Tuesday, October 5, 2010

Article 2 JC Penney Mobile Couponing Pilot Project

JC Penny is piloting a mobile couponing project in Houston, Texas. I think that they will have success with mobile couponing because people tend to not use coupons when they require extra work to use them. When you have to cut them out or have to remember to take it with you, this calls for extra steps and extra thinking and memory. People have so many things to contend with these days. When you make life easier and more convenient for them, they are more likely to engage.

Mobile couponing certainly accomplishes making it convenient. The consumers usually have their cell phone with them. If the coupon is readily available in their cell phone, which eliminates all the extra steps associated with paper coupons, the consumer is more likely to use them. As long as the coupons are easy to retrieve from the phone, women will love the idea.

Making them aware of the program is a matter of promoting it in the media currently used by the consumer such as JC Penny’s catalogs, sales papers, website, etc.

I think that mobile couponing is a logical progression in step with the evolution of technology. Everything that can be digitized will become digitized in time.

One company that is seeing notable success with mobile couponing is Domino’s Pizza. “Domino’s has seen significant growth from its mobile initiatives and plans to increase its investment in the mobile channel going forward.”

Cellfire mobile coupons are reported to be successful in comparison to the print coupon world. “In the print coupon world, industry average for redemptions is around 0.58% but for the mobile coupons from Cellfire, redemptions are in the 5 to 15% range.”

In May 2008, McDonald’s launched “Kazasu Coupon (kazasu = pass over)”, in order to convert the millions of members already registered on the McDonald’s mobile site…Since its launch this service has been a huge success.

Article 1 Digital Coupons

"Does "digital couponing" cause consumers to forsake brand name products over cheaper products or services? If yes, explain why you agree with this article. If no, why do you disagree with this article? Do you think the reason is brand loyalty? Do you think that well-known brands offer more discounts?

"Does "digital couponing" cause consumers to forsake brand name products over cheaper products or services?

I would answer yes and no to that question. There are consumers that are brand loyalist. They almost emphatically will stick with their brand no matter what. On the other hand, there are people who purchase according to what’s in their best interest or according to what their pocket dictates.

In some cases the name brand product is little or no different in quality or quantity from the generic or off brand. The store brand in many cases such as green beans for example may come from the same source. The only difference is the name brand has a fancy label, a well advertised, well known brand name and cost more. In this case, I would forego the name brand for the bargain brand.

In other cases the off brand is relatively as good as the name brand and in some cases better. Lastly, sometimes it is a matter of how far you need to stretch your dollars. If your money is tight and you need certain items and the only way you can get what you need is to go with the off brand products, then that is what best in that situation.

So if a coupon reduces the cost of a product in a tight budget situation, whichever product the coupon is associated with, will be the choice for many budget conscious shoppers.

Well known brands sometimes offer more coupons in order to stay competitive with competitors that can easily garner market share. However, some off brand, particularly new brands will offer coupons to get consumers to try their product.

“To attract new shoppers, retain existing customers and increase average sales, a wide range of suppliers including Kroger, Safeway, CVS, Walgreens, K-mart, HEB, Duane Reade and other intermediaries are leveraging online coupon programs and recording double-digit results, claims Crisp. “

            “Large retailers -- including Wal-Mart (WMT, Fortune 500), the world's             biggest -- are wrestling with having too many types of brand-name products.             At the same time, shoppers are buying less and looking for bargains.  So             unless a particular brand is a top seller in its category, it's getting knocked off             the shelf -- and sometimes getting replaced by a cheaper store brand.”

I do opt for generic brands when the perceptual difference between the generic and the name brand isn’t significant enough to be worth the difference in cost.