Coupons should be exciting. Maybe not as exciting as watching Brad Pitt fight zombies on the big screen, but seriously, they should be exciting. They are ‘free’ money. Coupons are available in bulk and for a variety of goods. We can find them in the newspaper, online, or even in smartphone apps designed to find people sweet deals. Honestly though, I rarely find myself using any of the hundreds of coupons I see every week. It should be bizarre that a college student such as myself, should pass up so many opportunities to save money on anything from computers to fast food. So what is the reason that I ignore all of these possibilities? My lack of coupon zeal probably stems from multiple factors such as time management, social influences and the coupon knowhow; however, the primary reason for my disregarding these money saving wonders lies in a basic economic principle. I just don’t want or cannot afford the advertised product.
Looking at the scenario of coupon consumption from an economic perspective allows for a better understanding of why or why not a coupon influences a person’s buying behavior. Everything that I buy has a cost, and for that cost the product purchased gives me some benefit. Whether that benefit is the product’s delicious taste or ability to entertain me, I find some value in the product. If the cost of that product outweighs the use that it brings me, I simply would not buy it. Each human being has their own level of benefit they receive from certain products and thus each person is influenced differently by coupons. Let’s check out a few examples.
Imagine a world in which sandwiches cost 5 dollars. I happen to be a big sandwich fanatic so buying one sandwich brings me 7 dollars worth of satisfaction. Because the value of the sandwich is more than the amount of money I will pay for it, I will buy the sandwich. A coupon, although it would save me money, is not necessary for the purchase. If I had a coupon handy, I may use it to decrease my cost, but it would not be affecting my buying behavior. For this reason, people do not use coupons as often when shopping for things that they can easily afford. The hassle of finding and using the coupon becomes of greater cost than the money they would save using it.
Now we are going to look at a scenario in which I would be influenced by a coupon. Continuing our example, imagine that in this same world all hot dogs also cost 5 dollars. Hot dogs, however, only bring me 3 dollars worth of satisfaction. In this case I would not buy the hot dog because the cost outweighs the satisfaction that it would bring me. If there were a coupon that could reduce the price of the hotdog by 2 or more dollars, then the benefit would be greater than or equal to the cost and I would buy the hotdog. In this case, the availability of the coupon would influence me to buy a hot dog. Another example of a case when coupons will influence my buying behavior is when a product is out of my price range. Using the example of the 5 dollar hot dog, let’s say that my satisfaction level from the hot dog is 6 instead of 3. Because my benefit is greater than the cost I should buy the hot dog, however, let’s assume I only have 3 dollars to spend on lunch today. In this case the hot dog is out of my price range. If I had a coupon to bring the price down from 5 to 3, the coupon would influence me to buy a hot dog.
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In summation, there are two key factors that affect whether of not coupons will influence my buying behavior. First and foremost, to use a coupon I have to want the product. If the product will not benefit me at all, I would not get it even if it were free. Next, is my ability to buy the product. If the coupon shifts the benefit to be greater than the cost and I have the money to buy it, then I will use the coupon.
My use of coupons is also influenced by the accessibility and usability of the coupons. The easier they are to find and use, the lower the cost of using them, making me more likely to use them in situations where they will affect my buying behavior. That said, because we are in a digital age, the best way to distribute coupons to the people using them would be to create a userfriendly phone app. I have looked at some of the top coupon phone apps and they are not the most approachable apps. Putting coupons onto a easy‐to‐use phone app would make the cost of using them close to zero and would also increase the net benefit people receive from their purchases. Additionally, a phone app would cut down on waste, keep coupons up‐to‐date and allow people to make much simpler coupon searches based on their location and desired product. By considering the demand for goods and their costs and benefits to target markets, I believe that there is a large coupon market that is currently untapped but is waiting to be supplied.