Having looked at several different definitions of coupons, it is reasonable to conclude that a coupon is a voucher that entitles the holder to a given discount on particular goods or services.  For example, a coupon may offer a particular promotional product at a cheaper price providing collection and presentation of the coupon(s) and at a participating venue thereby allowing consumers to try products for lower prices.

In recent years it has been shown that an initial small consumer base of price conscious shoppers has now expanded to a much larger mainstream audience, particularly in the use of online coupons.  The eMarketer forecasts that approximately 55% of US internet users of age 18 years and older will redeem online digital codes at least once in 2014.  NCH Marketing suggests that the use of coupons has increased by 3.3% in 2013, as it distributed 315 billion coupons in 2013, which was 3.3% more than the previous year.  This puts into perspective the sheer size of the coupon usage, which seems to be increasing.

Simply put, if people are able to purchase products for lower prices thus saving disposable income, then they may be motivated to continue saving money by using coupons, e.g. in the past four to six years, as the financial crisis reached record highs and put millions out of work.

Often products that are offered on discount coupons are products that are not necessarily found in standard household budgets.  Some coupons can include discounts or offers on big ticket items like televisions or stereo systems.  As these items are big ticket items in nature, regardless of the coupon’s discount offer, it is unlikely that a consumer would purchase these items unless the original intent was to purchase the item.

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There are also some consumers that do not wish to use coupons thereby ignoring the leaflets and newspaper offers that arrive in newspapers, handouts, and sales papers.  The general public tends not to pay close attention to this money saving information.

To conclude coupons can both effect consumers purchasing decisions but also have little effect on consumers purchasing decisions.  I believe it is based entirely on circumstances of the consumer, the product and the economy.

The consumer may have varying budgets to spend on goods.  Consumers will tighter budgets or less disposable income will be more reliant on having to use coupons to reduce the price of purchasing goods, thus increasing purchasing power.

The product also has an impact on whether consumers will use the coupons.  If the item is something considered to be one of the ‘basket of goods’ items, then it is likely to be a regular purchase by many consumers so consumers will try to use coupons to save money on these items.  However if items are big ticket, once every few year, items, then it is likely that consumers will buy based on quality and preference of the big ticket item and will probably be less motivated to use a coupon.  Recent NCH Marketing research suggests coupons on electric items have fallen 3.9% during 2012-2013.

Finally, the state of the economy and its effects on the consumer will likely influence consumer use of coupons.  In my opinion, a better performing economy is directly proportionate to higher consumer disposable income thereby reducing reliance on the use of coupons.  The inverse is true with a poorly performing economy.  Less disposable income can directly translate to a heavier reliance on discounts some of which are provided by coupons.

These three factors have to be considered when looking at whether or not coupons are likely to affect consumers purchasing decisions.

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