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Coupon clipping makes a
comeback
By
Jonathan Birchall in New York
Published: February 10 2009 21:09 |
Last updated: February 10 2009 21:09
As US consumer demand
falters, the humble money-off coupon - rather than the
high-profile advertising campaign - is emerging as a new
battleground for some of America's biggest packaged
goods brands.
Procter &
Gamble, the largest US advertiser, said recently that
it was "shifting funds, where effective, to coupons and
consumer promotions that deliver better value". The
group has been battling to stop customers shifting to
lower-cost private label rivals.
Bob Recchia, chief
financial officer of Valassis, a third-party distributor
of coupons, said last week that the company had had a
"good" fourth quarter in its newspaper insert business,
and expressed cautious optimism about demand in 2009.
"Historically, when you get into this type of an
economy, consumer packaged goods companies do put out
more coupons."
Cutting out the
coupons delivered as inserts in the weekend papers is
something of a national sport for frugally minded
Americans, but the business is sometimes seen as the
ugly sister of marketing, compared with high-profile
television adverts or emerging online strategies.
But coupons can
provide an attractive option to chief marketing officers
in difficult times. Hain Celestial, maker of Celestial
Seasonings herbal tea, last week reported an 8 per cent
increase in consumption of its herbal tea in the US
during its most recent quarter, after it shifted
advertising spending to coupons.
"The shift in market
strategy, not any big increase in spending, has driven
this consumption turnround," said John Carroll, head of
the US operations.
P&G has been
offering a booklet of coupons worth $120, or a $10
voucher valid at Wal-Mart's Sam's Club stores to
customers who mail in receipts for more than $50 of
P&G's brands.
David McCracken of
P&G's US business said that the offers were the
first of their type by the company. "Consumers are more
open to that kind of message than they would have been
18 months ago, and we're trying to resonate with them."
P&G distributes
coupons through its Brand Saver newspaper insert,
launched in 2002, which reaches some 57m US households.
Its coupon strategy, says Mr McCracken, seeks to promote
trials of new products and build brand loyalty, rather
than "subsidising" consumption.
The value of coupons
in each Brand Saver booklet has risen from about $60
since last summer, to a peak of $106 in December, and
$83 most recently.
Source: The
Financial Times
http://www.ft.com/cms/s/0/ad0bf5c4-f7b5-11dd-a284-000077b07658.html | 
