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No 127:
How does the use of in-store discount coupons affect retail revenues?

Madelen Lagin (), Sven-Olov Daunfeldt and Niklas Rudholm

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.

Keywords: Category management; Field experiment; Price tactic; Promotions; (follow links to similar papers)

JEL-Codes: C12; C99; D22; D40; M31; (follow links to similar papers)

38 pages, August 30, 2017

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