In marketing, a coupon can be referred to as document or ticket which one can redeem for financial rebate or discount in the process of purchasing a product. Customarily, they are provided by the manufactures or retailers of packaged products for use in retail stores a way of sales promotion (Rossi, McCulloch & Allenby, 2011). One interesting statistic regarding coupons is that they have been in use by companies to market their products to the people for more than 110 years. Coupons are not an emerging or a new idea but which have continuously evolved over the last 100 years. They have an interesting which history that can be traced from the 1800s.
Coca-cola was the first company to offer free products to their customers. In 1887 John Pemberton, the coca cola inventor and a pharmacist together with his bookkeeper started to hand out tickets to people for a free sampling of their invented drink (Rossi, McCulloch & Allenby, 2011). However, this strategy bore very mild results. Then in 1888, Asa Candler a businessman bought coca cola from Pemberton and decided to continue with the strategy of free sample ticket and also improve it.
In 1894 Asa Candler wanted to apply an innovative way to market his new acquired drink that had not been tried by many people. With the aim of rising to become a household name as well as reaching a wider market for his drink, he created many coupons for a free glass of coca cola. He tactically placed these tickets in magazines and also sent direct mailers to many potential interested buyers of the coca cola drink across the country. He also used coca-cola salesmen to hand out these coupons on the streets.
The first official campaign on the coupon that he conducted was a total success. Between the year 1894 and 1913, it was estimated coupons exceeding 8.5 million had been redeemed at soda fountains across the country and coca cola had grown to become a household name. These made the coca cola brand rise to become a popular product in the market and as a result generated huge profit for the company (Shaw, 2012). After this great successful coupon campaign pioneered by the coca cola campaign from 1894, 15 years later, a man named C.W. Post in the year 1909 decided to start using coupons as a way of increasing his levels of sales of the nuts grape cereal as well as their popularity to the customers. C.W. Post started his campaign by giving the customer who had a coupon a discount of one cent from the price he or she was supposed to buy the cereal.
As a result of using coupons, C.W. post enlarged the market for his goods and also provided an avenue for his business to grow. Today grape nuts still exist in the cereal market of many grocery stores showing how coupons have assisted to stay relevant in this business. The use of the coupon by C.W. Post marked the beginning of many businesses to start using as well as leveraging this innovative form of advertising that had put Grape Nuts and coca cola on the map of success.
In 1930s America was hit by the great depression. At this period savings money on services and goods became a great necessity for people to survive and live a better life. Since work had become scarce and many people had already lost their fortunes by betting on the dreams and hopes of the stock market the use of coupons during this period became common. This behaviour of clipping coupons grew and became widespread in the society ushering its path into the future of businesses. As time passed coupons moulded and adjusted to the current time as well as various technologies that were introduced (Rochet & Tirole, 2013).
In the 1940s after the great depression had been overcome in America, many large-scale supermarkets started adopting and accepting the use of coupons as a way of increasing the levels of their sales in the stores. This transition from having coupons being only available at the local grocery stores to permitting the large chain supermarkets to use this new method of marketing was groundbreaking. Since these supermarkets dealt with large volumes of product, it meant that they could reach their ever growing customers by use of national media and newspaper to make sure these coupons got on their hands. It is estimated that by 1965 over 50% of the Americans were already using coupons since saving money was and is something that almost everyone was focusing on.
With the rapid growth of the internet the delivery as well as the use of coupons transformed as people began shopping online and looking for information about the products they could buy offline in malls and local stores. Around 1995 coupons began emerging on the internet for offline purchases of services and goods and internet purchases (Rochet & Tirole, 2013).
Coupons began being distributed by companies on the internet and gave the customers the option of printing out these coupons and purchase them. This was an excellent innovation towards the growth of the use of coupons. By 2009 it is estimated that more than 3.6 billion people redeemed coupons. Customers can now download coupons and receive tax offers. With this high revolution in the usage of the coupon, the future is highly optimistic for continued and advanced use of coupons.
Annotated Bibliography
Rossi, P. E., McCulloch, R. E., & Allenby, G. M. (2011). The value of purchase history data in target marketing. Marketing Science.
This is a research that discusses about the important aspect associated with marketing practice which target consumers groups for differential promotional events. It dwells on how different available demographic information can be used to construct coupons that can fit each group of consumers. According to this research, the consumer groups can be divided according to gender, age or even preferences. This can assists different businesses to be able to attract a large number of customers since they are able to identify the specific need of each consumer group.
Shaw, R. (2012). How the smart card is changing retailing. Long Range Planning.
This book describes how coupons have been implemented in various technology systems in the United States as way of promoting products as well as services at both household and individual level. It shows how some technologies such as smart card technology have been as way of reaching out to many customers especially those who uses online technology. Coupons have been implemented in such technologies so as increases the sale of various products.
Rochet, J. C., & Tirole, J. (2013). Platform competition in two-sided markets. Journal of the European economic association.
This journal discusses the continued growth of coupons since the time at which they were first invented to be used as means of promoting products. It concentrates on the various stages that coupons have gone through to become successful and outlines clearly the impact that they have brought in the market.