COUPON ATTRACTIVENESS AND COUPON PRONENESS - A FRAMEWORK FOR MODELINGCOUPON REDEMPTION

The measurement of consumers' coupon proneness and the prediction of t heir redemption behavior is important to the evaluation of marketers' couponing programs. Although considerable attention has been paid in t he couponing literature to the identification of factors that influenc e coupon usage behavior, relatively little work has been done to devel op models that can help managers predict consumer response to specific coupons and design effective coupon promotions. The authors propose a model of coupon redemption that extends previous models of coupon usa ge by considering the joint effects of coupon attractiveness and coupo n proneness on redemption, and does not require explicit measurement o f these variables. Empirical application of the model shows that it co rrectly predicts redemption intentions for nearly 90% of consumers in a holdout sample and substantially outperforms a legit model that incl udes traditional measures of coupon proneness, coupon characteristics, and demographics. The proposed model also provides insights into cons umer response to coupons that are not provided by the legit model. Ove rall, the model shows considerable promise as an aid to managers in de signing coupon promotions and developing precision targeting strategie s.